Teachers Get Free Plastic Surgery; Dow Jones Hits Historic 13,000 Mark
MALVEAUX: We also are following another story, free plastic surgery for teachers. It kind of sounds bizarre, right? But it is not if you live in Buffalo, New York. For the last 40 years, teachers there, they've been getting Hollywood star treatment on the taxpayer's dime. Last year, the district actually spent almost $6 million -- we're talking facelifts, breast implants, you name it. Meanwhile, they're $42 million in debt. Gary Tuchman, he's got the story.</s>TUCHMAN (voice-over): This Buffalo plastic surgeon has a lot of happy patients.</s>VALERIE AKAUOLA, BUFFALO, NEW YORK TEACHER: Let's just suppose that I was a woman who weighed over 300 pounds and I lost maybe 150 or 160 pounds.</s>TUCHMAN: Indeed, that's what happened to Buffalo school teacher Valerie Akauola. But it's not just the results that make her happy, it's the sweet deal that she gets, the sweet deal that all the 3,400 teachers in Buffalo are eligible to get. Under one of their insurance plan options, they're billed nothing for any plastic surgery procedure such as Botox, liposuction, tummy tucks. And there is no deductible. Linda Tokarz teaches second grade and says she gets regular treatments.</s>LINDA TOKARZ, BUFFALO, NEW YORK TEACHER: I think it's great for us. I wouldn't want to see it taken away.</s>TUCHMAN: Dr. Kulwant Bhangoo has been a plastic surgeon in Buffalo for about 40 years.</s>DR. KULWANT S. BHANGOO, PLASTIC SURGEON: I feel that the teachers have paid their dues, and I think it would be wrong to take it away from them.</s>TUCHMAN: While he does have plenty of non-teacher patients, Dr. Bhangoo does say three out of every 10 are Buffalo teachers, and the school district insurance covers every single penny.</s>BHANGOO: They would come in for, like, hair removal on their lips, face.</s>TUCHMAN (on camera): Do they also come in for liposuction?</s>BHANGOO: Yes.</s>TUCHMAN: Breast enhancement?</s>BHANGOO: Yes, they do.</s>TUCHMAN: Facelift?</s>BHANGOO: Yes.</s>TUCHMAN: Rhinoplasty?</s>BHANGOO: Yes.</s>TUCHMAN: So it's busy?</s>BHANGOO: Yes.</s>TUCHMAN (voice-over): Dr. Bhangoo is one of many plastic surgeons who advertise in, where else? The teachers' union newsletter. Last year, Buffalo schools spent $5.9 million on plastic surgery, which is also known as a cosmetic rider. The Buffalo teachers have had this rider for nearly four decades.</s>LOUIS PETRUCCI, PRESIDENT, BUFFALO, NEW YORK BOARD OF EDUCATION: I've been unable to identify another district that has cosmetic riders for teachers.</s>TUCHMAN: Now, you might think Buffalo School District must be flush with cash to be offering perks like free plastic surgery, right? Wrong. Louis Petrucci, the president of the Buffalo Board of Education, says he's projecting a $42 million deficit in next year's budget. (on camera): If you had this $5.9 million that wasn't being spent on plastic surgery, what would you be doing with it now?</s>PETRUCCI: Hiring about 240 teachers.</s>TUCHMAN: You don't have to be a brain surgeon to know that a plastic surgeon or a teacher would like this policy more than the typical taxpayer. But the teachers will tell you there's a lot more with the story. They say their contract with the city expired nearly a decade ago, that negotiations have failed. (voice-over): And they add they are woefully underpaid. It's quite interesting to hear what the president of the teacher's union says about the plastic surgery benefit.</s>PHILIP RUMORE, PRESIDENT, BUFFALO, NEW YORK TEACHERS FEDERATION: We've told the district, you know, from the beginning of negotiations six or eight years ago that we're willing to give it up. And as long as the district comes back to the table with us and negotiates with us it's gone.</s>TUCHMAN (on camera): Do you feel that as a gesture of good faith, the union should say, teachers, no more free plastic surgery?</s>PETRUCCI: It would be a wonderful gesture of good faith.</s>RUMORE: We're willing to give it up. All the district has to do is come to the table and negotiate it with us.</s>TUCHMAN: But you're not willing to do it unilaterally?</s>RUMORE: No.</s>TUCHMAN (voice-over): The fact is that police and fire fighters in Buffalo have similar plastic surgery programs, but those departments are not dealing with the same financial programs as the economically challenged school system.</s>UNIDENTIFIED MALE: Everybody works for a living. They should pay their tithes and offerings like everybody else.</s>UNIDENTIFIED FEMALE: I don't think it's right the taxpayer has to pay for that. Not for free anyway.</s>TUCHMAN: But at least for now, the policy remains in a school district with a unique mix of brain and beauty. Gary Tuchman, CNN, Buffalo, New York.</s>MALVEAUX: We want to hear what you think about this story. Should school teachers get free plastic surgery, paid for by taxpayers? Send us your thoughts, Facebook.com/SuzanneCNN. We're going to read some of those comments on the air. We've got breaking news here. I want to bring in the best of the best here. We've got Christine Romans and Alison Kosik at the New York Stock Exchange. We have seen the Dow hit that magic number, 13,000. It has dipped just a little below right now, it's not quite at that number, but we did see it during our story that we aired. I want to go to you, Christine, first. Tell us what this means.</s>CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, first of all, your life hasn't changed from this very moment that it did two minutes ago. OK?</s>MALVEAUX: OK.</s>ROMANS: And neither did your money, really. But 13,000, you know, it's one of those milestones. Every time we hit one of these round numbers, people like to take stock and say, wow, that means that the 30 big companies that make up the Dow Jones Industrial Average are doing well. These companies are doing well, so their stocks are doing well. We haven't really seen this kind of optimism about the stock market in three or four years now. So that's what is driving this. Now, there are those who would say, but wait, this doesn't mean the companies are letting go of all that cash they are sitting on, it doesn't mean they are hiring aggressively. The companies that are really doing all the hiring are small-and-medium-size companies at this point. But it does show you that the money you have in your 401(k) is doing a little bit better right now. The S&P; 500 -- that's 500 stocks -- it's a better indicator, as Alison and I like to point out, better indicator of what's in your 401(k), that's up more than 8.5 percent so far this year. So stocks are telling us that the economy is slowly healing, they are not so worried about Greece anymore, and that the way the jobless situation is, at least static for now, is something that -- something the stock market likes. So that what is you're seeing right here, although, boy, this has been just tantalizing, this 13,000 that we're hitting for a second and then pulled back.</s>MALVEAUX: Right. It was two seconds. Is there any significance to that at all, or is it just the fact that it's hovering around 13,000 is really what's the big deal here?</s>ROMANS: Yes. I mean, and people who are making their orders in the stock market right now, I'm going to be honest with you, they are not buying or selling because they we're so close to 13,000. They're buying or selling because they want to buy or sell that particular stock or that particular index. So it's flirting around here because it is just a psychological number. Sometimes these round numbers can be what we call technical resistance or targets like that, but this is really just a psychological number here.</s>MALVEAUX: All right. Alison, want to bring you in here. You're at the New York Stock Exchange. How are they reacting to this? What are they saying? What are they doing?</s>ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, a plume of balloons did not come down from the ceiling. I'll tell you that. That did not happen. What did happen is you heard kind of the sarcastic cheer come from the floor. You know, people having sort of that sarcasm about that 13,000 number because of a lot of what Christine said. Your life isn't going to change because the Dow crossed over 13,000 ever so slightly. But you can't deny that it is an important psychological milestone for a lot of people, a lot of people look at the Dow for confidence as far as how good the economy is doing. Whether that is right or wrong, some people see how stocks are performing as how they equate it to how the economy is performing overall. And you know, the Dow has come a long way from where it has been. It's made up a lot of ground and it hasn't just happened over the past week. It's been happening over the past several months despite all the uncertainty as to whether or not Greece would security the second debt deal. The markets have been reacting to favorable economic reports that have come out lately on jobs, housing, GDP. GDP is weak but growing. What you see are stocks, our investors reacting to an improving economy.</s>MALVEAUX: Alison, out of all the things you mentioned, you said the economy, jobs, some of the reports about unemployment, which one do you think is the strongest indicator, which one is driving these investors to be a lot more confident in their investments now?</s>KOSIK: When you take them overall, the whole package, but if you want to pull out I think it's the jobs number. When you see an economic recovery happen, it's really jobs and the housing market that are kind of the laggard. The fact we're seeing improvement in the jobs market, that's a good sign. If people get jobs, they will have more money and that makes the economy turn around -- Suzanne?</s>MALVEAUX: Go back to Christine real quick. Christine, you had talked before about this good economic picture here, bright economic picture, especially when it comes to creating jobs. But not everybody is really feeling this the same way. There are some benefiting and some who are really suffering. Why is it that we don't see kind of a universal uplifting of everyone when it comes to the recovery?</s>ROMANS: Wouldn't that be great? They are calling it a jobless recovery. There are concerns from the Fed chief and others in fact you have a lot of people out of work for six months or longer who are structurally unemployed, meaning very difficult to get them back in the labor market. And that is something the big economists are studying, trying to figure out what it does to society and the job market. Look, you talk about demand for high-skilled machinists that companies can't get. Demand for engineers. It's engineer week, by the way. Cue all your engineer jokes at the moment. Scientist, mathematicians, very highly scheduled specific jobs they're trying to hire people to do those. and then you have all these people saying wait a minute, I'm skilled, ready to work, but I'm not finding my place in this economy. When you look at a Dow at 13,000 and contrast it with what people are telling you at the kitchen table, it's a very two-speed recovery. It's also something that makes it difficult for the president. This is the highest the stock market has been since his presidency. Gas prices are up. Long-term unemployment is a problem. 8 percent in unemployment is too high. Every one of these indicators is telling us things are better, remind us how far we have to go.</s>MALVEAUX: What are the kinds of jobs that are actually coming back? Who are these people who are hiring and investing in the companies?</s>ROMANS: We have a lot of temporary jobs coming back. We've seen mining is an industry hiring, petroleum engineering, anything has to do with engineering. There's a huge shortage of skilled and licensed truck drivers, for example. We've been sing jobs in health care, jobs in retail. Here's the biggest growth, retail, leisure and hospitality, basically waiters and people in the service industry who, in some cases, are not making as much money as the big manufacturing jobs we have been losing for 20 years. So there is the structural shift. What will the labor market look like? How much money will the wages pay into the tax base? What kind of society will we build from them? These are big history-book kinds of questions being asked right now even with the Dow at 13,000.</s>MALVEAUX: Christine Romans, thank you very much. Alison Kosik, thank you as well. We're keeping our eye on the Dow Jones. The Dow Jones hit the historic mark, 13,000 mark. We're breaking it down for you, telling you what that means. We'll move on because we know President Obama is trying to build some momentum from the payroll tax extension. Now his message to Congress is cooperate. Right? We cooperated on this, let's cooperate on other things. We hear from the president live this hour.