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President Obama's Stimulus; Kirsten Gillibrand Replaces Hillary Clinton; America First; Bailout Boondoggle; Arming the Enemy

Aired January 23, 2009 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Thank you, Wolf. Tonight President Obama calling for bipartisan support for his huge economic stimulus package. Will House Speaker Nancy Pelosi and Senate Majority Leader Reid follow the president's counsel, advice and leadership and listen to Republicans as well?

Also tonight rising opposition to that nuclear deal between the United States and the United Arab Emirates, a deal that could make it far easier for Iran to steal American nuclear technology.

Also tonight, seething anger among homeowners already reeling from our housing crisis and plummeting home values. Those homeowners now facing skyrocketing property taxes.

We'll have all of that, all the day's news and much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, January 23rd. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. President Obama today declared his massive economic stimulus package is on target, as he put it, to be passed by Congress by mid-February. The president appealed to congressional Republicans to support that economic stimulus package which will cost taxpayers an estimated $1 trillion.

After a meeting at the White House, Republican leaders declared the package to be too expensive, and to take too long to have any effect. Those Republicans are demanding much deeper tax cuts than the president, and Ed Henry now reports from the White House with the very latest for us -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well good evening, Lou. The president wants urgent action because his aides are saying that this financial crisis could get worse before it gets better. So that's why for the first time in his presidency he called in leaders from both parties to sit down and try to hash this out.

Trying to push them on this $825 billion economic recovery plan, and what was most interesting is that this was the president's most optimistic comments yet about that package, saying that despite the differences the two parties have over those tax cuts you mentioned, Republicans saying they want more of them focused for small businesses, for example, the concerns Republicans have for the growing price tag of this plan. Nevertheless, Mr. Obama said he is confident that it will be passed and signed into law by mid-February. (BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I know that it is a heavy lift to do something as substantial as we're doing right now. I recognize that there are still some differences around the table and between the administration and members of Congress about particular details on the plan. But what I think unifies this group is recognition that we are experiencing an unprecedented, perhaps, economic crisis that has to be dealt with, and dealt with rapidly.


HENRY: Despite those comments, Republicans are still expressing some concerns and skepticism, pointing to a Congressional Budget Office study earlier this week that showed that some of the money in this stimulus plan may not really stimulate the economy, $200 million, for example, for the national mall. Some of it to buy it some new grass. Republicans are wondering if that's really going to create a lot of new jobs. Part of the reason why the president next week is now planning to go up to Capitol Hill for the first time as president and reach out and meet behind closed doors with Republican members of Congress to try to convince them to sign onto this plan, Lou.

DOBBS: Well will this be the president's plan or the congressional leadership or a combination thereof or a bipartisan plan? A couple of things if we may, Ed. One, how many jobs will it create? And by what time?

HENRY: The president has vowed that this plan would create three to four million new jobs during his first two years in office. That's a standard that we're going to have to hold him to. And that's why Republicans are raising concerns that what they've seen so far from the Democratic leaders in Congress, they're skeptical that it will really create that many jobs, Lou.

DOBBS: That's more than $200,000 a job in an economy that generates just about 1.5 million jobs a year anyway. So it's hard to understand the mathematics there.

HENRY: Well, part of what they point to here at the White House is the fact that a large share of it will be infrastructure money. They think it will create a lot of construction jobs, for example. They've also talked about school construction, which they think will have two effects, creating jobs to rebuild those public schools, but also to try and help make schools better obviously for education for long-term benefit...


HENRY: But obviously there's a lot of skepticism, Lou.

DOBBS: Yes, I'm less skeptical than I am concerned that we don't clearly understand the impact of the president's proposal, namely, over what period of time it will take effect. Because obviously public investment in infrastructure is a remarkably sound public policy. It is not one, however, that can be carried out in a timely fashion to reverse a recession, or at least never has been in history. At what point will we be out of this recession based on the addition of $825 billion in federal spending?

HENRY: Well that was another question raised in this Congressional Budget Office study. It was suggesting that a lot of the spending proposals in the original plan would not really take effect for a couple of years, so it wouldn't clearly help create jobs in the first two years of the president's administration.

That's part of the reason why they've gone back to the drawing board. They're going through many iterations of this at the White House today. Spokesman Robert Gibbs trying to say that basically this plan has changed a lot already since the CBO did its study. But the problem is, it's going to keep changing and changing as Congress keeps poking away at it, and it's really unclear what the final product is going to be, Lou.

DOBBS: Well it's clear that there is a remarkable need for a high order of specificity irrespective of the partisan interests here it would seem. Thank you, Ed Henry, as always, for keeping us on top of these issues.

Astonishing remarks today on the stimulus package, the remarks coming from one of the president's more influential advisers outside government, Robert Reich. Reich saying in a committee meeting earlier this month that race would play a large role in determining who would benefit from the economic stimulus package.

His comments came in remarks to a top-level committee of congressional Democrats, comments ignored by the national mainstream media. Let's hear what he said.


ROBERT REICH, FORMER LABOR SECRETARY: I am concerned, as I'm sure many of you are, that these jobs not simply go to high school people who are already professionals or to white male construction workers. I have nothing against white male construction workers. I'm just saying that there are a lot of other people who have needs as well.

And therefore, in my remarks, I have suggested to you, and I'm certainly happy to talk about it more, ways in which the money can be -- criteria can be set so that the money does go to others. The long- term unemployed, minorities, women, people who are not necessarily construction workers or high skilled professionals.


DOBBS: Extraordinary set of possible criteria to be applied to an infrastructure and economic stimulus plan. Reich apparently doesn't believe government money should be allocated on the basis of need or skills, but by something else entirely. And that leaves open the question, I think it's a question that it is shouting is, what in the world is he thinking. Reich is a former labor secretary in the Clinton administration. A well documented liberal who obviously is not resisting the temptation to inject group and identity economics into group and identity politics that affects all Americans irrespective of race or ethnicity.

Well Governor David Paterson of New York today ended weeks of speculation and appointed an upstate New York congresswoman to replace Hillary Clinton in the Senate. The governor selected Congresswoman Kirsten Gillibrand one day after Caroline Kennedy abruptly withdrew her name from consideration. Gillibrand immediately praised Hillary Clinton who, of course, is now secretary of state.


REP. KIRSTEN GILLIBRAND (D), NY SENATOR-DESIGNATE: I look to Secretary of State Clinton whose seat with which Governor Paterson has now entrusted me with extraordinary appreciation and humility. I aspire to follow in her footsteps. Knowing her shoes I can only hope to fill.


DOBBS: Well Gillibrand is a strong supporter of Second Amendment gun rights. She opposed the Bush administration's bailout of banks and Wall Street, amongst other things that she has done. Joining me now to get a better, a clearer understanding of the congresswoman is our national political correspondent, Jessica Yellin.

Jessica, Congresswoman Gillibrand seems to be on the right on a number of issues perceived to be right on the Second Amendment. She is also rated highly by the ACLU, yet we're hearing liberals, some liberals just screaming about Governor Paterson's choice of this congresswoman to fill the Senate seat vacated by the secretary of state. What's going on?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Well, Lou, you're right, she's hardly getting a warm embrace from her liberal colleagues in New York. There are essentially three categories of concern for Democrats in New York. One is straight electoral politics. There's a great deal of concern that her House district leans Republican.

And so when she leaves that district, they believe it's likely to go to a Republican, so that's one fewer House seat for Democrats in the future ostensibly. And that she will face undoubtedly a Democratic primary challenge even for the Senate seat. So she they believe is not a lock even on the Senate seat. And then that means she'll be weakened, whoever gets ahead will be weakened in their Senate race against a Republican, so that could even put that Senate seat in question.

Then there's the straight politics. I'm sorry, there's the straight politics. The NRA, as you say, she's friendly on gun rights and that's very upsetting to some liberals. Go ahead. I'm sorry.

DOBBS: Yes, no, it's sort of buffaloing, if you forgive the expression, I hear, because she seems to be so well regarded. She won against a very strong opponent in 19 -- or rather in 2006. She won reelection handily. She's highly regarded. She's rated by the National Rifle Association and the ACLU at the top from their respective perspectives. What is the reason, simply a Second Amendment position is creating all of this stir amongst the left wing?

YELLIN: Right. Let's pull back the curtain a little bit and talk about what's really going on.

DOBBS: Right. Exactly.

YELLIN: There's a matter of personal politics here. She is, as you say, a very effective candidate, in fact a remarkable fund-raiser. But she's also from a well-to-do background, and she has not served for many years. Unlike a number of other people in the New York congressional delegation who feel they have paid their dues, it is their turn, and this upstart got the big opening that everyone else wanted. Also, she's considered a little bit aggressive. And you know aggressive women in politics are often criticized for being too ambitious, even though it's you know, it's a double standard sometimes.

DOBBS: Well, wait a minute.


DOBBS: We're not introducing the glass ceiling here in politics, are we? She's taking a seat held by a famously, a bright, aggressive woman, one Hillary Rodham Clinton and the -- and where were all of these left wingers who were so concerned about the glass ceiling when they refused to come out openly, at least, against Caroline Kennedy who had significantly less experience than she did?

YELLIN: Well there is -- you're right, Caroline Kennedy did not have a lot of support among other New Yorkers. Again, personal politics, these people want the office for themselves. Many of the colleagues thought it was their turn.

DOBBS: It's hard to imagine.


DOBBS: Selfishness, my goodness, self-interest, not in the national politics. Thank you very much, Jessica. Jessica Yellin.

Well in the war against radical Islamists, U.S. missiles today killed 17 people in two separate attacks on targets in Pakistan. These are the first such attacks under President Barack Obama. Unmanned aircraft operated by the CIA firing those missiles at suspected terrorist hideouts in the border area, the lawless border area of Pakistan.

That area has been a safe haven for radical Islamist terrorists crossing the border into Afghanistan for years. And those operations now, of course, their purpose and goal to kill our troops. Last year there was as many as 30 U.S. missile attacks against terrorists within Pakistan.

Up next, rising concerns that a nuclear deal with the United Arab Emirates would also benefit Iran, one of our most dangerous enemies.

Also how lobbying and political influence still playing a huge role in the massive unaccountable bailout of Wall Street, banks and other institutions.

And you might think that putting America first might be a terrific idea. Oh, no. The U.S. Chamber of Commerce and special interests, and lobbyists have a quite different view. We'll be telling you all about that here next. Stay with us.


DOBBS: I'm pleased to report to you tonight that the port of Los Angeles has apparently come to its senses on a very important issue. The Port of Los Angeles has just canceled the purchase of x-ray security scanners manufactured in communist China. Back in October, we reported to you that the Port of Los Angeles was buying those machines from China.

We also reported that those scanners are made by the Chinese company that has family ties to the head of the communist party, yes, and the communist government. I know that's a shock to some people that China is a communist nation. But take my word for it, it is. A spokesman for the port today is telling us that those Chinese scanners did not meet their requirements.

New efforts tonight to make certain taxpayer dollars spent to stimulate our economy benefits American workers and American companies. Amendments to the economic stimulus bill in the House would add buy America and hire America provisions that would ensure an extension of the E-Verify program at the same time.

E-Verify is the successful federal program that has open border and amnesty enthusiasts running scared. Also, it would assure that employers would be absolutely certain of the legal status of their employees. Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Congress is preparing to spend more than $800 billion, or higher, to jump start the U.S. economy, new roads, bridges and schools. Some lawmakers and labor groups want buy American provisions included in the stimulus package to make sure it's Americans who are being put to work.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: It makes no sense to appropriate taxpayer dollars for stimulus programs if the businesses that receive them go out and buy imported products, imported materials.

SYLVESTER: The House Appropriations Committee voted 55-0 on a buy America amendment that requires only U.S. steel be used in projects funded by stimulus dollars. Meanwhile, Congressman Jack Kingston (ph) has introduced a hire Americans amendment. It would require contractors and subcontractors who receive stimulus money use the federal E-Verify system to ensure only people legally authorized to work in the United States are hired.

REP. JACK KINGSTON (R), GEORGIA: The stimulus package is to get Americans working again. And if we are creating a situation where people can continue to use illegal aliens, then we're not helping the American taxpayers who should be getting these jobs from the stimulus package.

SYLVESTER: But business groups are pushing back. In a letter to Democratic congressional leaders, 15 business groups, including the U.S. Chamber of Commerce, said these mandates would "undermine the goals of the stimulus legislation, diminish efficiency in the contracting process and violate the United States' international trade agreements." The conservative Heritage Foundation says buy American provisions backfired during the great depression.

JAMES SHERK, HERITAGE FOUNDATION: They passed the Smoot Holly (ph) Act that massively raised tariffs and shut down most international trade in order to get Americans to buy American. The hope was that it would stimulate the economy. What actually happened is that something that most economists look back and say that made the great depression quite a bit more severe, quite a bit worse.


SYLVESTER: Now I spoke to Alan Tonelson with the U.S. Business and Industry Council about this very point, and he said the United States' trading partners are already taking steps to protect their workers and their economy. Just look at China. They've had protectionist measures...


SYLVESTER: And that's created an unleveled trading field. The question now is that the United States should respond and do more to protect its own workers and industries -- Lou.

DOBBS: It's extraordinary. That makes no sense. By the way, if I hear one more idiot economist speak in such simple terms about the great depression and Smoot Holly (ph), without considering, for example, the very important role that the failure of the world's reserve currency had in the early 1930s in stifling international trade rather than Smoot Holly (ph), which had a negligible and much subdued effect on trade, I mean, this is just ridiculous, that otherwise educated economists don't even understand the history of economics and the truth of the policy choices that were made at that time. It's utterly mind boggling.

SYLVESTER: Yes and you can tell that this is going to be one of the talking points that will be coming up again and again as they continue to debate this on Capitol Hill.

DOBBS: Don't you love the Chamber of Commerce, the U.S. Chamber -- I wish they'd take U.S. off, because they're not representing business, they're representing multinational business in this country. They couldn't give a hoot about small business, which by the way, creates 80 percent of the jobs as you well know in this country.

I mean this is -- this is a group of absolute jerks and if American business doesn't find the guts and the principle to stand up and say, the Chamber of Commerce no longer represents business in this country, the shame will last for years. I would think that business, big business in this country would have learned from the disaster that the mindless mouthpieces that the U.S. Chamber of Commerce and the Business Roundtable, and of course, on Wall Street have wrought over the course of the past two years. Lisa, as always, great reporting. Thank you very much.

E-Verify is one of those rare successes among federal programs. That's one of the reasons that a lot of people are scared to death of it. It began as a voluntary program in 1997. Now more than 100,000 businesses use E-Verify to clear their eligible employees and to establish the appropriateness and legality of their status in this country.

E-verify is highly accurate. And that's why it is so feared. The Department of Homeland Security reports that 99.6 percent of qualified employees are cleared immediately and that's why the opponents of border security and the proponents of amnesty hate the program, are trying to kill it. The Democratic leadership in the Congress is trying to destroy this program. And it will, we hope, survive that.

Evidence tonight that the massive bailout of Wall Street, banks and others is being heavily influenced by lobbyists, special interests, well, it's all raising new concerns about the utter lack of accountability, principle and transparency. As Ines Ferre reports now the amount of bailout money that banks in your state receive is determined in large part by just how powerful your elected officials are.


INES FERRE, CNN CORRESPONDENT (voice-over): While state banks from the East Coast and West Coast have received billions in TARP money, other states hit hard by foreclosures in the housing crisis have gotten little. New Mexico's financial institutions director says seven of his state banks applied for TARP money back in October.

BILL VERANT, N.M. FINANCIAL INST. DIR.: No TARP funds have been provided in New Mexico. It's very curious, but very disappointing, because we will put those funds to use.

FERRE: OneUnited Bank in Boston got $12 million of bailout money in December with the assistance of Massachusetts Congressman Barney Frank, Chairman of the House Financial Services Committee. Frank included a provision in the bailout bill intended to help banks like OneUnited and asked the Treasury to consider OneUnited for TARP funds. Frank says he's not ashamed of asking that the Treasury help small and minority banks. But taxpayer advocacy groups say the entire application process is open to political influence. PETE SEPP, NATIONAL TAXPAYERS UNION: Just like rogue funding or defense contracts, lawmakers can exert a political influence, sometimes an undue political influence on the process of deciding who gets the money.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: We don't know who's not getting money and we don't know why people are getting the amount they're getting or not getting anything at all.

FERRE: Especially critical of how the TARP process has been handled, the chairwoman of the Congressional Oversight Panel.

ELIZABETH WARREN, CHAIR., CONG. OVERSIGHT PANEL: If you're going to use American taxpayer money, American taxpayers have a right to know how you're using it and why you are using it that way.

FERRE: Banks of North Dakota, Montana, Wyoming, Arizona and New Mexico have received no TARP money. Of those states, only New Mexico was represented on the House Financial Services Committee.


FERRE: And on the other side of the capital of those states, only Wyoming and Montana are represented on the Senate Banking Committee. And while political influence is hard to prove, the lack of transparency in the entire process makes it open to criticism -- Lou.

DOBBS: Open to criticism, doubt and by the way, we can't report whether it's working or not or what any of it's accomplished or what it's likely to accomplish, whether it be the first 350 billion, the second 350, a new 825. There's not only no accountability, there's no transparency.

There's not even a metric by which to judge the success of $1 trillion in government spending. It's insane. It's good to know that we can at least track political influence still through it all. Ines, thank you very much. Ines Ferre.

Up next, we'll be telling you why property taxes are on the rise, even as home values are plummeting and why a deal with a U.S. ally could help Iran build nuclear weapons. We'll have that special report, a great deal more straight ahead. We'll be right back.


DOBBS: President Bush signed a nuclear deal with the United Arab Emirates in the final days of his administration. That agreement was made without congressional approval, nor that certainly of the American people. There is new concern that the deal would actually help Iran pursue its nuclear ambitions. Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): President Bush has left a nuclear sized problem on the desk of Barack Obama. A nuclear cooperation agreement with the United Arab Emirates. Other countries in the region are watching the deal closely as a model for their nuclear ambition.

UNIDENTIFIED MALE: It is a case where countries feel it's a status symbol to have a nuclear program.

PILGRIM: Congressman Ed Markey (ph) has written to President Obama saying let's not put nuclear commerce above nuclear common sense. With an indisputable record as a country whose weak export controls have enabled the proliferation of the world's most dangerous weapons, the United Arab Emirates has failed a crucial test of responsible nuclear stewardship.

Iran is a key trading partner with the UAE. Congressman Brad Sherman objects to the deal saying Iranian front companies, agents and firms complicit with the Iranian regime have set up operations in the UAE. By locating in the UAE, these companies and individuals are able to hide the fact that they are part of Iran's procurement network.

REP. BRAD SHERMAN (D), CALIFORNIA: They are a trans shipment hub for Iran. Iran finds it very easy to set up front companies in the United Arab Emirates.

PILGRIM: The Bush administration signed the pact on its last days in office saying it promotes peaceful nuclear energy in the region.

HENRY SOKOLSKI, NONPROLIFERATION POLICY ED. CTR.: This idea of promoting nuclear power in the Middle East is not well thought out. One thing that everyone needs to understand, every nation that has ever acquired a nuclear weapon first acquired a large reactor.


PILGRIM: Now this is not a done deal yet. Although it was signed by the Bush administration, he did not submit it to Congress, and it's now up to the Obama administration to decide whether to go through with the agreement or not by submitting it to Congress -- Lou.

DOBBS: We can only hope. All right, Kitty, thank you very much. An amazing legacy is all I will say. Thank you.

Up next here, outrage after one of President's Obama economic advisers, informal advisers, Robert Reich injected race into a discussion about the government stimulus package.

Also embattled Illinois Governor Rod Blagojevich blasting his accuser days before his impeachment trial. He says, what trial? It's a sham. Four top political analysts will assess that with us.

And skyrocketing property taxes as homeowners are on the verge of foreclosure. We'll have that story next.


ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion. Here again, Mr. Independent, Lou Dobbs.

DOBBS: Detroit's former mayor, disgraced mayor, Kwame Kilpatrick, could be released from jail next month. Kilpatrick serving time for lying about his role in firing a police official as he covered up a sex scandal including his chief of staff. He's expected to be released for good behavior on February 3. He would have served, at that point, some three months of his four-month sentence.

Kilpatrick isn't the only inmate in Michigan who could win early release. State lawmakers there giving thousands of prison inmates possibly an early release as part of a plan to cut spending. Under that plan, inmates convicted of crimes other than rape or murder would be considered for released after they serve a minimum time. They also need to complete rehabilitation programs. The parole board would of course hold inmates past the minimum sentence if they pose a high risk of reoffending. No word on how they would make that determination.

Well, turning to our worsening housing crisis, homeowners all across the country are being hit with higher property taxes, although the value of their homes are plummeting. As Bill Tucker now reports, local governments looking for a bailout from years of waste and mismanagement, and they want their homeowners and real estate owners to pay for it.


BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): Kristina Lawson arrived home from visiting her parents this Christmas to find a huge increase in her property tax bill.

KRISTINA LAWSON, HOMEOWNER: Which was surprising to me, because when I started to do the market research in my area, I found that typically my area, prices had dropped 20 percent. In my complex alone, 12 out of 20 last year did not even -- only 12 out of 20 sold.

TUCKER: Her experience is not unique. According to the National Association of Realtors, the median sale price of existing single- family homes fell by more than 19 percent from November of 2005 to November of 2008. Yet, during that same period, property taxes soared 16 percent.

JOSH BARRO, THE TAX FOUNDATION: According to the Tax Foundation, Christie's home state of Connecticut is third on the list of states with the highest property taxes. New Jersey ranks No. 1. Taxpayers are caught in a trap.

Property taxes are expanding so much because local government budgets are expanding so much.

TUCKER: Which means.

BARRO: Even if property values are going down, if municipal budgets are going up, then property tax bills need to go up.

TUCKER: In Arizona, Lynne Weaver is leading an effort to reform that state's complicated property tax code and put a cap on tax increases. She says homeowners in Arizona have no assurances that they won't be literally taxed out of their homes. LYNNE WEAVER, CHMN PROP 13 ARIZONA: I talked to many people, almost on a daily basis, that are having severe problems because of the increases in their property taxes or can't sell their home because their property taxes doubled in a year.

TUCKER: Thirteen states limit the rise of the property's assessed value. Even fewer limit how much a state or municipality can increase property tax bills. Massachusetts is one. And on the first day of the new legislative session in Georgia, HR-1 was introduced to limit the increase in the amount of total property taxes that a municipality can collect in that state.


Now, taxpayers should remember, they don't have to be victims in this deal. Property taxes are taxes that are set locally, not by some far- off federal government, which means that fighting them is a local fight where taxpayers can demand accountability from the town council in their counties on how their dollars are being spent and what they're being spent on. It's not a far-away place.

DOBBS: You're saying that very artfully, civilly and sweetly. Let me be very clear, homeowners putting up with rising tax assessments at a time of decline home values are being played for absolute fools. You need to be in the face of everyone in your city, your town to make sure it doesn't happen and make sure your neighbors join you.

This is an irresponsible act on the part of these local governments around this country and it's unfortunately -- it's not localized. It's across the country.

Thanks very much, Bill Tucker, there's a lot we can't control, but that's one of those that we still can, as long as we want to be members in a participatory democracy and take control of our lives.

Thank you, Bill.

We'd like to know what you think about all this. Our poll question tonight is, do you think voters should allow property taxes to rise during a recession? Cast your vote at We'll have the results here, later in the broadcast.

Up next, just when you think Governor Blagojevich can't say anything more outrageous, he tops himself.

And New York's governor, well, finally naming a new senator to replace Hillary Clinton. We'll be talking about that and a lot of new issues with our distinguished panel of political analysts, here next. We'll be right back.


DOBBS: Four of my favorite political analysts join me, now. Republican strategist former White House political director, chairman of the Mike Huckabee presidential campaign, CNN contributor, Ed Rollins. Columnists, "New York Daily News," CNN contributor, Errol Louis. Democratic strategist, Democratic national committeeman, Robert Zimmerman. And in Washington, D.C. the Washington bureau chief for the "Chicago Sun-Times," Lynn Sweet.

Thank you all for being here.

Lynn, I got to start with you. Governor Blagojevich says he's not going to bother with that little impeachment trial thing, it's a sham and it wouldn't be appropriate. You covered him for a long time. Was this predictable in any way?

LYNN SWEET, CHICAGO SUN TIMES: Well, even this surprised me a little bit. Instead of being at his impeachment trial on Monday, he's going to be on talk shows and on "The View," so whatever he has in mind, a lot of it has to do with the big media blitz, change the subject. I don't think it will change the outcome necessarily of the Senate. The impeachment trial, but it will be a heck of a show, Lou.

DOBBS: OK, well, we'll be looking forward to that. Robert Zimmerman, Congresswoman Kirsten Gillibrand appointed by David Paterson to be the new senator from New York.


DOBBS: Well, as a matter of fact, I did hear.

ZIMMERMAN: Right. It certainly -- we certainly now have a new senator, the process is now complete...

DOBBS: You're having some interim boy gone to work for the governor, because that sounded like something from his press conference today. But anyway.

ZIMMERMAN: I'm a great fan of the governor's, but no, Lou, I'm not working for him at all. And he can do better. Here's the point. She's very able. She's very able. She's proven herself.

DOBBS: She's an interesting person.

ZIMMERMAN: She is. She's a very able legislator. She won in a very Republican district. Her challenge will be to unite the Democratic Party behind her candidacy, behind her Senate leadership.

DOBBS: Well, by the time she gets in with all of the people who have been disappointed by not being named senator, the list was apparently as long as one's arm, she looks like somebody -- I mean, she's got high rankings from the NRA, from the ACLU, and just...

ZIMMERMAN: But you know, she also has to overcome a lot of -- some dissension among Democratic ranks over her position, her 100 percent rating with the NRA, threats of primary. That's her challenge. But I tell you something, I think she'll surprise everyone. She's tenacious, she's very...

DOBBS: You like the appointment?

ZIMMERMAN: I'm -- I want her to succeed for the state of New York and I'm proud to support her in that capacity.

DOBBS: He spent three days, Errol, in Washington, D.C. for the inauguration. And I swear he comes back talking like them.

ERROL LOUIS, NEW YORK DAILY NEWS: Talking like a politician. That's right. Well, I'm no politician. I can tell you she's in for a firestorm. She's going to get a primary on...

DOBBS: Wait a minute, you said Caroline Kennedy was going to get it, too, now...

LOUIS: Well, I said more likely than not and I said she was the choice. Now, why these things fall apart, political marriages, like real marriages, it's hard to say who's right and who's wrong. But I can tell you that the Gillibrand appointment has stirred up elements of the Democratic base who are going to be very determined to make their feelings known.

I mean, having 100 percent rating from the NRA, that includes supporting things like cop killer bullets, things very unpopular down state in the city, not just among the rank and file, not just among the voters, but the police chiefs across the board, the mayor of New York City, so...

DOBBS: Ooh, this is scary already.

LOUIS: Well, you know, I would be a little concerned.


DOBBS: This little island doesn't do that much, I know everybody here thinks it's a pretty big deal.

ED ROLLINS, REPUBLICAN STRATEGIST: As a Republican for the first time I thought we might have a pulse. Watching the press conference today, which I didn't think the governor performed very well, but more important, this is a candidate, I don't know her well. I know, obviously, of her victory against John Sweeney and it may have helped he was charged with assaulting his wife a couple of weeks before the election. But at the same time, she is formidable, she will be primaried and a very significant Republican will run against her. I think if it was Cuomo or somebody else, it wouldn't have been either primary challenge or what have you.

I think at the end of the day, Paterson's performance today may have brought a Rudy Giuliani into this race. We may have a Republican race in a couple places. And the most important thing is the seat that she presently sits in which will have a special election in two or three months. Republicans could win that seat, which is a first step back.

ZIMMERMAN: Let's remember, David Paterson's ratings are probably at a record high, right now, his approval ratings. Rudy Giuliani will do as well against David as he did against Republicans in Florida.


ROLLINS: I don't think you want to bet the ranch on that, but that's all right.

DOBBS: If anybody wants to bet a ranch on anything right now...

ROLLINS: You're the only guy that owns a ranch, though.


DOBBS: Well, I'm not betting. The fact is that Robert Reich, on January 7, before the Democratic Policy and Steering Committee, in Washington, made some of the most -- even for him -- made some of the most outrageous statements, injecting group and identity economics into group and identity politics. And he found a willing, it sounds like, audience. Listen in as we listen to Robert Reich on the stimulus package and his judgments.


ROBERT REICH, FMR LABOR SECRETARY: I am concerned, as I'm sure many of you are, that these jobs not simply go to high skilled people who are already professionals, or to White male construction workers. I have nothing against White male construction workers. I'm just saying that there are a lot of other people who have needs, as well. And therefore, in my remarks, I have suggested to you, and I'm certainly happy to talk about it more, ways in which the money can be -- criteria can be set so that the money does go to others -- the long- term unemployed, minorities, women, people who are not necessarily construction workers or high skilled professionals.


DOBBS: You can hear the sigh of relief all over this country from White male construction workers that Robert Reich is tolerant of their existence. We'll be back with our panel to discuss that, and more. Stay with us.


DOBBS: We're back with our panel. We just heard Robert Reich's comments before the Democratic Policy and Steering Committee back in January. The mainstream media didn't touch that, didn't touch this discussion in which, by the way, Charlie Rangel and Nancy Pelosi were in attendance talking about how they're going to mandate this thing right down the throats of governors and state legislators.

Lynn Sweet, your thoughts?

SWEET: Well, my thoughts are that...

DOBBS: On avoiding White male construction workers and professionals.

SWEET: Yes. The point is that Reich might have created a problem for the Democrats who said that his way of saying it just made it seem -- it is a polarizing way to talk about a program to try to put jobs in the system fast. The fact of the matter is, a lot of construction workers are White and male, but the way he said it just set it up as a wedge issue -- Lou. LOUIS: Well, I'm not sure how you're supposed to talk about it. As bad as the unemployment numbers are in many states, seven percent, heading towards 10 percent, you do that times two if you're talking about inner city, especially talking about young people, Black and Latino communities.

DOBBS: Well, you can't do it quite that way. You've got to compare exactly by age and by graphics. The most serious unemployment rate in this country is black male youth, and they are unemployed at an extraordinarily high rate. That has improved by 100 percent in the past 25 years. It is still not adequate. But, the idea of talking about group and identity politics on a stimulus package, Errol, that is absolutely an absurd way to pursue economic policy.

LOUIS: The idea is to spend about $700 billion and to defer the question for another 25 years, I don't think that's an acceptable outcome.

DOBBS: I don't think that's your choice. Your choice is to chose to pursue a program that works. One, we know economic stimulus packages do not drive the economy into recovery from recession. Just hasn't happened. The president's council of economics adviser chairman has stated precisely that. It is stipulated. We have a real, real crisis from which to recover. It requires a monetary policy, not a fiscal policy. This is pork. It is a political program and it is not economic stimulus, no matter what you call it.

SWEET: Well then, it's no matter who gets those jobs, you think it's pork, it's pork. But if it's going out there, you know, a lot of women aren't in construction, maybe they should, you know, these jobs are coming down the line...

ROLLINS: This isn't about construction or minority hiring or any of the rest of it. We have an economy that is teetering. If we don't get this entire economy moving, with this stimulus, we're going to spend trillions and trillions of dollars, if we don't get this moving in which every American benefits, who wants to work, we're going to basically suffer. That was the silliest -- secretary of Labor -- former secretary of Labor made a silly, silly statement and I can just tell you that there's a lot of Americans who don't think these programs are going to work and they want them to work desperately, that's why they believe in Barack Obama today, and he's got to do everything to make this economy move forward.

ZIMMERMAN: Just following up on that point, Ed, obviously this -- Secretary Reich's comments are a very good example of why he's not in the Obama administration. They're silly comments, they're irrelevant and they should be kept in that perspective.

The more important point is, how do we make sure that the stimulus package can produce jobs and maybe one of the steps is going to be the way we structure infrastructure jobs and get them ready -- shovel ready?

DOBBS: Infrastructure projects should be to create infrastructure. I know that's a radical concept. The fact is that we've got to be honest in this administration has got to be honest and so does this Democratic leadership of both Democratic and Republican. This economy will turn on the basis of liquidity and the monetary system. It will turn on the strength of low interest rates and real leadership and confidence in leadership. This is not the way to instill confidence and it is a recipe for real disaster through disappointment, an electorate that doesn't need further disappointments.

ROLLINS: And business, small business, small business, small business.

DOBBS: Which creates 80 percent of the jobs in this country and not part of the equation at this point. Thank you, all, appreciate it. A reminder to join us on the radio Monday through Friday for the LOU DOBBS SHOW. Go to to get the local listings for the LOU DOBBS SHOW on the radio, WOR 2:00 through 4:00 in the afternoons.

Still ahead, here, "Heroes," tonight, we bring you the story of a courageous Army medic, one of the most dangerous jobs in the Army and his distinguished valored service in Afghanistan.


DOBBS: And now "Heroes," our weekly tribute to our men and women who serve this nation in uniform. Tonight we introduce you to Sergeant Kelly Keck, the 37-year-old combat medic was severely wounded while treating his fellow soldiers in Afghanistan. As Philippa Holland now reports, Keck's fellow soldiers in turn saved the life of the man who was assigned to save theirs.




PHILIPPA HOLLAND, CNN NEWS CORRESPONDENT (voice-over): Kelly Keck's story of survival is about family. Family, here at the Walter Reed Army Medical Center as he recovers from major limb loss.

SGT KELLY KECK, US ARMY: It has definitely been a big help to me, not just for morale, but just, you know, the love and the emotion shown and the caring for me.

HOLLAND: And it was family that got him through those dark days in September after Keck stepped on a land mine while serving in Afghanistan.

KECK: And I remember them offloading me. And I woke up from there and I remember seeing my brother there and he was, you know, tried to grab my hand and he was crying. And I was glad he was there, you know, to help me.

HOLLAND: Remarkably, Sergeant Keck's half brother, Matthew Kellogg, an Army officer was serving in the same battalion.

KECK: I thought that I would be watching over my little brother, but turned out it was the other way around.

HOLLAND: It started as a routine day, activity had picked up in the area outside of Jilabad near the Pakistan border. As a combat medic, Keck was traveling with a convoy back to base.

KECK: And we were coming back and I think we were about, I'd say, two or three miles from our base, from getting back to ours and our lead vehicle got hit.

HOLLAND: Word came no one was wounded, but Keck had a responsibility to check and headed to the scene on foot.

KECK: All of a sudden, I just heard a loud explosion and next thing I know, I was laying on the ground on my side. I looked down and saw my right leg was below the knee was gone.

HOLLAND: The platoon sergeant was close by and administered tourniquets to stop the bleeding.

KECK: I taught, previously, the whole platoon, we had taught them skills in case something like this happened to be able to help their buddies, you know? You never knew it would be the medic it happened to.

HOLLAND: This is sergeant Keck at Walter reed, his second day of learning to walk again.

KECK: It is really good just to be able to stand up again and I'm my own height and see things again from that perspective. I make sure I roll up to the inside.

HOLLAND: For sergeant Keck, these are the best steps yet in his recovery.

Philippa Holland, CNN.


DOBBS: And unusual choice that led Sergeant Keck to join the Army in the first place, Keck first served in the U.S. Marines and then worked as a social worker. After being laid off as a social worker, Keck decided to rejoin the military, finding a home that he wants to keep in the U.S. Army.

Tonight's poll results, 95 percent of you say voters should not allow property taxes to rise during a recession. Let's take a look now at some of your thoughts.

Amy in Pennsylvania said, "Lou, you need to run for office. It's the only way change will happen."

There's got to be a better way than that.

And James in Georgia said, "Lou, these executives are so full of it that we should not be surprised when they pay that much for a toilet," referring to John Thain, the now disgraced and former CEO or Merrill Lynch, late, Bank of America, as of yesterday.

David in Texas, "Lou, keep the fire to their feet. Honest and fair reporting is what we get with LOU DOBBS TONIGHT." We sure try.

And Terry in Pennsylvania said, "I would just like to extend my gratitude in support for your coverage on the Wisconsin gentleman being sentenced unfairly and unjustly. I'm a gun owner and I go to the rifle range often and the fact that guns do malfunction and when they do, you investigate the problem and solve it, not put a man in prison."

We'll see how the appellate court rules, hopefully justice will ultimately prevail, here.

Mike in Alabama, "God bless you for airing the Olofson case. This is an extreme injustice being perpetrated on an innocent American citizen. Thanks for letting the rest of us know about it." And the Gun Owners Association also deserves great credit for helping him, in my opinion.

Cory in Connecticut said, "I'd like to commend Mr. Dobbs for informing the public in regards to the plight of David Olofson of Wisconsin. As a gun owner, such a situation is not only disheartening, but frightening on a personal level. Many talking heads would ignore or avoid such a story, so I applaud Lou for bringing it to the forefront."

Larry in New York said, "As a retired police officer in New York City, it makes me sick that these two border patrol agents were in prison by the testimony of a drug trafficker. The prosecutor should have his license revoked and President Bush should be ashamed he stood by and let this happen."

Send us your thoughts to you have a great weekend. We thank you for being with us tonight. CAMPBELL BROWN: NO BIAS, NO BULL starts right now.