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LOU DOBBS TONIGHT

Senator McCain Suspends his Campaign Temporarily; Obama Rejects McCain's Challenge; FBI's Criminal Probe; Is E-Verify Dead?

Aired September 24, 2008 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LOU DOBBS, CNN ANCHOR: May I say thank you, Wolf? Up next, Senator John McCain suspending his presidential campaign, he's setting politics aside and returning to Washington to deal with our financial crisis. Senator McCain also wants to postpone the first presidential debate. Senator Obama says no, he'd like to have that debate. He's staying on the campaign trail.
And tonight, President Bush will address the nation in just two hours to call upon Congress to pass his massive $700 billion Wall Street bailout. The Bush administration and Congress today agreeing to at least one compromise that would limit executive compensation, how much, we don't know.

And at the same time, the FBI is investigating the executives and top management at Fannie Mae, Freddie Mac, Lehman Brothers, and AIG. It's a fraud investigation, one that I called for a week ago.

And among my guests tonight, Congressman Barney Frank, he's the powerful chairman of the House Financial Services Committee. I'll also be joined here tonight by three of the best political analysts in the nation; all of that, all the day's news and much more with an independent perspective straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, September 24th. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. Senator John McCain tonight has decided to suspend his presidential campaign. He's returning to Washington, D.C. to help fix the financial crisis. Senator McCain wants Congress to have a deal by Monday. Senator McCain also calling for the first presidential debate, now scheduled for just over 48 hours from now, to be delayed. Senator McCain said he is setting politics aside and calling upon Senator Obama to do the same.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: (INAUDIBLE) I'll suspend my campaign and return to Washington. I had spoken to Senator Obama and informed him of my decision. I've asked him to join me. It's time for both parties to come together to solve this problem.

(END VIDEO CLIP)

DOBBS: Senator Obama rejected McCain's challenge. Senator Obama will continue his campaign. He says the debate should go ahead as scheduled.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Because obviously, there's a moment of great uncertainty in America, as I mentioned at the rally today, the era of greed and irresponsibility on Wall Street and in Washington has led us to a financial crisis as serious as any we've faced since the great depression. And there's much blame to go around. We (INAUDIBLE) do one thing and suspend everything else.

(END VIDEO CLIP)

DOBBS: Well the statements from the senators coming just hours before President Bush is scheduled to address the nation in a primetime speech at 9:00 p.m. Eastern tonight. President Bush will call on Congress to pass his massive $700 billion bailout for Wall Street. Senate Majority Leader Harry Reid today said it would not be helpful to have Senators Obama and McCain inserting presidential politics into those negotiations.

We have complete coverage for you tonight with Ed Henry here in New York, Jessica Yellin and Bill Schneider in our Washington, D.C. bureau and Brianna Keilar on Capitol Hill. Tonight we begin with Ed Henry -- Ed, a brilliant political move today by Senator McCain.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Certainly (INAUDIBLE) Senator McCain do think that he picked up and sort of seized the initiative. In recent days, ever since this crisis began, Senator McCain has sort of been playing defense when he first said that the fundamentals of the economy are still strong.

He had to immediately walk that back. And so what this does, what this helps McCain do is get back on offense and try to drive the debate once again. And he also succeeded, perhaps, in overshadowing President Bush a bit.

The day started with talk about this primetime address. Getting President Bush front and center again is not necessarily good for John McCain. He's been trying to separate himself from an unpopular president on this economy now all of a sudden the person driving this debate.

The story right now leading the program obviously is all about John McCain. The president taking a bit of a back seat though, he still has a big megaphone and he has a difficult job tonight. Basically, top White House aides say the president has been thinking for weeks about giving a speech like this. He had been holding back hoping things were going to turn around.

It's now become clear to the White House it has reached crisis stage. As one White House aide told me, you only get to use this bullet once. And they feel that they have to ratchet up pressure on Congress to pass this $700 billion bailout.

And what is most fascinating about the whole thing, if you peel the politics back for just one moment, there's one thing that all these players agree on, from the president to the Democratic presidential nominee, the rep presidential nominee, the Fed chairman, and the Treasury secretary that if nothing is done, we could be on the verge of a calamity, some sort of an even larger fiscal crisis. And that's what is sort of breath-taking about all of this back and forth, Lou, is the fact of the matter is that that's the one thing that all sides agree on is that we are obviously in pretty difficult shape right now.

DOBBS: Yeah, I accept that. What evidence has the secretary of the Treasury or the chairman of the Federal Reserve offered in support of that contention? We know we have a crisis, but to put a fine point on this is it a crisis that becomes worse tomorrow? Monday? What is the urgency here? What is the reason for it and why is neither the White House, the Treasury secretary, the Fed chairman or the Democratic or Republican leadership in Congress not communicating that to the American people?

HENRY: Well White House aides say the president will say specifically tonight and communicate that if nothing is done quickly, that this is going to spread from wall street to Main Street, that basically it will start affecting 401 (ks). It will start affecting car loans. It will start affecting even more mortgages, be more foreclosures. That's what the case the president is going to try to make is that this is going to go beyond just you know Wall Street firms going under...

DOBBS: I guess my reaction to this is straightforwardly, and this is a broadcast of advocacy journalism, so let me be very clear. This is my opinion and mine only.

But we have seen enough of the politics of fear, whether it be in foreign policy or whether it be in domestic policy. And to apply what has worked at the margin I guess over recent years, certainly it was far more successful in earlier years. I think that it should be rejected by the American people outright.

The American people, it should be remembered by those in Washington, D.C., I would hope, are not given to fear. And it's time to reject fear and all of its presentations but particularly by the people who presume to lead this nation and you know these folks, we're very proud to call fellow citizens.

They're not too thrilled with this approach, I suspect. Thank you very much. Ed Henry.

Let's turn to Jessica Yellin in Washington, D.C. Your thoughts here, Jessica?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well I can tell you, Lou, what the Democrats are saying, which is in stark contrast to what you heard from Ed, that while John McCain may be driving the news this evening, he's certainly not driving the debate on this overall bailout package.

Barack Obama himself stopped short of calling McCain's move a political stunt, but he is taunting John McCain saying look, the president should be able to do more than one thing at once. He should be able to both campaign and deal with the financial crisis, and Obama claims that's exactly what he's been doing. Let's listen.

(BEGIN VIDEO CLIP)

OBAMA: I think the message is, if you need us, if I can be helpful, I'm prepared to be there at any point, but keep in mind again, I'm talking to Nancy Pelosi, Harry Reid, the congressional leadership, Hank Paulson. I'm talking to them every single day. We have been working around the clock.

(END VIDEO CLIP)

YELLIN: Now Obama also says that he believes that this is injecting presidential politics into the debate, exactly what he doesn't need. And it's clear, Lou that McCain blindsided the Obama campaign with this.

He announced the plan to suspend just after he hung up the phone with Obama in a conversation that the Democrat said left Obama with the impression that neither was going to be taking immediate action. So right now both sides, they're jockeying for advantage. What they are doing is working together or their staffs are, to issue a joint statement about the importance of at least resolving this crisis somehow.

DOBBS: Do -- tell me please that neither of these senators, these presidential candidates think that the American people need one more statement about how important resolving this crisis is. I mean, are we being treated to some sort of condescending nonsense by these two -- these two -- well, presumptive leaders of the free world?

YELLIN: I think what they'd say is that they are showing they can work together in the spirit of partisanship at a time...

DOBBS: Who the heck cares?

(LAUGHTER)

DOBBS: You know it would be nice. We've seen what bipartisanship brings us. I mean it would be nice to see real effective leadership, intelligent original leadership and thoughtful leadership addressing the concerns, the needs of working men and women and the middle class of this country and to see some assertion of the rule of the majority, some representation of the rule of the majority. I mean it's just -- it's breath-taking.

YELLIN: Well I can tell you one of the concerns on the Hill right now is that because this has become this issue is now a presidential politics fight that somehow the bailout itself will get watered down, that both sides will use it as a proxy to argue for their candidate or to position their candidate...

DOBBS: Listen to how, if you will, think about what we're reporting here and the way the national media is dealing with it. The bailout will be watered down, my god. We don't even know what it is.

We have no concept of what is proposed, what it will cost, what it will do, what its impact, its influence will do? What will be the shape of American society and our economy after it is not watered down or watered down? My god, it's not even the issue here. And yet it has become the fulcrum point in presidential politics. It's truly remarkable. Jessica, thank you very much -- Jessica Yellin reporting from Washington.

Let's go to Brianna Keilar on Capitol Hill. She has the latest for us -- Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Lou, we've just learned exclusively that in just a short time House Speaker Nancy Pelosi and House Minority Leader John Boehner (ph) will release a statement that says -- a joint statement that says they have made progress, that they have come to agreement on key issues and that they will continue to work towards agreement on this bailout proposal.

It was really late this morning that we first started to see Republicans and Democrats gaining some common ground in their negotiations. A key breakthrough having to do with Democrats demand that CEOs not be given golden parachutes or hefty salaries if their corporations are bailed out by government money.

Well Republican leaders in House and the Senate last night and this morning agreed with that, and then this afternoon we saw Treasury Secretary Henry Paulson signaling that the White House would capitulate on this issue of golden parachutes and hefty salaries for these CEOs.

We're now expecting Senate Majority Leader Harry Reid to be making a statement shortly, along with Senate Banking Committee Chairman Christopher Dodd. We're expecting Reid to basically tell John McCain that really what he said to John McCain on the phone, which is that he said it wouldn't be helpful for John McCain to come to Washington at this point.

Obviously, Lou, some political maneuvering going on here because we saw Democrats for the past couple of days, they've actually been calling on John McCain to take a stand on this, saying that if John McCain did not support this bailout, there would be a loss of Republican votes and Democrats said they weren't going to be carrying this thing on their own.

We have also seen a number of statements coming out from Republicans in the Senate and the House basically commending John McCain for making this move, coming back for Washington, saying that he's taking an active and even presidential role here, Lou.

DOBBS: Well, isn't that an act of hubris on the part of the Senate majority leader to suggest that a man who has at least at this point, a 50/50 possibility of being president of the United States in a few months should not be engaged in this issue? Well you can't answer that. And I apologize.

KEILAR: Well, Lou...

DOBBS: I put you in a position of opinion. I don't mean to do that. But I just find it amazing, partisan politics dominating this issue and people defining it as an issue that should be resolved in a certain way without understanding its shape, its cost, its impact. It is really Washington nonsense at its height, in my opinion. Brianna Keilar, thank you very much for being with us.

Let's go to Bill Schneider, our senior political analyst. Bill Schneider, give us a little analysis of what has become really an Alice in Wonderland event.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: A crazier thing I have never heard than this whole situation. I mean the idea of a candidate saying I'm not going to debate unless Congress comes up with a bailout. You know the job of a political leader -- the job of a president in particular is to reassure people. Remember we have nothing to fear but fear itself? I fear that Senator McCain may be spooking a lot of people by heightening the sense of anxiety and crisis.

DOBBS: But Bill, you know we've -- I mean think about this. We have got elected officials in Washington, D.C. being told by the Treasury secretary that people in this country should be more scared than angry.

SCHNEIDER: Well...

DOBBS: And we've got a president and an administration basically saying it's got to be done in 36 hours or we're going to be in grave crisis. We have some of the most mindless, incomprehensible leaders, purported leaders in Congress and in this White House that this country has ever, ever been consigned to deal with.

SCHNEIDER: Well analytically, I can only give you a reason for that, which is the only way things get done in this country is if there's a sense of urgency. If there's a heightened sense of crisis. And the problem is that these politicians are trying to generate that sense of crisis because that's the only way they think they'll get anything passed, particularly if it's going to be bipartisan.

DOBBS: Well how clever of them to have found themselves in alliance with greedy, irresponsible CEOs and Wall Street moguls so that they could drive the financial system into the dust and create thereby a crisis that would be persuasive for the American people. I'm delighted to find out there was that much foresight at work here.

SCHNEIDER: That is a very good question. I'll tell you one thing. People are very suspicious of anything that comes out of this deal in Washington. Yes, they take it seriously. People don't say that they are panicky about this, but they are concerned. But when we asked them, do you think any new program that comes out to deal with this financial crisis, this financial problem, would treat taxpayers fairly, two thirds of Americans, nearly, 65 percent, say no, they do not think it's going to treat taxpayers fairly. They're suspicious of anything that comes out of Washington as some form of a deal. DOBBS: I would like to meet those folks who think that it will. That would be an interesting, an interesting encounter. All right, Bill Schneider.

SCHNEIDER: Sure.

DOBBS: Thank you very much.

The issue of this bailout, now you have talked about taxpayers, let me talk about citizens because this seems to me to be an issue of nation and citizen. And so therefore, we want to put before you the question and poll you on this view.

Do you support or do you oppose a federal bailout of Wall Street because that's what's going on. It's that straightforward and nobody can sugarcoat it beyond that effectively or truthfully. Do you support a federal bailout of Wall Street? Yes or no. We appreciate your vote at loudobbs.com. We'll have the results upcoming.

Next, you won't believe which of our elected officials took the most money from Freddie Mac and Fannie Mae, maybe you will. We'll be naming names here next.

And a week ago I calmed for a criminal investigation into the corporate executives who helped create this mess. Tonight, as you know now, the FBI is doing just that. We'll update you on that. We'll have the report, much more straight ahead. We'll be right back. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The FBI tonight investigating Fannie Mae, Freddie Mac, Lehman Brothers, AIG, it's a fraud investigation. One week ago I called for a criminal investigation into the executives at those companies. Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The Wall Street giants toppled quickly, Lehman Brothers, AIG, Fannie Mae and Freddie Mac.

STEPHEN MOORE, WALL STREET JOURNAL: They were essentially setting up a house of cards. Once you pulled out one card, the whole thing tumbled down.

SYLVESTER: Was it just bad business practices or corporate fraud? The FBI is zeroing in on 26 companies to see if corporate executives deliberately deceived shareholders and regulators. The list according to sources with knowledge of the investigation includes Lehman Brothers, AIG, Fannie Mae and Freddie Mac -- securities attorney and former U.S. attorney for Colorado, Bill Leone.

BILL LEONE, FORMER U.S. ATTORNEY FOR COLO.: Fraud cases never get very complicated. They all boil down to who knew what and when. And I think that is the -- that will be the inquiry that the FBI will pursue.

SYLVESTER: In fact, Lou Dobbs called for a criminal investigation on September 17th.

DOBBS: You know what else is outrageous is that we're not having a real investigation into the people.

SYLVESTER: Lehman Brothers, Fannie Mae, and Freddie Mac declined to comment on the investigation. AIG said quote, "We don't have details about the investigation. Of course we will cooperate with the FBI." Senator Patrick Leahy, chairman of the Senate Judiciary Committee, called for tough penalties for any criminal wrongdoing.

SEN. PATRICK LEAHY (D), VERMONT: If there are people that have been involved with criminal conduct, I don't want to see a slap on the wrist or a fine. You know a fine to a very wealthy person doesn't make any difference. Jail time does.

(END VIDEOTAPE)

SYLVESTER: The FBI is part of a broader probe into mortgage fraud. It's also investigating some 1,400 individual real estate lenders, brokers, and appraisers -- Lou.

DOBBS: And we have reported on a couple of occasions, in point of fact already that in that part of the investigation as many as a third of the FBI's staff is involved, its agents are involved in those fraud investigations. Lisa, thank you very much -- Lisa Sylvester from Washington.

Well as the FBI is launching this investigation of those financial institutions, there's new information tonight on how campaign contributions may have shielded Freddie Mac and Fannie Mae from congressional scrutiny and reform. The lenders put millions of dollars into the campaign coffers of federal lawmakers. Louise Schiavone has our report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): They boasted of helping hundreds of millions achieve the dream of homeownership, but Fannie Mae and Freddie Mac also helped top executives achieve their dream of multimillion dollar salaries and bonuses, along the way spreading around millions of dollars in campaign contributions to members of Congress.

BILL ALLISON, SUNLIGHT FOUNDATION: Both of these two government sponsored enterprises over the last 10 years was largely fueled by the ability to get members of Congress to look the other way as to what their activities were.

SCHIAVONE: Opensecrets.org calculates lawmakers now in Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, Democrats getting 57 percent of it. Big winners include the big decision makers between 1989 and 2008, drawing from a combination of political action committees and individuals. Senate Banking Committee Chairman Chris Dodd netted more than $165,000; ranking Republican Richard Shelby, 80,000; House Financial Services Committee Chairman Barney Frank's campaigns got more than 42,000; ranking Republican Spencer Baucus (ph) more than 103,000.

And Democratic presidential candidate Barack Obama got a big boost from friends at Fannie and Freddie, more than $126,000, dwarfing Republican John McCain's 21,000. Former key Republican Louisiana's Richard Baker said he warned the mortgage giants were under regulated and overexposed.

RICHARD BAKER, MANAGED FUNDS ASSN.: Fannie was involved in just about every fund-raising event for members. They were involved in trips, charities. Their foundation was extraordinarily active in making significant contributions to groups of interest, to particular Congress people, so they did it all. There wasn't anything they left untouched.

SCHIAVONE: Nothing is illegal about the way these politicians accepted these donations. The mortgage giants had no comment today for the story.

(END VIDEOTAPE)

SCHIAVONE: Lou what's a safe bet Fannie stocks have plunged from a 52-week high of $68.60 to today's 1.74. Freddie's stocks were up a 52-week high of 65.88 to today's $1.89 -- Lou.

DOBBS: A fall from glory as it were. Thank you very much -- Louise Schiavone from Washington.

Well up next, Democrats say progress has been made in the bailout negotiations. Is that a good thing? I'll be joined by Congressman Barney Frank. He's the powerful chairman of the House Financial Services Committee. We'll be talking about that and a new effort to save the E-Verify program, the government immigration program that actually works to enforce this nation's immigration laws. The Democratic leadership is trying to kill it. We'll have a special report for you here next.

(COMMERCIAL BREAK)

DOBBS: The Senate tonight is working on an effort to save E- Verify, if you define save very carefully. E-Verify is one of the federal government's most successful, if not most successful programs, allowing employers to verify the legal status of potential employees. But as our Casey Wian now reports, opponents of immigration law enforcement want to kill E-Verify.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Nearly 6.5 million newly hired workers have been checked through E-Verify, the federal government's voluntary employment identity authorization system this year. That's about twice as many as in 2007 and five times as many as in 2003. The Department of Homeland Security calls it one of the nation's best and most effective tools for insuring a legal workforce in this country. But without action from Congress, E-Verify will expire in November. The House has already reauthorized the program by a vote of 407-2.

UNIDENTIFIED MALE: The bill is passed.

WIAN: But it's stuck in the Senate. Largely because one senator, Robert Menendez, of New Jersey wants to include a provision to allow up to 550,000 new legal immigrants to enter the United States next year.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: What we're talking about is making sure that U.S. citizens who are presently torn apart from their families and who under existing law have the right to claim that immediate family as the wherewithal to be able to be reunified using visas that don't get used.

WIAN: Now a Congressional source tells LOU DOBBS TONIGHT a deal is in the works to extend E-Verify temporarily for just six months and put off the immigration debate until next year. That's angering some legislators.

REP. LAMAR SMITH (R), TEXAS: They're really playing politics with a very, very important program that we had, maybe the most important program to try to reduce illegal immigration. And I can't think why they would only approve it for six months unless they want to try to kill it.

WIAN: Complicating the issue, lawmakers are currently focused on the nation's financial crisis, so E-Verify is on the back burner.

(END VIDEOTAPE)

WIAN: During Senate debate last week, Republican Senator Jeff Sessions (ph) of Alabama accused Senator Menendez of ignoring the will of the American people and the realization by most of their colleagues that existing law should be enforced and borders secured before immigration is expanded -- Lou.

DOBBS: Well everyone is -- in the Democratic leadership is declaring themselves -- Senator Bob Menendez holding up E-Verify, which is one -- is the most effective in the issue of workplace enforcement because it puts employers on direct notice. It gives them a defense if they do happen to hire an illegal alien if they've used the program.

There is no excuse for this program not only being renewed, but made mandatory across the country. They haven't got the guts to do it because they know it will stop illegal immigration almost overnight. And it's why they're trying to kill this with everything in their possession. It is -- I can't believe Senator Menendez is sitting there actually so bald-faced as to say I want a half million more immigrants into this country or I'll kill your program. I mean -- I mean that's where we are, folks. These people running this Congress don't care about the national interest, the common good, this nation or its citizens, period. So where are we with this thing, Casey? What happens next?

WIAN: One of the big concerns is if they only extend this program for six months and leave it to the next administration and the next Congress to deal with it, businesses are going to be reluctant to sign up for this program in the rate they have been...

DOBBS: Oh, come on...

WIAN: Recently, thousands...

DOBBS: They're reluctant to sign up for it now because they know that it will put them on notice...

WIAN: Well a thousand businesses a month have been signing up for the E-Verify program voluntarily...

DOBBS: Why in the world...

WIAN: So actually it has had...

DOBBS: ... isn't this secretary of the Department of Homeland Security out demanding that this -- this and this president so-called, demanding that this program be renewed?

WIAN: I can't answer that, but I can tell you he has made a strong statement that he wants Congress to renew it because as he has said, it's a very effective tool.

DOBBS: All right, let your senators, your Congressmen know what you think of e-verify and the necessity to keep it in effect.

It's worth noting that e-verify is 99.5 percent effective in checking the status of employees. Homeland security Secretary Chertoff said 99.5 percent are verified instantly. The biggest busy lobbyists in the country, they're the biggest opponent of e-verify. They don't think they should be bothered with laws at the chamber of Congress. I'm sure the man is proud of his record. By the way, the chamber called the program misguided and unwarranted.

Up next, the bailout plan, but how about Americans struggling with credit card debt and trying to make a living and trying to stay in the middle class?

And Democrats on the hill say progress has been made in negotiations over the bailout plan. Is that a good think? Barney Frank, chairman of the Financial Services Committee joins me next. He'll tell me what's going on and where we're headed.

(COMMERCIAL BREAK)

DOBBS: Well, Democrats on Capitol Hill saying tonight there is progress in negotiations over the bailout on Wall Street. Barney Frank is the chairman of the House Federal Services Committee. The chairman joins us toot. Congressman Frank, good to have you with us.

REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES CHAIRMAN: Thank you.

DOBBS: We have heard reports there is some progress in the compromise. Can you articulate what they are?

FRANK: First of all, we're going to set a precedent because we're going to get restrictions on CEO compensation. They won't be everything we want, they will apply to only the companies that are benefiting from this, but it's a pattern I'm trying to take and apply broadly.

We're also doing proxy access, a very important improvement in corporate governance where you have these boards of directors that are immune to anybody. And we're going to give the shareholders the right to petition so they can elect the directors.

Next we have in our bill the right of people to invoke bankruptcy for their primary residence. Right now, you can for your vacation home, but not your primary residence. They say we're going to lose the federal control for foreclosures.

Beyond that, we're giving them authority they didn't want, not just to buy paper, but to take shares in the company, that will, a, give the dividends, and b, get warrants so the results of the companies become more profitable than they have been. The federal government gets extra help.

DOBBS: You say you're giving them authority. Does that mean you're making it a mandate that they will take equity in any company they provide direct assistance to?

FRANK: No, because we want them to buy up some assets so we can do some foreclosure relief. For that they've got to buy up securities.

We are also setting up contrary to what they requested, a very tough oversight board. They will be appointed by the Senate majority leader and speak. Every single transaction they take if the bill passes will have to be immediately in real time reported to the oversight board. It will be totally public, what they bought and paid for it. If there was any suggestion there was a problem how they're doing it, that will be public.

In addition, the speaker is talking very much about having money to pay for this that would come from some levy on the securities exchange themselves or a tax on people of great wealth, but finally, we have been arguing strongly that they should go with a stimulus to provide money for infrastructure, medical care, and low-income energy assistance.

DOBBS: With all of that, let's go over the causes of that. One, the expresses compensation issue. Any numbers you want to share with us? FRANK: We reached a point, a very good study done a couple years ago at Harvard that said the percentage of after-tax income in the top corporation, the top 500, doubled from 5 percent to 9 percent. When you're sending 9 percent to compensate, and this is just the top people. We're not talking about the working person, you're biting into what you get. We passed in the House last year a bill to begin the process by saying shareholders have to vote on this. We couldn't get it through the Senate, but we're not going to have the leverage to go beyond that.

DOBBS: How are we to -- do we have an understanding as to how the treasury would deal with buying the assets at what price and what form?

FRANK: We don't have an exact one, but that's what we have the oversight for.

DOBBS: If I may, there is no one in that Congress right now who is qualified to oversee these --

FRANK: Right.

DOBBS: Some of these are --

FRANK: Lou, the oversight board will not be members of Congress. They will be elected by Speaker Pelosi and Harry Reid and they will be experts in the financial field whom we trust. I agree. We're not doing this ourselves. I'm not sure everybody --

DOBBS: I have talked to a number of people in Wall Street. Some of the best minds there, and they will acknowledge right now they do not understand what is going on, yet we're watching -- go ahead.

FRANK: Warren Buffett told us he has a rule that he won't own anything he doesn't understand, and he sold a lot of companies. And there are people who understand and they had warning that these abuses were coming. And the treasury would have to report to them.

DOBBS: What you're basically talking about, the Republicans are going to get this administration is going to get a bailout of Wall Street. The Democrats are going to get a new deal. And the result is going to be what? A nationalized --

FRANK: No. Nothing nationalized. The ownership we're going to take is going to have no voting rights. I don't think it's Wall Street -- here is the problem, a lack of regulation going back to Ronald Reagan allowed the private sector to make the mistakes that put us in this situation.

DOBBS: May I point out that the President Jimmy Carter is the one who started deregulation in 1978. The partisan thing doesn't work for me.

FRANK: I'm not being partisan. If you'd stop interrupting me -- he never said it was the problem. He never said government is dumb and markets are smart. I'm sorry, Lou. We're not going to have a serious conversation. Jimmy Carter is very different from Ronald Reagan. He moved for regulations in two specific industries, but we're talking about not about whether or not you lack regulation or if you have no regulation. And Carter never regulated the financial markets.

DOBBS: My final question, what in the world has this administration said to frighten Congress to the point that you guys would try to put through legislation in some short order?

FRANK: Hire is what they have said. They have acknowledged that the philosophy and Alan Greenspan, we passed a bill for him in 1994. He refused to do that. They're acknowledging the mistake to the private sect. Has so mess said things up that we're being in threat of loans being cut off, to finance industry to be cut off. That's we're told, and we believe it's going to hurt -- the guys on Wall Street are going to be fine. It's the guy who's trying to sell automobiles, furniture, running a small business, they're in peril of being hurt if the lending industry shuts down.

DOBBS: All right. Chairman Frank, thank you. It's a shame for us to be talking about fear on everything corner, it seems, domestic or foreign policy. It will be nice to talk when --

FRANK: I agree. Irresponsibility breeds that. We have to put an end to irresponsibility.

DOBBS: We can finish on a point we have absolute agreement. Chairman Barney Frank, thank you.

A reminder to vote in our pole. Do you support or oppose the federal bailout of Wall Street? Cast your vote at LouDobbs.com. We'll bring the results to you in a moment.

Still ahead, what happens now? Barack Obama has refused John McCain's proposal to suspend debate, and McCain has refused to debate if they haven't agreed to a bailout by Monday. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Coming up at the top of the hour, the ELECTION CENTER with Campbell Brown.

Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Hey there, Lou.

We're counting down to the big speech by the president. It's being overshadowed by McCain's bombshell announcement that he's suspending his campaign to go to work on the Wall Street bailout. We're going to ask if it's a smart move or a Hail Mary pass on his part.

Also eye-opening polls in key battle ground states. No bias, no bull, in just a few moments.

DOBBS: Looking forward to.

We'll be talking to three of the best analytical minds in the country. We'll be talking about what in the world is going on in this presidential campaign, and just how is it we have gotten to a point that somebody wants a bailout of a lot of rich folks and big institutions by Monday? No questions asked. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now, three of the best political minds in the country. CNN contributor Ed Rollins who served as White House political director, also chairing Mike Huckabee's campaign, CNN contributor, Pulitzer Prize winning columnist "New York Daily News" Michael Goodwin, Democratic strategist and Democratic national committeeman and CNN contributor Robert Zimmerman.

All right. Let's start, Ed. What motivated this decision by Senator McCain today, and what does it mean?

ED ROLLINS, REPUBLICAN STRATEGIST: Could be polling, could be negative stories on the front a page of the ""New York Times" about his campaign manager, or it could be what he says it is, he's going to go to the White House since the in the first time since April. They should have been invited or go as a voting senator, not as someone who is --

DOBBS: What do you mean by the idea -- Harry Reid means we don't whatnot you. One of you is going to be president, but we don't want you involved in this.

MICHAEL GOODWIN, DEMOCRATIC STRATEGIST: That's the problem. The candidates are over here, and the crisis is here. The candidates have to get involved in this issue. They're both senators.

DOBBS: Look at the issues they're not involved in.

GOODWIN: This is right now the one that is front and center. This has legs. This bailout is going to be a millstone around the next president's neck. They darn well should be involved. They should have been involved before.

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Let's cut to the chase. Both candidates are absolutely involved in the issue. They're both consulting with their Congressional leadership. Once you inject presidential politics into such sensitive, high-pressure negotiation, you run the risk of derailing it.

DOBBS: You mean we're sullying the pristine practice on Capitol Hill between Harry Reid and the --

ZIMMERMAN: I think you're derailing what's a very important process. Let's understand the reality, the McCain campaign according to everybody out there, is in free fall. That's why he wants to delay the debate.

ROLLINS: That's a little of an overstatement. Barack is doing better on the political issues. The key thing here, if they're going to get involved, they have to get involved and talk about which of the programs they have talked about that they're going to give up. They can't cut taxes and do all of the things they want to do and have these billion dollar programs because they don't have money.

DOBBS: Both men maintain they will continue, they will cut taxes, they will pull off. As I have said on this program for a long time, entitlements will have to be cut, period. We will have to cut entitlements, and we will not be enjoying tax cuts, yet the national media started going around clucking, listening to this nonsense as if it's real.

ROLLINS: Well, it's dishonest. I'm more than happy to have them involved with the decision because they have to live with it, and they ought to be honest with the public and say, this has changed the whole dynamic. The consequence, this is what I want to do in my presidency, but right now, moving the agenda forward is important.

ZIMMERMAN: All the more reason to have this debate Friday night not to delay it.

DOBBS: Foreign policy at a time of economic crisis is about as mindless --

ZIMMERMAN: I think the policy that would cost the jobs in our country is an important part of the debate.

DOBBS: Driven by the United States Chamber of Commerce, corporate America, it's a policy of this administration and the previous administration.

ZIMMERMAN: And they have to address that.

DOBBS: We have let them know through this campaign, 45 days less, less than that, without addressing these issues, for crying out loud. By the way if you want to look at something that's fascinating, you look at the GOP, the Republican Party platform; if you go to gop.com, look at rebuilding homeownership. It states clearly and categorically, the Republicans are opposed to the bailouts because they're an intervention into free markets.

ROLLINS: You and the platform committee are the only ones who have read that.

DOBBS: Is there any principle at work here on the part of either party?

ROLLINS: Get elected.

DOBBS: Why in the world should the American people listen to the nonsense? You heard Barney Frank, a smart guy, talking about this bailout as if it's real and tangible, and it's only based on fear and invoked by the people whose job it is to keep fear out of the market.

GOODWIN: This is a clear big issue the American people are going to have to pick the next president on. The leadership on the issue, the position of the candidates, how this bill gets resolved should be determined by the candidates now. We have to merge the politics of the campaign.

DOBBS: You're saying these two presidential candidates should stand up on this issue.

GOODWIN: They should take a chance, but they shouldn't be on Capitol Hill injecting themselves into this.

DOBBS: I've been saying it for two weeks.

ZIMMERMAN: They shouldn't be on Capitol Hill injecting themselves in what has to be a bipartisan.

DOBBS: Why not? They're going to be responsible for this. Why shouldn't they be? What is the president responsible for?

GOODWIN: This is the front line.

ZIMMERMAN: All the more reason --

DOBBS: We'll take a quick break, then things will get heated here. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: We're back with our panel. I asked Barney Frank, you get the new deal, the Democratic Party, the Republicans get to bail out a bunch of Wall Street firms and they're happy as clams.

ROLLINS: I don't think they are. I think the Republicans are getting heat from conservative groups across Washington, across the country. I think they're getting some backbone.

DOBBS: Do the Republicans still stand for anything?

ROLLINS: We'll find out. I thing this bill is one of those things, I think they want to do the right thing, but I don't think they want to do what this administration wants them to do.

DOBBS: It's amusing to watch the "Wall Street Journal" which has a brilliant op ed page, but they're falling all over themselves with government intervention because they want all of their friends who have built the system up over the years to be saved. It is unconscionable what is happening in the country. It's ridiculous. We're talking about destroying the American dream. We're talking about destroying the free enterprise capitalist society in this country that has created the wealth, just about two thirds of the wealth in the world over the course of time.

ZIMMERMAN: I think we have seen that happen by the way Wall Street has conducted itself, by the way the federal government has failed to conduct itself, student loans, small businesses, whatever you may call it, home ownership. Those dreams of America to get a better education, to own a business, to own a home, those dreams have been shattered by Wall Street and the government. It's a bipartisan disgrace.

DOBBS: And institutionally those dreams will be destroyed if we watch the economy nationalized and destroyed by this president. Why in the world would anybody listen to Paulson, to Bernanke? These are the same people who made this crisis, they facilitated and enabled it?

GOODWIN: One of the things that happened on Capitol Hill is both sides have determined more or less, and it's right than Republicans are nervous about this more so, but both sites are concerned doing nothing is worse than the bill. That's why they're arguing over the bill.

DOBBS: What kind of deal is that? We know that in public policy, sometimes the most difficult thing to do is to do nothing at all.

GOODWIN: The immigration bill is a good example of that.

ZIMMERMAN: I agree with Michael. I do believe there has to be a bailout. As onerous as it is, it has to be put in place. The problem I have, and that's going to be a focus when the president speaks, is this administration has sacrificed any credibility, any trust on any level.

DOBBS: OK. Then let's get rid of him. I don't want him in the White House any more after January 20th. Do we agree with that? I'm done with him. I have been done with this president for a long time. What I'm not done with is the idea of what this country should stand for, and the idea we would permit the spending of half a trillion dollars, do you anyhow how many capital sheets could be balanced with that money? Let them just simply disappear.

ROLLINS: Don't think it won't be a precedent here. Any time they're going to bail out Wall Street, there's going to be a lot of people in line. They're all going to be in line. The autoworkers are going to be in line. You're going to find one after the other coming here and there is a precedent set. You're going to have a Democrat Congress; you may have a Democrat president at least McCain would be a check and balance on that and if you do, kiddie by the door. It will be deficit spending like you have never seen before.

(CROSSTALK)

ROLLINS: This is a three week problem. This is something that started three weeks ago, the discussion, and all of sudden we're gonna write the biggest check in history -

(CROSSTALK)

DOBBS: You just heard - as I asked Chairman Frank and others on Wall Street - what this will be? How will this going to work? You got a laundry list of things, but they are at the margin. No one knows what this bailout is about.

ZIMMERMAN: Well, you asked about the pricing mechanism, Lou. That's the key to it. That's the key. How this is going to work. (CROSSTALK)

GOODWIN: I think you are all overreacting. John McCain is coming back. That'll take care of it.

(CROSSTALK)

GOODWIN: But John McCain is now showing up the weekend before to interfere - to really intervene in this process, when in fact he has ignored it, avoided and in fact failed to recognize the economic calamity -

(CROSSTALK)

ZIMMERMAN: To Mike's point, the bottom line is they should have been having hearings on this six months ago. If the Treasury knew this in July, why weren't they basically putting alternative plans together and having a big national dialogue about this? The idea that a president with less than 30 percent approval rating is going to go to the American public tonight and try and explain this and create a crisis -

DOBBS: By the way, don't forget - it's nine percent approval rating for his partner, the Congress of the United States.

(LAUGHTER)

DOBBS: All right, thank you very much - Ed, Michael - thank you. Robert, thank you.

Tonight's poll results: 94 percent of you say you oppose a federal bailout of Wall Street. We thank you for being with us tonight. Join us here tomorrow for all of us thanks for watching. Tonight from New York, the "ELECTION CENTER" with Campbell Brown begins right now - Campbell?

BROWN: Thanks, Lou.

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