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How Long Will Recession Last?; Employment Falls; Afghan Security Situation; Deadly Ecstasy

Aired February 1, 2008 - 19:00   ET


Tonight, the strongest evidence so far that our economy has stalled and may even be in recession. Middle class Americans are once again the principle victims, all of that, the latest on the presidential campaigns, all the day's news much more straight ahead tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, February 1. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

New evidence tonight that our economy is in bring trouble. Employers cut jobs for the first time in more than four years. The number of jobs in this country fell by 17,000 last month.

Meanwhile, Senate Democrats are still arguing over the economic stimulus package, those Democrats apparently failing to understand the urgency of the crisis facing our middle class. We have extensive coverage tonight. We begin with Christine Romans here in the studio -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Kitty, it is rare for large dynamic labor market like ours to actually lose jobs but in January it did just that and recorded more job losses in manufacturing, a sector now that has lost 269,000 jobs over the past year.


ROMANS (voice-over): Across the country, hiring ground to a halt in January. Even the president long upbeat on the economy sounded an alarm.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Serious matter is that for the first time in 52 months that we didn't create jobs.

ROMANS: Serious indeed. Jobs lost in construction, manufacturing, the Department of Labor reports even the government shed workers.

KEITH HALL, DEPARTMENT OF LABOR: We have seen job loss fairly widely spread.

ROMANS: Where are the jobs? Hotels, restaurants, health care. But many of those pay less than the jobs this economy is losing.

JEFFREY JOERRES, MANPOWER, INC.: There are 28,000 jobs lost in manufacturing and that's difficult on the environment of the labor market because those are typically higher paying jobs.

ROMANS: The manufacturing sector shed jobs for 19 months in a row.

PHILLIP SWAGEL, ASSISTANT TREASURY SECRETARY: The loss of jobs in today's report was unwelcome and obviously in manufacturing we have seen that for a while now.

ROMANS: The government released figures for last year and found the economy added an average of 95,000 jobs a month. That's not enough to keep up with growth in the working age population. The number of Americans unemployed at least six months is rising already at levels usually seen in a deep recession. Wage growth and overtime hours also slowed, more evidence that companies are cutting back.

BUSH: Certainly some troubling signs, serious signs that we -- that the economy is weakening and we got to do something about it.

ROMANS: The president urged the Senate to pass fiscal stimulus without delay.


ROMANS: It was not without irony that on the day of this grim jobs report, oil giant Exxon Mobile reported the biggest annual profit of any company in history. Some $40 billion as crude oil prices and the price at the pump, Kitty, soared.

PILGRIM: Well as President Bush says, troubling signs. Thank you very much, Christine Romans.

Senate Democrats tonight are apparently too busy pursuing their own interest to agree on the economic stimulus package. One Democratic senator, Jay Rockefeller, is even trying to add a measure to help the coal industry. This as our middle class reels from the housing crisis, stagnant wages and rising job losses. Key votes on the stimulus package are due on Monday.

Senators Clinton, Obama and McCain may return to Washington for those votes. Senator Obama today won the endorsement of one of the country's most outspoken anti-war political groups, Obama returned to the campaign trail after last night's presidential debate with Senator Clinton.

Both candidates are fighting to win votes ahead of next week's Super Tuesday contest. Suzanne Malveaux reports from Los Angeles.


SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): Obama is on the move leaving California and the mother load of delegates some 370 behind. He insists he's not conceding the state to Hillary Clinton. He's just got a lot of other places to go.


MALVEAUX: Coming off his first one-on-one debate with Clinton, a visibly tired Obama said he was satisfied. His experience was no longer an issue.

OBAMA: I feel like voters who watched last night recognize that I know what I'm talking about.

MALVEAUX: In a race to the finish, everything counts. A big unknown is where the former candidate John Edwards' supporters will go. One good sign for Obama, California's SEIU, one of the largest labor unions in the state, which backed Edwards, announced it is now endorsing Obama.

The liberal activist group jumped on the Obama train, too. The far reaching organization has more than three million members across the country. Nearly two million in Super Tuesday states ready to mobilize. Obama is still working hard to win the coveted endorsement of John Edwards but says he's not making deals.

OBAMA: I have specifically asked him for his endorsement. We haven't had specific conversations about an Obama administration post.

MALVEAUX: One of Obama's stops today, New Mexico, home state of former candidate Governor Bill Richardson.


OBAMA: Thank you. Thank you, New Mexico.

We have no plans of receiving an endorsement but I would love to be pleasantly surprised.


MALVEAUX: And Kitty, he really would be surprised because CNN has learned that Bill Richardson is going to be spending his Sunday watching the Super Bowl with his former boss, his former boss being the former president, Bill Clinton. There was good news for Obama today.

He got the endorsement of the "Los Angeles Times." They of course are not taking anything for granted and that is why they are bringing back Oprah Winfrey, yes Oprah Winfrey on Sunday. She's coming out here to Los Angeles. She'll be with Obama's wife, Michelle, as well as Caroline Kennedy to try to win that female support, that critical group for Obama -- Kitty.

PILGRIM: Suzanne, you said he looked visibly tired, a tough, tough schedule and Tuesday must seem very far away to this candidate. What's his schedule like?

MALVEAUX: It's grueling. It's grueling for everyone. But obviously he's going to be heading to Minnesota. He's also hitting some of the smaller states as well as the big states. Utah, he's been to Colorado, of course California. He's going back to Illinois for the Super Bowl. He'll be in Chicago. But it is nonstop travel, Kitty.

PILGRIM: I would imagine. Thank you very much, Suzanne Malveaux.

Senator Hillary Clinton's advisers today blasted the Obama camp for a campaign mailer on health care. Clinton advisers accuse the Obama campaign of spreading false information. The exchange is marking a shift away from the respectful tones of last night's debate between the candidates. Candy Crowley joins us now from Los Angeles. Candy, do you expect this truce between the candidates to last as the campaign intensifies?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well it depends on what you're talking about. There's kind of the above ground campaign and that's what Clinton and Obama say and then there's the subterranean campaign, which is the mailboxes and the flyers and the telephone calls, so I don't expect much change in the subterranean level. I think that they are going at it.

This is about turning out the vote. This is about getting people not to vote for the other person. I think today we saw a reasonable campaign, kind of an after glow from that very chumming debate last night and it is conventional wisdom for all the history in this campaign, it is conventional wisdom that when you go in the final days before the voting you have to put your best foot forward and I think both candidates are intent on doing this. At this point it's about looking presidential for both of them.

PILGRIM: That's right. Candy, on the health care issue, though, Senator Clinton clearly believes that her health care plan is the vote winner. But let's hear what she said about that in San Diego a short time ago.


HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: One of the most important issues separating Democrats from Republicans is that when we stand on a stage against whomever the Republicans nominate, we are standing there 100 percent committed to universal health care as soon as we can possibly achieve it.


PILGRIM: So Candy, why did Senator Clinton believe she can win the health care argument now? She lost this argument in the 1990s?

CROWLEY: Well what she says is look I've learned a lot. I understand how this goes. I know who is going to push which way and so I have this experience, as you know that's the big theme of her campaign. She also believes the times have changed.

That there were a lot of people back in '94 when she was pushing the health care plan who were quite satisfied with their own health care. Now both campaigns say this. In fact, all the campaigns say this. That even people who have health insurance are worried they're going to lose it, are worried that they're one illness away from bankruptcy, one illness away from being thrown off their insurance plan. So she thinks both she has learned and the times have changed and that's the basis of why she thinks she can best do this.

PILGRIM: All right, thanks very much, Candy Crowley who is keeping probably a worse schedule than any of the candidates put together. Thank you very much, Candy Crowley.

CROWLEY: Thanks.

PILGRIM: Later in the broadcast, we'll have the latest on the Republican presidential battle, Mitt Romney accusing Senator John McCain of not being a true conservative. We'll have three of the best political analysts and strategists in the nation to join us on this broadcast.

And that brings us to the subject of tonight's poll. Do you believe the greatest crisis in American government is the failure of our elected officials to represent the will of the American majority? Yes or no. Cast your vote at We'll bring you the results a little bit later in the broadcast.

Also still to come, new fears about dangerous drug imports from communist China. Louise Schiavone will have the report -- Louise.

LOUISE SCHIAVONE, CNN CORRESPONDENT: Kitty, the Food and Drug Administration faces a possible new drug import nightmare after reports of drug mix-ups in the factory of a major Chinese manufacturer -- Kitty.

PILGRIM: Thanks, Louise. We look forward to that.

Also a deadly new form of ecstasy is coming into this country across our wide-open borders. We'll have a special report.

Also rising concerns that we are not winning the war in Afghanistan, most NATO countries are refusing to send extra troops. We'll have the story.


PILGRIM: Radical Islamist terrorists today carried out the most brutal and vicious attack in Iraq since the U.S. troop surge almost a year ago. The terrorists strapped explosives on two mentally disabled women and detonated the bombs in two crowded marketplaces in Baghdad. About 100 people were killed in the blast; more than 200 wounded. The attacks have been widely denounced as barbaric. The two women were almost certainly unaware of why they were sent into the market.

There are increasing concerns tonight about the deteriorating security situation in Afghanistan and the lack of help from our NATO allies. Secretary of State Condoleezza Rice and Defense Secretary Robert Gates head to Europe next week to ask our NATO allies for more troops. It's likely to be an uphill battle as most NATO nations seem unwilling to put their forces in harm's way. Jamie McIntyre has our report.


JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): In a mosque in (INAUDIBLE) in Afghanistan southern Helmand (ph) province, a suicide bomber kills a deputy provincial governor and five other worshippers. It's a harbinger of the coming Taliban spring offensive. With NATO short some 7,000 troops along its violent southern front the U.S. has been forced to dispatch 2,200 Marines to the front lines.

And Defense Secretary Robert Gates has been reduced to writing personal letters to other NATO countries pleading for reinforcements. Germany was the first to say (INAUDIBLE).


MCINTYRE: We have a mandate from the German parliament, says the German defense minister. We have a limit of 3,500 soldiers in Afghanistan. Those German forces also have a mandate to remain safely in the relative calm of northern Afghanistan.

That's the other problem, says America's top military officer. Germany and other countries need to lift restrictions on how their troops are used in order to defeat what Admiral Mike Mullen calls a growing classic insurgency.

ADMIRAL MICHAEL MULLEN, JOINT CHIEFS CHAIRMAN: It isn't just rhetoric from our point of view and we need that kind of assistance from those other countries including Germany.

MCINTYRE: Besides Germany, other NATO countries unwilling to do the deadly mission include France, Italy and Turkey. That leaves the U.S., Britain, the Netherlands and Canada doing the dirty work and the Canadians have threaten to pull out unless someone besides America sends help in significant numbers.

STEPHEN HARPER, CANADIAN PRIME MINISTER: The decision to allow our young men and women in uniform to continue to be in harm's way demands the responsibility to give them a strong chance of success.

MCINTYRE: The recalcitrance (ph) of America's NATO allies comes as two independent reports released in Washington warn the Afghanistan mission risks failure. Make no mistake, NATO is not winning in Afghanistan, says the analysis from the Atlantic Council (ph) chaired by former Supreme NATO Commander retired General Jim Jones (ph).


MCINTYRE: Defense Secretary Robert Gates will once again press U.S. allies for reinforcement when he attends a NATO defense minister's meeting next week in Lithuania. But Kitty, Gates has learned the hard way that while his counterparts may lend a sympathetic ear, their hands are tied by war weary governments who simply lack the political will to send any more troops into what has become any increasingly dangerous front line in Afghanistan -- Kitty.

PILGRIM: And Jamie that indeed is an unfortunate situation. Thanks very much, Jamie McIntyre.

The United States and Poland have reached an agreement in principle on the proposed missile defense shield. Now the U.S. plans to install interceptor missiles on Polish territory. The Polish foreign minister today said he was reassured that the U.S. would deal with any security issues. The Bush administration wants to start building the system this year but the project has been a major source of tension with Russia.

In California, rising outrage tonight over Berkeley's decision to kick the U.S. Marine Corps out of town. The city council voted last night to ask Marine recruiters to leave Berkeley. Officials in the liberal college town say if recruiters decide to stay, they do so quote, "as unwanted guests". Berkeley may also consider enforcing its anti-discrimination law focusing on the military don't ask don't tell policy. The Marines opened the Berkeley station last year. There is no comment from the Marines tonight.

Coming up, a deadly form of ecstasy is being smuggled into the United States from Canada. We'll have a report on this growing danger.

Also new concerns about drugs from communist China, the understaffed and overwhelmed FDA say the drugs are safe, but is that reassurance enough? We'll have a special report. Stay with us.


PILGRIM: There are growing concerns tonight over the safety of the drug RU-486. It's also known as the abortion pill. RU-486 is made by the same Chinese company that produced contaminated cancer drugs that harmed even paralyzed 200 patients. The Food and Drug Administration insists RU-486 is safe, but as Louise Schiavone reports critics are demanding every manufacturing plant be inspected immediately.


SCHIAVONE (voice-over): Stretched beyond its capacity to guarantee consumer safety, the Food and Drug Administration is facing a potential drug import nightmare. Chinese drug maker and exporter Shanghai Pharmaceutical Group is under fire inside China for producing an adulterated cancer drug that has left some users partially paralyzed. According to The AP, the Chinese government alleges that the company covered up the problem. The same Chinese company makes and is the only supplier to the U.S. of RU-486, nicknamed the abortion pill.

DR. SIDNEY WOLFE, WORSTPILLS.ORG: Any company that makes a decision to cover up a serious problem, a serious problem being people being paralyzed because of a contaminant in the cancer drug is a company not to be trusted. SCHIAVONE: The leukemia drug in question was not exported to the United States, according to the FDA, and was produced in a separate and distinct facility.

ELIZABETH WHELAN, AMERICAN COUN. ON SCIENCE & HEALTH: The leukemia drugs were not bound for the United States. In terms of the case of the RU-486 bound for the United States there was FDA oversight and no, I'm not concerned.

SCHIAVONE: Said the FDA quote, "The facility where mifepristone is manufactured was inspected by FDA in May 2007."

Danco Laboratories, U.S. distributors of mifepristone or RU-486 told CNN quote, "The plant in which mifepristone is manufactured was inspected prior to FDA approval of Mifeprex and has been inspected since then most recently in May of 2007. As FDA has said, the plant passed inspection in May 2007."

In repeated efforts to reach Shanghai Pharmaceutical Group, CNN ultimately was referred to the company's propaganda office, which stated that "due to the week-long Lunar New Year (ph) Festival, all officials would be unavailable for comment."

"The New York Times" reports that officials with Shanghai Pharmaceutical Group stood by their products, saying that drug regulators investigating the plant had found no problems.

The Chinese drug maker has not won the confidence of U.S. drug giant Pfizer which told CNN quote, "Shanghai Pharmaceutical Group has not met the standards required by Pfizer for suppliers of active pharmaceutical ingredients."

The U.S. distributor for RU-486 estimates that close to a million women have used the drug so far, reason enough, say critics, for the FDA to look at that Chinese plant again.

UNIDENTIFIED MALE: It is not enough to say the default is we don't have any evidence and therefore we should be secured.

SCHIAVONE: Said the FDA, quote, "We are considering whether inspection follow-up may be appropriate at this company's facility. Our goal is to ensure that drugs coming into the U.S. are safe."


SCHIAVONE: Kitty, the case of the tainted leukemia drugs comes to light as a radically under-funded FDA faces sharp criticism for its inability to conduct domestic and foreign inspections and the question remains will the Bush administration decide in its budget due next week to give the FDA the tools that it needs to protect the nation's consumers -- Kitty.

PILGRIM: Well budget constraints aside, Louise, it certainly seems prudent to give it an extra check. What is the FDA saying? This is a problem or not. SCHIAVONE: Well for the record the FDA is saying that they believe that RU-486 is safe, but they are in fact considering going back to that factory to check and see what the conditions are -- Kitty.

PILGRIM: Thanks very much, Louise Schiavone.

We have time now for some of your thoughts. Thousands of you e- mailed us about the new identification requirements to enter this country at the U.S./Canadian border.

So, Jon in New Jersey wrote, "When I went to Canada I had to show a birth certificate and an I.D. Why should it be any different coming into the United States?"

Chris in New York wrote, "Identification at the border is a long overdue idea, but it won't do a thing until we have some interior enforcement of our immigration laws."

And Jim in Virginia wrote, "Lou, I am a former Republican. What is so hard to understand about the need to fix our borders? I am voting Independent this go-around. Thank you for all you do to preserve this great nation."

We will have more of your e-mail later in the broadcast. Each of you whose e-mail is read here receives a copy of Lou's new book "Independents Day: Awakening the American Spirit". The book corporate America, the Democratic and Republican Parties don't want you to read.

Coming up, Republican candidate Mitt Romney and John McCain argue over who has the right stuff to be president, Senators Obama and Clinton fight over who is the best qualified to lead our nation. Three top political analysts will be here to sort that all out and a deadly new form of ecstasy is coming into this country. We'll have a special report from our wide-open northern border with Canada.


PILGRIM: A new potentially deadly form of ecstasy is finding its way into this country from Canada. The National Drug Intelligence Center says Canadian drug trafficking organizations present a quote, "significant and growing concern to U.S. law enforcement". Kelli Arena has our special report.


KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): An open road in upstate New York, an open border with Canada, a pipeline for illegal drugs to American kids.

NICK, FORMER DRUG USER: There are kids that can get it in large quantities and just sell it. It's easy to get.

ARENA: It is ecstasy. Made in Canada by Asian gangs and other criminal groups, Canadian officials say that raw chemicals are smuggled from China and India; finished pills are then pushed in vast quantities to the United States.

RAF SOUCCAR, ROYAL CANADIAN MOUNTED POLICE: The labs that we're finding now are what you refer to in the United States as super labs. We call them economic based labs. They are labs that produce over five kilos or 10 pounds of the drug in one batch.

ARENA: The drugs come in by private vehicles and big rigs, or couriers just walk them in.

(on camera): I'm literally standing on the border between the United States and Canada just behind me. DEA officials say that this is one of the many passageways the drug traffickers use to get drugs from Canada into the United States.

(voice-over): This time of year drug smugglers can also transport drugs over frozen lakes or through land owned by Native Americans.

ED DUFFY, DRUG ENFORCEMENT ADMIN.: Because that is a sovereign nation, easy access to the United States with limited ability to govern who is coming and going.

ARENA: And there's a hidden danger. Drug labs are now mixing ecstasy with meth, a cocktail that could kill you.

In downtown Albany, at the Equinox Agency, evidence that Ecstasy use is rising.

GREG REID, COUNSELOR, EQUINOX AGENCY: I'm getting more reports from the kids I'm working with about their friends and the people they know who are using it more often.

ARENA: So what's the solution? Good cooperation between the Mounties and the feds has helped. There have been a string of big busts. But for every load of pills that's seized, DEA agents estimate at least four get through.

And more resources are hard to get these days. This DEA surveillance plane, for example, hardly ever patrols the northern border. It's usually hunting for drugs coming in from the Caribbean.

UNIDENTIFIED MALE: You can never have enough. I mean, the drug war has gone on for some time, but there's a war somewhere else and resources can't always be spent right here.

ARENA: So don't expect a quick fix. The border is too long with too few checkpoints. Demand for ecstasy in the U.S. too strong.

Kelli Arena, CNN, Albany, New York.


PILGRIM: It's not just ecstasy coming from Canada. Methamphetamine and Marine from Canada are also being struggled here.

Mexico, however, remains the primary supplier of those and other illegal drugs to the United States. Mexican drug cartels are even producing drugs in this country, harvesting marijuana on huge plantations in our national forests.

Another example of the absence of border security. There's still no sign of 100 workers from Nepal who left their jobs and their apartments in Huntsville, Alabama, unexpectedly this week. No one is looking for them, either. The Alabama Department of Homeland Security told us it has no concerns about the workers.

A department spokesperson said the workers are in the country legally and had gone through security screenings prior to obtaining their visas. But the incident has raised security concerns among other officials, and it also raises concerns about the number of foreign workers in this country at a time when it is becoming increasingly difficult for Americans to find jobs.

Coming up, Democratic presidential candidates are playing nice, but the race is intensifying as Super Tuesday approaches. We'll hear from our distinguished panel of political analysts.

Also, how right is right enough? The GOP candidates feud over the conservative credentials. And we'll hear from the panel on this issue also.

And it may no longer be a question of whether we're in a recession but rather how long it will last and how deep it will be. We'll have a special report. Stay with us.


PILGRIM: President Bush continues to press conference to pass the economic stimulus package. Today he pointed to troubling indications that national and job growth is ending, another sign the economy is stalling.

Now, many economists believe a recession is inevitable. The question now is how long will the recession last?

Bill Tucker has our report.


BILL TUCKER, CNN CORRESPONDENT (voice-over): The signs of an economic slowdown are already here. Job creation has slowed. In December, all of the growth was in government jobs. The private sector posted losses.

The Center for Economic and Policy Research says it could get worse, much worse. It could last three to four years. During that time the unemployment rate could rise from its current rate of 5 to a rate of 7 percent or even higher, pushing four to five million workers out of their jobs, workers who are still feeling the effects of the last recession in the early 2000s.

JOHN SCHMITT, CENTER FOR ECONOMIC & POLICY RESEARCH: Well, I think it's problems that workers will face if we enter a recession in 2008, is that they're going to be entering that recession from an already weak position. We haven't gotten back to the income levels, the wage levels, the employment levels that the economy had in 2000 right before the last recession.

TUCKER: Pressures on wages will continue, and the pressure on benefits will intensify. According to the center's analysis, even a mild recession could mean that another four million people will lose health care coverage.

Josh Bivens of the Economic Policy Institute says the pressure is, in part, the result of American workers being thrust into competition with cheap foreign workers whose wages and living standards are far below ours.

JOSH BIVENS, ECONOMIC POLICY INSTITUTE: It is clearly a fact that a rich U.S. economy integrating with a much poorer global economy is going to be tough for American workers on a lot of fronts. It puts serious pressure on living standards for lots of Americans.

TUCKER: And that pressure could cut into the median family income by $2,000.

Bill Tucker, CNN, New York.


PILGRIM: Joining me now are three of the best political analysts in the country. Here in New York, Pulitzer-Prize-winning columnist for "The New York Daily News," Michael Goodwin. We have syndicated columnist Miguel Perez with us. And in our Los Angeles bureau, Ben Smith, senior political reporter for

Gentlemen, thank you for being with us.

You know, we just heard Bill Tucker's report. The economy, the housing crisis, the economy, these are things that are weighing on the campaign. They're weighing on the minds of Americans, and the economic stimulus package appears to be politically bogged down.

Let's start with Ben. I give the -- deference to the most remote correspondents. Ben, what do you think? Do we have a chance of getting this done, or is this politically bogged down at this point?

BEN SMITH, SENIOR POLITICAL REPORTER, POLITICO.COM: Well, Harry Reed has said that they can't -- they can't get it done at all until John McCain and Hillary Clinton and Barack Obama get back off the trail.

So they're certainly going to wait for that. You know, for all three of them and, you know, for both parties there's a lot of incentive to get something passed. And there's been sort of a minimal package that the House got through that seems like it contains elements that everybody -- that everybody can agree on, particularly injecting some cash right into the economy.

PILGRIM: And yet, there are some political additions, too. This -- there's a February 15 deadline. Do you think they'll make it, Miguel?

MIGUEL PEREZ, SYNDICATED COLUMNIST: I don't know. You know, I've been following up on what Ben just said. I think it's so disgusting that the American people are watching our Congress and our president and everybody that we are -- supposedly put there to represent us and to do well for us stagnating this way. Because it's stagnant. Congress is not going in any direction.

And, you know, it makes me very, very upset, and I'm sure a lot of Americans are very upset. Here's all these politicians asking us for their vote. And now Harry Reed says he has to wait for three main political candidates to come back to Washington so that we can solve this emergency?

PILGRIM: No, the situation -- it is abysmal. And the bills don't stop at the American kitchen table. That's for sure.

MICHAEL GOODWIN, COLUMNIST, "NEW YORK DAILY NEWS": Well, let's not overstate, though, what the stimulus will do. I mean, people will get a certain amount of a rebate. Businesses will get some faster write-offs of their expenses. And everybody will enjoy that.

But the fact is that's not going to solve the economic problems that we're -- that we're facing. That's not going to stop a recession. It's not even going to shorten one. It may provide some temporary relief for the individuals who benefit, but we shouldn't kid ourselves that this is the answer to the economic problems.

PILGRIM: Absolutely not, Michael. And -- but in fact, the economy is one of the top issues on the campaign trail, and all the candidates are professed to try to fix it for the American people.

You watched the debate last night. I'll start with you, Michael, since you just brought this up. You watched the debate last night. Do you think that any concerns were answered in any of the discussions that have come forward so far?

GOODWIN: By and large, the candidates are in full pander mode. And the answers to the economy are going to require sacrifices, and this is going to be very difficult. We've dug ourselves into a hole of debt, both nationally and for many families.

And we've outsourced the jobs. We're importing products. We're borrowing money from China. And we're -- you know, our banks are being bailed out by Arab oil sheikhs and people in -- throughout the Asian continents.

So it's a very difficult situation now to say, "Let's fix it right away." It's going to take time. It's going to be difficult.

So the candidates don't want to really approach these things that's going to say, you know, "Mr. and Mrs. Public, I can't really solve this right now. It's going to take a big program." They don't want to bring that up. It's not a happy response.

PILGRIM: It certainly isn't. Ben, thoughts on this? SMITH: Well, I mean, a stimulus package is something that, you know -- I mean, whether or not it's a pander, it's also, you know -- economists -- economists seem to think it's a good idea. And that involves sending people checks in the mail. And that's something that politicians, you know, are eager to do and like to do.

PILGRIM: Miguel, thoughts?

PEREZ: Yes. Look, it's all mental. The stimulus package will help our mentality as a nation. We will go out and spend. And it's -- we will think that the economy is better, and that's why we'll make the economy better.

GOODWIN: I just want to add, we do know that we're borrowing that company. Our government doesn't have the money. It's borrowing the money from China, presumably, so we can go out and buy more goods made in China. I mean, I'm not sure who we're bailing out here besides China.

PILGRIM: All right. Let's talk politics, and the debate last night was riveting, I have to say. We do have a sort of post-debate discussion going on. The tone was extremely cordial last night, losing a little bit in translation today.

We have something from Los Angeles. Barack Obama said he's more electable, the more electable candidate for the Democrats. Let's listen for a second.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: I'm confident I will get her votes if I'm the nominee. It's not clear that she would get the votes I got if she were the nominee, and that, I think, illustrates the potential difference in terms of how we could run our campaigns.


PILGRIM: Two members of my panel just said that's tough.

PEREZ: Very strong point.

PILGRIM: That is quite a target. Any...

PEREZ: I agree with him totally. I think that, especially with African-Americans after what's happened with Bill Clinton and so forth, it's going to be very hard for Senator Clinton to attract the African-American votes. They're not going to vote Republican, but they're just not going to go out to vote.

GOODWIN: I'm not sure why Obama in particular kind of slept- walked through the debate last night. And I'm not sure what his point was in approaching it that way. I mean, he obviously has some hard points to make. He went after her today on Iraq, on the 11th amendment and her original vote. I'm not sure why he didn't bring it up more last night. There was something about the audience. The audience seemed to want a kissy-huggy thing, and the candidates complied.

PILGRIM: And right from the beginning it was that.

Ben, any thoughts on the tone of the debate last night and the new tone that's being taken today?

SMITH: I mean, it was a huge audience of -- I think record- breaking audience, 8.3 million people. People who are not political junkies like us who want to see these guys slash each other up but rather, you know, people who are maybe getting introduced to them to some degree for the first time. And, you know, they wanted to seem like they were nice human beings. I mean, that was a big part of it.

PILGRIM: You know -- go ahead. Go ahead, Ben.

SMITH: Returning -- you know, returning to today what's so striking about what Obama said is last night he said Hillary would be on his short list to be vice president. Based on what he said this morning, I guess that she's not electable. She's actually not on his short list.

PILGRIM: I would say that's quite a departure. You know, I really would like to get into something that's being talked about a lot. But you know, we like to take apart the myth of this, and this is the Obama youth vote. Many people say he has galvanized the youth of the country. And I don't think that's deniable.

But what is a question is how mobile will that youth be in going to the polls? Traditionally, they're not. Miguel, your thoughts on this?

PEREZ: Traditionally they're not. You just read my mind. That's the problem. That was the problem all along with the Obama followers. And I think it will repeat itself.

It's also the same situation with the Hispanic vote that he's so anxiously trying to get right now. He's kind of come late to that competition with Senator Clinton, who already has the support of the overwhelming majority of Hispanic leadership.

PILGRIM: It has been suggested to me that we're working with a new -- a new situation with these, because they can now watch reruns of the debate on YouTube, that they can become galvanized in their own way. They don't have to actually participate in a schedule of events. The only thing they really have to do is show up at the polls. And it may change the equation a bit. What do you think?

GOODWIN: Well, look, I think Obama is a different character than, say, Howard Dean or the other people who sort of had a youth buzz in the beginning of their campaigns and then fizzled. I think Obama has proven already that he's attracting that coterie of Democratic voters, plus the black voters in the South we saw turn out for him. I mean, he's galvanizing a coalition, surely creating a coalition that hasn't existed in Democratic politics for some time. If he can hold it together and expand it, he's got a real shot.

PILGRIM: The campaign is really styling itself as a young campaign. We were struck by the sort of pop culture, Warhol-esque posters that the Obama campaign has put out.

Ben, any thoughts on the youth vote and the Obama campaign?

SMITH: Yes, I mean, two things. First of all, you know, the -- people like us always say, "Oh, well, they never turn out." This year they have, basically. It turned out in proportion to the group. You know, people under 35 usually turn out less than Baby Boomers. That's not -- that has not really been true this year.

And this is probably something the Obama campaign, you know, thought really hard about. They got everybody's e-mail address. They got their cell phone numbers at rallies. They worked really hard to contact people, to you know, get -- to tell them that, if they haven't voted before, how to vote, how to register. And it seems to be working.

PILGRIM: He has $32 million in January buys a lot of pizza for workers.

PEREZ: I do want to follow up on something Michael said about building that Democratic coalition. Because you've got -- they do have to be careful about who they invite into this coalition. People like is not going to help them in the general election. The support that Obama just got from I think is going to hurt him.

GOODWIN: You mentioned the money, too. That's -- that's another big distinction between these previous insurgent campaign. I mean, he's probably got at least, if not more money than Clinton, and he's getting it from more people in smaller donations.

And the beauty of that is they've invested in him. He can go back to them later. They haven't maxed out. And because they've given $25 or $50 -- they're probably going to follow him. This is not just an easy check they write and they're going to ignore it. So it's a different thing that so far it's working like we haven't seen it work for a long time.

PILGRIM: Ben quick one? Or shall we go to break?

SMITH: You know, the money is a huge deal. It means that Hillary Clinton needs to close it out fast, because you know, she may be ahead. But the longer this runs, the more he can outspend her.

PILGRIM: OK. We'll be back with our panel in a minute.

Coming up at the top of the hour, "THE ELECTION CENTER" with John Roberts. And John joins us now with a preview of that show -- John.

JOHN ROBERTS, CNN ANCHOR: Kitty, good evening to you. Thanks very much.

"CNN ELECTION CENTER" coming up at the top of the hour. After being so agreeable last night, senators Hillary Clinton and Barack Obama are back to highlighting their differences. Iraq and health care are in the center of the spotlight.

As well, John McCain and Mitt Romney going at it. Both Barack Obama and John McCain pick up important endorsements in the state of California today.

And Soledad O'Brien has a rare one-on-one interview with Michelle Obama. You're not going to want to miss that. She talked to her for about a half an hour and got some interesting insight into the campaign, as well as her thoughts on what it might be like to be the first lady of the United States.

Kitty, join us at the top of the hour at the "ELECTION CENTER."

PILGRIM: We look forward to it, John. Thank you.

A reminder now to vote in tonight's poll. Do you believe that the greatest crisis in American government is the failure of our elected officials to represent the will of the American majority? Yes or no. Cast your vote at We'll bring you results a little bit later in the broadcast.

We'll be back with more of our panel in a moment. We'll next discuss the Republican candidates. Stay with us.


PILGRIM: We are back with Michael Goodwin, Miguel Perez and Ben Smith.

Gentlemen, let's talk Republicans. Mitt Romney yesterday was attacking John McCain for not being a true conservative. Let's listen to what he said.


MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Senator McCain has, over his career in Washington, demonstrated in very remarkable ways strong leadership which has tended to be, in most notable accomplishments, leadership towards -- for liberal causes.


PILGRIM: What do you make of this, Miguel?

PEREZ: It's funny that Mr. Romney would accuse anybody of being too conservative when he has flip-flopped so many times himself, we don't know what he is.

PILGRIM: You know, I have to say Mr. Huckabee also came out today and said, "I don't consider McCain a liberal. What Romney says is absurd." Ben, thoughts on this? SMITH: I think Mike Huckabee wants a slot on the ticket. It's a very sharp, accurate criticism in certain ways. But Romney is just a terrible messenger for it, because it applies to him, as well.

PILGRIM: John McCain got the endorsement of California Governor Arnold Schwarzenegger and Rudy Giuliani, who arguably would be on the more liberal side of the party. Today he got conservative endorsement of Ted Olson, former solicitor general, and -- but then the "L.A. Times."

GOODWIN: "L.A. Times" and "The New York Times." That's not exactly the conservative organs.

Look, McCain is having a problem consolidating the conservative block of the party. It's -- you know, he's done very well everywhere else, but that is still hanging out there. It's been a longtime issue for him. That's his battle now, to do it in the next few days. And so Romney recognizes this is his last chance to upset that. So that's why he's sharpening his attacks.

PILGRIM: Romney is also spending enormous amounts of money at this point. It's not a surprise. I mean, it's the way to basically run the campaign. Any thoughts on his strategy?

GOODWIN: Buy, buy, buy. And if you've got the money, why not spend it? This is it.

PILGRIM: This is...

GOODWIN: No sense saving it now.


SMITH: Save money.

PILGRIM: What? What, Ben?

SMITH: You know, conservatives always say that it's easier to spend other people's money than your own, about government, but Romney here is spending his own.

PILGRIM: Yes, 1,600 delegates at stake next Tuesday for the Democrats. More than 1,000 for the Republicans. This is -- this is basically the whole thing, isn't it?

PEREZ: Yes, I would argue that, you know, it's kind of obscene that Romney is trying to buy this election, though. I mean, that's the way I look at it. I mean, if the other guys had his wealth, then you know, the competition would be totally different. So he's basically buying -- you know, pushing himself to our eyes with his commercials and so forth.

PILGRIM: Nobody's not spending money. You can't really...

PEREZ: But it's -- you know, it's his own wealth that he's spending, and he's sort of buying the election. PILGRIM: OK. Is Iraq out of this campaign right now, the Iraq debate?

GOODWIN: Well, look, it has kind of fallen off a little bit. It's that the Democrats more or less agree with each other on what to do next. They don't agree about the past, but they do it sort of going forward more or less.

And the Republicans agree with each other about going forward. Soon, when we have the nominees, it will be sharpened again.

And I think what we saw today with the uptick of violence, the big blast in Baghdad, American deaths went up in January from December. December was a record low. January was 39 deaths. So it's going to come back, and it's going to be sharply defined, I think, for the rest of the election, along with the economy.

PILGRIM: Ben, quick -- quick thought? We're just about to finish.

SMITH: You know, Obama said today that he's the better candidate than Clinton because we can kind of re-litigate the beginning of the war with McCain. That's the case he's now making, that he'll be able to argue that, you know, McCain was wrong in the first place about the war. It seems like that's the central argument on the Democratic side now.

PEREZ: What is clear to me right now is that there is one issue, that it will be very clear for voters in November, and that is the war. Because there's a gulf between the Republicans and the Democrats. The Republicans are accusing each other of having set a timetable, and the Democrats are setting all kinds of timetables.

PILGRIM: Yes, and it's absolutely not possible to run a campaign without getting back to this issue ultimately.

Gentlemen, we have to hold it there. Thank you very much. Michael Goodwin, Miguel Perez and Ben Smith, thank you.

Still ahead, "Heroes," our tribute to men and women who serve this country in uniform. We'll be right back.


PILGRIM: "Heroes" is our weekly tribute to the men and women who bravely serve this country, and tonight we introduce you to former Marine Sergeant Justin Clough.

Last month, Sergeant Clough was awarded the Bronze Star for his bravery in Iraq. Sergeant Clough was shot by a sniper while on patrol in his second tour. He endured nearly 20 surgeries in order to walk again.

Philippa Holland has his incredible story of survival and recovery.


PHILIPPA HOLLAND, CNN CORRESPONDENT (voice-over): Former Marine Sergeant Justin Clough is fighting back, fighting to overcome life- threatening wounds he suffered while leading troops in Iraq.

SGT. JUSTIN CLOUGH (RET.), U.S. MARINE CORPS: I remember them kind of pulling me in the truck and, you know, feeling some burning in my hip area. And the last thing I remember was my brother yelling at me, "You're going to be OK. You're going to be OK."

HOLLAND: Clough joined the Marines the day after he graduated from high school, his action motivated by the terrorist attacks of September 11.

CLOUGH: It was time to serve and do something for my country.

HOLLAND: Barely 19, he was an infantryman and sent to Afghanistan.

CLOUGH: We were on the Afghan/Pakistan area a lot. We were climbing the hills and patrolling the borders.

HOLLAND: A year later, he was sent to Camp Bucca in southern Iraq.

CLOUGH: Our job was to secure the prison.

PILGRIM: During the second tour in Iraq he was promoted to squad leader.

CLOUGH: Something I always wanted to work up to. To be a squad leader, lead Marines in combat.

PILGRIM: For over five months, Clough trained his Marines while they patrolled the streets of Iraq and drove out insurgents. On December 26, 2005, he was out with his squad on a routine patrol and had stopped a car for inspection.

CLOUGH: That's when I got shot. By a sniper.

PILGRIM: Shot in the hip, the bullet damaged his internal organs, his femoral artery and caused severe nerve damage. He's undergone 17 surgeries. Now he's walking again.

CLOUGH: No matter what happens in life, you can bounce back from anything if you have the right mental attitude. And pretty much if you set your mind to anything, you can achieve it.

HOLLAND: Philippa Holland, CNN.


PILGRIM: We would like to wish Sergeant Clough our very best.

Now we have the results of tonight's poll. Ninety-eight percent of you believe that the greatest crisis in American government is the failure of our elected officials to represent the will of the American majority.

We do have time for some of your thoughts. And Glen in Arkansas wrote to us: "Hey, Lou, everybody has it all wrong about George w. He has done wonders for uplifting the middle class... of India and China."

And Charles in Georgia wrote to us, "I just realized that we won't have a candidate in the general presidential election who will both get us out of the mess in Iraq AND correct the illegal immigration problem! I guess I'll flip a coin, if I can get my hands on one!"

And Mary in California wrote to us, "If we are going to turn this country around we need to start producing goods in the U.S. that will bring the jobs that went overseas back home."

We love hearing from you. Send us your thoughts at Each of you whose e-mail is read here receives a copy of Lou's new book, "Independents Day: Awakening the American Spirit." It is the book that Republican and Democratic Party and corporate America do not want you to read.

Thanks for being with us tonight. Please join us tomorrow. For all of us here, thanks for watching. Good night from New York. "THE ELECTION CENTER" with John Roberts starts right now.

ROBERTS: Kitty, thank you very much. And welcome to the "CNN ELECTION CENTER."