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LOU DOBBS TONIGHT

President Obama's Health Care Plan Delayed; Michael Jackson's Death; New Partnership with China

Aired July 27, 2009 - 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, thank you. Good evening everybody.

House Speaker Nancy Pelosi tonight acknowledging what everyone in Washington knew that the president's health care plan is likely be delayed until at least the fall, should it even happen. Two leading senators join us here tonight to debate the future of that health care legislation in our "Face Off".

Also, the United States addicted to debt. Utterly dependent on loans from countries, including communist China. Some are now wondering whether the United States is on the verge of bankruptcy. We'll have a special report on a worsening crisis.

And important new information tonight about the showdown between Cambridge, Massachusetts, police, and black Harvard Professor Henry Louis Gates -- 911 tapes today released cast new light on the controversy. We'll have details.

We'll have much more on the breaking story of Michael Jackson's death and the doctor who allegedly administered a lethal sedative. But first, the House of Representatives appears unlikely to pass health care legislation by President Obama's deadline of August 1st, or a deadline that he says is the people's deadline.

House Speaker Nancy Pelosi today said House Democrats need more time to write the bill and plenty of time to review it, which is a complete reversal of what she was saying just last week. The Senate has already delayed its consideration of its version of this bill. Senate Majority Leader Harry Reid said there won't be a vote in the Senate until the fall. Dana Bash reports from Capitol Hill.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): House Democratic leaders called this press conference to tout progress, but the House speaker hinted they may miss the president's deadline to vote on health care reform before leaving for August recess, the end of this week.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: We're on schedule to either do it now or to do it whenever, but a lot depends on when the ways -- excuse me -- the Energy and Commerce Committee finishes its work.

BASH: A lot depends on whether House Democrats can calm skittish members like Congressman Jerry Connolly (ph). UNIDENTIFIED MALE: Well again I think it's premature to be talking about a tax increase.

BASH: Connolly (ph) is a freshman Democrat elected from a traditionally Republican district in northern Virginia and Exhibit A of an ironic twist. A big reason for the Democratic divide delaying health care reform may be that Democrats are a victim of their own election year successes.

Democrat's huge House majority comes from winning and holding 27 Republican districts in 2006 and an additional 26 Republican seats in 2008. That means Democrats like Connolly (ph) have to answer to and represent conservative leaning districts wary of many aspects of their party's health care reform.

REP. GERRY CONNOLLY (D), VIRGINIA: I think it's very important to remember that a lot of suburban districts such as mine switched and supported both President Obama and Democrats in Congress, and I think it's very important that the message we send to those districts not be a negative one. That we're taking into account their concerns.

BASH: Concerns like tax increases which Republicans are already stoking with press releases and a media blitz in the works targeting Connolly and other vulnerable Democrats.

REP. JOHN BOEHNER (R-OH), MINORITY LEADER: Democrat leaders are going to walk their members down the plank on nationalizing our health care system here in this country. And require them to vote on a massive new tax increase in small businesses.

BASH (on camera): Are you worried that if this is done wrong that this could jeopardize your seat and others like you?

UNIDENTIFIED MALE: Well I -- when you run for Congress on some of these big issues, you want to make sure you get it right. That's really where we are right now. We want to...

(END VIDEOTAPE)

BASH: Now much to the chagrin of the Obama White House, that sentiment slowed down as something we continue to hear more and more from Democrats. And part of their concern, Lou, is that they don't know all the details of what is in the thousand-plus page plan that the House Democratic leaders have out there and that is why as we speak House Democratic leaders have agreed to a five-hour seminar. They're in that seminar right now. Five-hour seminar to help explain and even persuade some of their own skittish members on this plan.

DOBBS: I don't know -- we call them skittish. We keep referring to this as reform, yet there is no specific architecture to the legislation before these members even in that 1,000 pages. I'm wondering why the national media has chosen the word reform to describe in rather editorial terms what the White House is proposing here.

BASH: Well, I think that pretty much everybody, Republicans and Democrats, it's fair to say, think that reform is needed. And Republicans may not be happy with the details of what's coming out now, but even they admit that any change is from their perspective reforming or changing the system.

DOBBS: So any change would be good? Remarkable...

BASH: No, not necessarily...

DOBBS: It's hard to imagine they wouldn't vote on that right away then.

BASH: Not necessarily good. Just reforming or changing what is the current plan.

DOBBS: All right, Dana, this -- after this five-hour seminar, the speaker has been rather well filled with bravado about passing this legislation this week. Is that now inoperative?

BASH: We just don't know, Lou. You know it was very interesting to hear her words this afternoon, saying you know maybe we'll do it now or whenever. It was kind of an interesting choice of words. They are just trying to figure out if they can come to terms between fellow Democrats and whether or not they can do that in the next couple of days. That will determine whether or not they just like the Senate will miss the president's original deadline of getting something off of the House floor by the time they leave for August recess.

DOBBS: The congressmen with whom I have spoken and admittedly a small number of folks, but they don't think that Nancy Pelosi has the votes irrespective of what she's claiming. Does that comport with what you are detecting with your reporting.

BASH: That is absolutely what some of -- many of her fellow Democrats who oppose her efforts, who want changes, they agree. They say that despite what she says, they don't think she has the votes and you know I think whether or not she goes forward and has the vote on the House floor that will probably determine whether or not she thinks she really has the votes despite what she's saying in public, Lou.

DOBBS: All right, Dana, thank you very much -- Dana Bash from Capitol Hill. The speaker of the House is trying to convince opponents that Congress will eventually pass health care legislation, but the speaker obviously as Dana Bash just reported faces a very tough challenge. She is one of the most unpopular elected officials in the country, by the way.

She has an approval rating below 25 percent according to a recent poll. Speaker Pelosi, however, doesn't seem to care about her lack of popularity. In fact she says it's more important to be trusted. She told "Politico" quote, "I'm not particularly concerned if I'm liked."

But one poll shows most Americans don't trust her, either. The public strategy's "Politico" poll showing only 24 percent of Americans trust the speaker of the House. White House officials have been trying to raise Americans' trust in the president's health care plan by using the same talking points in media interviews. Listen, if you will, to these two very similar comments by a White House adviser David Axelrod and White House press secretary Robert Gibbs. First, David Axelrod.

(BEGIN VIDEO CLIP)

DAVID AXELROD, WHITE HOUSE SENIOR ADVISER: Everybody I think wants to get something done and now we're at that final 20 percent. We're trying to work through those details. But I think that we're going to get there because this is a situation that is untenable for the American people.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: There's an agreement on about 80 percent of what we need to get health care reform passed in this country. We're working on that last 20 percent.

(END VIDEO CLIP)

DOBBS: Robert Gibbs last night using the same talking points as Axelrod and using those same talking points again in today's White House press briefing. The nonpartisan Congressional Budget Office tonight taking aim at a critical component of President Obama's health care plan.

The White House had argued that savings from a proposed advisory panel would significantly cut costs for government programs such as Medicare. However, the Congressional Budget Office concluding that that private individual would save only about $2 billion over a decade.

A tiny fraction of the bill's overall price tag of more than $1 trillion. This is not the first time that the Congressional Budget Office has criticized the president's health care plan and come up with almost a 180-degree opposite conclusion.

Earlier this month, it warned that the House version of the health care bill would end almost $240 billion to the federal budget deficit over the next decade. President Obama however frequently declares the legislation won't raise the deficit.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Health care reform is not going to add to that deficit. It's designed to lower it. That's part of the reason why it's so important to do and to do now.

(END VIDEO CLIP)

DOBBS: Well, that urgency seems to have ebbed as well. The president repeatedly urging the House and the Senate now to bring the matter to a vote before leaving for summer vacation next week. Now, however, as we just reported, key players on Capitol Hill say the deadline -- that deadline is absolutely impossible to meet.

The Senate will not vote on that legislation, as I said, before the fall. Negotiations are right now stalled in the House, and many Democrats and members of Congress saying there's no way that Nancy Pelosi will move forward with the vote. The president is now asking Congress to approve health care legislation this year, as he put it.

Well breaking news now -- important new developments in the investigation into the death of Michael Jackson. A source close to the Jackson family says Jackson's personal doctor administered a powerful drug that authorities believe killed him. Ted Rowlands reports now from Los Angeles. Ted, what can you tell us about this breaking story?

TED ROWLANDS, CNN CORRESPONDENT: Well basically, Lou, it's a significant development in that this is the first time, and this is through a source that is close to the family with knowledge of the investigation, that Dr. Conrad Murray, Michael Jackson's personal physician, the doctor that was with Jackson at the time of his death, has been connected to the drug Propofol (ph) or Diprivan (ph), which is an anesthetic that's normally used in a hospital or a clinic scenario where you bring a patient down for a minor surgical procedure using this drug.

It's never used outside of those conditions. But the allegation here is according to the source that Murray administered this to Michael Jackson in his home. Now, this, of course, is not the first we have heard of this drug. It has been out there for the last few weeks and a part of this investigation, but this is the first connection between Jackson's doctor, personal physician, the man with him at his death and this drug.

Of course, Murray's clinic was raided last week by DEA officials along with local police and the LAPD. We're told also to expect possibly more of those search warrants being served for -- towards Dr. Murray in the days to come here as part of this investigation. But a significant development in this investigation, to be sure, that this connection has now been made.

DOBBS: That connection, Ted, I also recall you reporting early on some unaccounted for time on the part of the doctor upon learning of the death of Michael Jackson. Can you refresh us on that?

ROWLANDS: Well, after Michael Jackson was taken to the hospital, Dr. Murray went with him in the ambulance and was also there while physicians were trying to revive Jackson at the UCLA Medical Center. After that, Michael -- or Dr. Murray did retreat and waited to talk to investigators.

There was a few-day period there where they wanted to talk to him and he didn't want to talk without his lawyer. And he wasn't running by any stretch of the imagination. That was really the first report that we had that they were looking for him. But the reality as we found out later, he was waiting for his lawyer to come to Houston just to represent him in front of the investigators.

They say they have been more than cooperative. In fact, they had a third meeting scheduled with investigators, did Murray's camp and LAPD that was canceled for last Friday because of the search warrants. They say they're still more than willing to provide anything and provide more testimonial, too, in the form of an interview with the LAPD as needed. And after we reached them today, after we started reporting this, they started first off, they're not going to comment on it at this point, but they did direct us to a statement earlier saying that at no time did Dr. Murray either prescribe or administer any medication that should have been fatal to Michael Jackson. That's their stance right now.

DOBBS: All right, Ted, thank you very much -- Ted Rowlands reporting. We'll have much more on the investigation coming up here.

Also, President Obama has a new partner, communist China. He's now treating China as an equal to the United States and a partner. New information about what happened when police arrested that Harvard professor. We'll tell you whether the liberal national media exaggerated the role of race in this controversy.

(COMMERCIAL BREAK)

DOBBS: Well President Obama today declared a new era of cooperation with communist China. President Obama made his remarks at the opening of a so-called strategic and economic dialogue with Chinese officials in Washington, D.C. President Obama also appeared to suggest the era of U.S. global preeminence is over. He said quote, "the relationship between the United States and China will shape the 21st century." Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Standing before a panel of U.S. and Chinese flags, President Obama talked about the United States and China and equal partnership to build the 21st century.

OBAMA: Some in America think that there's something to fear in a rising China. I take a different view.

PILGRIM: Today, a "Wall Street Journal" editorial by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner calls for a new dialogue with China nearly conferring super power status on China, arguing that simply put, few global problems can be solved by the U.S. or China alone.

The courting of China has been going on since President Obama took office. Secretary Clinton went to Beijing in February. Chinese Leader Fu (ph) was there in April and Secretary Geithner was in China in June, but Derek Scissors (ph) of the conservative think tank Heritage Foundation says U.S. goals are still unclear.

DEREK SCISSORS, HERITAGE FOUNDATION: There's a lot of visiting. There's a lot of talking. There doesn't seem to be a lot accomplished, and there doesn't seem to be a priority. What is the Obama administration's principle set of goals with respect to China, I'm not sure?

PILGRIM: China has grown from an underdeveloped country to a strategic competitor, as President Bush called it, to now the chief U.S. banker with the largest foreign holdings of U.S. treasury debt at over $1 trillion. China has grown itself into a $4 trillion economy on the backs of U.S. consumers, gaining global clout, but not always playing by global rules.

RANA FOROOHAR, SENIOR EDITOR, NEWSWEEK: The fact is that if you're trying to develop an economy fast, it helps to be an autocracy. They don't have to deal with the rule of law as strictly as we do here and that's led to very fast economic development.

(END VIDEOTAPE)

PILGRIM: Now critics say it's time for the Obama administration to start insisting on equal rules in trade, human rights, and the environment before there's any discussion of China being an equal partner -- Lou.

DOBBS: All right, Kitty. Thank you very much -- Kitty Pilgrim.

The White House today trying to play down apparent divisions between Vice President Joe Biden and Secretary of State Hillary Clinton on another major foreign policy issue, the future of Russia. That controversy started when Vice President Biden declared Russia to be clinging to something in the past that is not sustainable.

Talking with "The Wall Street Journal" Vice President Biden said quote, "they have a shrinking population base. They have a withering economy. They have a banking sector and structure that is not likely to be able to withstand the next 15 years."

Secretary of State Clinton, however, said the Obama administration believes Russia to be a great power.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: We have our challenges. Russia has their challenges. And there are certain issues that Russia has to deal with on its own. And we want to make clear that as we reset our relationship, we are very clearly not saying that Russia can have a 21st century sphere of influence in Eastern Europe. That is you know an attitude and a policy we reject.

(END VIDEO CLIP)

DOBBS: And today White House Press Secretary Gibbs said it's in the national interests of the United States and Russia to have better relations.

Up next here, more on the breaking news over the investigation into the death of Michael Jackson, also the Senate showdown over health care. Two leading senators join us here to debate whether there will be a health care piece of legislation this year and whether there should be.

And the president pushing Congress to spend more money while the United States falls deeper into debt. We'll have that special report next. (COMMERCIAL BREAK)

DOBBS: There is good news on the economy tonight. New home sales soaring by the largest amount in more than eight years. New home sales up 11 percent in the month of June. That's far better than industry analysts had expected and predicted. Economists say it's a sign that the housing market is finally bouncing back. Sales of existing homes up 3.6 percent last month.

Well, there are signs the economy is improving. The United States is mired in massive debt. The United States increasingly becoming dependent on foreign lenders for loans, especially communist China, but President Obama keeps pushing Congress to spend even more money as America's budget and trade deficits and debts soar. Bill Tucker with our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Imagine a stack of $1 bills that would go all the way to the moon, come back to the earth and then go all the way back to the moon again. That's about the size of the federal deficit, $11 trillion and counting. You don't have to be an economist to know we're in trouble.

OBAMA: Well we're out of money now. We're operating in deep deficits.

TUCKER: But we're not broke yet. That's because our assets still outnumber our liabilities and there are still willing buyers of our debt. Some economists argue we should and must continue to run up those deficits because we are in a recession.

LAWRENCE MISHEL, ECONOMIC POLICY INSTITUTE: I am not saying that we can go on forever at the deficits we have. But we need to get out of this recession and to do it, we can take on some more debt, reasonably, and you know lower the deficit as we have a robust recovery.

TUCKER: But our budget deficit is only part of the story. Our trade deficit is another roughly $7 trillion. These deficits have many economists worried. They see extreme risk in continuing to depend upon the willingness of foreign buyers to loan us money.

They see trips by Treasury Secretary Geithner to China, India, and the Persian Gulf to assure creditors of our credit worthiness as a sign of our economic vulnerability. These economist warn we cannot expect to continue to borrow without severe consequences.

ALAN TONELSON, U.S. BUSINESS & INDUSTRIAL COUNCIL: Accumulative debt which is now in the trillions of dollars is going to come due, mainly for our children and our grandchildren and it's going to lower their standard of living.

(END VIDEOTAPE)

TUCKER: That lower standard of living that they argue will come in the form of slowed growth, high interest rates, and likely high taxes to pay for all the debt that we continue to incur, Lou.

DOBBS: So we're suggesting this isn't happening now?

(CROSSTALK)

TUCKER: Oh, it is happening now.

DOBBS: My point exactly. All right, Bill, thank you very much. Bill Tucker.

Well coming up next, startling new developments in the investigation into the death of Michael Jackson. We'll have the very latest for you on this breaking news story.

And new questions about what happened when police arrested black Harvard professor Henry Louis Gates (ph), and whether race was the factor the national media suggested.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN Breaking News.

DOBBS: More now on tonight's breaking news on the death of Michael Jackson. A source close to the Jackson family says Jackson's personal physician gave him a powerful drug that authorities believe killed the entertainer. Joining us now with the story, Ted Rowlands, he's in our Los Angeles bureau, and CNN senior legal analyst Jeffery Toobin joining us now by phone. Ted, this drug that was administered, what is it and what would be the likely effect of such an administering of that drug?

ROWLANDS: It's Diprovan (ph) or Propofol (ph) and basically it is used to put patients under in a clinic setting or a hospital setting for minor surgery, so the effect on the patient would literally be to go to sleep and be put under because of this drug. Now, according to doctors, it is administered only during the time where the patient is under, but in that once they stop administering it, the patient comes out right away.

And it's a very -- very common drug used in clinics across the country. It's just not used outside of that setting, so it's really perplexing. It's not illegal to have. It's not controlled; it's not a controlled substance. But clearly if it was being used in this setting, it would raise a lot of eyebrows legally and could put this doctor, and this is basically the story we're reporting, is that Dr. Conrad Murray, the physician with Michael Jackson at the time of his death, according to the source, administered this drug, Diprovan (ph) or Propofol (ph) to Michael Jackson.

DOBBS: And to be clear Ted, I mean Dr. Murray is categorically denying all of this.

ROWLANDS: Absolutely and is saying that he never -- through this lawyer -- had never administered or prescribed anything to Michael Jackson that could have resulted in Jackson's death. In terms of this story, what are they saying -- they're saying no comment because quite frankly they say they're sick of these things popping up on a daily basis and having to respond to them, so their stance now, Murray's lawyers, is that they're not commenting on anything unless it's coming from an official, not from the source reporting.

DOBBS: All right. Jeffrey Toobin, this -- two family members have basically said they believe Michael Jackson to have been murdered. This development that Ted Rowlands is reporting tonight, what is the import in your assessment, legally for Dr. Murray, and what would be the next step in an investigation?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST (via phone): Well, I would certainly take this report with a great deal of caution. First of all, we don't know what killed Michael Jackson. The autopsy report has not been produced. It should be produced by the end of the week. If in fact this drug Propofol (ph) killed Michael Jackson, and if Dr. Murray administered it, that still doesn't mean that he will be charged with any crime, much less convicted, because we have to know under what circumstances, for what reason he gave the drug.

It could be a legitimate reason. It is not an illegal drug. So certainly, it is not good news if he administered the drug that killed Michael Jackson, but that is far from an indication that he committed some crime.

DOBBS: And let me ask you both, if I may, Jeffrey and Ted, the doctor has said that he did not administer any drug or prescribe any drug to Michael Jackson that -- is this correct, Ted -- that should have killed him? Is that the correct expression of the denial?

ROWLANDS: Yes, and basically it's couching it, saying that nothing inherently giving to him -- through the lawyer, we're talking -- that Murray says nothing inherently would have killed him under normal circumstances.

What Jeff is basically saying and brought up, too, there's a lot that has to be deciphered here in that what exactly killed Michael Jackson may never be known. Even after toxicology because of the possible mixture of different environmental factors outside of the drugs.

You know the shape he was in, what he had done the day before, et cetera, et cetera. It may be a case that will never be brought. Charges may never be brought. There's a very good possibility of that.

DOBBS: And your thoughts, Jeffrey?

TOOBIN: Well, I think that's right. And obviously, Dr. Murray has been the focus of a lot of attention, and there is a desire on the part of a lot of people, including members of the Jackson family, to blame him for Jackson's death.

But sadly, just because someone died doesn't mean a crime was committed. And I think we just ought to be very cautious before we -- we allow Dr. Murray to be accused of something that he may never be charged with, much less convicted of. DOBBS: Yes, as you said sadly, about happily, as well. Let's, if we may, we're going to have to turn to other news developments. I want to say, Ted Rowlands, thank you very much for the report. Jeffrey Toobin, thank you for the analysis. We appreciate it, gentlemen.

We'll have much more on this investigation coming up here.

And turning now to the battle over health care. The Obama administration pushing Congress to pass a bill on health care before the end of this year. But opposition to the president's at least trillion-dollar plan is rising. Many senators including some Democrats are pushing back and pushing back hard.

That is the topic of tonight's "Face-Off Debate". Joining me now, two distinguished senators, Senator Orrin Hatch, Republican of Utah. Senator, good to have you with us.

And Senator Bernie Sanders, independent from Vermont. Bernie, good to have you with us. We appreciate it, Senator.

SEN. BERNIE SANDERS (I), VERMONT: Good to be with you.

DOBBS: Let me turn first to the fact that a bipartisan group in the Senate apparently closing on a compromise which we have not heard until just now. Is it to your sense, Senator Sanders, that that is the case?

SANDERS: I really don't know. That's in the finance committee. I think Senator Hatch may know more than I do.

DOBBS: All right. Senator Hatch?

SEN. ORRIN HATCH (R), UTAH: Well, I don't know. I'd be surprised if they can put together a program that could be supported by Republicans because they're pushing for, you know, more taxes, more government, and more spending. I don't see how you solve the problem of $2.5 trillion current bill by adding another $1.5 to $2.5 trillion more. But I know they've had a very difficult time because of that government planned approach.

SANDERS: Well, I'm not quite sure where Senator Hatch is coming up with those numbers. What I do know is it concerns me less whether we do it today or tomorrow or a year from now. What's most important is that we do it right.

And, Lou, we have a major crisis in this country. And it's not only that tens of millions of people are uninsured or underinsured. We've got over 18,000 people every year die, they die because they don't get to a doctor when they should. We've got a million people this year who are going to go bankrupt because of the very, very high cost of health care.

So I think doing nothing is not an option. But my main point is we've got to get it right. That's much more important whether it's done tomorrow, next week, or four months from now. DOBBS: Senator Hatch, your reaction to that?

HATCH: Well, I think we do have to get it right, but I don't think getting it right is expanding the federal government. They want us now to set up a board of five people or a panel of five people, nameless, faceless bureaucrats to determine how to ration health care because that's the only way they're going to save money the way they're going.

Otherwise, we're moving right straight to a -- everything the Democrats are asking for, at least the liberal Democrats are asking for, would lead us to a single payer system or in other words socialized medicine.

SANDERS: Well...

(LAUGHTER)

Well, first of all, a single payer system is not socialized medicine. Medicare is a single payer system. And I would argue that most Americans feel a lot better about Medicare than they do about private health insurance companies who throw them off of health care if they have a preexisting condition or if they got sick the preceding year, whose CEOs have enormous salaries and compensation packages, whose administrative cost -- you know, Lou, we have got to ask ourselves why in the United States we are spending almost twice as much as any other major country on earth and our outcomes in most cases are not as good.

HATCH: Part of it is...

SANDERS: And the price...

HATCH: Part of it is because of government run. The Medicare system is $39 trillion in unfunded debt. We're going to turn the rest of our health care system over to the federal government. Not on my watch you're not going to.

SANDERS: Now that's just not accurate. I think what anyone will tell you...

HATCH: Sure, it's accurate.

SANDERS: No, it's not accurate. Medicare -- you know, if you're looking at the average person, their health insurance costs have doubled in recent years. What we're looking at is 1300 private health insurance companies who have thousands of plans in the last few years, the last couple of decades, what we have seen for every new doctor that's come onboard.

We need doctors. We have 25 health care bureaucrats and people all over this country know how hard it is to get the health insurance companies to pay them what they're supposed to be paying.

HATCH: And the worst health care bureaucrats we have are the government health care bureaucrats... SANDERS: I don't think so.

HATCH: ... who are running this system into the ground. And to be honest with you, anybody who believes that the federal government is going to do better than the private health insurance competitive system is wrong.

Now let me just make one other point. We have 300 million people in this country. They claim 47 million are not covered by health insurance. Now let's just be honest about it. An awful lot of those people are people who could afford it but won't get it. Some qualify for the chip bill or some qualify for Medicaid right now.

Now what they want to do is move into a Medicaid expansion where they move more and more people into Medicaid when we're having a rough time paying for it now, and doctors don't even want to take Medicaid patients because of the way the federal government is handling it.

SANDERS: Well...

HATCH: Look, Bernie, I -- have a lot of respect for you, but come on. You know the doggone federal government is half the problem here.

SANDERS: Well, look, is that right? Well, then you go back and you tell veterans of this country that we should disband the Veteran's Administration, which is 100 percent government run. Is that your suggestion?

HATCH: Well, I'm not telling them that. I...

(CROSSTALK)

SANDERS: Wait a minute. That's a government run program. Do you want to expand Medicare?

HATCH: There are things government can do.

SANDERS: Right.

HATCH: I don't think they're doing it as well as they should do, but to throw over the whole private sector approach that is competitive...

SANDERS: But...

HATCH: To throw it over so we can have a bunch of bureaucrats, nameless, faceless bureaucrats...

SANDERS: But nobody is talking about...

HATCH: ... get in between your doctor and you, it just isn't right.

SANDERS: First of all, nobody is talking about that. What people are talking about is... HATCH: Well, I'm talking about it.

SANDERS: Well, we're talking -- nobody is talking about a government-run health care system. We're talking about...

HATCH: Well, sure they are.

SANDERS: No, they're not. They're talking about a public...

HATCH: What do you call the public plan? What do you call that?

SANDERS: A public option -- a public option that will compete and give people the choice of whether they want a public plan or a private plan. Why are you afraid of that? If the private plans are so much better, people will go into the private plans. If the public plans are more cost effective, more reasonable, people prefer a Medicare type program, they'll go into that. Why are you afraid of the competition?

HATCH: Not afraid at all.

SANDERS: Good.

HATCH: It's just we know that -- we know that there would be unfair competition because...

SANDERS: No, we don't.

HATCH: ... the federal government has unlimited funds...

SANDERS: No.

HATCH: ... to be able to carry on whatever it wants to carry on.

SANDERS: No.

HATCH: And it wouldn't take long. Companies have to pay taxes. They have to meet certain state and federal standards.

SANDERS: Well, first of all...

HATCH: They get all kinds of other things they have to do.

SANDERS: But that's not...

HATCH: They can do it better than the government.

SANDERS: This is a level playing field that I think it's interesting that...

HATCH: No, it isn't.

SANDERS: The health insurance people who are spending a million dollars a day, lobbying Congress, putting huge amounts of money into campaign contributions are afraid of that competition. I think that the American people are sick and tired of the private health insurance companies who have been ripping them off for years and they want to see some competition.

HATCH: Well, Bernie, why don't you and I work on solving some of the private health insurance problems? I admit there are some that exist, but they don't exist nearly as much as the federal government problems. And federal government control would just run this whole system right into...

(CROSSTALK)

DOBBS: We're going to have to leave it. Awaiting the outcome of the Sanders/Hatch resolution. And we appreciate you both being with us.

SANDERS: Thank you.

DOBBS: Senator Orrin Hatch and Senator Bernie Sanders.

HATCH: Nice to be with you, Lou.

DOBBS: Thank you, gentlemen.

Up next, it's now former Alaska Governor Sarah Palin. She had some choice parting words for the liberal elites.

(BEGIN VIDEO CLIP)

SARAH PALIN, FORMER ALASKA GOVERNOR: By the way, Hollywood needs to know, we eat therefore we hunt.

(END VIDEO CLIP)

DOBBS: We'll have a lot more of the former governor's farewell here next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The 911 call and police radio transmission in the Professor Gates arrest controversy made public today. The woman who made that 911 call, Lucia Whalen, has been under fire for supposedly saying two black men were breaking into the Cambridge home. But she never mentioned the race of men on that 911 call.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't know if they live there and they just had a hard time with their key, but I did notice that they kind of used their shoulder to try to barge in and they got in. I don't know if they had a key or not because I couldn't see from my angel. But you know, when I looked a little closely, that's what I saw.

UNIDENTIFIED 911 OPERATOR: (INAUDIBLE) or Hispanic?

UNIDENTIFIED FEMALE: Um... UNIDENTIFIED 911 OPERATOR: Are they still in the house?

UNIDENTIFIED FEMALE: They are still in the house, I believe, yes.

UNIDENTIFIED 911 OPERATOR: Were they white, black or Hispanic?

UNIDENTIFIED FEMALE: Um, well, there were two larger men, one looks kind of Hispanic but I'm not really sure. And the other one entered and I didn't see what he looked at all.

(END VIDEO CLIP)

DOBBS: Cambridge Police sergeant, James Crowley, arrived on the scene to investigate. He talked with Professor Gates, who had entered the house.

(BEGIN VIDEO CLIP)

SGT. JAMES CROWLEY, CAMBRIDGE POLICE: I'm here with the gentleman who says he resides here. Little uncooperative, but keep the cars coming.

(END VIDEO CLIP)

DOBBS: Crowley ultimately arrested Professor Gates for disorderly conduct. Gates accused police of racism.

President Obama put himself in the midst of the controversy in his national press conference saying the Cambridge Police acted stupidly. President Obama then talked with both Crowley and Gates after he said he was surprised at the public reaction to his statement.

He was trying then to diffuse the controversy that he managed to fuel. He's invited both men to the White House for a beer. That beer is scheduled for some time this week.

Former Republican vice presidential candidate Sarah Palin has officially stepped down as governor of Alaska. In her farewell speech, Palin warned Americans about the dangers of big government. She praised the military and she blasted the national liberal media.

But Palin is still not saying whether she will run for president in 2012 as it's her right.

Candy Crowley has our report.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Good-bye, Palin style.

PALIN: By the way, Hollywood needs to know, we eat therefore we hunt. CROWLEY: The Second Amendment right to bear arms is an unexpected topic in a farewell speech, but this is Alaska and she is the elk-hunting, fish-catching Sarah Palin, telling Alaskans to stiffen their spines.

PALIN: Because you're going to see anti-hunting, anti-Second Amendment circuses from Hollywood. And here's how they do it. They use this delicate, tiny, very talented celebrity starlets.

CROWLEY: Palin did not elaborate but she may be smarting from this, from a wildlife protection group.

UNIDENTIFIED FEMALE: Palin even proposed a $150 bounty for the severed foreleg of each killed Wolf.

CROWLEY: It was one of many shots Palin took over the years since she exploded on to the national stage and gave John McCain the best two weeks of his campaign. But as she handed over the keys to the governor's office almost a year and half early, the wear and tear of the year in the klieg lights were evident in her parting words, including a parting shot at the media.

PALIN: So how about in honor of the American soldier, you quit making things up?

CROWLEY: The latest ABC/"Washington Post" poll found that 53 percent of Americans view Palin negatively. 40 percent see her positively. Worse, 4 in 10 Republicans don't think Palin understands complex issues.

Still, she wouldn't be the first politician to rehabilitate herself, and it's clear, while she's handing over the governor's chair, she's not relinquishing the microphone.

PALIN: Know with this decision now, I will be able to fight even harder for you, for what is right and for truth.

CROWLEY: Palin is writing a book. She said she'll help other candidates. She'll give speeches, and one of her first post governor events is at the Ronald Reagan Library in California. She'll make good money and she could be teeing up a 2012 run or both.

UNIDENTIFIED FEMALE: Because I just asked her that about five minutes ago. And she -- you want to know what she said? She said I don't know, with her little smirk.

CROWLEY: Sarah Palin, former vice presidential candidate, former governor of Alaska, exit stage right, but definitely don't fade to black.

(END VIDEOTAPE)

CROWLEY: Certainly, Sarah Palin private citizen sounds an awful lot like Sarah Palin politician, and most everybody believes that sooner rather than later we will see and hear from her again. Lou? DOBBS: And Candy Crowley, I've got to believe that the left in this country, the liberals in this country, are just excited at the prospect of having her up close and personal now, and not tucked away in Alaska.

CROWLEY: They would love it. I mean several liberals say bring us Sarah Palin. We would love to run against her in 2012. You know, in politics, it's the same thing, be careful what you wish for. But at this point, they look at those poll numbers. They think she would be a weak candidate. And I have to tell you, so do a number of Republicans.

DOBBS: And one thing about it, she's got some great sound bites.

CROWLEY: She does.

(LAUGHTER)

She does.

DOBBS: Candy, thank you so much. Candy Crowley.

CROWLEY: Sure.

DOBBS: Well, joining me now, three of my favorite political analysts, the New York bureau chief of the "Washington Post," Keith Richburg. Keith, good to have you here,

Democratic strategist, CNN contributor, Robert Zimmerman. Robert. Good to see you.

And editor of OpinionJournal.com, and James Taranto. Good to have you with us.

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: Thanks.

DOBBS: Let's start with the president -- Nancy Pelosi, a 24 percent trust rating by the American public. She has been with great beravira (ph) saying she's going to pass health care legislation in the House this week, it doesn't look like it, and the president is back on his heels on this issue. What's going on?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Here's the bottom line. Regardless of her public polling, she's got 100 percent support from 256 Democratic House members. And that's what counts when you're speaker. She's not running for national office. And I know the media is -- you know and the political pundits are fixated by her national polling numbers.

The reality is, I don't envision a vote this week before recess in the House on health reform. I think it's probably wise especially....

DOBBS: Contrary to the statements of the speaker of the House? I'm shocked.

ZIMMERMAN: Well, that may be her goal...

DOBBS: I'm shocked. I'm shocked.

ZIMMERMAN: I don't see that happening...

DOBBS: I think she declared that, not as a goal, but as a fact.

ZIMMERMAN: Well, I don't think it's going to be a reality. Nonetheless, maybe -- but here's the more important point. When we brought this up on LOU DOBBS TONIGHT back in October of 2008. You have the Democrats who put the Democrats in the majority in the House and Senate, come from Republican and conservative states, and they've got to spend some time listening to the constituents. But there is a bipartisan recognition. There has to be change in the system.

DOBBS: Change, not necessarily reform.

ZIMMERMAN: I listen to LOU DOBBS TONIGHT.

(LAUGHTER)

DOBBS: Some editors of large national news organizations should be listening, too. Thank you, Robert.

Let's -- Keith, your thoughts? Where are we?

KEITH RICHBURG, WASHINGTON POST: Well, I agree absolutely on Nancy Pelosi. The only two constituencies for her that count are the Democratic caucus where she's very popular and her constituents in San Francisco, where she's very popular. Doesn't matter what her national numbers are.

And in terms of health care, the most important number as my colleague at the "Post" said is 49.

DOBBS: Why so dismissive of those numbers? Because those numbers obviously are watched very carefully for the president. 24 percent trust approval rating for Nancy Pelosi. I would think would scare the Dickens out of -- Robert was nice enough to say 256 Democrats have given their undying loyalty to her.

RICHBURG: Sure.

DOBBS: But in fact we know there are about 51 who equivocate a bit.

RICHBURG: Yes.

DOBBS: ...

RICHBURG: There's 49 Democrats who got elected from districts carried by John McCain. They hold the key to this whole thing right now. They are the -- most of them are members of the Blue Dog Coalition, some aren't. But 49 is that number and those are key...

DOBBS: So it's not really -- this is a little more complicated than some might have it.

RICHBURG: Absolutely. And you know, the...

ZIMMERMAN: But it's not about Nancy Pelosi. It's about what type of legislation's going to be crafted in this process. And I think that's the critical point. She has to build coalitions in the House the same way the Democrats in the Senate have got to build coalitions.

TARANTO: You know the reason that this health care bill is in trouble is because, you know, there's a basic principle of medicine, first do no harm. And this mad rush to get something passed, something massive and fundamental passed in a matter of few months has led people to look at what kind of harm it might do. And I don't think...

DOBBS: Like they did with the economic stimulus package.

TARANTO: Right.

DOBBS: The rhetoric, by the way, we might point out, is precisely the same.

TARANTO: It's very similar. And, you know, Nancy Pelosi could have the trust ratings of Walter Cronkite. I don't think she'd be able to get this through.

DOBBS: Well, that's an interesting point.

ZIMMERMAN: But, you know, something, James, the bottom line is the system as it exists is unsustainable. And there have to be changes in it. And unless you do put deadlines in place you get no action out of Washington.

DOBBS: Did you know that we heard exactly the same things in 1993 when the Health Security Act was put forward by one of your favorite people, Senator -- then-first lady Hillary Rodham Clinton.

ZIMMERMAN: Absolutely. And look at the results since then.

DOBBS: Yes, the results since then. Longevity continues to extend. The United States still has the highest rating in patient care in the world. And we hear a president and Democratic leadership talking about a crisis. But it's a crisis that is certainly not universal in this country.

RICHBURG: Well, people are scared to death. I mean, during the last campaign...

DOBBS: Some people are scared to death.

RICHBURG: Yes.

DOBBS: But I don't know that we can say people are scared to death. RICHBURG: Well, a lot -- most people last year during the most of the month of the campaign until the economy went off the cliff, all Democrats and Republicans said health care was their biggest concern.

DOBBS: Yes, but also in the election, 55 percent of African Americans in this country said that they were feeling pretty good about race relation. Just about five months after President Obama had taken office as the first African-American president, that number's down to 38 percent.

We have the president stepping forward saying that a police department in Cambridge, without any knowledge of facts to which he foreswore, acted stupidly. And immediately the national media started talking about racial profiling.

What in the world is going on here? Keith?

RICHBURG: I'll tell you, you know, he backed off from the word stupidly because that was the lightning rod word....

DOBBS: Took him three days to do it.

RICHBURG: Yes. You know looking at all the facts, looking at everything that the -- that the sergeant said in his own statements, I don't think there should have been an arrest made there. You know?

DOBBS: OK.

(CROSSTALK)

RICHBURG: Stupidly is your word -- I'm just saying if you look at all the facts there.

ZIMMERMAN: You know, Keith, we don't know all the facts there. And that's part of the issue. One of the teachable moments, if I may, that is most important from this experience is not just the issue of racial profiling which the police have addressed aggressively over the past 15 years more than any other segments of our society, but the issue of police profiling. The assumptions that are made by the media and by so many without knowing the facts that just because...

DOBBS: Amen, brother.

ZIMMERMAN: OK.

DOBBS: And we're going to continue with our panel in one moment. But first, a preview of what's coming up at the top of the hour.

Time for Campbell Brown. Campbell?

CAMPBELL BROWN, CNN ANCHOR: Hey, Lou, we are, of course, following the breaking news on the Michael Jackson investigation. Could his personal doctor face manslaughter charges? We'll have the very latest on that in just a moment.

Also the NFL gives Michael Vick the OK to play ball again after he served nearly two years in prison for dog fighting. Should he be allowed back on the field? We'll talk about that.

Also should it be legal to sell human organs? Just ahead, you'll meet a doctor who says yes. We've got that plus our mash-up of all the top stories of the day at the top of the hour, Lou.

DOBBS: Thank you, Campbell. We'll be back with our panel in one moment. Stay with us. We're going to have insight into exactly what's happening with this White House. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, we're back with our panel. I want to turn -- James, we haven't heard you weigh in on the Gates' controversy.

TARANTO: Well, I have some sympathy for Professor Gates in this episode because something similar happened to me about 15 years ago. I was staying at a friend's house and I was mistaken by a neighbor for a burglar. The police showed up. One of the cops had his gun drawn, not pointed at me but pointed in the holster.

But it was kind of a scary and upsetting moment. Now I had the presence of mind not to get belligerent with the cops. I had no doubt that if I had I would have taken into custody. But I can understand why Gates felt the way he did.

Now, that said, I think there's absolutely no evidence that this was a racial incident except in Professor Gates' mind. And I think that's an important part of it, too.

DOBBS: The teachable moment here, Robert, it seems that the teaching -- the primary pupil is the president of the United States.

ZIMMERMAN: I think there's a lot of teachable moments here, certainly for the president, certainly for the media in terms of the way they covered and reacted to this.

DOBBS: Reflexively. And that was the expression you used, police profiling.

ZIMMERMAN: That's right.

DOBBS: On the part of the national media, on the part of some elected officials.

ZIMMERMAN: Absolutely.

DOBBS: I think that you couldn't put it more correctly. And I'm going to be using that expression quite a bit.

ZIMMERMAN: Go for it.

RICHBURG: Let me just add one thing on...

DOBBS: Quickly if you will.

RICHBURG: Yes, it just seems that one thing is, Professor Gates and his neighbor should get to know each other.

(CROSSTALK)

TARANTO: But she was not a neighbor. She lived about seven miles away.

RICHBURG: Well, she worked -- yes, but she worked in an office 100 miles away.

DOBBS: But she was actually -- she was not able to recognize either the individuals. And the fact that she was so attacked by various people who decided they know what the facts are, from either reading...

RICHBURG: (INAUDIBLE)

DOBBS: Many of them not have been reading the police report, but to rush to judgment and criticism based on ideology here is -- if there's a teachable moment, I hope the president is the first pupil. It is also a lesson for the rest of us.

Thank you very much, James. Thank you. Keith, thank you, sir. Thank you very much, sir. Robert Zimmerman, Keith Richburg and James Taranto.

We'll be right back.

(COMMERCIAL BREAK)

DOBBS: A quick reminder if I may, I'm on the radio Monday through Fridays with the "Lou Dobbs Show," 2:00 to 4:00 p.m. each afternoon on WOR 710 Radio in New York. Go to LouDobbs.com to get the local listings in your area for the "Lou Dobbs Show." And please follow me on "Lou Dobbs News" on Twitter.com.

We thank you for being with us here tonight. Join us tomorrow. For all of us, thanks for watching. Good night from New York. Next, Campbell Brown.

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