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LOU DOBBS TONIGHT

Remembering Senator Kennedy; County in Crisis

Aired August 27, 2009 - 19:00   ET

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


LISA SYLVESTER, CNN CORRESPONDENT: Thanks, Wolf.

Tonight, thousands of people line up to remember "The Lion" of the Senate as the body of Ted Kennedy lies in repose at the John F. Kennedy Library in Boston. Also tonight our "Face Off" debate, whether the so-called public option will decide the fate of President Obama's health care overhaul. And with a record-breaking deficit, will the president be forced to break his promise and raise taxes on the middle class?

But, first, the nation remembers Senator Ted Kennedy, one of the country's most polarizing, but yet at the same time, one of its most respected leaders. Two days after his death Kennedy's body lies in repose tonight inside the John F. Kennedy Presidential Library in Boston where mourners will pay their respects tonight and tomorrow.

Earlier today his body was taken from the famous Kennedy family compound in Hyannis Port, Massachusetts -- the motorcade's route lined with spectators as it wound its way to Boston. Our own John King -- he joins us now from the Kennedy Presidential Library. John, describe the scene. What is it like there tonight?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: It's a fascinating mix, Lisa. Inside as you can see you have the senator's wife, the widow Vicky Kennedy (ph), still in there greeting members of the public. Most of them from Massachusetts but some from other parts of the country and some from overseas as they pass by the casket, the flag-draped casket of Senator Edward M. Kennedy, quite a somber reserved reflective mood inside.

Outside here it is more of a celebration. People are telling stories and members of the family, Caroline Kennedy, Bobby Kennedy, members of the Shriver family have come through shaking hands in the lines outside thanking people for coming to pay tribute to their Uncle Teddy. And most of the people simply pausing and saying sorry for your loss as members of the Kennedy family have passed by.

As you mentioned, the hearse carrying Senator Kennedy and the motorcade with the family, the large family came here a little bit late about 5:00 Eastern Time. He was brought inside by a military honor guard. The family had some time to pray and reflect inside and now we're told more than 1,600 members of the public have passed by. There are more than 12,000 people, we are told, in the line outside.

There is scheduled to 12 hours of public viewing over two days but the family has said it will keep the doors opened if there are people waiting here outside. Massachusetts has had a Kennedy in the Senate for more than a half century and now as we have two days of tribute, then the funeral mass on Sunday, there is speculation, of course, as to what comes next for the state of Massachusetts, what comes next for the big shoes Senator Kennedy had in Washington, Lisa, for the next 48 hours or so, it will be a chance to reflect on the legacy of the senator of course, to see his family in the public eye and you're watching the spectacular pictures there inside the John F. Kennedy Presidential Library, the casket of Senator Kennedy in the foreground -- members of the public passing by and paying their respect and on the outside is Boston Harbor -- quite a touching and remarkable scene here, Lisa.

SYLVESTER: It is pretty amazing there, John. Now I understand you said that Vicky Kennedy (ph), his widow, she is still there shaking hands because it's been what more than an hour that she has stayed there shaking hands and greeting people?

KING: And we are waiting to see when she will leave. And we have been led to believe that she might not stay for much of this. But we're told from the drive in from Hyannis Port -- they took the highway of course -- but when they came off the highway into Boston, and they took a farewell tour -- Senator Kennedy wanted this. He planned very much the events of these days, in his final days alive and there's a picture of Vicky Kennedy (ph) there on your left and congressman -- former Congressman Joe Kennedy (ph) with the wife here on the right -- he is the son of Robert F. Kennedy and Senator Kennedy planned this.

They passed through his mother's old neighborhood in Boston. They passed by the federal building where he had his office. They passed by the Historic Annual Hall and we're told that Mrs. Kennedy, Vicky Kennedy (ph), the senator's wife for 17 years was overwhelmed at one point simply turned around and said, wow inside the car three, four deep sometimes the people were. Some of them were wearing old Kennedy campaign buttons from his Senate campaign, from his presidential campaign and she clearly has decided to stay inside a bit longer, Lisa, to say thank you. You see that.

She's reaching this crowd is young and old, they are black and white and Latino and Asian and some in wheelchairs. And as you see them walking through, Mrs. Kennedy has taken a few seconds for each one to say thank you very much, occasionally bowing down to talk to somebody in a wheelchair or a young child walking through, taking her time to thank people for turning out to pay tribute to her late husband, Senator Kennedy -- Lisa.

SYLVESTER: Yes, so remarkable. She just lost her husband such a short while ago, but she's holding out well. Those are quite remarkable pictures and John, we certainly appreciate your time and appreciate you sharing your insight with us.

KING: Thank you.

SYLVESTER: Well, on Saturday, Senator Kennedy will be buried at Arlington National Cemetery near the graves of his brothers, John and Robert. A private burial will mark the end of one of the most prominent public lives, as you heard John mention, in the last 50 years of American history. Barbara Starr has this report.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): The final resting place for Senator Edward Kennedy will be by these trees on the sloping green hill close to the graves of his brothers John and Robert. Arlington superintendent, Jack Metzler (ph), showed us the site.

(on camera): The senator will be laid to rest here.

UNIDENTIFIED MALE: Yes he will be.

STARR: And his family will...

UNIDENTIFIED MALE: His family will be here and we understand approximately 200 people will attend the service. It will be a closed funeral, invited guests only. Senator Kennedy will receive military honors.

STARR (voice-over): Cemetery staff are already working at the burial site but this area will close early Saturday while the grave is prepared. It was just in the last few weeks that this site was selected. It's an area Senator Edward Kennedy knew well.

UNIDENTIFIED MALE: Senator Kennedy was here all the time. He came on the anniversaries of the deaths. He would come on the anniversaries of the births, if he was available. He would just come. Sometimes he would announce himself. Other times we would just be up here doing maintenance and we would find him up here. If he came to funerals of one of the soldiers from his state, he'd also before he left the cemetery always stop and have a prayer or a quiet visit here. Sometimes he would spend five minutes -- other times he would talk to the people until they quit talking to him. He would spend half hour, 45 minutes just talking to people and visiting with his brothers.

STARR: President Kennedy visited Arlington just a few days before he was assassinated in November, 1963. From the top of the hill, he looked out over this vista of the nation's capital and said it was so beautiful he could stay here forever. Now all three Kennedy brothers will be reunited on this Arlington hillside.

Barbara Starr, CNN, Arlington National Cemetery.

(END VIDEOTAPE)

SYLVESTER: And stay with CNN for live coverage tomorrow as Senator Kennedy lies in repose at the JFK Library and then tomorrow evening for the memorial service there.

Well some things are still unclear tonight who will replace Ted Kennedy in the Senate and how fast the replacement process will happen -- Jessica Yellin reports.

(BEGIN VIDEOTAPE) JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Before he died, Senator Kennedy sent a letter to his state's top officials writing, "I believe it is vital for this commonwealth to have two votes in the Senate." He asked that state lobby change to allow the governor to appoint someone to Kennedy's seat as soon as it became vacant. Massachusetts' new senior senator echoed that request.

SEN. JOHN KERRY (D), MASSACHUSETTS: He is asking simply for a temporary ability to appoint someone who will not run, will not get in the way of other people who want to run, who will be there for a moment only.

YELLIN: Currently the state is required to hold a special election -- the earliest that could happen is January, probably too late for a vote on health care reform -- the issue Kennedy caused the cause of my life. In this climate Democrats need every vote that they can get and the math is not good. With Kennedy's death, Democrats are one vote shy of a 60 vote supermajority.

They could try to pass reform using a special tactic called reconciliation that requires only 51 votes, but Senator Robert Byrd is ill and top Democrats worry at least six of their own senators, plus, independent Joe Lieberman, could vote no depending on the contents of the bill. If they pick up no Republicans and lose all (INAUDIBLE) sitters Democrats have barely enough votes to pass health care reform. Massachusetts governor is pressing lawmakers to change the law and give Democrats that vote.

UNIDENTIFIED MALE: I'm hoping that the legislature will turn to it and turn to it soon and if they send me a bill, I will sign it.

YELLIN: So far it's unclear if state leaders will go along. Whoever fills the seat would have to vow not to run in the special election.

(END VIDEOTAPE)

YELLIN: And, Lisa, whenever there is a special -- whenever there is an election for the seat there will be obviously be many people interested in running to replace Senator Kennedy. Speculation has focused on Kennedy's widow Vicky (ph) and his nephew Joe, but people close to the family have dismissed both of those options saying they are not considering a run -- Lisa.

SYLVESTER: Do you know when -- I know you said it's unknown at this point. Do you know how soon the state legislature might make a decision? But you know time -- as you well know, time is running out. I mean there is a push to get this done in September. We are just about on September's door step here.

YELLIN: Right. The leadership in the state legislature, which has to run with this is being very noncommittal. They're not even indicating that they want to do this yet, so the ball has to be moved significantly forward for them to even take the step to begin this. And so they -- it's all in the stage of negotiation right now, heavy lobbying, lots of discussions, but something should be resolved quickly for a decision to be made.

SYLVESTER: OK, Jessica Yellin reporting from Washington, thank you very much for that report.

Well, another unknown tonight. Is the future of the Kennedy compound in Hyannis Port -- now this has been the scene of American history and tragedy, but with Ted Kennedy's death, this, too, may pass from the family. Brian Todd has our report.

(BEGIN VIDEOTAPE)

BRIAN TODD, CNN CORRESPONDENT (voice-over): The Kennedy family's grief so often shared with the public, so often at this place. With Ted Kennedy's death, what does the future hold for the cherished Hyannis Port compound? A close Kennedy family associate tells CNN the property could be given to a nonprofit organization, possibly to be made into a museum or another type of educational center.

The associate says plans are not yet final but that the senator for some time had talked to family members and close friends about how to preserve the compound and its history. Author and historian Robert Dallek says it reflects...

ROBERT DALLEK, HISTORIAN: The extent to which the Kennedys are so mindful of the country's history and how much their family history is bound up with the public life of the nation -- that they are intertwined.

TODD: It was Hyannis Port where the family gathered in November, 1960 to hear the final results of John Kennedy's election victory over Richard Nixon, where they came to absorb the heart wrenching after shocks of John's and later Bobby's assassinations, where Ted Kennedy himself retreated in 1969 to reassess his life and career following Chappaquiddick (ph). But it was also a place of genuine contentment. University of Virginia Professor James Young (ph) spent nearly 100 hours interviewing Ted Kennedy for an oral history project. Much of it was done at Hyannis Port where the senator shared simpler, happier moments.

JAMES YOUNG, UNIVERSITY OF VIRGINIA: He would mention, you know this is where I tried to jump from the roof of the garage, being a parachutist with an umbrella up. This is where my brother Jack did such and such or fail on his bicycle. This is where we used to play games.

TODD: The house is also a symbol of the family's wealth. Senate disclosure records indicate Kennedy family trusts are worth at least $14 million. And its power, something Dallek says could still be worth holding on to for some members of the family.

DALLEK: And it could be very useful to any younger Kennedy who aspires to public office, to maintain that kind of image.

TODD: But Dallek says he's not sure if the younger Kennedys have quite the same connection to the place, the sense of growing up there, of being part of that landscape, as Ted's generation did. So the idea of a museum there could be very appealing to the younger Kennedys as well.

Brian Todd, CNN, Washington.

(END VIDEOTAPE)

SYLVESTER: And stay with us for more tonight on the life of Senator Edward Kennedy.

Also as education budgets are cut nationwide a new study says American students are falling dangerously behind the global competition.

And with tough times and high unemployment all across the country, we'll take you to the unemployment capital of the nation. This is a county with a 30-percent jobless rate.

(COMMERCIAL BREAK)

SYLVESTER: Unemployment is taking a heavy toll throughout the entire country. Imperial Count (ph), California, is reeling from the loss of jobs and the recession and its jobless rate is three times -- three times the national average. Casey Wian reports from El Centro (ph), California.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Brenda Ramirez (ph) is at a job center, newly unemployed for the fourth time in two years, even when she was working, the Calexico (ph), California resident only found part-time jobs.

BRENDA RAMIREZ, JOB SEEKER: I'm ready to work. I'm eager to work. I have the energy. I have the skills. And nobody wants to use it.

WIAN: Unemployment at Imperial County (ph) is an epidemic. Located in eastern California, on the U.S.-Mexico border, Imperial (ph) has always struggled with the seasonal nature of agricultural work and low levels of education. Daniel Gaxiola (ph) is a high school dropout now working on his GED.

DANIEL GAXIOLA, JOB SEEKER: It's been pretty hard here (INAUDIBLE) valley. Not many opportunities for people who don't have diplomas.

WIAN: In July the unemployment rate here topped 30 percent, the highest rate of joblessness in the nation, with nearly one in three people looking for work, job placement and training centers are busier than ever.

MARY CAMACHO, JOB TRAINING SUPERVISOR: I've seen cuts before in my career but not this deep and the concern and the worry, that we're all feeling probably not as great as what we are feeling right now.

WIAN: Like many places in the southwest, Imperial County (ph) has suffered through a boom bust housing industry cycle that has devastated the construction industry, but California's budget crisis has intensified the pain. Thousands of employees at two state prisons here are on furlough three days a month. Those pay cuts have an effect throughout the local economy. Even the state funded job training agency laid off 16 people in June just when its services are needed most. Last summer a super Wal-Mart opened in nearby Brawley (ph), recruiters passed out 10,000 applications for 250 precious jobs.

SAM COUCHMAN, DIR., IMPERIAL COUNTY ONE-STOP: We never tell people that we can't help them. We always try to help them in some way. And we keep their hopes up because if they keep coming into us as we see jobs develop we'll try to place them.

WIAN: Couchman says he sees some bright spots including newly arriving federal stimulus money and more Border Patrol jobs. Most local officials remain optimistic.

RUBEN DURAN, EL CENTRO, CITY MANAGER: It's tough like it is (INAUDIBLE). But it really is not much different than everywhere else. It just we've got a set of numbers that is getting a lot of attention and we're trying to tell our story. Say look, we've got opportunity to do business. We have the water. We have the land. We've got people that want to work. And we want to be able to get this turned around.

WIAN (on camera): Imperial County may lack jobs but it has plenty of land, heat, wind and sun, so it's trying to attract renewable energy companies in solar, geo, thermal and wind power, provide more stable economic growth in the future.

Casey Wian, CNN, El Centro, California.

(END VIDEOTAPE)

SYLVESTER: One part of our economy that is under funded is education. There's new evidence tonight of how far behind our students are falling in comparison to their international peers. And while our students perform below average in math and science, spending on those programs is also in decline. Bill Tucker reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: What's the hybridization on carbon...

BILL TUCKER, CNN CORRESPONDENT (voice-over): California has cut more than $6.6 billion from its schools, Washington State, $800 million, Oregon, $500 billion. School funding has been cut in most states in America, but softening the impact of those cuts are hundreds of billions of dollars in federal stimulus money. That money originally intended to promote innovative educational initiatives and reforms is instead being used to fill budget gaps and save jobs, according to the American Association of School Administrators.

DAVID SHREVE, NATIONAL CONF. OF STATE LEGISLATURES: School administrators find themselves between a rock and a hard place. There's enormous pressure from the communities who save jobs and there's enormous pressure from all positions to keep people on as best they can.

TUCKER: From a budgetary and an educational standpoint, it's a strategy that makes sense, say education officials.

CYNTHIA STEVENSON, JEFFERSON COUNTY PUBLIC SCHOOLS: People will say live within your means. We are forced with what I consider almost draconian choices because 87, 88 percent of your budget will always be in people, I think we're people, you know teachers and school secretaries and bus drivers and school principals.

TUCKER: That part of the budget is seen as largely untouchable because of contractual obligations, pension liabilities, benefits, but (INAUDIBLE) they are trying to get at some of those so-called fixed costs.

DAVID SUPPES, DENVER PUBLIC SCHOOLS: Our goal is to do everything we can possibly and challenge things that might be fixed costs -- are they really fixed and are things we can do about them, perhaps not in six months, but over several years.

TUCKER: Unfortunately part of the budget that is not fixed and therefore easily cut is money that directly impacts learning. School districts are facing the choices of cutting teachers and increasing classroom sizes, cutting classroom resources like computers and textbooks that are tools for learning, considering charging students for all extracurricular activities such as band, sports, even advanced placement courses.

And schools don't have years to figure it out. Just this week a new analysis for the National Center for Education of Statistics underscored the urgency of the situation. The analysis shows American students are below average in math and science when compared to their international counterparts -- not only below average, but international scores are on the rise. American scores have stalled.

(END VIDEOTAPE)

TUCKER: (INAUDIBLE) SAT scores offer an unfortunate confirmation of that analysis. SAT scores for the class of 2009 were flat and Lisa they show that widening racial achievement gap that we keep talking about on the program, and it's not over yet. It's expected to only get worse and stay lower for the next several years.

SYLVESTER: Yes the thing that amazes me, Bill, is that you have people from big business, the Chamber of Commerce, you have people with small businesses, you have educators, everyone agrees, you have the politicians -- everyone agrees that this is a problem but yet we don't really see solutions. There just seems that there's so much talk but not any action to improve it.

TUCKER: Done there -- exactly.

SYLVESTER: OK thanks, Bill. Thanks very much for that report.

Well coming up, the public option, will it be the downfall of the president's health care proposal -- that's the topic of tonight's "Face Off" debate. Also, our continuing coverage of health care systems around the world -- tonight we take a look at India. And residents of a New Jersey town are outraged over a possible visit by Libya's leader, Moammar Gadhafi (ph).

(COMMERCIAL BREAK)

SYLVESTER: Residents of Englewood (ph), New Jersey are outraged tonight that Libyan leader Moammar Gadhafi (ph) that he could be staying there during an upcoming U.S. trip. The area is home to many relatives of the victims of the Pan Am Flight 103 bombing. Last week, the only man convicted in that attack that killed 270 people was set free. He returned to his home in Libya where he received a hero's welcome. Jill Dougherty has our report now from Englewood (ph), New Jersey

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: This is your old fence line.

UNIDENTIFIED MALE: Yes, right -- this is the fence that they just installed.

JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): Three weeks ago Rabbi and reality TV star Shmuley Boteach (ph) says he came home to find his fence gone, a dozen of his trees chopped down, and a construction crew fast...

(AUDIO GAP)

DOUGHERTY: A residence owned by the Libyan government.

UNIDENTIFIED MALE: Every thing you're seeing, maybe 40 vehicles inside that property...

UNIDENTIFIED FEMALE: Wow.

UNIDENTIFIED MALE: ... are for one thing, Moammar Gadhafi (ph).

DOUGHERTY: When the Libyan leader attends the U.N. General Assembly next month, speculation abounds he'll pitch his trademark Bedouin (ph) tent that he takes on international trips on the lawn of this mansion in the affluent community of Englewood (ph), New Jersey. The Libyan Embassy refuses to comment. But Rabbi Boteach (ph) is pitching a fit.

RABBI SHMULEY BOTEACH, LIVES NEXT DOOR TO LIBYAN RESIDENCE: And all of us who watched Gaddafi's (INAUDIBLE) welcoming the Lockerbie bomber as a hero do not want a man like him and a better funder and lover of terrorists to be in our neighborhood.

DOUGHERTY: Bert Ammerman (ph) who lives just a few miles away lost his brother Tom in the bombing of Pan Am Flight 103.

UNIDENTIFIED MALE: I thought when Megrahi (ph) was released that was the sad last chapter. I didn't realize that something else could kick you in the stomach or slap you in the face. DOUGHERTY: If Gadhafi (ph) is allowed to set up his tent in Englewood, he says...

BERT AMMERMAN, LOST BROTHER IN PAN AM 103 BOMBING: It is as if December 21, 1988 never occurred. It's as if 189 Americans were not massacred at 31,000 feet. It's as if 270 innocent citizens weren't murdered by Megrahi (ph).

UNIDENTIFIED MALE: It is deja vu all over again.

DOUGHERTY: Congressman Steve Rothman (ph) was mayor of Englewood 26 years ago when Libya bought the property. Not only does the town lack the resources and security to deal with the Libyan head of state he says, the residents don't want him here.

REP. STEVE ROTHMAN (D), NEW JERSEY: They believe that he is a murderous dictator with American blood on his hands. Also they know a lot -- a number of the families who lost relatives in the Lockerbie bombing. So they would feel terrible if he were to come here.

DOUGHERTY (on camera): Congressman Rothman thinks all this will be resolved diplomatically, but he also says he is prepared to use any methods at his disposal to make sure Gadhafi (ph) does not stay here in Englewood. Meanwhile, construction here at the residence continues.

(END VIDEOTAPE)

SYLVESTER: That's Jill Dougherty reporting from Englewood, New Jersey.

Well still ahead our "Face Off" debate -- can President Obama's health overhaul succeed with the public insurance option included. Also our continuing coverage of health care around the world -- tonight we take a look inside India, where the life expectancy there is just 69 years old. And Tropical Storm Danny taking aim at the East Coast -- we'll have the very latest.

(COMMERCIAL BREAK)

SYLVESTER: We continue our reporting on health care systems around the world and how they compare with health care here. Tonight we report on India -- the life expectancy there is 69 years. That's far lower than the United States average of 78 years.

Access to medical care and malnutrition continue to be major problems facing the Indian. Brooke Baldwin reports.

(BEGIN VIDEOTAPE)

BROOKE BALDWIN, CNN CORRESPONDENT: India -- it's a sprawling country of 1 billion people. It's one of the world's fastest-growing economies with them, it's 26 percent of the population while the poverty, 456 million live on less than $1.25 a day, and 46 percent of children are malnourished.

Healthcare in this country is government financed and government run, but for many people, accessing that care is a challenge.

PETER BERMAN, ECONOMIST, WORLD BANK: In principle, they should be able to get a comprehensive free publicly-financed and publicly- provided health care. In practice, people have to pay quite a lot out of pocket to get any health care, and it's often the main source of health care, even for the poor.

BALDWIN: A major problem in the public sector, lack of government funding. Total expenditure on health per capita, it's $109. Compare that to $7,290 in the U.S. Health care consumes 4.9 percent of India's GDP versus 16 percent in the U.S. The outcome -- long lines, fewer facilities, and inefficient staff.

PROF. REGINA HERZLINGER, HARVARD BUSINESS SCHOOL: The supply of health care in India is on par with that in sub-Saharan African countries.

BALDWIN: According to the World Bank, 75 percent of all health expenditures is in the private sector, where 95 percent is paid out of pocket. Venture capitalists from all around the world are investing millions to create a medical infrastructure.

HERZLINGER: Rather than building great, big, everything for everybody hospitals, they use a hub and spoke model, where the hub is a general purpose, very high-end hospital, and the spokes are specialty hospitals that provide care for orthopedics, for cardiology, things like that.

BALDWIN: In the private sector, the doctors are highly skilled and facilities are world class. Indians are utilizing technology like tele-medicine to treat patients in rural areas, and doctors are performing innovative procedures which attract potential patients from all around the world.

With a growing middle class, more and more Indians can afford this type of health care, but --

BERMAN: You have a very large group, much larger group of people who are poor and who don't have the means, and they don't have access to this kind of health care. So this is the nature of the challenge that India faces today.

(END VIDEOTAPE)

BALDWIN: Sometimes there is success in India. Infant mortality is down. They says it's less than half of what it was some 20 years ago. In addition here, life expectancy, even though it's a little bit lower than compared to the U.S., it is up in India.

And in the last 62 years, India has reduced its absolute poverty by more than half, Lisa.

So it's an interesting dichotomy, quite a unique challenge for India and its health care system.

SYLVESTER: Brooke Baldwin, thanks very much for that report. And we'll continue their coverage of health care systems around the world. We'll have reports of the health care systems of New Zealand and Turkey.

In this country there is a heated debate over one piece of the proposed healthcare plan, public option, a government-run insurance plan which would be an alternative to private insurers.

Supporters say that it will help keep costs down and will make sure that everyone is covered. However, opponents say it would grant government control over private medical decisions and that it could force private insurers out of business.

That's the topic of our face-off debate. And joining me now, Bruce Raynor, president of Workers United, an affiliate of the service employees' international Union. He is in favor of public option. And Michael Tuffin, executive vice president of America's Health Insurance Plans. He is opposed to a public option.

Gentlemen, thank you very much for joining. I want to get started first with Bruce. Give us your case, why is public option why is the public option necessary?

BRUCE RAYNOR, SERVICE EMPLOYEES INTERNATIONAL UNION: Right now the insurance company are the ones that interferes with the delivery of health care. If we're going to have an efficient system that is cost effective we going to have to have a government alternative that allows the pressures on the insurance companies to keep costs down and to provide good services.

SYLVESTER: Michael, is it necessary? Do we need this public option as Bruce has outlined?

MICHAEL TUFFIN, AMERICA'S HEALTH INSURANCE PLANS: No we don't. What we need to do is to fix the insurance market so we get everybody covered. Make pre-existing conditions a thing of the past. Build on the system that works well for about 85 percent of Americans.

Every survey shows strong satisfaction with private coverage. We need to build on that system rather than put it at risk with a government-run plan.

SYLVESTER: You both are saying that you want to see some kind of health care reform, but you're defining it differently on what exactly reform is.

Bruce, there is perhaps a political reality. Senator McCain earlier this week, he said it's not going to get through Congress with the public option. Even Steny Hoyer, the House Majority Leader has said the same thing. It might have to be dropped.

Is there a political reality that you have to face?

RAYNOR: Well, the political reality is that 14,000 people a week are losing health care coverage in this country. So there's a crisis. And Congress and the general public believes that every man, woman, and child in this country, the richest country in the history of mankind, ought to be covered by health care.

And so we have got tremendous pressure to do something to reform the system. If we don't have a government option in the program, then we're not going to have an affordable program that will cover every man, women, and child in this country.

And insurance industry is opposed to it because the insurance industry has a monopoly on health care coverage and they don't want to compete. You know, we've heard for years that the private sector can perform things more efficiently than the public sector. Then why are the private sector and insurance companies afraid of the government option?

SYLVESTER: Mike, do you see health coverage as a right in this country, and do you think it's the government's responsibility to provide it?

TUFFIN: Well, health care coverage is something all Americans need to have, and there's a strong role, a critical role for the government in making that happen.

We need to bring Medicaid up to 100 percent of the federal poverty level. We need to build on the children's health insurance program. Those are the two things that we've supported.

We need to strengthen Medicare. Medicare is on a path to bankruptcy. It's a critical program for seniors, and it is headed towards bankruptcy unless we get health care costs under control.

So the idea that while Medicare is under strain, headed toward bankruptcy, that we're going to move tens of millions of more people on to government care, it just doesn't added a up.

And we don't have to go that way. The government-run plan is a road block to reform. You mentioned some of the comments from Congressional leaders. It's a divisive plan that doesn't bring people together. You can solve this by fixing the insurance market.

RAYNOR: You're talking politics. I'm talking health care for average Americans.

The fact of the matter is Medicare costs have gone up slower than private insurance costs. The government-run option is simply a way to provide an alternative to the insured.

It doesn't cut insurance companies, it doesn't cut the private sector out of health care. It just provides pressure on them to deliver a good product at an affordable price.

And if, in fact, the private sector can really do better than the government, then what will happen is people will move towards the private sector.

Our experience is that without pressure on the private sector -- right now we've got preexisting conditions. We have insurance companies standing in the way of people's medical care. We want medical care to be between the doctor and the patient.

And to achieve that in this country we're going to have to have a government option in this program.

The political reality I don't accept. The overwhelming majority of Americans, both Democrats, Republicans, and Independents, and voters agree that a government option ought to be offered. And we have some of the most successful programs, Medicare and the Veterans' Administration, health care in the world.

SYLVESTER: Michael, is that true? Is there that widespread support for a public option?

TUFFIN: There's not. And unfortunately there's not, and unfortunately, the focus on the divisive government-run program has brought down support for the health care reform.

Most American agree that we need health care reform. Employers want it, labor wants it, physicians and hospitals want it, health plans want it.

But the focus on the government-run plan has drawn down support for health care reform and put health care reform at risk.

RAYNOR: We appreciate --

TUFFIN: We see this across the country. And what the American people want, and they are making this very clear, they do not want to give up their employer-base coverage, and all of the analyses show that that is what will happen with the government-run plan.

RAYNOR: And we don't want them to lose their employer-base coverage either. Unions have negotiated that employer-based coverage.

What we want, however, and it's clear in all of the statistics, is that we have an oligopoly. In most markets, there are those one or two insurance companies that control the overwhelming majority in the coverage in that market, and therefore the prices rise. The government option provides an alternative to that.

What's really happened politically is not that people are reacting to the government option, Mike. What's really happened politically is that the Republican Party and the insurance industry has stirred up a minority and made a lot of noise about a government option.

All the polls show the American people still support that option, and I believe we'll have a health care system passed by the Congress of the United States and signed into law that will include that government option. That's what people want and that's what makes sense.

TUFFIN: Let me tell you what the insurance industry is stirring up. We're running advertising right now on CNN in support of no more preexisting conditions, in support of affordability, in support of universal coverage. RAYNOR: And we're you're doing, Mike.

TUFFIN: That's the reform we're stirring up.

SYLVESTER: All right, gentlemen, we're going to have to end there. I'm going to have to cut off the debate right now. This fascinating topic really do appreciate your coming on. And of course this is a discussion that will continue.

Thank you very much, Bruce Raynor from the Workers United and Michael Tuffin from America's health insurance plans. Thank you, gentlemen.

RAYNOR: Thank you.

SYLVESTER: Coming up, we'll have much more on the memorial for Senator Ted Kennedy.

Also, charges that the Pentagon screened reporters' coverage before allowing them to cover our troops in Afghanistan.

And can President Obama keep his promise not to raise taxes on the middle class. That story is coming up next.

(COMMERCIAL BREAK)

SYLVESTER: The memorial services for Senator Ted Kennedy are underway tonight. Kennedy's body is lying in repose inside the John F. Kennedy presidential library in Boston where thousands of mourners, as you can see, are lining up, paying their last respects. The funeral and burial will take place on Saturday, and CNN will have complete coverage.

Joining me now with more on some of the other stories that CNN is following tonight, Brooke Baldwin. Brooke, what do you have for us?

BALDWIN: Lisa, a stunning story developing out of northern California. The 1991 kidnapping of a California girl appears to be solved.

The victim surfaced on Tuesday along with her alleged be abductor in northern California. Her name is Jaycee Dugard, and she was taken from a bus stop in 1991 when she was just 11 years old.

Convicted sex offenders Phillip Garrido shone upon the woman, now 29, on Tuesday when he was called in by his parole officer or a completely unrelated matter. Garrido reportedly admitted kidnapping the girl, police say he fathered two children with his kidnapping victim.

Tropical storm Danny is gaining strength as it moves towards the east coast. Danny's path has been a bit erratic, though, and forecasters expected to eventually turn north and back east, they are warning it is still possible for Danny to make landfall with strong winds and rains into the sometime weekend. And back out in California, firefighters battling three separate wildfires, the largest one right above the city of Azuza (ph). It's burned almost 2,000 acres there, unbelievable pictures.

Firefighters using helicopters, planes, bulldozers just to try to contain those fires. So far, no injuries have not been reported, but some people who live in the area, as you can imagine, Lisa, are trying to evacuate.

Those are just some of the stories that we're following tonight.

SYLVESTER: Thanks, Brooke.

New concerns tonight that President Obama won't be able to keep his promise not to raise taxes on the middle class. Many analysts are questioning how the government is going to pay down a multi-trillion dollar deficit without cutting spending or raising more money in the form of taxes.

Louise Schiavone reports.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Well, it may have been months or even years in the making, the worst post World War II economy has fallen on president Obama's watch. The president's own budget director projects a deficit of $9 trillion over the next decade, $2 trillion higher than the previous White House forecast.

The question is, how will the nation paid down?. Former congressional budget office director Douglas Holtz-Aiken frames the traditional debate.

DOUGLAS HOLTZ-EAKIN, FORMER DIRECTOR, CONGRESSIONAL BUDGET OFFICE: Between the policy people in an administration were on the campaign who know the budget outlook and recognize that taxes that may have to be part of fixing this, and the political people who know what campaign promises can mean, the rhetoric that arises when you break one.

SCHIAVONE: This was the promise from Senator Obama last year.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: No family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.

SCHIAVONE: The dilemma, says Rudy Penner, who was Congressional Budget Office director in 1980s, is that Washington is reluctant to spend less, especially on Social Security, Medicare, and Medicaid. That, he says, means revenue increases are the most obvious answer.

RUDY PENNER, URBAN INSTITUTE: It's inevitable that taxes will go up for the middle class as you look at the nature of the problem. And everything I see points toward some sort of value added tax like they have in Europe. It's going to be extraordinarily unpopular and probably can only be passed in a crisis.

SCHIAVONE: Asked on a Sunday talk show this month about the possibility of looking to raise revenues, the treasury secretary responded --

TIMOTHY GEITHNER, TREASURY SECRETARY: We're going to do what it takes, we're going to do what is necessary.

SCHIAVONE: Despite this year's $1.6 trillion deficit shock, the White House still stands by its no new taxes pledge to the middle class, and Congressional Democratic leaders tell us the middle class can take that pledge to the bank.

(END VIDEOTAPE)

SCHIAVONE: Lisa, analysts say that if the U.S. is serious about turning a fiscal corner and maintaining its standing among international investor, one way or another the government will have spend less and collect more -- Lisa?

SYLVESTER: Thanks, Louise Schiavone, reporting from Washington.

Joining me now, also from Washington, President of Christie strategies and former special adviser for President George W. Bush, Ron Christie, editor of opinion.com James Taranto, and Democratic strategist and CNN contributor Hank Sheinkopf.

We're going to talk about the passing of Senator Ted Kennedy. He had so many signature issues, education, really fighting for the little guy out there. In his passing, how is that going to change the dynamic, Hank, on Capitol Hill?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: In 1964, Lyndon Johnson was able to get the solar rights act passed because Jack Kennedy the martyred had wanted it, and Ted Kennedy's death will be the emotional current that drives the health care issue for President Obama probably.

SYLVESTER: James, do you agree with that?

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: No, absolutely not. I think it's ridiculous.

First of all, only a member of Congress would think that spending a trillion dollars of our money is an appropriate way of memorializing their colleague when he dies. They ought to just lay a wreath, for crying out loud.

But as a matter of political analysis, Ted Kennedy is extremely popular among liberal Democrats, among the media, as we've seen with its wall-to-wall coverage. He's not really that well loved in red states and districts that are represented by blue dog Democrats, and those are the people who are the swing votes here.

I think if anything it's a slight net negative politically for Obama-care. SYLVESTER: I want to read to you what House Speaker Nancy Pelosi said on this. This was her statement on Senator Ted Kennedy's death yesterday. She said, and we have a screen of this that we can share with our viewers. She said, quote, "Ted Kennedy's dream of quality health care for all Americans will be made real this year because of his leadership and his inspiration."

So, Ron, picking up on this theme, is this going to make it easier for Democrats to push through their health care agenda?

RON CHRISTIE, FORMER ADVISER FOR BUSH ADMINISTRATION: No, I don't think so at all. I think James' analysis was spot on.

I think when you look at the congressional districts around the country where people have gone out to their representatives in town hall forums where they flood the phone lines on Capitol Hill, there is not the support in the United States Congress either in the House or the Senate to pass a bill that has a public option or that costs $1 trillion out. there.

I think what the president will do or what many Congressional Democrats will do will be to try to find a way to eulogize Senator Kennedy. They will obviously name a bill after him and say we're doing this for Senator Kennedy.

But the size and scope and the breadth of what the president and Senator Kennedy originally outlined I think is just too politically difficult to find the votes to make it pass.

SHEINKOPF: I can certainly stand up to both of you at the same time. So let me put it a different way. The emotional currency will be there. Something has to change.

And the way, big pharmacy companies and everybody else can't keep winning the battle. That's what Kennedy's life was about. He was a rich kid who didn't have to do any of this. For that, he deserves our admiration.

As to health care reform, we'll see some kind of reform package. $1 trillion, who knows? But Kennedy's legacy will be in that new bill.

TARANTO: Big pharmacy companies, I believe, cut a deal with the Obama administration on Obama-care. Let's see if they keep it.

If they win the battle, your side wins.

SYLVESTER: Hank, talk me through the numbers. How do you get the numbers there, because the reality is they're going to possibly need 60 votes if they're going to do this on their own? They just lost one vote. So how do you make the numbers work?

SHEINKOPF: Not going to be easy. Other things have happened that have had significant social gain over time weren't easy either. But we're going to bite the bullet. You know why? Because it's an economic issue, and the Congress is going into an election in an economically turbulent time.

SYLVESTER: Go ahead, Ron.

CHRISTIE: The reality is it's not 60 votes. The Democrats now with the passing of Senator Kennedy and with Senator Robert Byrd from West Virginia in the hospital, they only have 58. The ability for the Senate to stop a filibuster, you need 60 votes.

The Democrats just don't have the votes with the vast, vast price tags that's o these bills that we've been talking about.

So it's going to be a very interesting debate to see how they can try to find a way to pass something that meets the muster with some of the Congressional Democrats who are more conservative, but yet and still meets the muster of the more liberal members of the House. It will be a very interesting time the next couple months.

TARANTO: They'll probably make up that Massachusetts vote, because the Democrats, who have an eight-one majority or something in the Massachusetts legislature, are probably going to pass a law allowing the governor to appoint the replacement senator, which, by the way, is what the law was before 2004. They changed it to prevent Romney from appointing someone if Kerry were elected.

SYLVESTER: All right, Gentlemen, we're going to have to take a break here. but we'll be back and have so much more with our panel in just a moment.

(COMMERCIAL BREAK)

SYLVESTER: Back now with our panel.

I want to put up a full screen for our viewers. Take a look at this. This is a "Washington Post"/ABC news poll. They asked the question, do you support or oppose changes to the health care system, the proposals being developed by Congress and Obama?

Want to highlight one number in particular -- 40 percent say they strongly oppose it. That compares to 27 percent saying they strongly are in favor of this. 40 percent strongly oppose. That's a big number to have to overcome.

Hank, how does the White House get over that hump when they have -- when Congress returns in September?

SHEINKOPF: They may have to do this in a couple stages. They may have to come up with something that works now, not long term or something that is less expensive in front.

But there will be a change, because this can't continue. We cannot continue to spend this kind of money on health care per annum, and people can't afford. We're making economic decisions on who's going to live and die. That's not the way a democracy should function.

SYLVESTER: James, public option? Do you think it will be kept in or is that going to be a compromise?

TARANTO: I would think that will be on the chopping block because it doesn't sound like they have the support in certainly the Senate and maybe not even the House.

SYLVESTER: OK. And, Ron, your thoughts? What's going to happen when Congress returns in September? Are they going to have to significantly modify this, scale this back from what the president wants?

CHRISTIE: They're going to have to significantly pare this down, Lisa. There is no way we can afford given the new budget estimates saying that the deficit projection over the next ten years is $9 trillion.

That is $9,000 billion. People around the country are upset with this. The reason that that 40 percent disapproval number is there is people are saying I can't afford to pay my bills. I can't afford to make ends meet. The government has to be more responsible.

So I think ultimately what Hank said is probably right. They'll find a smaller legislation, maybe a couple thing they can cobble together. But the public option I think at this point is dead on arrival.

SYLVESTER: All right, gentlemen, thank you very much. Ron Christie from Washington, D.C., James Toronto and Hank Sheinkopf, always a pleasure. Thank you very much, gentlemen.

Coming up at the top of the hour, Campbell Brown. Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Hey there, Lisa. Tonight a girl kidnapped nearly two decades ago, as you reported earlier, she has been found alive. What happened to her? Where was she during all of this time? We're going to have the latest details, plus, reaction tonight from her parents.

We'll also hear from Elizabeth Smart who was also kidnapped, then found alive, and her father on what it's like to reunite with a child who has been missing.

Also, tropical storm Danny, we are tracking its path along the east coast this weekend. That along with all our mash up of the other top stories of the day at the top of the hour -- Lisa?

SYLVESTER: Thanks, Campbell.

And we'll be right back.

(COMMERCIAL BREAK)

SYLVESTER: We'll have complete coverage of the funeral of Ted Kennedy tomorrow. You're looking at live pictures from the JFK library where his body is lying in repose. And a reminder to join Lou on the radio Monday through Friday for the "Lou Dobbs Show." Go to loudobbs.com to find local listings for the Lou Dobbs show on the radio. And remember to sign up for Lou's podcast also at loudobbs.com. And follow Lou at "Lou Dobbs News" on twitter.com.

Thanks for being with us to night. For all of us here, thanks for watching. Good night from New York. Next, Campbell Brown.

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