WOLF BLITZER: Let's go to the White House right now. Valerie Jarrett is a senior adviser to President Obama.

Repulsive, he says. He was there at the creation of TARP, and he says there was never any notion that this TARP money, which was supposed to help the financial sector, would be used to try to do something else.

VALERIE JARRETT, SENIOR PRESIDENTIAL ADVISER: Well, the whole point in helping the financial sector was to jump-start the economy and help bring down the unemployment rate.

Let's face it, Wolf. We still have a 10 percent unemployment rate. And although certainly as a result of the president's bold action when he first took office, he brought the economy back from the brink of disaster, and we're beginning to turn it around, but we still have far too many Americans who are unemployed.

And, so, I think it's very prudent to do what we can to bring down that unemployment rate. To the degree we are able to bring down the -- the unemployment and get the economy going again, that will help bring down the deficit. That's the way we have a long-term, sustainable, healthy economy, both in the public and in the private sector.

BLITZER: But -- but he says -- and a lot of other Republicans agree -- that TARP, troubled asset, that's what we -- what you were talking about when you created this whole program, and it had a specific purpose. And if you want to try to redirect that money, you need to go back to Congress and authorize it.

JARRETT: Well, let's talk about it in segments. The small-business initiative that the president announced today that will help small businesses have a better way of growing and expanding and investing in our country, that is eligible for TARP. Now, in terms of the infrastructure and the second -- third piece, which is to help consumers retrofit their homes, we're going to work with Congress. This is going to be a collaborative effort.

(CROSSTALK)

BLITZER: So, there will be legislation required to make this change?

JARRETT: There probably will be legislation. We're going to be working with Congress.

The president announced today what he thinks are the three critical initiatives that will help jump-start the economy, bring down unemployment in a very targeted and focused way, where we get the biggest bang for our buck. And -- and this didn't happen in a vacuum.

Let's face it, Wolf. The president and his economic team have been working on initiatives for a long time. His financial economic recovery board has recommended a series of initiatives that are included in today's announcement. And, just last week, we had a jobs forum where also several of the initiatives that he included today were a part of the jobs forum recommendations.

And this is an ongoing effort.

BLITZER: All right.

JARRETT: This is something that he's been focusing on, as you know, Wolf, since the day he took office.

BLITZER: And we're talking about $200 billion. Is that what the president wants to take away from TARP and use for these other initiatives?

JARRETT: There isn't a dollar amount that has been established yet. This is -- these are three key initiatives. We're going to be working and figuring out what is the right dollar amount. And we're going to figure out how much should go for these initiatives.

BLITZER: But is that the ballpark?

JARRETT: I don't even want to say what the ballpark is, because some of it may go to reduce the deficit. Some of it may go to the new programs.

But what I think the real message here today is, is that we have to do everything within our power to bring down the unemployment rate and to help small businesses grow, put investments back in our infrastructure, which will be good for our country and also create jobs. And we have to be more energy efficient.

And, so, what better way than have consumers get a credit for working to retrofit their homes? So, these are key initiatives that are at the backbone of the president's way of helping bring down the unemployment rate.

BLITZER: All right.

JARRETT: And we're also open to new ideas. So, as opposed to people being critical...

BLITZER: Let me...

JARRETT: ... let's figure out a way to work with us and let's see how we can get Americans working again.

BLITZER: As you know, you're getting a lot of grief from some of your closest allies on the Hill, including some really strong supporters of the president, like John Conyers of Michigan.

Listen to what he recently said.

(BEGIN VIDEO CLIP)

REP. JOHN CONYERS (D), MICHIGAN: You know, holding hands out and beer on Friday nights in the White House, and bowing down to every nutty right-wing proposal about health care, and saying on occasion that public options aren't all that important is doing a disservice to the Barack Obama that I first met.

(END VIDEO CLIP)

BLITZER: And today he told "The Hill" newspaper that the president recently called him and asked him to stop "demeaning him." That's John Conyers, who is a close friend and ally of this administration.

Is this what's going on right now, that you're losing some of your most ardent supporters?

JARRETT: No, I don't think so. Listen, we have a great deal of respect for Congressman Conyers. He's a huge supporter. He's worked very closely with the administration.

He represents a state, Michigan, that has been very, very hard hit, has one of the highest unemployment rates in the country. Certainly he's frustrated. We share his frustration, and of course look forward to working with him and all the members of Congress to figure out how we can tackle the problems that we have ahead.

The president inherited a mess. Let's face it, the largest national deficit in our nation's history, an economy on the brink of a meltdown, two wars, a health care crisis, an energy crisis, a public education crisis, a confidence crisis in terms of how we're perceived around the world. He inherited a full plate. And what he has done every day, Wolf, is to reach out and work with members of Congress and try to deliver on behalf of the American people.

BLITZER: How often does he call friends of his up on the Hill and ask them, you know what, stop demeaning me?

JARRETT: Wolf, listen, I don't know. I know that he and Congressman Conyers have a very close friendship. I think they have the kind of relationship where they can call each other any time they want and talk about issues that are important to the two of them. But I don't think you should be distracted by that.

I think you should be focused on, what are the two men doing to work together? And nine times out of 10 we're agreeing on issues, we're working constructively together. And if once in a while they blow off a little steam and have some frustration, I think that's fine, too.

BLITZER: All right. Let's quickly talk about Desiree Rogers and the White House's decision not to let her go testify before the House Homeland Security Committee.

This is what the president, then senator, said about transparency and executive privilege back in 2007.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), ILLINOIS: There's been a tendency on the part of this administration to try to hide behind executive privilege every time there's something a little shaky that's taking place. And I think, you know, the administration would be best served by coming clean on this.

(END VIDEO CLIP)

BLITZER: That's what he said about the Bush White House back in 2007. Tomorrow, we expect the House Homeland Security Committee to issue subpoenas to the Salahis to come and testify.

Is the White House rethinking its decision to prevent Desiree Rogers from testifying?

JARRETT: Listen, Wolf, with the full support of the president, Mark Sullivan, who is the director of the Secret Service, went forth last week and testified openly and fully and transparently before Chairman Thompson's committee. The Secret Service is solely responsible for the president's safety. They took responsibility for what happened when the family -- uninvited couple was admitted into the White House at the State Dinner, and they have had an open and transparent discussion with the committee.

And, moreover, deputy chief of staff Jim Messina released a report he did taking a look at what the White House did overall, including the Secret Service, and he said, yes, we should have done a better job. We should have had people at the gate working hand in glove with the Secret Service to make their jobs easier.

That's really it. That's all there is.

BLITZER: But what would have been the big deal if Desiree Rogers would have actually gone up to the Hill and said, you know what, we probably should have had a representative from the Social Office there checking off names at the gate, we made a mistake but, you know, it's not going to happen again? What would have been the big deal if she would have gone before the committee?

JARRETT: Well, I think what's important is that we were open and transparent. If you look on our Web site, WhiteHouse.gov, you will see Jim Messina's memo. It's open, it's clear.

We accepted responsibility, we shared responsibility with the Secret Service. And case closed. And so, now, ,I think it's important that we move on.

And the Secret Service will continue their investigation. They'll determine what to do in terms of safety. But they're the ones who are principally responsible for the president's safety, and they assume that level of responsibility. And we're going to do our job to make their job easier.

BLITZER: So if they continue to seek her testimony, she's not going to go?

JARRETT: Well, I don't think so, Wolf. I don't think so.

BLITZER: Valerie Jarrett, thanks very much for coming in.

JARRETT: You're welcome.