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Lou Dobbs Tonight
Obama's Big Decision; Major Shift in Bailout Plan; Border Betrayal
Aired November 12, 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: Wolf, thanks. Tonight, a stunning reversal by Treasury Secretary Hank Paulson. Paulson acknowledging that his ill-conceived plan to buy so-called toxic assets simply didn't work and is unnecessary.
Tonight, crude oil and natural gas prices are plummeting. Crude oil prices today fell to the lowest level in 21 months. Oil man T. Boone Pickens joins me tonight to tell us what plunging energy prices mean for his plan for energy independence.
And tonight a new setback for supporters of the former border patrol agents at the center of an outrageous miscarriage of justice. We'll have the very latest for you on the case of former border patrol agents Ramos and Compean. All of that, all the day's news and much more from an independent perspective straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate, and opinion for Wednesday, November 12th. Live from New York, Lou Dobbs.
DOBBS: Good evening everybody. Treasury Secretary Hank Paulson today abruptly reversed course on the federal government's trillion dollar bailout of Wall Street. Paulson said the government no longer plans to buy those so-called toxic assets that he said six weeks ago were an absolute necessity.
Instead, the government will now make new investments in financial institutions, something we've been advocating here for months, and at the same time, the Bush administration, under intense pressure to bail out the automobile industry. The president-elect considering the idea, of appointing in fact a top official, a car czar to supervise the turnaround of the big three car makers. Ed Henry has our report from Chicago.
(BEGIN VIDEOTAPE)
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): President- elect Barack Obama has been huddling behind closed doors in Chicago mulling additions to his team. Sources close to the transition say one option getting a serious look is a new White House job dubbed car czar, a point person to deal with crisis in the auto industry.
Among the names starting to circulate for that post, David Bonnier (ph), a former Michigan congressman with close ties to the labor unions who helped elect Obama and are fretting about dwindling manufacturing jobs. Auto industry officials also tout Dan Terrillo (ph), a trade expert helping to lead Obama's transition on that issue. SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I would like to see the administration do everything it can to accelerate the retooling assistance that Congress has already enacted.
HENRY: Beyond creating more bureaucracy, Obama wants drastic action, urging President Bush to support an emergency aid package for the auto industry, but the Bush administration remains skeptical of yet another government bailout unless the big three agree to drastic changes.
HENRY PAUSLON, TREASURY SECRETARY: We need a solution, but the solution has got to be one that leads to viability.
HENRY: Obama too wants Detroit to fix its business model and help clean up the environment by sharply increasing production of green vehicles, but he's also suggested some long-term solutions may have to wait to help prevent a short-term catastrophe.
OBAMA: The news coming out of the auto industry this week reminds us of the hardship it faces. Hardship that goes far beyond individual auto companies to the countless suppliers, small businesses, and communities throughout our nation.
(END VIDEOTAPE)
HENRY: But the Obama transition team may face some critics who believe that what's needed is not a new layer of government, just a new approach to the issue, which is why in the end after some contemplation, they may not end up not actually picking a car czar. They may just rearrange some other things, Lou.
DOBBS: Car czar, bizarre thing, has been with us now for third 30-some odd years. It's something that we really don't need any more of, I would hope. Maybe just some good old fashioned hard work and some results. Thanks a lot. Ed Henry.
Rising tensions on Capitol Hill tonight over whether to bail out the automobile industry. House Financial Services Chairman Congressman Barney Frank is drafting legislation right now to give the car makers $25 billion of emergency aid in return for a government stay. Republicans, however, increasingly concerned that federal government bailouts are completely out of control. Kate Bolduan has our report from Capitol Hill.
(BEGIN VIDEOTAPE)
KATE BOLDUAN, CNN CORRESPONDENT (voice-over): Democrats are ratcheting up pressure on President Bush to go along with bailing out the American auto industry, despite fresh push back from congressional Republicans and the White House.
REP. BARNEY FRANK (D-MA), FINANCIAL SERVICES CHAIRMAN: We will pass the bill and then he can decide to veto it or not.
BOLDUAN: Barney Frank, chairman of the House Financial Services Committee, is the man tapped to craft the automaker bailout bill. According to a Democratic aide, the new bill will include a provision giving taxpayers an ownership stake in the automakers, raising the question of whether the government will demand reforms. A bill could be ready as early as Tuesday, perhaps $25 billion coming from the Wall Street bailout package, money Frank says is needed.
BARNEY: In its weakened question that the economy is in, a total collapse of the American automobile industry would do more damage than not doing anything.
BOLDUAN: This may make next week's lame duck session one last showdown with President Bush. Conservative Republicans are finding it hard to stomach the idea, coming hot on the heels of a string of government rescues.
UNIDENTIFIED MALE: Members of Congress all have these voting cards. Right now, we're using them as credit cards.
BOLDUAN: Republicans like Alabama Congressman Spencer Bachus ask, where do the bailouts end?
REP. SPENCER BACHUS (R), ALABAMA: And I'm afraid if we don't answer the question very soon, when does this stop? That it's going to stop when we run out of money. If we don't, I think the American people will simply rise up and stop us.
(END VIDEOTAPE)
BOLDUAN: Now one big question is what will happen in the Senate. Democrats maintain a slim voting majority here, and there is some skepticism among Republicans, but it's still unclear if there's enough opposition to block this new bill, Lou.
DOBBS: Kate, thank you very much. Kate Bolduan from Capitol Hill.
An astonishing reversal by Treasury Hank Paulson today on that huge trillion dollar bailout of Wall Street. This after Secretary Paulson's outright fear mongering back in September when he said the purchase of toxic assets, the only way to save our banking system from collapse. Lisa Sylvester has our report.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Treasury Secretary Henry Paulson making a dramatic u-turn from the plan he sold Congress and the American people back in September.
PAULSON: We said the right way to do this is not going around and using guarantees or injecting capital.
SYLVESTER: But today, that's exactly what the Treasury secretary is doing. The Treasury Department has already pumped nearly $300 billion into U.S. banks. Paulson now wants the Treasury Department to expand the program, injecting capital into the markets for credit cards, auto and student loans. Paulson also announced he's scrapping the cornerstone of his original plan to buy up toxic bank assets. PAULSON: When we went to Congress, illiquid assets looked like the way to go. As the situation worsened, the facts changed.
SYLVESTER: Paulson didn't say what facts changed, and he doesn't seem to be looking back.
PAULSON: I will never apologize for changing an approach or a strategy when the facts change.
SYLVESTER: Critics say Paulson doesn't appear to have a solid plan in place.
PETE SEPP, NATIONAL TAXPAYERS UNION: No one is really driving this policy bus. People are just all sitting in the back yelling to go this direction or that and they're hoping that they won't run into something and crash the entire thing.
SYLVESTER: Much of the first installment has already been spent, but instead of loaning the money to unclog the credit system, many banks are holding on to it.
STEPHEN MOORE, WALL STREET JOURNAL: We still have a crisis in the banking industry, and there's no evidence that that 300 billion that has already been spent has had an efficient effect in terms of getting the financial markets working again.
SYLVESTER: There's not a lot of transparency or accountability either. The bailout package passed by Congress called for a special inspector general to oversee how the money is being spent. That position is still vacant.
(END VIDEOTAPE)
SYLVESTER: Congress also called for a joint House/Senate oversight committee, but because lawmakers are out of session, that's not up and running, so at this point Secretary Paulson has a lot of room to maneuver, make changes, spend billions, without much oversight. And we should mention for financial institutions that want a piece of the bailout, the application it's only two pages long, incredibly -- Lou.
DOBBS: Two pages. Do they have to sign it or anything --
SYLVESTER: They do have to sign it, but you know as many people have pointed out, the credit card applications are longer than this. Now they say that this is a preliminary application, but we are talking billions of dollars here. And again, two pages long. That's the preliminary application.
DOBBS: Do the taxpayers get some sort of reward points if they provide a bailout for something like American Express or one of the credit card companies?
SYLVESTER: You know it is not even clear if taxpayers will ever see a dime of this money. I mean and that's what several of these taxpayer groups like the National Taxpayers Union, they see that this is just throwing money -- that it doesn't even -- there's no sign that it's actually going to work and no sign that taxpayers will ever get this money back, Lou.
DOBBS: We should probably start a LOU DOBBS TONIGHT booking operation placing odds on whether or not the taxpayers ever get a dime back, maybe pick up a little extra bailout money on the side here. Thank you very much -- Lisa Sylvester.
Well as Lisa just reported, today's abrupt stunning reversal by Treasury Secretary Hank Paulson is nothing less than a humiliating defeat and retreat from a policy he declared to be urgent and critically necessary just at the beginning of September. Paulson repeatedly saying the country faced a financial disaster, talking about disaster and financial collapse if Congress didn't allow the federal government to start buying up those toxic assets.
I told Paulson at that very time, at the beginning, that the very idea of buying these toxic assets would not work. In point of fact, I warned the Bush administration a year ago that any bailout of financial institutions wouldn't tackle the root causes of this financial crisis. Here's what I said November a year ago.
(BEGIN VIDEO CLIP)
DOBBS: Maybe instead of putting 75 billion to $100 billion in front of those financial institutions, maybe they give that money to those homeowners in foreclosure and nearing foreclosure and will try a trickle-up theory in this country for a change.
(END VIDEO CLIP)
DOBBS: That was November of last year. Here we are a year later, this Treasury Department with a lot more information than any of the rest of us had available to us, still failing to come up with an intelligent plan to help working men and women who remain in danger of losing their homes, not to mention the million Americans who have lost their homes over the course of the past year.
Secretary Paulson's bailout reversal today did nothing of course to calm the markets. Investors absolutely nervous as they can be now. And stocks plunged for a third straight day, dropping more than 400 points. Closing at 8282 on the Dow. Crude oil prices continuing to fall from the all-time high of $147 a barrel setback in July. Crude oil prices down to a 21-month low today of $56 a barrel.
Gasoline prices also dropping. Now standing at $2.20 a gallon, national average. More evidence today, however, of the financial crisis that faces many homeowners. A new report showing home values have fallen for seven straight quarters. Home prices down nearly 10 percent in three months. According to zeiler.com (ph), one third of homeowners who sold their homes in the past year lost money.
Well, homeowners prospects next year will depend in large measure on the new Senate. Three Senate races, however, remain unresolved. And in Alaska, election officials there are counting the last ballots in the contest between Republican incumbent Senator Ted Stevens who was convicted of corruption last month and his Democratic challenger Mark Begich (ph). Stevens currently leads the vote by more than 3,000 votes.
In Minnesota, that race between incumbent Senator Norm Coleman the Republican, his Democratic challenger, the comedian Al Franken is of course going to a recount. Coleman right now leads by just about 200 votes, and in Georgia, there will be a run-off December 2nd between Republican Senator Saxby Chambliss and Democratic challenger Jim Martin (ph).
Neither candidate won the election outright with a 50 percent majority the state requires, although Chambliss missed it by just a hair. Until those races are resolved, the Democrats have 57 seats in the new Senate. Republicans, only 40. The Democrats need 60 seats to have a filibuster-proof majority.
A reminder today of the national security challenge facing this country in Iraq. A man dressed in an Iraqi military uniform today killed two of our troupes in the northern Iraqi city of Mosul. Six more of our soldiers were wounded in that attack and five of our troops have been killed in Iraq so far this month; 4,195 troops have been killed since the war began; 30,793 of our troops have been wounded; 13,565 of them seriously.
Still ahead here, important new developments in the case of the former border patrol agents given a harsh prison sentence for shooting an illegal alien drug smuggler given immunity to testify against those border patrol agents. We'll have that report.
And lobbyists and special interest in a feeding frenzy in the nation's capital, trying to win a share of the government's massive bailout. Is anyone looking after the interests of our middle class? Is there such a thing as our national interest that anyone recognizes at least in Washington, D.C.?
We'll have that story next.
(COMMERCIAL BREAK)
DOBBS: More and more businesses are joining financial institutions seeking a big government bailout. Lobbyists and special interests all looking toward Washington to give their clients a piece of the federal money, but no one seems to be looking out for the interests of American taxpayers as Ines Ferre reports.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): The list of ailing companies running to Uncle Sam for a handout keeps growing. American Express, which turned itself into a bank, is now reportedly asking for $3.5 billion. Expect more to come.
STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: We don't print enough money to bail out every section of corporate America and at the end of the day, some companies are going to go under, some are going to fail, and some we're going to support, but clearly, the taxpayers are going to be at risk for the foreseeable future.
FERRE: Of the $700 billion approved by Congress, Treasury has spent most of the initial $350 billion on banks and AIG. There's now a scramble for the 60 billion left. Lobbyists in Washington are swarming around the money pot. Congresswoman Marcy Kaptur voted against the bailout bill twice.
REP. MARCY KAPTUR (D), OHIO: Those lobbyists have a lot of money behind them and that the ordinary citizen on whose back this bailout price tag has been placed have nobody lobbying for them, but they're members of Congress, and we need to get that workout money out now, down into the communities that are being affected.
FERRE: Critics say the bailouts can't continue.
PETER SCHIFF, AUTHOR, "CRASH PROOF": They're in a bus and they're driving for a cliff. And either we're going to drive off the edge of the cliff or we're going to turn course. If we continue on this current policy path, we are going over that cliff.
FERRE: With the American taxpayer along for the ride.
(END VIDEOTAPE)
FERRE: And some say that the frenzy to get a slice of the bailout money is undermining the original target of the rescue package, to get banks lending again and eventually trickle the money all the way down to Main Street -- Lou.
DOBBS: And I go back to what I said over a year ago and that is we should be trying trickle-up economics here, dealing with the issue of the housing crisis, dealing with the issue of millions of families facing foreclosure here and let that money flow up to the institutions that would receive it and improve their balance sheets.
But this bailout is going to everyone, and now, as we've reported, Barney Frank is getting ready to provide money to the automobile industry. We did a quick check. The market cap of both General Motors and Ford now less than $6 billion. It's incredible.
FERRE: And the thing is the definition of who's getting this money keeps expanding and expanding. So the question that people have is well when does it stop? And when do you say, let's pause for a second and assess ourselves?
DOBBS: And it also raises the question of why in the world is Hank Paulson Treasury Secretary, displaying the incompetence that he has over the course of this crisis and frankly before. Thank you very much. Ines Ferre. We appreciate it.
Well GE also participating. Of course we wouldn't want anybody to be left out of the bailout. Their financial unit will be receiving some of that federal bailout money. GE Capital saying it's eligible for government backing of $139 billion of its debt. GE Capital's business that includes credit cards and real estate lending has been hard hit by the credit crisis. Nearly half of GE's earnings in fact originate with its finance business.
House Republican leader John Boehner today demanded that the Federal Reserve tell the American people just who is receiving $2 trillion of emergency loans from the Federal Reserve. Boehner said in a statement that the Fed should comply with the Freedom of Information Act request filed by Bloomberg News.
The congressman said quote, "They must begin providing lawmakers and taxpayers all information about how they are using federal tax dollars."
And that brings up tonight's poll. The question: Since the banks, automakers and credit card companies want you to bail them all out, shouldn't you the taxpayer receive at the very least, reward points, perhaps frequent flier miles? Yes or no. Cast your vote at loudobbs.com. We'll have the results upcoming.
Up next, oilman T. Boone Pickens, he's at the forefront of alternative energy development, calling for energy independence. We'll be talking about the Obama energy plan and the Pickens Plan for energy independence.
And a setback for the cause of justice again. A Texas court upholding the sentence of imprisoned former border patrol agents Compean and Ramos. We'll have that report. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: Now developments in the case of former border patrol agents Jose Compean and Ignacio Ramos. A judge today upheld Compean's 12-year sentence for shooting a criminal illegal alien while he was fleeing. This comes even after some of his other convictions in this case were overturned by an appellate court. Casey Wian has the latest on this case of absolute outrageous justice from El Paso, Texas.
(AUDIO GAP)
DOBBS: Well, obviously, we're having some technical problems there. We'll be returning to El Paso, Texas, and Casey Wian for that report on Ramos and Compean here later in the broadcast.
Authorities in Mexico say a mass kidnapping may be linked to that country's powerful drug cartels. Mexican soldiers were patrolling an area in northwestern Mexico where gunmen kidnapped 27 workers from a farm earlier this week. Some of those workers have been released. Local media reports say a drug gang may have kidnapped those men to force them to work in marijuana fields. This is the second mass kidnapping in two months.
Let's take a look now at some of your thoughts.
Ed in Georgia: "I listen to you every evening. Obviously AIG has not gotten the message yet. Why don't we do as bankruptcy judges do put a trustee with AIG to approve what they can spend. After all whose money is it?" I think that is an absolutely splendid suggestion.
Well, Jennifer from Ohio said: "I am amazed that while millions of us are struggling, the AIG executives still flaunt their individual wealth and laugh at the government they're holding hostage."
And Julie from Florida: "American citizens need to have more input into how the Senate and Congress spend our money. AIG's unconscionable spending of our money on luxury is reprehensible."
More of your thoughts are coming up here later in the broadcast. Each of you whose e-mail is read here receives a copy of my new book, "Independents Day: Awakening the American Spirit" now available in paperback.
Up next, President-elect Obama postponing his plans to fix our utterly broken public school system. We'll have that report. And President-elect Obama taking office in now in 69 days. Will the Democratically-led Congress try to impose a liberal agenda on the liberal Obama administration?
And crude oil and natural gas prices plunging, oilman T. Boone Pickens joins me. We'll be talking about the chances of energy independence for this country. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: We'll be talking with oilman T. Boone Pickens in just a moment about energy independence and whether it's possible, but first our report on the latest developments in the case of former border patrol agents Compean and Ramos. A federal judge today upheld Compean's 12-year sentence for shooting a criminal illegal alien drug smuggler who was given immunity to testify against those two border patrol agents while still running drugs, of course. Casey Wian has the latest for us from El Paso, Texas.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Patty Compean's husband, Jose, a former border patrol agent, has spent nearly two years in prison, in protective custody for his part in the shooting and wounding of an illegal alien drug smuggler from Mexico in 2005. She was allowed to spend eight minutes with her noticeably thinner husband before a hearing to determine if his 12-year prison sentence would be modified now that an appeals court has overturned some of Compean's convictions.
PATTY COMPEAN, WIFE OF JOSE COMPEAN: He's doing very, very well considering that he's in solitary and it has to do a lot with the support and the love that he feels from the American people.
WIAN: Supporters of Compean and fellow imprisoned border patrol agent Ignacio Ramos say they are victims of an over zealous prosecution. They've collected more than 276,000 signatures asking President Bush for pardons. Many were hoping Judge Kathleen Cardone would reduce Compean's prison term by up to two years. Ten years of the agent's sentences are mandatory under a law intended to penalize criminals who use a gun to commit a crime. But Compean's attorney asked the judge to impose the same sentence, which she did. He said reduced prison time could be opposed by prosecutors and jeopardized what many believe is the agent's best hope, a presidential commutation of sentence.
ED MASON, ATTORNEY FOR JOSE COMPEAN: We have an application for commutation pending at the department of justice. And there, it will go to the president's desk. But as long as we have pending litigation, we're not entitled to a commutation, which is different from a pardon.
WIAN: Different in that his conviction would stand, but his sentence would not. For now, Compean returns to prison.
CLAUDIA MARTINEZ, SISTER OF JOSE COMPEAN: All we can do is pray and hope, you know, that's all we have left at this point. Hopefully, things will turn around for us.
WIAN: After the hearing, Patty Compean hugged Monica Ramos, Ingacio's wife. He'll be in court Thursday but his attorney's will pursue an entirely different legal strategy including a reduction of his sentence and a transfer to a minimum security prison.
(END VIDEOTAPE)
WIAN: The agents' families did receive good news recently. An anonymous donor has given $100,000 to their defense fund to help offset the incredible cost of having two fathers incarcerated.
DOBBS: All right, Casey, thank you very much. We'll continue to follow those developments. It's just an outrageous miscarriage of justice, and no amount of rationalization can change that. And apparently, this president doesn't have the sufficient character to try to reverse what is an outright wrong on the part of his administration. But anyway, we'll keep you up to date with further developments coming tomorrow from El Paso.
Now, oil man T. Boone Pickens wants to break America's dependency on foreign oil. Last summer he unveiled the Pickens plan to create real energy independence and to increase the use renewable energy. T. Boone said his plan would replace over a third of foreign oil imports within a decade. He's also the author of the book, "The First Billion is the Hardest."
T. Boone Pickens, glad to have you with us.
T. BOONE PICKENS, FOUNDER, BP CAPITAL MANAGEMENT: Thanks, Lou. Glad to be back.
DOBBS: We have oil prices, natural gas prices plummeting. This is all great news for America. Average price of gasoline now under $2.20 nationwide. Who thought we would be talking this way, even the summer you were bringing out your energy plan?
PICKENS: The Pickens plan came out July 8, gasoline prices 411. Today, 220 half. I have done a pretty good job.
DOBBS: Crude oil prices on July 11, $147. Today, $66. You have it all going.
PICKENS: Doing good.
DOBBS: The idea we can move to a plan that will give us energy independence, that is critically important to the prices because we know that they're going to move higher at some point, how high no one knows, of course. Where do we stand? What are the odds today that we'll see under the Obama administration, under this Congress, a move toward an energy-independence plan?
PICKENS: Senator Obama, President-Elect Obama, has two times said that we in ten years will not be importing any oil from the Middle East or from Africa. Two unstable areas that we have. OK, he said that twice. He's got a plan.
DOBBS: Well, I mean, that sounds good until people start to focus on the fact we don't bring a lot of our oil from those areas already.
PICKENS: Fifty percent.
DOBBS: Not from the Middle East into the United States. We bring it in from Mexico and from Canada.
PICKENS: Twenty-nine percent.
DOBBS: Right.
PICKENS: Twenty-nine percent. 50 percent.
DOBBS: Fifty percent of that which is imported.
PICKENS: That's right. 50 percent of the 70 percent imported, which would be 35 percent. But Canada, Mexico, and the UK would get 29 percent. But there's a way to do it. And I think that Senator Obama knows how to do it. And the reason is because I have had some conversations --
DOBBS: How did he figure this out? You haven't been helping him, have you?
PICKENS: Sure, I talked to him. I'm hoping the plan he has -- whatever his plan is, I think he can pull it off. And we can get our dependency on foreign oil down 30 percent in 10 years.
DOBBS: We have reports that president-elect basically -- the coal companies went bankrupt, coal right now amounts to 55 percent of the production, 55 percent of the utility power in the country. We can't replace it that rapidly under any circumstance. As a matter of fact, we have more coal resources more natural resources that we have to depend on, that is fossil fuel. Why are we not hearing more straightforward talk not only from the president-elect but from the democratically led Congress and everybody else about what we have to do to make this thing work?
PICKENS: It hasn't been going on for very long.
DOBBS: You had since July.
PICKENS: They haven't been in power that long.
DOBBS: I'm talking about you.
PICKENS: Me, I'm doing good. Listen, I'm getting the Pickens plan in front of them. I picked up a lot of support. I have 1,437,000 signed up with me in what we call the Pickens plan army.
DOBBS: Let me laugh because everybody has to have an army. A mailing list or, you know.
PICKENS: I got one. I went to Washington for 30 years and tried to influence things that happened. Nothing happened. They were nice to me and nothing happened. See if I can do better with 1.5 million people.
DOBBS: With energy prices falling as they have, how much of a setback is that? Every time prices back off, everybody forgets about alternate energy. They put it in a drawer.
PICKENS: OK. Look what's happened. It's been a yo-yo. In the '70s, the prices went up and it went down when we talked about renewables. The '80s, we were down to $10 oil, and everything was put away. Every time, if you look at the trend, yes, yo-yo up and down, but never goes back to where it was.
OK, now what's going to happen, the American people, I think I have done a good job of explaining energy in America, so I think I have done a good job with Congress. I think I have done a good job there. They understand we have only one resource in America, one resource that can replace foreign oil. You know what that is?
DOBBS: Let me guess, natural gas.
PICKENS: Why does everybody know, but we're coming around. We're getting closer and closer to solving the problem.
DOBBS: And good for you because as I said, if Boone Pickens hadn't started this campaign on the Pickens plan, who would have done it? Kudos to you and good work as always. Boone Pickens, still worth a few surprises or two for the American public.
PICKENS: Listen, I've still got tricks in my bag.
DOBBS: Keep them coming. Good to see you.
PICKENS: Thank you.
DOBBS: Up next, will President-Elect Obama take immediate crisis action to end the crisis? And public education, we'll have that report and new question about whether the president-elect can reach across the aisle in Washington and whether he needs to or wants to? We'll talk to two of the leading Congressional experts here next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Well, the transition to the Obama administration is already under way, 69 days go until the swearing in on inaugural day. No one, however, on either side of the aisle believes there's time to waste. Two of the country's top Congressional experts join me now. The co-authors of the book, "The Broken Branch, How Congress is Failing America and How to Get it Back on Track," now out, by the way in paperback. We're joined now by Thomas Mann, senior fellow in government studies at the Brookings Institution. Great to have you with us, Thomas.
THOMAS MANN, CO-AUTHOR, "THE BROKEN BRANCH": Happy to be with you, Lou.
DOBBS: And Norman Ornstein. He is the resident scholar at the American Enterprise Institute for Public Policy Research. Good to have you with us.
NORMAN ORNSTEIN, CO-AUTHOR, "THE BROKEN BRANCH": Great to be here, Lou.
DOBBS: Let's start with this Congress coming back to do -- what would it be, an addendum to the bailout seeking to bail out the automobile industry. This Congress is moving in more directions simultaneously than any I can recall. Thomas, what is your first thought when you watch this?
MANN: Well, it is. It's partly real uncertainty as to what's going to work. Secretary Paulson has been improvising (ph) for two months now, and we just don't know what will work. I think this Congress is going to try a down payment on a fiscal stimulus bill, but then grapple with this question of whether we should help the auto companies. Very controversial, very dangerous, but lots of support is building behind it.
DOBBS: Norman, your thoughts. I mean we have by some measures, depending on how you look at it, including all the money the federal reserve has put forward, the liabilities behind which now the federal government stands, we can argue between $2 trillion and $5 trillion has been poured into the economic system trying to stave off the housing crisis, mortgage crisis, confidence crisis, is this a government out of control?
ORNSTEIN: We're going to see more money poured in, Lou. I think it's a government to some degree floundering, trying to figure out what will work. We're in a brave new world when it comes to economics. We have new instruments out there like these credit default swats somewhere between $55 trillion and $70 trillion worth. We don't have any idea where they are or what the standing is or what the liabilities are, what the consequences are.
This is also an awkward time, when you have a lame-duck session in Congress. You have a president going out who is still the president and has things he'd like to get done. At the top of his list is the Colombia Free Trade Agreement. We have a Congress that wants to do some things but doesn't want to do too much.
DOBBS: I need somebody to explain to me, Tom, Norm, whichever one of you, I need somebody to explain to me why a man with just two months left in office, with all of the challenges facing this nation, wants a so-called free trade agreement with Colombia, which is -- it's a peanut in the ocean of economics. What is going on here?
MANN: Well, he believes it's part of his legacy.
DOBBS: Unbelievable.
MANN: Free trade, Lou. I know you're very excited about that.
DOBBS: Oh, I am. If I could ever see free trade, I'd get real excited.
MANN: The real important thing is what's happening with the president-elect and with his transition. The fact is he's off to a good start. The recent democratic Presidents Clinton and Carter have had very, very shaky transitions. We're seeing some competent here. We're seeing coolness and restraint. Obama's not committing much, but he's beginning to line up priorities, so look ahead past Bush, toward Obama.
DOBBS: All right, you know what? I'll sign up for that deal right now because as I was just talking with T. Boone Pickens about his energy independence plan which he says Senator Obama, the president-elect, supports. At the same time, John Podesta, the co- chairman of the committee for Senator Obama, is saying two of the priorities will be through executive orders since research funding and to stop the executive order lifting the executive ban against offshore drilling for oil and natural gas. What sense does that make?
ORNSTEIN: You know one of the things that's happening Lou is they can do more than one thing at once. They're trying to figure out, and they've got now 69 days so they're ready to hit the ground running. What they can do that will satisfy multiple constituencies. That includes a few things that will make the liberal democrats who helped to bring him into office happy while he's going to end up doing a lot of other things that will make him less happy. That's part of what's happening here.
It's also trying to figure out how you can tread through this very difficult time because you're going to have 69 days to make it happen, but you're not the president. Imagine if you're getting married to somebody. You move into the house with your fiancee, but the person she's divorcing is living there as well. That's the kind of thing we're dealing with as we go through this transition.
Fortunately, the Bush administration and President Bush himself are helping to make it easier, but when you have the president in office trying to do his own executive orders to get last things done to tie the hands of the guy coming in, and the guy coming in is talking about reversing the course of what he's done is not easy.
DOBBS: Not easy, or as President Bush would say, it's hard work. The most recent poll offers up, I think, the reason for some real competence on the part of Senator Obama. Will Obama do a good job as president? Yes, 75 percent. No, 21 percent. That's the kind of political capital that a president needs to go through what will invariably be a view rocky, points in the traditional honeymoon period. Do you expect that to be foreclosed or extended in the case of President-Elect Obama?
MANN: I do think the public's reaction to Obama after the election has been very, very positive. Combine that with the crises we face economically with the recession and I think Obama has an opportunity to get off to a good start. But he's going to prioritize, achieve some early victories, and not try to get everything done in 100 days.
DOBBS: OK, let me ask you this last question, if I may, gentlemen. "The Broken Branch," your book, as you focus on the leadership of Nancy Pelosi, the leadership of Harry Reid in the senate, is there a greater likelihood we're going to see a contest for control of the agenda, conflict, if you will, between Congress and the white house, or do you believe we're going to see a unified liberal left direction in this government for some time to come that will be untainted by petty politics between the house and the white house?
ORNSTEIN: Oh, yes, right, Lou. You know, but the fact is it's not going to be a Congress that's going to try and grab hold of the agenda from a president who served in the senate with the vice president who served in the senate, with a chief of staff that knows the house inside out and can pull it back to the middle.
There's going to be tugging and hauling. We're seeing it on the health policy front with Max Baucus coming up with his own pretty strong plan that deviates some from what President-Elect Obama promised during the campaign. We know that Ted Kennedy will weigh in and many others will as well.
But I think you have a Congressional leadership, unlike the leadership when Clinton became president that understands the Congress and the president will hang together or separately, and they're going to be pretty much attuned to try to make things happen that he wants to do. The question is whether they're going to have the numbers in their own ranks or if he can reach across to republicans as well.
DOBBS: All right. Well Norm Ornstein, Tom Mann, we thank you both, gentlemen, and appreciate it, and hope you're right.
At the top of the hour, Campbell Brown, "NO BIAS NO BULL." Campbell, what's up?
CAMPBELL BROWN, CNN ANCHOR: Thanks, Lou. Tonight, we're cutting through the bull on today's huge surprise in the government's Wall Street bailout. Turns out, as you probably know, all that money won't be going where they said it would. Also tonight Governor Sarah Palin back in the lower 48 states after offering advise to President Bush, President-Elect Obama, even the new first lady. We're going to have it all.
We're also inducting a new member into our "NO BIAS NO BULL" Rose Gallery. A Congressman who left in disgrace two years ago now going on camera to explain himself. We'll have that very emotional interview when we see you in a minute -- Lou?
DOBBS: Thank you very much Campbell.
And a reminder to join me on the radio Monday through Friday for the Lou Dobbs Show. Go to loudobbsradio.com to get your local listings for the show.
Up next here, another challenge for President-Elect Obama, fixing our failing school system. That special report is next.
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DOBBS: We devote extensive resources, time, and energy to reporting this country's educational system and its failure to prepare a generation of students to live in our society. On the campaign trail, President-Elect Obama has pledged to fix our troubled public schools, but with a struggling economy, education reform no longer seems a top priority. Kitty Pilgrim has our story.
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KITTY PILGRIM, CNN CORRESPONDENT (voice-over): One of the big decisions for the Obama family is where to send their daughters to school in Washington. Barack Obama claims to understand the challenges in education. His own sister is a teacher. He is determined to be different on the issue of education.
OBAMA: The urgency of upgrading public education for the 21st century has been talked to death in Washington. But not much has gotten done. And that failure to act has put our nation in jeopardy. I believe the day of reckoning is here.
PILGRIM: But in these troubled times, Obama ranks the education well down the list of priorities, after the economy, energy, health care, and tax reform.
OBAMA: Priority number five, I think, would be making sure that we have an education system that works for all children.
PILGRIM: The economy is already taking a toll on education budgets. School tax revenues based on property values have fallen during the real estate crisis. Sixteen states have already cut K-12 education and other childhood education programs. And President-Elect Obama has called for federal funding for early childhood funding programs, doubling funding for federal charter schools and expanding after school programs, but education policy experts say more federal programs, despite good intentions, are not the answer. DAN LIPS, HERITAGE FOUNDATION: The federal government is ill- equipped to deal with the challenges we face in our schools. Do we want decisions made here in Washington, D.C. by the distant bureaucracy, or should these decisions be made at the state and local level.
PILGRIM: One example is the no child left behind program. Federal funding for the program has increased by 50 percent in the last eight years but there's been no real improvement in education test scores.
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PILGRIM: President-Elect Obama said he would like to reform the "no child left behind" program, but he has offered only a few details on what he would like to change. The reality is in the current economy, he may be reluctant to change education policy until well into his education.
DOBBS: And this economy may well dictate many other policies as well. Thanks very much Kitty, Kitty Pilgrim.
Up next, the results of our poll and more of your thoughts as well. We'll be right back.
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DOBBS: And our poll result tonight: Ninety seven percent of you say the taxpayer should receive reward points since the banks, automakers and credit card companies want you to bail them out. We'll pass that along to our friends in Washington.
Time for more of your thoughts.
Patricia in Nevada: "AIG is spending taxpayer money on training seminars? If their training seminars were successful in the past, why is AIG in the shape it is today? 160 events cancelled? I say they cancel them all and the higher ups including Edward Liddy should be removed from their positions immediately."
And Patti from California: "I emailed AIG today and asked them when I can expect my invitation to the lavish spa retreats, dinners, and cocktail parties because I'm paying for them with my hard earned tax dollars. I haven't heard back." Well, I'm sure you will.
And Caroline in Florida: "Lou, you were absolutely outstanding last night with Ted Turner. I haven't laughed that long hard in a long time. You two are great together, get him on here more often. Love the mouth from the south." As a matter of fact, I talked with Ted about that. He'll be back soon. And we hope frequently.
We love hearing from you. Send us your thoughts at loudobbs.com.
Thanks for being with us tonight. Join us here tomorrow. We thank you for watching. Good night from New York.
Campbell Brown, "NO BIAS, NO BULL," starts right now -- Campbell?
