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CNN LOU DOBBS MONEYLINE
Bush: No Doubt WMD Will Be Found in Iraq
Aired June 5, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN HOST: Good evening, everyone.
Truth be told President Bush today said there is no doubt that the truth will be revealed about Saddam Hussein's biological and chemical weapons. Our senior White House Correspondent John King will have that report.
And, capital ideas, Senator John Breaux of Louisiana will be here to tell us about a landmark agreement to reform Medicare and to provide drug coverage.
And, Democratic presidential hopeful, Senator Joe Lieberman joins us to discuss his ambitions and plans for the economy and the country.
And, troubled times, the two top editors of "The New York Times" today resigned; they finally take responsibility for the Jayson Blair scandal. Peter Viles will have that report for us.
ANNOUNCER: Live from Washington, this is LOU DOBBS MONEYLINE for Thursday, June 5.
Here now, Lou Dobbs.
DOBBS: President Bush today said that the United States will find out the truth about Saddam Hussein's weapons of mass destruction. The president told coalition troops in Qatar that Saddam Hussein spent decades hiding tools of mass murder.
Senior White House Correspondent John King has the report.
(BEGIN VIDEOTAPE)
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT (voice-over): The final stop was a pep rally, the commander-in-chief thanking the troops and dismissing those who say there was no reason to go to war to begin with.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: No terrorist network will gain weapons of mass destruction from the Iraqi regime because the Iraqi regime is no more.
KING: Mr. Bush faces scrutiny in Congress from some Democrats who question whether the administration exaggerated the extent of Iraq's weapons programs and Parliament is putting even more heat on the British Prime Minister Tony Blair.
But as he visited the U.S. military command post in Qatar, Mr. Bush was anything but apologetic.
BUSH: This is a man who spent decades hiding tools of mass murder. We're going to look. We'll reveal the truth.
KING: U.S. public support for the war remains high and administration officials say they see no political damage from the fact that no banned weapons have been discovered so far.
The Iraq war was an issue at every stop of a weeklong trip that included fence mending with Russia and another prominent war opponent, France. Mr. Bush sees the war as part of an ongoing evolution in the Middle East and was upbeat about the post-war transition despite festering complaints.
BUSH: Day by day the United States and our coalition partners are making the streets safer for the Iraqi citizens.
KING: U.S. troops are leaving Saudi Arabia but are welcome here in Qatar and Mr. Bush called on Emir Hamad bin Khalifa Alfani (ph) to say thanks. The new Israeli-Palestinian peace effort is the most dramatic change and, as he heads home, the president says he is optimistic his hands-on diplomacy will quickly bring progress.
(on camera): The president used an old cowboy term to describe his personal role in the peacemaking in the days ahead saying he will not hesitate to pick up the phone and "ride herd" if either the Israelis or the Palestinians are slow in keeping their new commitments.
John King CNN Doha, Qatar.
(END VIDEOTAPE)
DOBBS: And, President Bush aboard Air Force One expected arrive at Andrews Air Force Base here in Washington this evening. We'll be bringing that to you as soon as the president does land here.
A major change in the U.S. military commitment in South Korea tonight, the 2nd Infantry Division will be moved to bases at least 75 miles south of the demilitarized zone that separates North and South Korea.
Senior Pentagon Correspondent Jamie McIntyre has the report.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): The new strategy calls for pulling U.S. troops back from near the DMZ out of range of North Korea's more than 11,000 artillery pieces, and instead consolidating them south of the South Korean capital of Seoul where they would be poised to launch a quick attack on the north in the event of war.
That may sound provocative like the U.S. may be planning a first strike, but in meetings with South Korea's president this week, Deputy Defense Secretary Paul Wolfowitz insisted the moves are defensive, designed only to increase deterrence.
PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: People may issue rhetoric about those kinds of enhancements. I think in both the short run and the long run, enhancing deterrence contributes to less tension on the peninsula, not more.
MCINTYRE: Currently, the roughly 14,000 troops of the U.S. 2nd Infantry Division are scattered among two dozen small camps between the DMZ and Seoul. The first phase of the plan would consolidate those troops in just two camps, and in the coming years after real estate is located and new facilities built, all U.S. troops would be concentrated at two hubs, one around the Osan Air Base south of Seoul, another farther south near Taegu.
And, applying concepts tested in the Iraq war, the U.S. plans to send the Army's new, more mobile Striker combat vehicles to Korea to provide a lighter force that can capitalize on speed, and more Patriot missile batteries which shot down Al Samoud missiles during the war will be sent to Korea as well. All tolled the U.S. has agreed to spent some $11 billion upgrading its capabilities.
(END VIDEOTAPE)
MCINTYRE: It's still not known whether the reduction, whether the troop plan will allow an overall reduction of U.S. troops. It will take some years to implement but it is believed that in by just consolidating the troops into two locations, there will be an ability to reduce the number of support troops -- Lou.
DOBBS: Jamie, thank you very much, Jamie McIntyre our Senior Pentagon Correspondent.
One American soldier was killed five others were wounded, by a rocket-propelled grenade in Iraq today. They were attacked in the town of Fallujah, a stronghold of Sunni loyalists to the old regime. The soldiers are members of the 3rd Armored Cavalry Regiment and the 101st Airborne Division.
Central Command also said troops have arrested the former head of Saddam Hussein's civilian militia. The man is the seven of clubs in the deck of cards issued to U.S. troops.
The Pentagon today also said there is a possibility that the notorious Iraqi general Chemical Ali could be alive after all. Earlier, it was reported he was killed in an air strike in Basra.
And, in northern Iraq today, U.S. forces what appears to be another truckload of gold bars. These gold bars could be worth a quarter of a billion dollars.
Here in this country, Attorney General John Ashcroft today asked Congress for much tougher powers to fight the war against terror. Ashcroft said that the Patriot Act has weaknesses, weaknesses that terrorists could exploit.
Justice Correspondent Kelli Arena is here now with that story -- Kelli.
KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, the attorney general laid out three additional laws that he said would close some loopholes in the Patriot Act which was just passed one month after the September 11 attacks.
The first would ensure that individuals who train with a terrorist organization can be more easily charged with a crime. He also asked for new authority to hold suspected terrorists indefinitely before trial and to let him seek the death penalty or life imprisonment for any terrorist act which kills Americans. Ashcroft asked for the new powers as he was defending the authority he already won from Congress.
(BEGIN VIDEO CLIP)
JOHN ASHCROFT, ATTORNEY GENERAL: Our ability to prevent another catastrophic attack on American soil would be more difficult, if not impossible, without the Patriot Act. It has been the key weapon used across America in successful counterterrorist operations to protect innocent Americans from the deadly plans of terrorists.
(END VIDEO CLIP)
ARENA: The Patriot Act, which allows federal agents to more easily access records, obtain wiretaps, and conduct searches, has met with resistance from a variety of businesses, libraries, and civil libertarians who argue that the new laws just go too far. Some of that concern was echoed by lawmakers today who will decide in 2005 whether to extend the Patriot Act or to let some provisions expire.
Another issue causing some concern an inspector general's report released earlier this week which was critical of how the Justice Department treated illegal aliens in the aftermath of September 11.
(BEGIN VIDEO CLIP)
REP. MAXINE WATERS (D), CALIFORNIA: Isn't it a fact that after you rounded up these individuals you found that they had no involvement with terrorist activity?
ASHCROFT: In all of the conduct of the activities of the Justice Department, we have not violated the law and we will not violate the law. We will uphold the law.
(END VIDEO CLIP)
ARENA: Ashcroft says the department makes no apologies for its policies post 9/11 and says so far his mission has been successful to prevent another attack on U.S. soil -- Lou.
DOBBS: And that is obviously the critical part of the mission. Is there a sense that he is going to win these powers that he seeking from Congress?
ARENA: He hasn't formally put in a legislative request yet and we're not sure that this will come in this congressional session. But there is some momentum building for support but there's lots of questions, Lou, and the first issue has to be how is the Patriot Act that's currently in effect being implemented and there are some concerns that still have to be eased on that front.
DOBBS: And, as you point out, to this point the mission is successful. Kelli, thank you very much, Kelli Arena our Justice Correspondent.
Well, anti-terrorist police in France today said that they've arrested a Moroccan man in connection with the September 11 attacks in this country. The man was arrested at Charles DeGaulle Airport in Paris. Prosecutors believe that he had links to a suspected al Qaeda terrorist located in Hamburg, Germany.
Turning to our series of special reports on "Vanishing Retirement" tonight, affordable retirement is a global crisis not only in this country, but as lawmakers here in Washington struggle with a search for solutions, they may not find much inspiration from overseas.
Kitty Pilgrim tells us why.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In Europe, people have taken to the streets over pension reform. This week in France strikes closed airports, shut down railroads and subways, stranding people.
Over the last 30 years, Europe became a retirees dream. European Union workers could count on lavish benefits, healthcare, and pensions, paid for by the government. Vacations were long. The average retirement age was 58, and people received 88 percent of their salary. This German teacher worked for 35 years and is comfortably retired.
UNIDENTIFIED FEMALE: I never found in any country I found the conditions we had and but it couldn't go on like this. It has to be changed.
UNIDENTIFIED MALE: It has to be changed somehow because the population has -- the ratio between people working and people on pension is getting out of hand.
PILGRIM: Europe can't afford it anymore. The European Union countries now spend more than ten percent of GDP on pensions. By the year 2050 more than half the population will be over the age of 65.
One solution being looked at is to raise the retirement age or increase the number of years worked before a worker can collect. Unions have complained about some European governments trying to privatize the systems making companies and individuals pay more.
In the U.K., however, American-style 401(k) plans are more common, although in Britain only about half the people participate through corporations.
GRAHAM VIDLER, ASSN. OF BRITISH INSURERS: As in many things, the U.K. is moving more slowly in the same direction that the U.S. is moving. In the U.S., I think we see people taking greater personal responsibility for their pensions and other investments. That's something that just started to take hold in the U.K.
PILGRIM: In Japan, a 20 percent savings rate made retirement something to look forward to but no longer. The declining economy and growing ranks of elderly have produced a similar retirement crisis. One radical solution put forward by the business lobby is to raise the national sales tax to 18 percent.
(END VIDEOTAPE)
PILGRIM: For lawmakers in the United States, the examples overseas are a chilling example of a system that will collapse of its own weight. Over reliance on government clearly is not the way to go -- Lou.
DOBBS: I think many people are surprised. Germany and France often held up as sort of the emblem of Social Security for its aging citizenry but that just is not the case.
PILGRIM: That's exactly right. Everyone was very jealous of the system.
DOBBS: Right.
PILGRIM: But, in fact, it was very expensive and, in addition to that, Europeans are not so used to dealing with equities markets. They're at more of a disadvantage in dealing with their own plight than American citizens are.
DOBBS: And they have an extraordinarily low birth rate in both countries now as is true throughout most of Western Europe. They're in very big trouble. They're in very big trouble. Kitty, thank you very much, Kitty Pilgrim.
Still ahead here tonight, troubled times, the Jayson Blair scandal leads to a major shakeup at "The New York Times," Peter Viles will report from New York.
Also ahead, Martha Stewart kicks off a public relations campaign in her own defense. We'll be talking with Congressman James Greenwood who led a ten-month investigation of the ImClone stock scandal; those stories, a great deal more still ahead here as we continue tonight from Washington, D.C.
(COMMERCIAL BREAK)
DOBBS: On Wall Street today, stocks staged a late session recovery, the Dow Jones industrials down as many as 69 points in the session but moved into positive territory in the final minutes of trading to eek out a gain. The Dow rose for a fifth straight day, today rising two whole points. The NASDAQ gained 11, still a gain of almost one percent on the NASDAQ. The S&P 500 up four points on the day.
Christine Romans is at the New York Stock Exchange and has more on a day of a big comeback -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: It really was, Lou. The market fought back from higher jobless claims and a weak factory report in the morning and the Dow scratched out its tenth higher day in 11 sessions and a new high for the year.
It was biotech and retail stocks very strong here, twice as much volume came at higher prices, and almost 1.7 billion shares traded overall at the big board. More than 300 stocks making 52-week highs. We've been seeing that every day. It's the second close in a row above 9,000 for the Dow. That hasn't happened, Lou, since last August.
The S&P 500 now up 13 percent this year, 24 percent since March, and a whopping 28 percent since October's low, and where has that rally taken valuations, the price-to-earnings ratio of the S&P 500 just shy of 19, slightly above the historical average.
Meanwhile, Lou, the two-year note traded for a third day just below the Fed funds target of 1.25 percent. Bond analyst Tony Crisenzi (ph) told me that that has just happened five other times since the Fed started using a funds target back in 1989 and each time he said the Fed has cut rates within six months. So, that's got the focus on tomorrow's jobs report and what it could mean for the next Fed meeting in just a few weeks -- Lou.
DOBBS: Absolutely. We should get a good indication. Christine, is there any concern being expressed down there now that this market is being just a little bit overdone, perhaps a little overcooked?
ROMANS: You've been hearing that since, oh, about 8,500, 8,600, 8,700. They've been saying that but as Arthur Cashen (ph) says, Lou, you can tell a bumblebee that it's not aerodynamic enough to fly but it still does. He said the market feels a little bit like that right now.
DOBBS: Art Cashen. Does he address you as grasshopper when he makes those kind of aphoristic observations?
ROMANS: No, but he says in this market people keep saying that it can't go any further and it keeps doing it, so.
DOBBS: Absolutely, and I'm sure that if any of us has a choice we'd prefer it just keep inching forward and higher. Christine Romans, thank you very much.
ROMANS: You're welcome.
DOBBS: Time now for a check on the national debt. Tonight, it stands at almost $6,570,000,000,000.
And, our "Quote of the Day" tonight from a man who keeps a close eye on that national debt Federal Reserve Chairman Alan Greenspan. He spent some time today at the John Phillip Sousa Middle School here in Washington, D.C. and the Fed chairman gave students some advice about careers and life.
(BEGIN VIDEO CLIP)
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: If you feel insecure as you're trying to move up the ladder and in competition with other people, just remember everyone else feels the same way. Everyone else makes mistakes. I'm 77. I've been through an awful lot but I remember when I was your age and I will tell you it's been a great ride.
(END VIDEO CLIP)
DOBBS: And still riding.
Still ahead here tonight, the scandal that rocked "The New York Times" has unseated the newspaper"s two top editors. We'll have a report on the latest fallout of the Jayson Blair scandal at the Old Gray Lady in New York.
And, Democratic presidential hopeful Senator Joseph Lieberman has some bold ideas about strengthening this economy. Senator Lieberman will share those details next here with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, Chicago Cubs slugger Sammy Sosa awaits a decision on his future with the Cubs. Sosa was thrown out of Tuesday's game after he was busted for using a corked bat.
Now, Sosa waits for Major League Baseball officials to determine his punishment. Sosa could face a suspension of as many as ten games. Sosa's 76 other bats that were inspected were all clean.
A controversy of a different kind, a dramatic change today in the leadership at one of this country's most prominent newspapers, the executive editor of "The New York Times" Howell Raines, and managing editor Gerald Boyd resigned after the scandal over Jayson Blair's false reporting a plagiarism.
Peter Viles from just outside "The New York Times" has the report.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): More turmoil at "The New York Times" as Jayson Blair strikes again. The top editors who promoted him and failed to supervise him have resigned, Howell Raines and Gerald Boyd unable to win back respect in their own newsroom.
WILLIAM MCGOWAN, MANHATTAN INSTITUTE: Both Boyd and Raines had hands-on contact with Blair, left fingerprints all over the crimes that he committed certainly through negligence, not through active encouragement, but through a gross managerial negligence. So, I think they had to go.
VILES: Outside "The Times" building mixed emotions.
UNIDENTIFIED FEMALE: I feel sad about what's taken place and I feel kind of relieved that we're going to have a break with the tumultuous period moving forward.
UNIDENTIFIED FEMALE: I was so happy. I was just in a dentist's chair. I just came from the dentist. I was having a crown fixed and I was out of my mind.
VILES: Raines had other problems in "The Times" newsroom his aggressive, autocratic style had alienated much of the staff. He did lead the paper to seven Pulitzer's last year, was fond of quoting the great Alabama football coach Bear Bryant. When a big story broke, he liked to "flood the zone with reporters."
But one of those reporters was Jayson Blair and when Blair flooded the paper with fiction and plagiarism, many reporters simply would not forgive Howell Raines.
PAUL COLFORD, "NY DAILY NEWS": People were telling him to his face in private settings, dinner meetings, that sort of thing, that they could not imagine what he could do, if anything to regain the trust in the newsroom.
CLAY WATERS, "TIMES WATCH": Howell Raines doesn't do a kinder, gentler persona very well and he'd already lost the fear in the newsroom and he never really earned the respect and he seemed to be doomed. He was fresh out of friend in "The New York Times" newsroom.
(END VIDEOTAPE)
VILES: Now, the new editor of "The New York Times' is also an old editor of "The Times" and he"s a temporary editor. Joe Lelyveld comes out of retirement. He ran "The Times" for seven years prior to Howell Raines, won seven Pulitzers during that time at the paper. He is said to be very well liked in "The Times" newsroom -- Lou.
DOBBS: Any indication of successors here, Peter?
VILES: No, they did not name a replacement for Gerald Boyd and they didn't give any clue who might replace Joe Lelyveld when he decides to step down. One name being floated around is a "Times" journalist who was passed over when Howell Raines got the job. That"s Bill Keller who now writes long pieces for the op-ed page of "The Times," but nothing official from "The Times" on this.
DOBBS: Terrific. Peter Viles, thank you very much.
Coming up next, Senator Joseph Lieberman, one of nine Democrats hoping to win his party"s nomination to win the 2004 presidential election, he joins us here next.
And, a deal in the Senate on prescription drugs, we'll be talking with one of the authors of the legislation Senator John Breaux of Louisiana. Stay with us.
(COMMERCIAL BREAK)
DOBBS: The next presidential election a year and a half away but nine Democrats have already announced they are seeking their party"s nomination to challenge President Bush. They all believe the president"s weakest link is his economic policies.
Senator Joseph Lieberman recently announced an ambitious plan to stimulate growth. Senator Lieberman here with us in Washington, D.C.
Senator, good to have you with us.
SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: Lou, good to be with you. Thank you.
DOBBS: Stimulating the economy, we've been assured that the new tax cuts will create over a million jobs, $330 billion in reductions. Do you really think we need more with all of that?
LIEBERMAN: Yes. Well, of course, I didn't think that was the right way to go. This president has one answer to all of our economic woes, and that's one tax plan after another. And the way he's repeated a bet that he made in 2001 that didn't work. And of course, it's our money that he's betting. It's going to take us into long- term debt that we will have to pay back. I have a different approach. I think what we all ought to be doing is trying to create growth again. And the way you create growth and protect jobs and create new jobs is with innovation that leads to productivity increases and new jobs. And you know, as we were talking before we went on the air, productivity was pretty high last year, 4.8 percent. But I would say that productivity, Lou, is a little like cholesterol. There's good productivity and bad productivity.
DOBBS: I think you would probably win some support for that view.
LIEBERMAN: Well, and if you have 4.8 percent productivity increases but you're losing hundreds of thousands of jobs, that's not good. And the way to connect those two is with investments and innovation: tax credits to help businesses invest; zero capital gains for money going to new businesses; and investments in research; better education, science and engineering graduates.
DOBBS: Amongst other things, you want to see more investment in R&D in this country. You want to see - support tax breaks for technology in particular.
LIEBERMAN: Right.
DOBBS: Is it - how do you rationalize tax breaks for one particular industry, in this case, technology?
LIEBERMAN: Well, it's really tax breaks for the - in this - that was my fiscal stimulus plan...
DOBBS: Right.
LIEBERMAN: ... because I - short term. Because I think short term you've got to get the information technology sector moving again. It's part of what is backlogged. It's part of what created growth in the '90s. And to me the best way to do that is with a very sweet super tax credit for acquiring information technology. Longer term you want to have government invest, incentivize businesses to invest through tax credits in the new technologies that will create - the new industries that will create the millions of new jobs. I believe a president ought to set goals. And the goal that I would set is for 3 percent productivity increases over a long term, which would be 50 percent greater than the last 10-year average. But we could do it. And if we do, we can double American family incomes in a generation, each generation.
DOBBS: Can we double job growth, over the past - take the last five years, because job creation is just not happening? What do you say to those who say that part of the job loss that we've experience over the past few years that we're victims of our own success and technology, we've made it possible (ph) to be more productive and to use fewer people, to have fewer jobs?
LIEBERMAN: Well, some of it - some of those productivity increases have led to efficiencies that have reduced some jobs. And that's why we've got to go on and create the new invest - do the new investments that create the new innovations that create the new industries that create the new jobs. I think most of what happened over the last couple of years was that the business cycle turned down, that we were shocked by the corporate scandals associated with Enron, and, of course, by September 11. And my criticism of the Bush administration is that the response that they offered has spent us into long-term debt which diminishes confidence and hasn't worked. The economy is still stagnating and we're still losing jobs, lost 3 million in the last 2 1/2 years.
DOBBS: You've said that President Bush has been irresponsible in terms of fiscal responsibility here. We're going to have at least a $400 billion federal budget deficit. We're moving north of that in the next two years. What would President Lieberman do to deal with that issue?
LIEBERMAN: Well, short term, if I were president today, I would have proposed a fiscal stimulus plan that had $150 billion in it. But unlike the Bush plan, which only - which costs $350 billion at least over the long term but only spends about $60 billion of it this year when we need it, I'd spend about all of that $150 billion right now this year. And that would be tax cuts for business to invest and grow, consumer tax breaks and investments in education, help to the states. Long term, we've got to go back to fiscal discipline, invest in innovation. That's the way to grow. We can't be a strong country in the world or here at home if we're running multi-trillion-dollar deficits, which is what the Bush program does to us.
DOBBS: So Senator, if you were president now - that means you're not content to win an election in 2004. You want the last year too.
(LAUGHTER)
LIEBERMAN: Yes. I'm ready to go right now.
DOBBS: Senator Joe Lieberman, it's always great to see you, to talk with you.
LIEBERMAN: Thank you, Lou, good to see you.
DOBBS: Thank you.
LIEBERMAN: Thank you.
DOBBS: A short time ago, the Senate voted 94-2 to extend the child tax credit. It will provide some 6.5 million low income families in this country with a $1,000 credit. The credit for low- income families was removed at the last minute from the president's $350 billion package. Extending the child tax credit will cost $10.5 billion. It will be offset by an increase in custom service fees.
That brings us to a poll question of the evening: "Which issue should the Democratic presidential hopefuls run on?"
Senator Lieberman, are you ready? We're going to get some guidance...
LIEBERMAN: I'm ready. I want to get the answer to this. Yes.
DOBBS: "The economy, healthcare and retirement, the war on terror, or I love George?" Cast your vote at cnn.com/moneyline. We'll have the preliminary results coming up for you later in the broadcast.
Now the final results of our poll question last night: "Do you consider Martha Stewart a criminal, a scapegoat, a victim, or hey, it's corporate America?" Twenty-nine percent of you said a criminal; 47 percent said a scapegoat; 8 percent said a victim; 15 percent said Hey, it's corporate America.
Our nightly check of the trade deficit. Tonight it stands at more than $217 billion. It's growing by almost a billion and a half each and every day.
Coming up next, a breakthrough in the prescription drug debate. We're talking about real answers being advanced, legislation possible, solutions on the way. Senator John Breaux, one of the authors. He'll join us next.
And Martha indicted. Congressman James Greenwood headed a 10- month investigation of Martha Stewart and the ImClone scandal. He will be joining us.
All of that and a great deal more as we continue tonight from our nation's capital.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Excellent.
A major breakthrough tonight on the issue of making prescription drugs more affordable for seniors in this country. Two key senators today reached a bipartisan agreement on prescription drug coverage for senior citizens under Medicare. This plan will cost $400 billion over the next decade. It's made some Democrats very unhappy.
Jonathan Karl tells us why.
(BEGIN VIDEOTAPE)
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Seniors are a step closer to getting long-awaited Medicare prescription drug coverage, now that the top Democrat and top Republican on the Senate Finance Committee have struck a deal on the issue.
SEN. MAX BAUCUS (D), MONTANA: We've been at this point before, only it's passed us by. This time, it's going to be different.
KARL: The details aren't final, but the deal promises to provide drug coverage to seniors for $35 a month beginning in 2006. There would be a $275 deductible. Half of costs up to $3,450 would then be covered. There would be no coverage, however, for costs between $3,450 and $5,300. Above that, Medicare would pay 90 percent of all drug costs. Total out-of-pocket expenses for seniors would be limited to $3,700.
The plan would also set up a program called Medicare Advantage to encourage seniors to enroll in privately-administered managed care programs. Senator Ted Kennedy hailed the deal as a -- quote -- "major breakthrough in our effort to give senior citizens the prescription drug coverage under Medicare they need and deserve." But Kennedy, the Senate's liberal icon, is at odds with Tom Daschle and other Democratic leaders, who are denouncing the deal as inefficient and a hidden effort to privatize Medicare.
A top Democratic aide says Tom Daschle is -- quote -- "apoplectic" at Max Baucus for striking the deal with Republicans. Baucus was lambasted about the deal at a private meeting with top Democrats, including Daschle. Sources at the meeting say Kent Conrad, the top Democrat on the Senate Budget Committee, stormed out of the meeting in anger.
SEN. JOHN ROCKEFELLER (D), WEST VIRGINIA: The mood of that meeting was very bad. It was very angry.
KARL: Republican leader Bill Frist Praised the deal as -- quote -- an important achievement. But some conservatives are not so sure. They are concerned the plan would cost too much and do too little to reform Medicare.
(END VIDEOTAPE) KARL: The support of those top senators on the Finance Committee, coupled with the support of Ted Kennedy, makes it highly likely that this deal will have enough votes to pass in the Senate.
As for the president, the White House put out a statement saying today that he is -- quote -- encouraged by the deal -- Lou.
DOBBS: Jonathan, thank you very much. Jonathan Karl reporting from Capitol Hill.
One of the authors of the legislation that was making its way through in what is a historic agreement, major breakthrough, as Senator Kennedy said, is Democratic senator John Breaux of Louisiana, and he joins us now.
Senator, good to have you with us.
SEN. JOHN BREAUX (D), LOUISIANA: Good afternoon, Lou.
DOBBS: You've been working on this plan, and there is not a great deal of difference in this plan from that which you proposed five years ago, is there?
BREAUX: It's pretty much follows what we had outlined when we chaired the Medicare Commission, Lou, and I think that it's probably the most important thing to happen to Medicare since 1965, when we first passed the program. It's a major breakthrough as liberals have called it, as well as some conservatives. So it's really bringing together people.
DOBBS: Tom Daschle, Jonathan Karl just reported, Senate minority leader, apoplectic about this agreement. Why would Senator Daschle be apoplectic about something that seems to have grabbed the center of support in the U.S. Senate?
BREAUX: Lou, I think the problem has been when you're talking about health care it's obviously very sensitive.
DOBBS: Right.
BREAUX: There are some on the Democratic side who would like the government to do everything and the private sector to not do anything and some on the Republican side that would like the private sector to do everything and the government not to do anything.
This really is a blend. It takes the best of what the government can do and combines it with the best of what the private sector can do. I think Senator Daschle is going to have some amendments. Perhaps they can improve the bill. I don't think Tom's (UNINTELLIGIBLE) about it. He has some concerns, and hopefully they'll be able to be addressed.
DOBBS: One of the concerns for all of us is the aging population in this country. You've worked very hard on this issue and various forms. But next year, as I understand it, this legislation can be passed. It was attempted last year and failed. But if it were to succeed, there would be a discount card for seniors that would give them a range of, what, 15 to 25?
BREAUX: Probably 20 percent, 25 percent discount on all the drugs that they buy.
DOBBS: And what astounds me is that the large drug companies have not been, let's say, more vigorous and effective in lobbying against that.
Why is that?
BREAUX: Well, I think that the drug companies, if they're smart, and you can't accuse them of being dumb, I mean, they know that they're going to have an opportunity to sell more drugs, have it paid for through the Medicare program to the nation's seniors, who are the largest users of prescription drugs. So they have a lot of interest in this, to have a good program as well.
DOBBS: Those same drug companies, however, for the main RX plan, which will create a discount of about 25 percent initially, should it be implemented, they were very upset about that. The Bush administration itself upset. Is the fact that it's operating within the Medicare plan itself a big differentiator?
BREAUX: I think so. I think what we're saying, look, we're going to have ultimately a prescription drug plan that utilizes the private sector to deliver those drugs, to go out and cut the best deals, to negotiate the best prices. But the federal government will still be involved in seeing to it that it's being run properly but not micro managed. I think that's the blend of what government and private sector can do when we work together.
DOBBS: Max Baucus, Charles Grassley moving ahead. Max Baucus said this simply point blank, without John Breaux this doesn't happen.
What does Senator Breaux say about when it will happen, what are the odds of success here?
BREAUX: Well, my colleagues have been very generous, and I think really without the leadership of the chairman, the ranking member, this would not have happened. But I think we can get this passed in the Senate Finance Committee next week. I think we can actually get it passed in the full Senate before the 4th of July recess. I think it will be completed and signed certainly this year.
DOBBS: That's good news for seniors, and it will be interesting to see how the Senate embraces the center's initiative. Thank you very much, Senator John Breaux. Always good to see you.
Well, a reminder to vote in our poll tonight.
The question, "Which issue should the Democratic presidential hopefuls be running on?" The economy, healthcare and retirement, the war on terror, or I love George?
Cast your vote at cnn.com/moneyline. We'll bring you preliminary results just a few minutes later in this broadcast. Still ahead tonight, the man who led the Congressional investigation of Martha Stewart's stock sale, the investigation into ImClone systems, Congressman James Greenwood will join me.
And then the earth is changing, and it's for the better. We'll tell you about climate changes that could make even Greenpeace a happy bunch of folks.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: In "News Around the World," tonight a Chechen suicide bomber killed 18 Russian Air Force staff members today outside the Russian city of Mozdok. The woman triggered a blast outside a bus that was carrying 40 passengers. This latest attack brings the death toll now to more than 170 people in the last six months of the conflict in Chechnya.
The global SARS virus outbreak is over its peak, according to a World Health Organization official. China has had three days this week where no new cases of the deadly virus have been reported.
A computer virus, however, is eating its way through the Internet tonight. It's called BugBearB, and it's spreading quickly, we're told. The bug gives hackers complete control over infected PCs, including access to personal information, passwords and credit card numbers. Computer networking companies have already blocked 10's of thousands of copies of the virus from all over the world. But this threat is far from over.
The planet earth is becoming a greener place, according to a new report from "Science" magazine. The study finds that climate changes because of our warmer weather of the past two decades has in fact led to increased plant life.
And an upset to report tonight at the French Open. Defending champion Serena Williams lost to Justine Henin in the semifinal in Paris. Williams the top-ranked player in the world, trying to win four consecutive Grand Slam titles.
Martha Stewart tonight is fighting back. One day after she was indicted by a federal grand jury, Stewart is vowing to clear her name. And today took out a full-page newspaper ad in "USA Today" where she declared her innocence in an open letter to her supporters. She also launched a web site, marthatalks.com. Stewart said, "I am confident I will be exonerated of these baseless charges, but a trial unfortunately won't take place for months. I want to thank you for your extraordinary support during the past year," she said. "And I appreciate it more than you will ever know." Last night Stewart resigned as chairman and CEO of Martha Stewart Living Omnimedia.
We are now joined by the person who spearheaded the investigation against ImClone -- well, of, rather than against, ImClone Systems and Martha Stewart, and fought tirelessly to have those charges brought. Congressman James Greenwood is the chairman of the Oversight and Investigation Subcommittee. He joins us now here in Washington.
Congressman, good to have you with us.
REP. JAMES GREENWOOD (R), PENNSYLVANIA: Good to be here.
DOBBS: This is turning out to be, as we would have, I guess, expected a highly public confrontation.
These charges, you're confident that they are appropriately placed, that they have been brought by the grand jury?
GREENWOOD: Everyone's entitled to their presumption of innocence, including Martha Stewart. If I had to bet money, I would bet that she's guilty of these charges. If you look at her conduct for the last year and a half, it's been very odd for someone who is in fact guiltless. The simplest thing for her to have done, and we sort of begged her attorneys to do this in the beginning, is just say, you know I made a mistake, I'm a former stock broker I ought to know better, but pay some money, pay a fine, get it over with. But the lawyers had her digging in and in denial for all this time, and I think it's just not a credible story. We didn't believe it so in our committee, and obviously the Justice Department doesn't think her story is credible, either.
DOBBS: Were you surprised that she did not just simply take the fifth amendment?
She is now being charged of effectively lying, changing documents, obstruction of justice. Whereas none of those charges would have emanated from a simple fifth amendment plea.
GREENWOOD: Her problem is she has had criminal and civil exposure from day one as a person. Then she has the whole question of her company and what happens to her company as it's tied to her reputation. If she takes the fifth amendment early on, everybody -- fifth amendment makes -- when you take that, people assume she must be guilty. So I think people trying to protect the equity of their company are saying she can't take the fifth amendment, because it looks bad and the company stock dives.
DOBBS: Congressman, as I'm sure you hear from your constituents and others, as we do from our viewers here, a number of people saying if Martha Stewart were not a celebrity, if she were not a big deal, the Justice Department and the SEC would never have taken this level of interest or your committee in her sale of stock that amounted to a $47,000 savings in what would have been a loss on that stock.
How do you react to that?
GREENWOOD: I don't think it's accurate.
First off, our committee was looking at ImClone and the Waksal brothers and Erbitux and really just stumbled upon this phone message between Martha Stewart and Waksal's office and so forth.
So -- and we really went out of our way not to sensationalize this. We could have called her up to the hearing room and made her take the Fifth in public. We -- I said, I don't want to do that. I don't want a media circus. We gave her opportunities to quietly come in to off campus or her home or anywhere to tell her story, and she didn't do that.
I hope that what's happened here is that both we in Congress and in the Justice Department have said it doesn't matter whether you're a wealthy famous woman or Joe Nobody, you can't lie to Congress and you can't lie to the Justice Department. And that is a bigger offense than the $40,000 she saved by selling the stock.
DOBBS: The -- at the same time there is this -- well, I think there's broad agreement that when a celebrity transgresses or appears to have violated a rule or a law that the criminal justice system has to move against them, the regulators have to move against them as a signal to everyone.
At the same time, we have now almost 70 people who have been charged in the corruption scandals since the bankruptcy of Enron in December 2 of 2001. Where are we going with this? Because at the same time, people are saying, my God, nine indictments against Martha Stewart for $40,000...
GREENWOOD: Why is Ken Lay still playing golf?
DOBBS: Ken Lay is playing golf, or whatever.
GREENWOOD: Right.
DOBBS: And WorldCom, Enron, the list goes on. How do you respond?
GREENWOOD: Well, I think it's a normal reaction. It's an understandable reaction.
And here's how I would explain it. The wheels of justice turn slowly, and they have to because the Justice Department can't afford to make mistakes.
DOBBS: Right.
GREENWOOD: They really have to avoid falsely accusing people. They have to avoid indicting people and then not having their facts ready so that they lose cases against guilty persons. So they have to be careful.
The Martha Stewart case, the ImClone case is very simple matter compared to Enron, compared to WorldCom, compared to Global Crossing, et cetera. Those are incredibly complex financial situations.
So I believe, and I'm quite confident that the Justice Department is pursuing every wrongdoer identified by our hearings and others and eventually you will see all of the guilty partners trialed, whether they are famous, whether they infamous, rich or poor.
DOBBS: Congressman Greenwood, we always enjoy talking with you. GREENWOOD: My pleasure.
DOBBS: Appreciate you being here tonight.
GREENWOOD: Thanks for having me.
DOBBS: Thank you.
The New York Stock Exchange Board met today. They voted to change the way the Exchange does business. Those changes mostly affect the chairman of that Exchange, Dick Grasso, whose compensation has been recently the subject of considerable public scrutiny.
Jan Hopkins reports.
(BEGIN VIDEOTAPE)
JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): Dick Grasso's reported $10 million pay package will no longer be a secret. Beginning next spring, his salary and the salaries of other top executives will be disclosed in the Exchange's annual report. This is one of the 10 changes approved by the board after a committee took a hard look at the way the Exchange operates.
LEON PANETTA, SPECIAL CMTE. ON GOVERNANCE OF NYSE: We are going to increase transparency. We're going to enhance independence. We're going to strengthen the checks and balances process. And we're going to address apparent and real conflicts of interest.
HOPKINS: The New York Stock Exchange wants to live up to what it advertises.
(BEGIN VIDEO CLIP, AD)
NARRATOR: So every shareholder can invest with confidence.
(END VIDEO CLIP)
HOPKINS: To end possible conflict, starting today the committee that decides on Grasso's pay will not include people from Wall Street firms he regulates. Grasso will also have to resign from the Home Depot board by next spring. He and other Exchange officers will not be able to serve on boards of companies that are listed on the Exchange.
How does Grasso feel about the changes? The new chairman of the Compensation Committee responded.
H. CARL MCCALL, SPECIAL CMTE. ON GOVERNANCE OF NYSE: I can clearly say on behalf of the committee that Dick Grasso supports fully the recommendations and the actions that were taken by the board.
UNIDENTIFIED MALE: Dick Grasso confirms that.
(END VIDEOTAPE) HOPKINS: We may never know if Dick Grasso is a $10 million man or even a $20 million man. But we will know next year what he made this year. The Exchange will now follow the same rules that companies that list here follow, at least when it comes to disclosing CEO pay -- Lou.
DOBBS: My gosh, Jan. Transparency at the New York Stock Exchange?
HOPKINS: Amazing.
DOBBS: Incredible.
HOPKINS: Following the same rules as the companies that list here.
DOBBS: Well...
HOPKINS: Some progress, I think.
DOBBS: It's a good idea, even if a bit overdue. And here we go.
HOPKINS: That's right.
DOBBS: Jan Hopkins, as always, thank you very much.
Turning now to our "Thought of the Day," on integrity: "This above all: to thine own self be true and it must, as the night the day, thou canst not then be false to any man." A fellow named William Shakespeare, from the play "Hamlet."
When we continue, we'll share some of your thoughts about Martha Stewart and Sammy Sosa, and we'll have the results of tonight's poll.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: President Bush is back here in Washington tonight after his trip to the Middle East and Europe. On the way here, Air Force One flew over Iraq with an escort of four F-18 fighter jets. The president was in Iraqi airspace for just over an hour. He was able to see Baghdad International Airport. He saw a suburb of Baghdad that was attacked on the first night of the war.
The president's tour took him to six countries over a period of seven days. As John King reported, the president ended his tour in Qatar with a rousing speech to coalition troops at the headquarters of Central Command. The president flew there after his historic summit with the Israeli and Palestinian prime minister in Jordan to further urge progress in the road map for peace.
Checking the preliminary results of our poll question, "Which issue should the Democratic presidential hopefuls run on?" -- 60 percent of you said the economy; 21 percent said healthcare and retirement; 4 percent said the war on terror; 14 percent said I love George.
Let's take a look at some of your thoughts now. Many of you wrote in in support of Martha Stewart.
George Kopp in Chicago said: "Martha Stewart has to do a dignified perp walk for a sale of 4,000 shares of ImClone? When are Ken Lay, Jeff Skilling, Bernie Ebbers going to do the perp walk for taking down the life savings of thousands of employees and lying to their shareholders. Those three could be the most wanted on your corporate scoreboard."
Tony from Florence, Alabama, said: "If our government had spent half as much time prosecuting Kenneth Lay as they have prosecuting Martha Stewart, maybe today he would be where he truly belongs -- and that is in prison."
Denise from Cleveland, Ohio, said: "My confidence as an investor doesn't inch up by one bit by visualizing Martha Stewart in an orange jumpsuit."
E-mail us here at loudobbs@cnn.com.
And that is our broadcast for tonight here from the nation's capital. For all of us, thanks for joining us.
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