JOHN HOCKENBERRY: We're very pleased to be joined by the man at City Hall in the city of Philadelphia, Mayor Michael Nutter. Good morning Mr. Mayor.

MAYOR MICHAEL NUTTER: Good morning John, Celeste.

JOHN HOCKENBERRY: In Philadelphia, how much has the federal government done to help specifically the types of problems that bear directly on the recession's impact on property values and city budgets and deliveries of services?

MAYOR MICHAEL NUTTER: Well, let me say that while we're deeply appreciative of the Recovery Act and the great work that President Obama and the Congress did, $787 billion which is starting to get out into the streets, for pure city issues, and our city budget situation in Philadelphia, we can't use those dollars to plug budget holes. And so we've got to do those things on our own. And that's the case with most cities across the country, who are very appreciative of the American Recovery Act dollars, they don't do anything for our budgets. We've had to deal with $2.4 billion dollars worth of a budget gap over a five-and-a-half year period. And we've got to solve that on our own. That's anywhere from layoffs, to stopping tax reductions, cutbacks in services and programs, a wide array of actions. So what I refer to as a shared sacrifice, in a series of budget moves, everyone has been effected in the city of Philadelphia. Getting people back to work, which of course is the recovery act, we're getting some dollars out, people are being trained in solar panel installation, re-paving roads, et cetera et cetera. But as Tom Cochran, from the U.S. Conference of Mayors says, everyone's not going to jump on a backhoe, and everybody's not going to be a solar panel installer, so somewhere in between that, I've had to lay people off. Mayors all across America have had to lay people off. Mayor Bloomberg in New York, Mayor Menino in Boston, Mayor Franklin in Atlanta, you go down a whole laundry list, everyone has had the same challenge, and what we're saying is, that there are things that the federal government can do. Targeted assistance in areas where you have high unemployment. My unemployment rate in Philadelphia is 11.1%, and unfortunately it will probably continue to grow through 2010.

JOHN HOCKENBERRY: Well Mayor, are you making an argument for a return – because of the severity of this recession – to what went on under the Nixon administration, block grants, where you had unrestricted federal revenues going to cities to deal with their own priorities at the local level?

MAYOR MICHAEL NUTTER: Well we have block grant funds right now; community development block grant, community service block grant, CDBG, there's a new energy efficiency and conservation block grant, there's the cops program. All block grants, formally based usually on population and poverty et cetera, that's direct aid to cities with guidelines, reporting responsibilities and accountability, we know how to do that. So I'm suggesting here those programs are good, we just need more funding, and they work, and the federal government knows it. And they've been doing some of these for thirty some odd years. Transportation is another area. Those kinds of supports are well-known; you can go back to UDAC, or Urban Development Action Grants – one of the hotels in Philadelphia was built with the support of an Urban Development Action Grant. Those put people to work in family-sustaining jobs, whether it's on the construction side, or also on the permanent job site. And so cities have a special role to play, cities and metro areas. We heard last year all the discussion about this industry, too big to fail, this industry, too big to fail.

JOHN HOCKENBERRY: The banking industry.

MAYOR MICHAEL NUTTER: City and metro economies are too important to fail. They cannot fail. We don't go out of business: We pay our bills. And so there needs to be a re-evaluation of the relationship between the cities and the federal government. One of the big challenges is the President and the Congress, when they have a problem they just call up Secretary Geithner and say "print more money." We don't print the money in cities.

JOHN HOCKENBERRY: Mayor, I'm sensing a certain amount of frustration here, and while in theory you see eye-to-eye with President Obama, the federal government isn't moving as quickly on urban issues as it has on treasury issues and dealing with AIG and Goldman Sachs, and that involves real human beings.

MAYOR MICHAEL NUTTER: Well it does. And look, I understand you have to stabilize the financial system. Without it where would any of us be? So the President has had to systematically and strategically look at how to deal with these issues. Remember, the bulk of this started while he was still a candidate. And he had no office and no power and still put forward ideas in a post-election environment leading to of course the economic recovery package. But cities and metro areas need a different kind of assistance than the banking industry and the auto industry. And those industries are important. But eighty some-odd percent of the American public lives in a city or metro area. In order for the President to accomplish his goal of saving or creating three-to-four million jobs, that will only happen in cities, metro regions and metro economies.

JOHN HOCKENBERRY: At what point – and this is the final question – you won by a huge majority, a huge landslide in Philadelphia. At what point does your political constituency become threatened by lack of action on the part of the federal government?

MAYOR MICHAEL NUTTER: Well, I think you'll see, whether it's in Philadelphia or any other city across the country, I mean the citizenry is still pretty angry, mad and confused about what's going on. And again, on the ground we've had to make some very very tough decisions. Every program, every service we have has a constituency, and some have been upset by actions I've had to take and others have had to take as mayor. And we saw earlier this year, this has been a tough year politically for incumbents to run and we saw some upset races. None of us created this. I'm a mayor of a city and my primary job is having officers on the street that make the streets safe, we pick up trash, we fill pot holes, I mean I didn't lend anybody money. I didn't create derivatives. But when the public get angry, they take it out on their elected officials.

JOHN HOCKENBERRY: You're definitely on the front lines there. Mayor Michael Nutter of Philadelphia, thanks so much for joining us. We're gonna leave it there, but certainly the City Hall in Philadelphia is one place that's on the front lines of this recession.