we'll see you back here tomorrow bright and early at 4:30 a.m. >> caption colorado, llc comments@captioncolorado.com good morning. ask the president. good morning. ask the press. president obama joins "the early show" in our nation's capital to answer americans' questions about gas prices, housing and unemployment. >> i think the key is to recognize that some of the jobs that left aren't going to be coming back. but we've got to be creating new jobs here in america. >> the press answers your questions in a cbs town hall meeting on the economy. terror diaries. osama bin laden private yurnl reveals he was obsessed with attacking the united states, urging followers to kills thousands by targeting

thousands. and delta destruction. flooding ravages communities along the mississippi, forcing thousands to evacuate. and threatening to destroy entire towns. we're live as the forecast calls for more rain "early" this thursday morning, may 12th, 2011. captioning funded by cbs good morning. sun just coming up there. i'm erica hill in washington. >> good morning to you, erica. good morning to you at home. i'm chris wragge in our new york studio. we have a lot to get to including details from osama bin laden's public diaries. we are going to start things there. let's go back to you. >> chris, we have. you can imagine, the diaries, a hot topic of conversation here in the nation's capital. we on the set of "face the nation." one day after our town hall meeting here in washington talking all about the economy

with president obama. we are going to bring you that in our next hour. a fascinating day. the president answering important questions from the audience and people at home and i would imagine that many of you can relate to these concerns. before we get to that, though, this morning, u.s. officials are pouring through a diary they say is written by osama bin laden. it was found if his pakistan compound. this he say it shows how the al qaeda leader was directly involved in planning future terror attacks. cbs news correspondent, mark phillips, is in london with more. good morning. >> good morning, erica. according to the material, osama was looking to launch another 9/11 style mass casualty attack. as to whether he was directly able to plan those attacks or command just strategy, that seems to be the question. the conventional wisdom is that he was marginalized, hiding and occasionally just a symbol rather than a director of these attacks. now, after going through these diaries, officials are saying something different. they indicate that he was

directing strategy and had input that he was dealing with al qaeda's number two, a man zawahiri and number three, tia, there was no indication as to where those people were or are. curriers carried the flash drives back and forth. osama counseled that smaller city, not necessarily new york, could be targeted but that those targets had to have massive casualties as only that would shift u.s. policy. he said as you said that trains as well as planes could be attacked but that those attacks ought to happen on specific significant dates, july 4th, for example, or the anniversary of the 9/11 attacks. the material was contained on computers and about at least 100 portable flash drives, also hand written diaries. he counseled that the focus had to continue to be in terms of attacks on the u.s. and the west and that al qaeda should find people other than muslims to carry out the attacks. all and all, it seems that osama

had become a man that was not in direct control of individual planning but that he was still a man very much in command of the overall targeting of al qaeda. >> joining us here in washington, yuan zarate. >> as we look at this, mark made an interesting point at the end. these diaries seemed to show he wasn't necessarily in direct control but that osama bin laden was still somewhat in command. >> i think what we have is a revelation that bin laden was serving still as al qaeda's ceo. he wasn't necessarily placing operatives in person cities or directing the attack plotting per se but he was still part of the strategic overlay of al qaeda directing it toward the west assuring the cohuesion of the movement. >> they are actually

calculations apparently in these diaries about those mass casualties. did the map on some of them as to the impact. >> i think what he wanted to do was clearly replicate the impact of 9/11 not just in terms of body count but in terms of strategic impact. he was the strategic thinker for a al qaeda. he wanted strategic strikes. he didn't want pinpricks but things that would affect american policy. >> with all that focus on the u.s. specifically, not just western world, did it actually take away from some of the other theoretical, at least goals of al qaeda, within the muslim world. >> great question. there is tension from within the al qaeda group and their local goals versus this global western focus goal that bin laden had been pushing. this was bin laden's innovation

in the '90s to focal the global jihad on the united states. that has caused tension among the groups in the network. >> it that make him at this point or leading up to his death more of a liability or an asset? >> well, i think bin laden was clearly still an asset. he was the strategic thinker for the group, the glue for the global movement, the symbol in many ways. he was still driving it. there was tension and friction within the movement. that's why losing bin laden will lead to greater division and friction within al qaeda. >> erika, thank you. to the latest on the great flood of 2011. forecasters predict rain and thunderstorms for the lower mississippi. that is the last thing people need in that flood ravaged area. cbs news correspondent, mark strassmann, is in greenville, mississippi. we join him now. good morning. >> reporter: good morning, chris. the great mississippi flooding has a new target, the mississippi delta, a region that's mostly rural and low income, people least able to recover from a crisis.

>> it's up in hair. >> reporter: in greenville, steve lots' house is gone. his neighborhood is a soup of filthy floodwater. >> we knew it was going to be bad but seeing it is different. you kind of see your whole life floating there. >> reporter: north of greenville. >> we love everyone from there. >> reporter: melanie is homeless. this photo shows why. her house ruined like all three homes in tunica, 20 feet of floodwater. with new building codes, rebuilding is unaffordable. tunica cutoff could be gone for good. >> we want to keep our address. >> it's my home. >> reporter: in mississippi alone, floodwaters have destroyed at least 800 homes. most people will rebuild. almost no one in tunica cutoff had flood insurance. they will str to start over somewhere else. >> it is hard to face it, you know what i mean. if you hadn't been there, you

just don't know. >> reporter: within mississippi spill zone, the state is sounding the alarm. governor haley barbour is urging anyone who has a threat of flooding to get out bhil they can. chris? >> mark, with the mississippi now bearing down on louisiana, some worst case estimates have some low-lying districts in new orleans inundated with up to 25 feet of water down there have the that's the worse the inundation than katrina. could anything be done to avoid this? >> reporter: remember, the mississippi, if it is allowed to run full through louisiana all wait to new orleans. the power of the river could eat away at the levees and potentially expose as many as 1 million people to flooding. there is one option. the morganza spillway outside baton rouge, sort of a pressure valve. if you open it up, you could divert about one-third of the river and its power into an all together different area. here is the issue. it would flood an entire river basin of farmers and fishermen and a truly devastating event

for all those folks. it is a very, very painful choice. the u.s. army corps of engineers may have to make that decision. >> thank you, mark. back to washington. you can expect sparks to fly as top executives face members of the senate finance committee asking about soaring gas prices and tax breaks. nancy cordes is on capitol hill. good morning to you. what exactly are senators expecting to hear this morning from the oil executives? >> reporter: well, erica, democrats want to know whether they really need those $2 billion worth of tax breaks that they get every year. they are proposing legislation that would strip away those subsidies and put that money towards the deficit. here is the rational. >> we are here to say enough already to big oil. you are doing just fine on your

own. you don't need the taxpayer giving you an extra handout to help. >> reporter: now, the oil company's ceos are likely to say, look, we are not the ones who are driving up the price of gasoline. it is investors who are looking for somewhere that they can get a return on their money. so they are putting it in oil. don't punish us, especially when all of industry gets this money in tax breaks for research and development, erica. >> looking at all of this, nancy, what are the chances the democrats really could pass legislation that would strip away these subsidies? >> reporter: well, right now, erica, you have republicans in senate saying look this amounts to a tax hike. we are not interested in hiking taxes on anyone right now. besides, it wouldn't do anything to bring down the price of gasoline. you have got some democrats from oil-producing states who agree with them. so i think pushing legislation like this that targets just one industry and isn't part of a larger tax reform package is doable but it is difficult. >> difficult indeed.

nancy cordes on capitol hill, thanks. >> sure thing. we want to get a closer look at some of the other headlines on this thursday morning. jeff glor is standing by at the news desk. jeff, good morning. >> good morning, erica. good morning to everyone at home. two men are under arrest tied to an alleged terror plot. jay do yw has more on that. >> reporter: good morning. fbi officials confirm the bureau is not handling this case. it will be prosecuted by the manhattan district attorney's office under new york state's anti-terrorism law. sources tell us one of the two suspects is of north african descent. the arrests come at a time of heightened awareness in new york city as law enforcement tries to ward off any kind of retaliation from al qaeda. the fact that the manhattan d.a.'s office is handling this case seems to support law enforcement's position that this

plot at this point was more of an aspiration more than fully operational. sources also tell us that new york city mayor michael bloomberg and other city officials will hold a news conference this afternoon to announce details of the arrest. jeff? >> jay, thank you very much. in libya, overnight, nato launched new air strikes in support of rebel troops and moammar gadhafi appeared on television. mandy clark is in the rebel headquarters city of benghazi. good morning to you. let's talk about the significance of the gadhafi appearance. was the regime trying to send a message here at this time? >> reporter: well, what's interesting is that we haven't seen him since april 30th. that was before a native strike killed one of his sons and three of his grandchildren. now, libyan government set up the time that gadhafi was there but escaped unharmed. as the days past, on television, people were beginning to wonder what had happened to him. so, yesterday, we saw footage of

him. what was really interesting was the camera seemed to focus on the television that had yesterday's date. in a way, it seemed like a hostage video where the captive is made to show a newspaper to prove that he is alive. what's also interesting is the location. the libyan government made a point to say that the meeting with so-called tribal elders happened at tripoli hotel. there is one speculation that this is the same hotel where the foreign journal. is are kept. that i, of course, a location that nato would never strike. >> mandy clark in benghazi this morning, thank you very much. two flight recorders from the air france jet that skrashd in the atlantic ocean almost two years ago arrived in france today. investigators say it will take at least three days now to get any information from these recorders. they do say the recorders appear to be in very good shape. flight 447 was on route from rio de janeiro to perry killing all

228 people on board. a court in germany convicted former u.s. citizen and accused nazi death camp guard john demjanjuk. he was charged with more than 28,000 counts of accessory to murder, all for deaths that took place during world war ii. the german court sentenced him to five years in prison. former house speaker, newt gingrich is officially a candidate for president again. he made it official on the internet. >> i believe we can return america to hope and opportunity, to full employment, to real security, to an american energy program, to a balanced budget. >> of the major republicans, only gingrich has officially announced. romney, pawlenty and santorum have formed campaign exploratory committees. billy graham is said to be resting comfortable in asheville, north carolina. he checked himself in yesterday

and is being treated for pneumonia we are told. a spokesman says it is not an acute situation. >> and it appears that facebook has banned mark zuckerberg, no, no the that mark zuckerberg, a man named mark zuckerberg, a bankruptcy lawyer from indianapolis says he had

>> thanks so much. that's your latest weather. now over to erica and chris. >> marysol, thank you very much. still ahead here this morning on "the early show," tougher trading rules for pilots after an horrific plane crash in western new york. are the new regulations enough to keep you safe? we're going to look at the proposed changes that have just been released. erica? >> and chris, americans still so concerned about the economy. we wanted to give you a chance to talk to the president. just ahead, the cbs news town hall on the economy, when you're asking the questions. this is "the early show" on cbs. [ school bell rings ] you have a child with adhd. you're getting calls from his teacher he's impulsive in class.

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>> >> coming up from washington, average americans talking to president obama, asking questions about unemployment, rising gas prices, and so much more. a one-hour cbs news town hall on the economy coming up right here on "the early show." >> also coming up here on the broadcast, erica, an inexperienced pilot is blamed for a series of mistakes leading to a dead ply plane crash in buffalo. two years later the faa has a plan to overhaul airline pilot training to try and prevent future disasters just like that one. coming up here on the program we'll ask an aviation safety expert what the changes could mean for pilots and paechxers alike when we come back here on "the early show" here on cbs. stay with us. >> this portion of "the early show" sponsored by preen. preen stops weeds before they start. visit preen.com. ♪

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elizabeth wenger... later this morning, we expect to learn the names of the three people involved in tuesday's san jose it's 7:25. time for news headlines. i'm winning. later this morning we expect to learn the names of the three people involved in tuesday's murder-suicide at san jose state. we're told they have ties to the university but officials are not saying whether they were students. cbs 5 has learned that a former top drug cop of contra costa county is accused of new crimes. norman wielsch is charged with stealing and selling drugs taken in raids. now his co-defendant says wielsch also ran a brothel in an office park in pleasant hill. he has not been charged in connection with that. san francisco police are investigating another video that appears to show officers abusing their authority. undercover officers are seen searching a drug suspect's room

in a residential hotel. the suspect says he never gave permission for police to enter his room or to take a duffel bag that has vanished. traffic and weather around the bay area in just a moment. stay with us. ,,,,,,,,,,,,

[ sea gull squawking ] [ waves crashing ] [ gasps ] brrrr! [ giggles ] [ sea gull squawking ] coming up northbound 101 we have an accident blocking a lane approaching shoreline.

so watch out for that. speeds are slow past 237. wow, lots of sunshine at the bay bridge toll plaza. so you will need sunglasses if you are heading towards the pay gates and it's backed up to the 880 overcrossing. we got a late morning backup. light traffic there for a while. metering lights are on. mass transit off to a great start. systemwide everything is on time for bart, ace train number 3 is right on track, right on schedule. that's a check of your traffic. for your forecast, here's lawrence. >> elizabeth, you like diamonds. looks like sparkling diamonds out there on the bay today! >> how did you know? >> beautiful sunrise. partly cloudy skies out there tri-state now and looks like we're in for a spectacular day in most spots. we are going to see some sunshine and just a couple of passing clouds near the coastline. that will keep you cool there. warming up, inland lots of 70s around the bay area. tomorrow very similar outside but by the weekend things change. we got clouds rolling into our skies. there is a chance of some showers as we head in toward saturday night. rain becoming more likely into sunday. and looks like things could stay very unsettled possibly wet well into next week. ,,,, i am a sneeze whisperer.

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half past the hour there. a beautiful shot of the white house on this thursday morning as we welcome you back to "the early show." in our next hour we'll be talking to the rather famous president of the white house, president obama, and nearly 200 guests joining us for a cbs news town hall on the economy yesterday afternoon. we heard from so many different folks. a small business owner, a government worker facing layoff, who is also pregnant. a woman who lost her job and is afraid of losing her house. there were questions on gas prices. you name it, they asked it of the president. some of the questions coming from you at home, as well. and just ahead we'll bring you his answers. chris? >> looking forward to that, erica. also ahead here on the program, the faa proposed tougher airline

pilot training. this goes back to a plane crash that killed 50 people in buffalo. a report says the pilot made crucial mistakes. we're going to see if better training is all it takes to keep you safe when you're in the air. so we've got those stories coming up in just a couple of moments. first jeff glor is at the news desk with another look at our top headlines for us this morning. >> chris, good morning once again to you. osama bin laden's private handwritten journal recovered from his compound in pakistan shows that bin laden was still very much plotting against the u.s. bin laden pressed his followers to find new ways to attack. and sought to kill americans in large numbers, they say. his goal was to force the u.s. to withdraw from the middle east. he suggested striking a variety of targets, including smaller u.s. cities and trains, as well as aircraft. family members may be allowed to visit prisoners at guantanamo bay. "the washington post" says today the pentagon is looking at ways to ease

this morning the government is planning some big changes in the way pilots and other air line worke erers prepare for th job. changes that are being called the most significant overhaul of airline training in 20 years, especially when it comes to smaller airlines. cbs news correspondent elaine quijano reports. >> reporter: the federal aviation administration on wednesday proposed strict new guidelines that could overhaul training techniques for the nation's airline pilots. >> the level of discipline, the type of training, the quality of training, and i think that's the key word, is the quality of training, is going to be scrutinized. >> reporter: among the proposals, requiring the use of advanced flight simulators to train for a real-world emergency scenario. and remedial training for pilots who fail key tests. the proposal is in part reaction to this deadly commuter plane crash near buffalo, new york, in 2009.

air flight 3407 stalled and plummeted to the ground as it approached the airport to land. 49 people on board, and a man in a house below, were killed. the crash was blamed partly on faulty training of the pilot. >> it was that buffalo accident that really pushed us to the edge, and that required action. and, of course, congress stepped in and said immediate action is necessary. >> reporter: that action is now one step closer to reality. elaine quijano, cbs news, new york. >> joining us now cbs news aviation safety expert mark rosenker, former chairman of the national transportation safety board. good to have you here. good to talk to you in the studio. instead of over satellite. taking a look at these proposals, and they are just proposals at this point, would they make passengers and crew safer? >> i think so. this is a really big change in the way the philosophy of training at the faa, and for the air carriers. they're going to require the pilots to demonstrate proficiency in critical skills.

rather than just read in a syllabus and take a test. very important step to raise the bar of safety. >> and these are things, just clear up for us, the things that they're going to have to prove they can do now on these simulators, did pilots actually have to prove those skills in the past? or simply that they had, as you say, read the manual. >> no, in some cases you actually had to recognize that you were approaching the stall. but in the more advanced simulators, you're actually able to put these pilots in to stalls, into upsets, and let them demonstrate their skills in being able to recover. >> there are some airlines that have, perhaps, similar things in place now, some of the bigger carriers. some of the smaller wins do not. we were talking at the break, you said this would be a little bit more cohesive for the industry. it comes out of, as elaine mentioned, the colgan air flight over buffalo. could this kind of systemwide regulation have avoided that disaster? >> i believe it would have. we learned a lot after the colgan accident and the investigation that followed.

there were many recommendations that came out, and this is clearly one of the ones that, in fact, the faa has listened to, and frankly, when they do finally implement these rules, we'll see a much safer system. >> you say when they finally implement them. what are you thinking in terms of when this would actually happen? >> unfortunately, the process takes awhile. it could be months. it could be years. but they are moving forward, and i have to make that compliment to them. and frankly, the carriers themselves, once they see what these rules are really looking like, they're already stepping up to the plate. >> you think they'll do this? because it's expensive, too. those simulators are very expensive. and that's just one part of it. >> that's right. but the reality of life is, is they will bring that money back significantly on a return in investment, when they find that their pilots are much, much safer and providing a much better service to their passengers. >> weaver been talking mainly about pilots here. but these proposals actually go across the board for all of the crew in terms of safety. >> we're talking about the first officers, there will be increased hours in the

simulator. we're talking about captains training with the first officers to do crew resource management. the flight attendants are going to have a more rigorous program. and even the dispatchers are going to be brought in to this. >> so everyone is a part of it and they would be updated yearly in some cases. in less of a time, six or even nine months. i want to ask you about a couple of recent events. passengers on flights we've heard about one trying to open the cockpit door. another allegedly trying to open the exit door. which, you know, he says it fell on him. all of these stories, though, request really make a person nervous about flying. in reality, could someone storm the cockpit? could someone open that emergency exit? >> it's virtually impossible to get into the cockpit today. after september 11th, the government required a much more stringent door to be put in, a much more robust door. these are very strong doors. you cannot bust them down. you cannot even shoot through them with small arms. you're not getting into the cockpit. that i can guarantee you. >> all right, mark rosenker,

always good to have you here. we appreciate your expertise, and laying it out for us. thanks again. >> you bet. >> we'll be right back with more. you're watching the "early" show on cbs. breakfast! [ male announcer ] discover the new taste of eggo thick and fluffy waffles. whoa! a deliciously different way to waffle. how'd you make these, dad? secret recipe. really... [ male announcer ] new eggo thick and fluffy waffles. really... you know rheumatoid arthritis means pain. but you may not know it can also mean destruction.

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from professional athletes to stay at home moms there is a growing fad in getting fit. millions of performance bars are being sold to help you with everything from balance, control. are they more fad than help susan koeppen joins us. >> performance bands like this power balance bracelet sell for about $30. they're very popular. but some experts say consumers are just wasting their money. >> i don't do a lot of testimonials, but this works. >> reporter: they go by names like power balance, energy force and i-renew. >> the revolutionary bracelet that uses natural frequency to promote strength and wellness. >> reporter: performance bracelets make up part of the $20 billion wellness industry. and they can be found on the wrists of professional athletes like shaq, kobe, and carmelo.

celebrities, former president bill clinton. and even the new princess. >> there's no way that putting a piece of plastic next to your body could have any effect on any energy. >> reporter: skeptics say performance bands are a fad. more hype than help. one of the leaders in the market is power balance. made of plastic in china, these bands come with a hologram that the company says is programmed to mimic eastern philosophies. >> basically helps you are your endurance, your balance, your flexibility, and your strength. >> reporter: with the help of world renowned myth buster banichek we put some power balance bracelets to the test. we brought together ten people with varying degrees of physical fitness. all ten were tested on balance and strength, flexibility and jumping. but without their knowledge, only three of them got the real power balance bracelets. the others got this white bracelet purchased for just a buck at a dollar store.

>> let me know when you're ready for me to do that. >> reporter: our test subjects wearing real power balance bands saw immediate results. >> pretty amazing, isn't it? >> this is crazy. it's insane. i came in thinking absolutely not, no way that a piece of plastic would, but it really worked. it was freaky. >> reporter: but we got the same results with the dollar store bracelet. everyone improved their balance. >> i couldn't even push you. >> that's crazy. >> reporter: their flexibility increased. so what did you think about the bands? >> i thought it made a huge difference. >> reporter: huge difference? >> huge difference. >> reporter: and they all jumped higher. did the bracelet help you? >> oh, absolutely. >> reporter: and then it was time to tell our participants the truth about our experiment. how many of you feel like the band helped you? >> definitely. >> reporter: want to know who got the real bands? susan. shari and suzette. >> we didn't? >> reporter: the rest of you were wearing a bracelet that cost a dollar. >> that's right.

>> reporter: so why do these bands seem to work so well pl >> what i have to demonstrate for you today -- >> reporter: in demonstrations sponsored by power balance, the testers always try out the bands second, never first. banichek says that's the key to the success. >> you already set yourself a goal at this point. you know how far you've gone. you know you have to go further, so you will go further. >> reporter: and in my second round of testing, my flexionibility and jumping improved. and the improved balance? it's a matter of physics. >> i'm going to push straight down. >> reporter: i fall over. if we do it again. >> i'm going to change it about two degrees and i'm going to push inward. >> reporter: can't move me. >> but did you notice, i wasn't wearing a band for any of these tests. >> reporter: so it's all up here? >> it's all up here. >> reporter: not on your wrist? >> not on your wrist. >> in a statement to cbs news, the company says it's

undertaking a series of clinical studies to expand, further validate, and quantify the benefits of its products. chris? >> shaquille o'neal says it works. how would he know? he's been injured for the last three seasons. on a serious note, if people do have these bands and think that, okay, this is probably just some silly piece of plastic, what can they possibly do? >> the company offers a money back garren if i. it says it makes no assurances that it will work. it says it doesn't work the same for every person, so if you are not happy, you can get your money back. >> let's be totally honest, if you do have a problem with balance, something like that is probably not going to remedy it. >> i have to say, though, that everybody that we had in our experiment who did the test, afterwards, even after they knew that they got the fake bands, they all wanted one of these to walk out the door with. >> it is probably more cool than anything else. >> they said it's all up here but they still wanted the bands. >> all right, susan, thank you so much. now here's erica. >> just ahead, the people tell the president what's on their minds. medicare, jobs, small business.

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coming up here on "the early show," something we've all been looking forward to, a town hall on the economy with president obama. and erica hill is in washington, d.c. erica, what can we expect? >> chris, it was a great event. and what really made it were the people in the audience and the people at home who sent in their questions. real americans with real concerns about the economy. and that's quite an umbrella. we cover everything from gas prices to job security, to entitlements. so stay tuned for all of that just ahead. that town hall meeting on "the just ahead. that town hall meeting on "the early show." that measy to buy a new laptop. or get one fixed. with highly trained tech experts, staples makes repairing technology easy. staples. that was easy. bay! kin! cheese! [ alarm ] spinach-spinach- spinach-spinach-spinach- spinach-spinach-spinach.

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head .. i'm elizabeth ... san jose state university will hold a news conference about two now... regarding the it is 7:55. time for news headlines. i'm elizabeth wenger. san jose state university will hold a news conference about two hours from now. regarding the apparent double murder-suicide in the tenth street garage. the school is expected to reveal the names of the three people involved in tuesday's shooting and their connections to san jose state university. it is the first fatal shooting in the university's 154-year history. it is do or die for the sharks tonight if they are going to continue toward a stanley cup championship. san pedro square is decked out in a festive play-off regalia ahead of tonight's game 7. the sharks won the first three games of the series but the detroit red wings bounced back to win three in a row. the puck drops at hp pavilion

at 6 p.m. we'll have your traffic and weather traffic and weather. we'll have your traffic and weather and your weather forecast in just a moment. [ male announcer ] yiayia may not approve of an unmarried couple living together. you are going to hell. [ male announcer ] but yiayia approves of them eating athenos greek yogurt. mmmmmm! because athenos is made the greek way, never using preservatives or artificial flavors. athenos. maybe the only thing approved by yiayia.

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maze. a 15- to 20-minute wait to get on the span. good news, no incidents, no accidentses across the bay bridge, just a lot of people trying to head into san francisco right now. and mass transit so far everything is on time for bart, ace, muni metro and caltrain. and one more live look at eight, a the nimitz freeway through oakland, so far looks great as you pass the coliseum. and a nice light 20-minute drive between 238 and macarthur maze. that's your traffic. for your forecast, here's lawrence. >> a little more sunshine around the bay area getting going today as we are going to see pretty nice weather around the bay area just a couple of patches of low clouds. you can see some of the clouds there in the distance. going to see more sunshine as we head in toward the afternoon. that's going to allow the temperatures to warm up pretty nicely. let's plan on lots of 70s inland. 50s and 60s at the coast. next couple of days looking good. the weekend, clouds move in and they are storm clouds. chance of rain developing saturday night. rain expected on sunday. ,,,,,,,,

hello welco >> hello and welcome to a special hour of ""the early show." a special town hall meeting with barack obama. i'm erica hill. this is harry smith. >> we're going to talk with the president about the economy. as you know, americans are still facing serious problems. >> unemployment now stands at 9%, and it's expected to stay high for months or even years to come. >> gas prices have hit an average of $4 a gallon nationwide. that's up nearly $1 since the first of the year. >> and as president obama's overall approval rating went up in last week's cbs "/new york times" poll, he received his lowest rating yet on his

handling of the economy, 34%. >> so today we have invited college students, residents of the d.c. area, people who have answered questions for previous cbs news polls and also you at home to ask the president about the economic issues affecting your lives. it will include questions sent to us online as well. >> so without any further ado, why don't we get started. ladies and gentlemen, please welcome the president of the united states. >> good to see you guys. how are you? good to see you. harry, good to see you. >> good to see you. >> thank you, everybody. good to see you. thank you. good to see you. thank you. thank you. everybody please have a seat. well, wonderful to see both of you and all of you. thank you so much for having me. >> nice to have you here with us. welcome. thanks for coming in. >> thank you very much. >> for the past four years, mr. president, it seems that we have been hearing whether it's on tv, at the office, around the

kitchen table, things are tough. >> yeah. >> and there is some improvement. there's positive economic data coming through. yet sometimes it can feel like for every two steps forward, it's one step back. there's definitely a psychological component to this recovery. how, then, do we change the mindset from things are tough to things are turning around? >> well, there's no doubt that we're in a better place than we were when i first came into office. we had just lost 4 million jobs in the previous six months. the financial system was melting down. in the few months after i took office, we lost another 4 million jobs. so this was the worst recession since the great depression. and i think understandably, people still feel pretty bruised and battered from that recession. since that time, we've been able, as a consequence of the actions that we've taken, and most importantly, the resilience of the american people. we've been able to turn that ship around.

so now the economy is growing again. over the last year, 14 months, we've actually seen the private sector create 2 million new jobs. over the last three months, we've seen three quarters of a million jobs created in the private sector. so you're seeing improvement all across the country, but you're absolutely right that people still aren't feeling it. now, part of that is the fact that the unemployment rate is still high. and we've got a lot more work to do to get businesses to invest and to hire. but part of the problem is also that we had a lot of problems before this recession hit. and i think a lot of folks are still anxious about the fact that even if they have a job, even if they're working really hard, that they're wages haven't gone up. their incomes haven't gone up. but the costs of everything from gas to groceries to health care

to a college education, those have all gone up. and i think a lot of people just feel like the american dream, the core notion that if you work hard and you act responsibly, that you can pass on a better life to your kids and your grandkids, a lot of folks aren't feeling that anymore. and so that's why it's so important for us to focus not only on recovery from recession, but also dealing with some of those problems that existed before the recession so that middle-class families are able to see their incomes go up, their savings go up. they can retire with dignity and respect. they can send their kids to college. they can meet some of these rising costs. and a lot of the work that we've tried to do from health care to energy policy, all those things are designed to get at those structural problems that have been around for the last decade now. >> people aren't feeling it, though. just to sort of reemphasize the question. so you can read in "the wall street journal," the stock

market has recovered really well, but at the same time, there is -- there are a lot of people who have stopped looking for jobs. jobs just around there. >> well, part of what's happened is that the recovery's uneven. so certain sectors of the country are doing better than others. manufacturing is actually doing really well in part because the auto industry is getting back on its feet. and that has to do with decisions that we made early in my administration to make sure that we still have those big three auto companies here in america making u.s. cars and innovating so that we can complete internationally. but part of the problem is not just folks who don't have work, it's also folks who have work seeing their incomes flat-line. and that is a decade-long trend. that's part of the reason i ran for president was because too many folks were losing ground. between 2000 and 2009, during that decade, the average income for american families actually went down. even though, as you said, the

stock market was booming, corporate profits were way up, ceo pay was -- >> up 27% in the last year. >> that's exactly right. so part of what's happened also is some structural changes in the economy where it used to be that there was broad-based shared prosperity. now if companies are doing really well, they're not necessarily hiring back work, they're just figuring out how to do more with fewer workers. that may increase profits, but it doesn't help folks who are looking for a job, and offert e oftentimes that puts pressure on people who are already on the job. some of the changes taking place in the economy are ones that took a decade or two to get to. and it's going to take us several years for us to get back to where we need to be. the important thing, though, harry, and i'm sure as we get questions today i want to emphasize, is we're moving in the right direction. the fact that the economy is growing is a good thing. the fact that companies are

making a profit is a good thing. the fact that we're becoming more competitive is a good thing. but we've got to stay with it. and that means improving our education system, improving our infrastructure, making sure that we've got an energy policy that actually makes sense so that our economy is not subject to the whims of what happens over in the middle east. >> and speaking of energy policy, we want to get to our first question. our peter baca is here. peter, let's fire away. >> good day, mr. president. the american people have seen gas prices double and in some areas triple within the last year or so. this impacts every single american today including the likes of retailers, grocers and such. what changes can the american people expect to see, and what actions, if any, are you willing to take to relieve this growing inflation? in other words, what measures can we anticipate?

>> well, first of all, i think it's important to know that although i don't pump gas myself these days, the secret service doesn't let me. we pay attention every single day to what's happening with oil prices because you're absolutely right. this is something that affects everybody. you know, if you're somebody who works, has to drive 50 miles a day to get to your job and you're not making that much to begin with and you may not be able to trade in your old car for a new hybrid so you're only getting 12 or 15 miles a gallon, this is taking a big chunk out of your budget. and you're right, it's also affecting businesses because nothing affects consumer sentiment, how people feel about the economy, more than gas prices because they see it every single minute when they're driving, right? you're passing and you're seeing the prices go up every time you

go by a gas station. so this is something that we've really got to get a handle on. now, some of this was inevitable because the economy started growing again. when the economy was in deep recession, everybody was using less because folks weren't producing as much. companies were not as active. and so worldwide demand for oil went down. and when the economy started growing again, worldwide demand for oil went back up. what's also true is the disruptions in the middle east. particularly in libya. ended up having some impact because people started worrying, well, even if there's still some supply now, what's going to happen in the future? those are things that we could not completely control. what we can control is, number one, are we producing as much as we can here in the united states? and, in fact, we're producing more oil now than any time since

2003. so production is actually up. even after what happened in the gulf, we're still saying to oil companies, you can drill as long as you do it safely. we don't want to go through another oil spill like we had last summer. but we are going to give you permits if you show us that you've got a good plan for containing it if something goes wrong. the second thing that we can do is we can make sure that speculation and price gouging isn't taking place. and so my attorney general's been assigned to make sure that nobody is taking advantage of the current oil situation. and as oil prices on the world markets go down, we want to make sure that's reflected in the pump. but frankly, the most important thing we can do is to have a long-term energy policy. so let me just give you one example. >> quickly. >> we increased our fuel efficiency standards on cars for the first time in 30 years. we just did it administratively last year. that's going to save us 1.8

billion barrels of oil. and it's going to save the consumer about $3,000 during the life of their car if and when you guys buy a new car, it's just going to have better gas mileage. and by making our energy usage more fuel efficient, particularly in the transportation sector, that will bring demand down, and that will bring prices down. but there's no single silver bullet. we're going to have to do efficiency, alternative energy, develop electric cars that can be cheaper, and those are all things that we've been investing in over the last two years, which is why it's going to be important for us to continue making those investments in the years to come. >> and the anticipation is with the price of oil going down, the price of gas could be down significantly by the end of summer. >> that's our hope. >> we need to take a break. thank you for your question. we have a lot more questions to come with more of our town hall meeting with the president here on cbs. we'll be right back. >> thank you. it's 2011. wonder where the durango's been for the last two years?

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and welcome back to this special edition of "the early show." cbs news presents a town hall meeting on the economy with president barack obama who, of course, joins us this morning. thanks again for being with us. we do want to get straight to the questions because this is about the american people asking you those questions. karen gallows is joining us in the audience with one of her questioning. >> hi, mr. president. about three years ago, just under three years ago i took a job with the federal government thinking it was a secure job. recently i've been told i'm being laid off as of june 4th. and it is not an opportune time for me. i am seven months pregnant in high risk pregnancy, my first pregnancy. my husband and i are in the middle of building a house. we're not sure if we're going to be completely approved. i'm not exactly in a position to waltz right in and do great on interviews based on my timing with the birth. and so i'm stressed. i'm worried.

i'm scared about what my future holds. i definitely need a job. and i just wonder what would you do if you were me? >> well, karen, first of all, i think you'll do great on interviews just based on the way you asked the question. and congratulations on the new one coming. >> thank you. >> where were you working? >> the national zoo. and i would be nonessential employee number seven. >> right. well, let me -- let me just first of all say that workers like you, for the federal, state and local governments, are so important for your vital services, and it frustrates me sometimes when people talk about government jobs, as if somehow those are worth less than private sector jobs.

i think there's nothing more important than working on behalf of the american people. >> well, i thought that i'd be more important and secure. >> i agree with you. i think the challenge has been that, in some of these negotiations, to try to reduce the deficit, i think the feeling, particularly on the part of some folks on the other side of the aisle, has been that we want to just cut and cut and cut, and that somehow is going to create economic growth. now the truth of the matter is, our biggest problem when it comes to jobs right now is not in the private sector. we've been creating a lot of private sector jobs. the reason the unemployment rate is still as high as it is in part is because of the huge layoffs of government workers. at the federal level, at the state level, at the local level. teachers, police officers, firefighters, social workers. they have really taken it in the

chin over the last several months. and so what we're trying to do is to see if we can stabilize the budget. for awhile, for example, people were a little frustrated with me when i said we need to freeze federal pay. now we already freeze pay over in the white house. my aides can testify they haven't gotten a raise since they came in. but we've imposed a federal freeze and some folks were upset. the reason we did that was so we don't have to cut as many workers. as we try to get control of our debt and our deficit. but, my main message to you is, that the work you've done at the national zoo is important. every child that you see who comes by and is amazed by those animals, you know, they're benefiting from your work. i don't want to, sort of, find out more details in front of everybody about what your status is. but, we can have this conversation maybe afterwards. i do want to make a larger point to people, though, that folks like karen provide vital

services. and so when we have discussions about how to cut our debt and our deficit in an intelligent way, we have to make sure that we understand this is not just a matter of numbers, these are people. >> but in 20 seconds, assume the economy improved dramatically. >> right. >> say in the next year or two. can karen get her job back? >> well, i would hope so. >> but if reality -- >> because part of my argument is that we're having to make some decisions about cuts to federal programs now. but also states and local governments are making these decisions on programs that oftentimes are doing a lot of good. i mean, these are good things. you know, so everybody has a tendency to think that somehow government is all waste, and if we just sort of got rid of all the waste, well, that somehow we would solve our debt and our deficit. in fact, most of the government services that people get are ones they really like.

social security, veterans affairs, our military, our -- the help we give in terms of law enforcement, preventing terrorist attacks, making sure our food is safe, making sure that our national parks and our functioning. these are things all of us appreciate and care about. well, that's what our government does. and so, these are not abstract questions, and i think karen makes it really clear that there are real consequences when we make these decisions. >> thank you. >> all right. >> we're going to take a quick break. when we come back we'll be hearing more, mr. president, from the folks in the audience. also for many of you from home who submitted your questions online, stay with us for them. p" introducing the mccafé frozen strawberry lemonade from mcdonald's. we're tart, tangy, and even sweet when you mix in the strawberries. oh, yeah. how do you like me now? with being fed on. we demand k9 advantix ii.

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[ male announcer ] ask your veterinarian ian stow may be back home in

the bay area soon. the een in a good morning. it is 8:25. time now for some news headlines. i'm elizabeth wenger. bryan stow may be back home in the bay area soon. the giants fan has been in a southern california hospital since he was attacked outside dodger stadium in march. next week, he is expected to be moved to the uc-san francisco medical center. expect to pay more for a.c. transit rides. board members decided to raise fares by 25 cents every five years. basic adult fares will go up by a dime. fares for youth, seniors and the disabled will increase by a nickel. hundreds of bay area commuters are leaving their cars behind for "bike to work" day. organizers say at least 700 cyclists participated last year. in addition to oakland and san francisco, "bike to work" day events are being held in other

counties from alameda to sonoma. speaking of the commute, we'll have more on your traffic and weather coming up. hemistry afi. diphenhydramine. magnesium hydroxide. atheletes foot. yes. i'm a people pleaser. if elected, i promise flu shots for all. i am a walking medical dictionary. congratulations virginia. inflamed uvula. i'm virginia. i'm a target pharmacist and i'm here to answer your questions. let's just think of warm things...my new-sorry... -steak grilled sandwich...piping hot with tender steak, grilled onions, and bourbon barbecue sauce all covered with hot melty cheese on grilled artisan bread. hot...steaky... toasty...melty... this isn't working, i'm just getting hungry. that's working...that's...

good morning. northbound 280 is very slow right now heading out of downtown san jose. the problem is an accident right by saratoga. and we have a camera close by near the 880 interchange and you can see that traffic is, yeah, not moving too fast right now heading out of downtown as

i said. it is also a slow ride, unfortunately, on 101 through that stretch. we had an earlier accident approaching shoreline. that is now completely cleared out of lanes. but it's still jammed from at least julian. san mateo bridge this looks great. no problems in either direction across the span. and the golden gate bridge i wanted to throw this up shot it's a little sluggish between novato and san rafael but picture-perfect day across the span and it's "bike to work" day as well so you may see more cyclists out there on the roads. that's a check of traffic. for your forecast, here's lawrence. >> yeah, that sunshine looking good out there, too. boy, what a great day it looks like we have ahead here. a lot of sunshine over coit tower. we have partly cloudy skies around the bay area a few clouds out there now but throughout the day more sunshine. no getting around that. temperatures going to warm up nicely. a lot of 70s in many spots inland. 50s and 60s at the coast. next couple of days look good, but rain on the weekend.

welcome back to this special hour of "the early show." a town hall meeting on the want to hear from as many americans as possible, so cbs news business and economics correspondent rebecca jarvis has been monitoring the questions you have sent in to us online. rebecca? >> good morning, mr. president. >> hi, rebecca. >> not surprisingly, a number of the questions in this room today have focused on jobs. the same is true of the online community. let me read you one from a viewer who comes from an e-mail. her name is tina peak in charlotte, north carolina, and she asks, so many of the good

paying jobs have been outsourced leaving nothing but low wage jobs. how can employers feel good enough to hire again or increase wages with so much uncertainty about the economy? >> well, i think that a lot of employers are feeling more confident about the economy. as i said, the economy has not grown for a pretty good stretch of time. we're seeing terrific jobs numbers over the last three months, and we've seen sustained job growth in the private sector for over a year now. and i think the key is to recognize that some of the jobs that left aren't going to be coming back. but we've got to be creating new industries, and new jobs, here in america. and i'll give you one good example. when i took office, we had about 2% of the world's advanced battery market. those are the batteries that go in to these new electric cars and hybrid cars. in a couple of years we'll have 40% of that market.

because what we did was we invested in small businesses, medium sized businesses, and some large businesses, in michigan, giving them research dollars so that they could start developing new technologies. the same is true on green energy. creating wind turbines. creating new types of solar panels that are more energy efficient. so what we've got to be doing is looking at what are the jobs that are going to be there 20 years from now, 30 years from now, whether it's in biotech? whether it's in clean energy? whether it's in energy efficiency. and make sure that we're funneling basic research dollars there, making sure that the infrastructure is in place so that those companies can succeed. that's where a lot of these new jobs are going to be coming from. >> at the same time, though, that we've seen some job growth, there are still 13.7 million people in this country unemployed. wages have stagnated for the last decade. and you mentioned stocks are up 10% away from their all-time highs. companies are making record profits. they have $2 trillion of cash to

spend. >> right. >> if this isn't the right circumstance for raising wages and really going out and employing new people, what will be? >> well, i guess that's my point when it comes to companies. when i talk to ceos, the issue here is not uncertainty. at issue is they've got to start placing their bets on america. it is time for companies to step up. when we're in the middle of recession, our whole job was to make sure that the economy was still growing, and we stabilized the financial system, and we did that. and american taxpayers contributed to that process of stabilizing the economy. companies have benefited from that. and they're making a lot of money. and now is the time for them to start betting an american workers, and american products. and we've got some companies that are doing that. i was up at intel, the microchip manufacturer up in oregon, and they've just built a new multibillion dollar plant. and they are hiring hundreds of

new or american workers to work at this new plant. and there are i a lot of companies that are doing the right thing and making investments here. it turns out, in fact, that a lot of the advantages that other countries had in terms of low wages are now offset because quality is better here in the united states. >> we do want to switch gears a little bit here now. when we talk about the economy, so much is focused on the housing market. which in many ways started this road that we're on. nancy is joining us here in the audience. she has a housing-specific question for us this morning. >> mr. president. >> hi, nancy. >> i'm a college educated single working mom in fairfax county with an 11-year-old daughter. i've been divorced for four years and receive little to no child support. after my divorce, i worked with my mortgage company and was given a loan modification so i could afford to pay my mortgage on one income. my loan modification sends in january 2012 and although my credit is good i can't refinance the house because i owe more than it's worth. my new mortgage payment may increase up to $1,000 more a

month. and my question to you, mr. president, is do you have any plans to help improve the housing market so hard-working americans like myself don't lose our homes? >> one in four mortgages in the united states under water right now. >> this is probably the biggest headwind along with high gas prices, this is the biggest headwind on the economy right now is the housing market. part of what happened was that the housing market got way overbuilt, and a lot of people got way overextended, because of these subprime loans. and so there was a housing bubble that popped. and it's just now starting to recover. and because prices have gone down, a lot of folks are, what's called underwater. where their mortgage is higher than the value of their home. so, we've done a lot of work already on this. there have probably been about 3.5 million people who've been able to get loan modifications as a consequence of some of the programs that we've done, and encouraging banks to negotiate.

because our attitude is, you know what? you're going to be better off, speaking of the banks, you're going to be better off if somebody is still paying on their mortgage, than if they get foreclosed on, and you end up not only having to go through all those legal processes, but you also end up selling the home in a fire sale price. and some banks have been better than others on this. but we've got more work to do. so, we are trying to expand the loan modification program to reach more people. >> a lot of what you've first introduced has worked very well. >> well, it's not that it hasn't worked. the problem is that the need is so great. so it's like you have a huge pothole and you only have so much gravel. and if you're talking about $5 trillion worth of home values, and a program that only is a few billion dollars, then there are a lot of people who are not going to be helped. and so what we're trying to could is to figure out how can we get the banks to do more.

and we're going to continue to work with congress to see if we can propose more legislation, take and encourage longer loan modifications. i'm not sure of your particular circumstance, but if you've already gotten a loan modification, i don't know why it would expire in 2012. it seems to me that it should be able to continue if you are making regular payments on it. >> it was just for three years and they won't extend it, as far as i know. >> and this is why -- >> maybe you could make a call. it worked for -- >> this is why we're going to be talking to the banks. . i mean on a regular basis our attitude to them is, how do you benefit if the house goes into foreclosure? you know, if somebody's there, they're making regular payments, you know, stick with those customers. and remember, we helped the banks a lot. as everybody here knows. now, i know this was probably the most unpopular thing that

government has maybe ever done, was helping banks who helped cause the crisis. and the program, the t.a.r.p. program was in place when i was sworn in. we tried to manage it in an effective way. and the truth is that we have -- the taxpayers have gotten their money back from the banks. they've paid back the money. in fact we'll end up making a little bit of profit on it. but the point is, the bigger point is, if we were there for you, when you got the trouble, then you've got to be there for the american people when they're having a tough time. and that's why, in addition to the short-term loan modifications, we want to see if we can get longer-term loan modifications, and in some cases, principle reduction which will be good for the person who owns the home. but it will also be good for the banks over the long term. >> let's get another question right here. anna, where are you? there you go. >> hi, mr. president. as you are well aware, small businesses make up about 40% of

the gdp, and employ the majority of public sector -- private sector employees. what can your administration do to ensure that any new laws and regulations not only not hurt small businesses, but, in fact, help them grow and thrive? >> well, it's a great question, and you're exactly right. small business employs the majority of americans. and, it's an area where we see the fastest job growth. so -- and by the way, they were the ones who were probably hardest-hit during the recession. so what we did was put in a whole bunch of emergency lending provisions, because small businesses were having the hardest time getting credit. and the sba, the small business administration, went out and, you know, real hard, to these folks and said, how can we help you get to financing to keep your doors open and make payroll? the second thing we did was we cut taxes on small businesses.

and i want everybody to hear this, because a lot of times the rumor is perpetrated that somehow we've been raising taxes. we've cut taxes for small businesses 16 times. we cut taxes for the investments they make in new equipment. we cut taxes for the costs of health care premiums that they pay for their workers. we cut taxes for capital gains that they may obtain because they started up a business. so we have cut small business taxes significantly. >> but as a small business person do you feel overregulated? because that's the other theme that we've heard over the past two years. >> part of it is that i'm taxed because, as a small business owner, my business' income is my income so i feel like i'm being taxed higher than somebody, you know, who earns a regular job with the same amount of income. >> what kind of business do you have? >> i am a researcher. i help companies figure out how

to work the federal government. >> well there you go. well, i tell you, there are some legitimate complaints about regulations. a lot of it is overstated. but there's no doubt that, let's say applying for a loan sometimes through the sba, we found that the paperwork was way too complicated. a lot of times if you want to -- everybody knows this example, if you are filing your taxes and you want to take advantage of one of these tax breaks, if you end up having to hire some accountant and pay them thousands of dollars to get the tax break, it takes away whatever savings you were going to have. so we've got to do more on simplification. hopefully you'll see some improvements over the next couple of years. >> our next question is from a self-employed accountant. so if you need a little help, bernard miller has a question for us.

>> how you doing, mr. president? >> good. >> first i'd like to thank you for the great job you did last weekend keeping america safe. and my question to you is, your proposed budget changes to medicare, i'd like to know how they still will be able to keep the 45-year promise that's been made to the american public. >> well, let me talk about the budget, overall, and then talk about medicare in particular. because this is something that you're going to be hearing a lot about in the weeks and months to come. when i came in to office, i had wrapped in a big bow waiting for me as a present a $1 trillion deficit. and part of the reason was is that for the last ten years, we cut taxes, but we didn't pay for those tax cuts.

and we didn't have corresponding spending cuts. we started two wars and then we started a new prescription drug plan that was very, very expensive. and all that created what's called a structural deficit. just -- and all that means is more money was going out than was coming in. then you had the recession, and that made things worse. because, first of all, we had to help state and local governments with their budgets that were falling apart. a lot more people were getting unemployment insurance. a lot more people were making demands on the system. and less tax revenue was going in. so that grew the deficit temporarily. all told now, we're looked at trillions of dollars of debt, and we've got to get that under control. and i don't care whether you're a republican, a democrat, whatever your politics are, we can't keep on living beyond our means. and our government has to make sure that it is only spending what it's also taking in.

what we've done is we've proposed $4 trillion in deficit reduction over the next 12 years. and republicans have also said that they think that $4 trillion over 10 to 12 years is the right number. but we have very different ways of going about how to reduce the deficit. what we've said is, let's look at all the spending we're doing and making sure that we're doing it in -- we're doing what we should be doing and stop doing things that aren't benefiting the american people. and we think we can identify $2 trillion worth of cuts in spending. including defense spending. which has grown very, very rapidly over the last decade. but also including some things that i care deeply about. some programs that i think are good to have, but are not absolute necessities. but that only gets you about half of the way there. so what i've also said is, let's get a trillion dollars in

revenue from those of us who can afford to pay a little bit more. because i think the concept of shared sacrifice is something that most americans believe in. now, the tax rates generally for individuals are the lowest that they've been since 1958. they're especially low for millionaires and billionaires. and for folks like me. you know, i can afford to pay a little bit more. and if we got a trillion dollars of revenue from high-income americans who've been blessed by this great country of ours, we would also then save a trillion dollars in interest so we'd get to that $4 trillion. now what the republicans say is, we're not going to ask any sacrifices from folks like me. in fact, i get a $200,000 tax cut, and in order to pay for

that, we're going to slash education by 25%, we're going to cut transportation by 33%, we're going to cut investments in clean energy by 70%, and that doesn't, from my perspective, make sense if we're concerned about how do we create jobs for the future. one last point with respect to medicare, though. i'm sorry, harry, but this is a big question. so, in addition to the first ten years, we've still got to deal with the long-term problem, which is our health care costs are skyrocketing. both in the private sector, and in the government-run health care programs. and unless we control those costs, it's going to gobble more and more of our budget. now, the health care reform act that i passed last year started on the road of reducing health care costs, and, in fact, it's estimated that we'll save about

$1 trillion once we implement that plan fully. but we're going to have to do more. and that's where this issue of medicare comes in. what i've said is, let's continue to try to improve the health care system by, for example, reducing unnecessary tests. if you go in to a doctor, and the doctor's testing you once, well, if you then go to a specialist, he should just e-mail the test. you shouldn't be charged to have another test at the specialist's office. right. or medicare shouldn't be charged for that. about 80% of the patients, or about 20% of the patients account for about 80% of the cost because they have chronic illnesses. how can we manage those chronic illnesses more effectively? so what we've proposed is, let's continue to make the system smarter, to reduce medicare costs. what the republican proposal is, is to basically just say, we're only going to pay this much and we're going to create a voucher system for medicare. here's the amount of money that you get, and then if health care costs keep on going up, that's your problem.

and it's estimated that that's going to cause an additional $6,000 for the average medicare beneficiary. $6,000 per person. and, again, if the choice is between me getting a $200,000 tax break or 33 of you folks who eventually, or your parents or your grandparents, having to pay $6,000 more for medicare, i know the choice that i'm going to be making. i'd rather make sure that i'm carrying some of that sacrifice so that our seniors have security over the long term. >> thank you very much, mr. president. we're going to take a break.

there's still a lot of pain in this country, and there's still a lot of people who are saying, when is it going to start breaking my way? and mr. president we just really appreciate you taking the time to spend some time with our

audience and answer our audience and our online questions, as well. we really appreciate it. >> well, harry, i appreciate you guys hosting this. to the audience, not only here live, but who are watching, just remember that we've gone through tougher times than this. we always come out on top. bernard was nice enough to thank me for what we did a week ago. obviously that's because of our men and women in uniform, as well as great intelligence work. but it's an example of, when america puts its mind to it, there's nothing we can't do. the same is true for the economy. if everybody is pulling together, democrats, republicans, business, labor, if everybody is focused on how we are investing in this future, how we're making sure our kids are getting the best education. how we're making sure that we're building good infrastructure, how are we getting our debt under control in a way that shares the burden, if we do those things, we are going to be as strong as ever, and i'm confident we're going to be able to do that. >> mr. president, thanks for being with us today. thanks to all of you who came

in, as well. thanks to the folks who submitted their questions online. >> you can see more of the town hall meeting on the economy with president obama sunday morning on "face the nation." and to view the entire town hall meeting all you have to do is go to youtube.com/cbs or cbsnews.com and be sure to logon to cbsnews.com for a special edition of "washington unplugged" with reaction from our participants here today. and it's how well they felt like they got their questions answered. and our most sincere thanks, also, to president obama, all of our questioners, and our studio audience. and our host here today, the ninth studio at the newseum in washington washington. mr. president, thank you very much. >> thank you. i enjoyed it. >> very good. ,,,,,,

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headlines... today - san jose state officials are expected to na good morning, it is 8:55. i'm elizabeth wenger with your cbs 5 headlines. today san jose state officials are expected to name the three people dead in a murder-suicide. we are told they have ties to the university but official not saying whether they were students. a campbell mother is charged with felony child abuse with her own three-year-old daughter. officers are searching for her ex-boyfriend. police say they found evidence of abuse yesterday while conducting a welfare check at jane marin's home. the mother and daughter were found a short time later. the long wait for new driver's licenses in california is over. the "sacramento bee" reports the dmv is now sending out new

licenses in 3 to 4 weeks of people sending in renewals. there had been a four-month wait blamed on the company that makes the new version of those licenses. traffic and weather coming right up. stay with us. ,,,,

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one of our slowest commutes is silicon valley westbound 237. an earlier accident you can see it's jammed exiting milpitas from 880. it's pretty long line of brake lights all the way out towards 101 as you make your way towards san jose. bay bridge, kinds of hard to tell you about it's better than normal backed up beyond the west grand overcross. slow down -- 33 minutes from the carquinez bridge to the maze so sluggish through berkeley. golden gate bridge looks great. lawrence has weather. >> sunshine in most spots today, temperatures warming up. still it is going to be cool at the beaches 50s and 60s here. 60s and 70s elsewhere and you know what? as we look toward tomorrow another similar day a lot of sunshine after patchy fog. and then as weigh head toward the weekend clouds -- then as we head toward the weekend, clouds roll in and rain on

saturday night and sunday. ,,,,,,,,