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LOU DOBBS TONIGHT

Health Care Debate; Democrats Split on Key Issues; Swine Flu Fears

Aired October 15, 2009 - 19:00   ET

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


LOU DOBBS, HOST: Wolf, thank you. Deep divisions tonight within the Democratic Party and the administration over major issues including health care, secret meetings exposing a rift over a government insurance plan. Liberals such as House Speaker Nancy Pelosi saying the public option must and will be included and in Afghanistan, President Obama's war council has yet to resolve the central question -- whether or not to escalate the war, a plan the vice president reportedly steadfastly opposes and now the White House is trying to float a good Taliban-bad Taliban theory of Afghanistan. We'll explain.

Also tonight, home forecloses are peaking, now at record highs, the Obama administration promised homeowner relief, but homeowners continue to suffer. What can be done? Why hasn't the government delivered on its promise?

ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and analysis for Thursday, October 15th. Live from New York, Mr. Independent Lou Dobbs.

DOBBS: Good evening everybody.

Democrats divided over health care, tense negotiations today continuing behind closed doors, clear lines drawn over the major issue that divides the party -- whether a government insurance plan, a so- calmed public option will be included. Speaker of the House Pelosi has made her position clear, stating emphatically that any House legislation and any conference will include a government-run health care plan.

Lawmakers in secret trying to reconcile what are five different health care bills with the administration's preferences into a single piece of legislation for the president's signature. Where are these mystery meetings and writers? Our Dana Bash found them in the basement of the Capitol building.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Senate Democrats gathered in private for what CNN is told was a spirited, at times tense meeting about how to proceed on health care.

SEN. HARRY REID (D-NV), MAJORITY LEADER: There are different views within my caucus. BASH: Democratic sources say half a dozen liberal Senate Democrats pleaded for a Senate bill with a government-run insurance option which won't fly with some conservative Democrats or GOP Senator Olympia Snowe, the only Republican so far to back a Democratic plan, which gives her a lot of clout.

SEN. OLYMPIA SNOWE (R), MAINE: (INAUDIBLE) found was this that they gave power equally to every member of the United States Senate whether you represent a large state or a small state.

BASH: Some Democrats think Snowe has too much power over health care.

UNIDENTIFIED REPORTER: Does she have more influence than you do ultimately on the health care bill and what it will look like?

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: If I may say that's a strange question. Senator -- I respect Senator Snowe and the role that she has constructed, the role that she has played in the deliberations for the Senate Finance Committee.

BASH (on camera): A diplomatic answer from the House speaker, but we came down here to the basement of the Capitol where House Democrats met behind these doors, we heard some frustration from rank and file Democrats about the influence of Maine's Republican senator.

REP. LYNN WOOLSEY (D), CALIFORNIA: This is the United States of America, this is not the United States of Maine.

BASH: What do you mean by that?

WOOLSEY: Well, I mean that one senator cannot hold the entire nation's health care plan hostage.

BASH (voice-over): Snowe's belief is that a public option would only be triggered down the road, if health care costs don't come down.

REP. SHEILA JACKSON LEE (D), TEXAS: The idea that we're going to succumb to the insurance industry's fears, and then do a trigger which means that our constituency, the American people will delay in getting a public option. That's like the house of cards just collapsing on top of us.

(END VIDEOTAPE)

BASH: And the reality is Senator Snowe wouldn't have the clout she does if there weren't a fair number of conservative Democrats who agree with her that a public option is the wrong way to go. And that's why Democratic leaders in the Senate especially are having such a hard time deciding whether to include that public option in the Senate bill, and Lou, they still want to begin debate on the Senate floor on the health care bill later this month. Lou?

DOBBS: Yeah, it's quite interesting to see Republicans, all are you know in a tether over the fact that Senator Snowe has joined up with the Democrats, and the Democrats, particularly left wing Democrats, all a tether because the leadership is at least at this point paying homage to Senator Snowe and letting her have her voice and to this point at least apparently sizable influence.

BASH: That's right and if you ask Senator Snowe, I think she would say that that makes her in the right place, that she's -- maybe she's angering the right, and she's angering the left, she's in the right place from her perspective even for the people in her state. But I think what really is interesting is that yes, there is anger and you heard it right there, from liberal Democrats at Senator Snowe. But you know you cannot deal with -- really escape the reality that it's not just Senator Snowe, it's important to emphasize that, and it's also conservative Democrats who agree with her on that public option.

DOBBS: The public option, this has now become the term of art for what is public health care, government health care. When are we all going to say that we'll no longer follow the Senate leadership, the Obama White House and the House leadership and say what it really is, which is government health care.

BASH: I think by the end of this debate, you're probably going to see a lot of different ways to quote, unquote, "market that idea". In fact Democrats were pretty clear today that they're going to try to market it in different ways if they do end up with a bill that has something like that in it.

DOBBS: Creating a brand already for a product that hasn't even been manufactured. All right, thank you very much. Dana Bash, great job of reporting.

BASH: Thank you.

DOBBS: All of these discussions on such a critical issue are happening in secret. The president's chief of staff, Rahm Emanuel, who is a key player in these initial discussions at the very least, the president vowing things would be very different. Candidate Obama promising openness and transparency -- remember this?

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We will return government to the people by bringing government to the people. By making it open and transparent so that anyone can see that our business is the people's business. As Justice Louis Brandeis once said, sunlight is the greatest disinfectant. The more people know about federal laws, rules, how regulations are made and who's making them, the less likely it is that critical decisions will be hijacked by lobbyists and special interests.

(END VIDEO CLIP)

DOBBS: Candidate Obama also pledged during the campaign to broadcast negotiations on CSPAN to bring all Americans into the process. For the record, no health care meetings aired on CSPAN today. President Obama and his war council are engaged now in intense debate over what to do next in Afghanistan -- one option that the president has apparently not considered that of secretary of state Hillary Clinton's view being represented. In an interview with ABC News, Secretary Clinton seemed to suggest the president has yet to ask for her opinion.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: I will, you know, be prepared to offer the president my best advice when he asks for it.

(END VIDEO CLIP)

DOBBS: Secretary Clinton repeating claims that it's become more difficult to determine who the real enemy is in Afghanistan. The Obama administration is now testing a good Taliban-bad Taliban theory. Chris Lawrence has the report.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): A senior defense official says the U.S. is considering a revamped initiative of reconciling with elements of the Taliban as part of an overall reassessment of strategy. And on ABC's "Nightline", Secretary of State Hillary Clinton said the goal remains defeating al Qaeda and its extremist ally.

H. CLINTON: But not every Taliban is an extremist ally.

LAWRENCE: The defense officials says that Taliban's organizational structure is complex, there's no hierarchy and the political leaders are mostly outside Afghanistan. And there are dangers engaging one group can anger another. When it was rumored that Afghan President Hamid Karzai had offered concessions to Mullah Omar, there were reports of militias in the north rearming to oppose it.

UNIDENTIFIED MALE: There are fault lines within tribes both on the Pakistani and the Afghan border.

LAWRENCE: Qamar-Ul Huda is an analyst at the U.S. Institute for Peace. He says some commanders in their networks would stop fighting the Afghan government if they're protected and given honorable positions of authority.

QAMAR-UL HUDA, U.S. INSTITUTE FOR PEACE: Money is just one piece of the puzzle and they will ask for and they have asked for jobs and they will ask for property.

LAWRENCE: Others question even the idea of a moderate Taliban.

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Is that the guy who says -- allows his daughter to go to school once a month or once every two months or -- I mean it's -- what is a moderate Taliban. LAWRENCE: CNN national security analyst Peter Bergen says since 2005, there have been multiple efforts to dialogue and cut deals with regional Taliban commanders.

BERGEN: Every time you do a deal with the Taliban, they take it as an opportunity to regroup and grab more territory. So that history doesn't suggest that additional deals with the Taliban make sense.

(END VIDEOTAPE)

LAWRENCE: And several defense sources tell me that they believe that the Taliban and al Qaeda have grown closer and the leadership bonds between those two groups is actually even stronger than it was before September 11. Lou?

DOBBS: Well if that is the judgment of the intelligence community, if that is the judgment of the intelligence division in the Defense Department, why is the Obama administration advancing the good and bad Taliban theory?

LAWRENCE: Well, I am told it is an option; it is not necessarily the way they have decided to go. But it is a way they are thinking or considering, and the key would be this, they're looking at Afghanistan 33 million people, a huge geographic area, it would simply be impossible, even if you increase the number of troops 40, 60,000, it would still be impossible probably to secure that entire country. Some may feel that cutting some deals and taking some areas off the table so to speak may be the only way to win in the big picture.

DOBBS: And with most suggesting that the Taliban has the support of only a minority of all Afghans, this becomes an Afghan problem, and why would the president persist in making it an American problem, perhaps even expanding the problem?

LAWRENCE: But think about this too, Lou, I was also told, you know when you think about, well, only a certain small percentage of Afghans really support the Taliban, I was also told by a defense official the key here is the Taliban believe they're winning and a lot of Afghan people believe that they are winning and when you think a side is winning, you're more likely to stay with them than to try to cross over and cut some deal with a side that you think may end up losing.

DOBBS: Particularly one might imagine a side that has been engaged in the conflict for eight years without success. Thank you very much -- Chris Lawrence, as always from the Pentagon. Thank you.

President Obama may have won the White House, but a new Gallup poll shows the secretary of state is now more popular than the president. Secretary of State Hillary Clinton enjoying a 62 percent favorability rating, compared with 56 percent for the president. Clinton's numbers haven't changed much since Obama took office.

But the president's numbers are down 22 points over the same time period. Criticism of the president's role in health care, the war in Afghanistan, and government bailouts cited as reasons. Joining us now for more analysis on the split over those two major issues, health care and Afghanistan, our senior political correspondent Candy Crowley. Candy let's start with Afghanistan -- secretary of state seeming to suggest she hasn't been included in the discussions about strategy in Afghanistan.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, she may have seemed to suggest that, but I know for sure that she has been in on or called into all of these meetings. She was in Russia when the latest one happened; she called in from the plane. So she has been there. I talk to some folks over at the State Department today who said listen, this is -- you know let's parse some words here.

It is one thing for the president to say what do you think I should do, which they don't believe, at least the people I talked to has been directly asked of anyone, and it's another thing to say well what do you think the issues are here? How do you think we should go about this and that obviously what they say -- what the secretary was saying was look, when he asks me my opinion I'm going to give it to him.

And Hillary Clinton as secretary of state does have -- as Larry Speakes used to say -- the spokesman for Ronald Reagan -- Hillary Clinton does have a dog in this hunt. Because she has civilians and State Department employees over in Afghanistan who if more troops are not sent and it continues to kind of evolve into chaos are in danger and then would have to be pulled out. She is also thought to be, although she has said in this recent interview that she thinks these labels are not necessarily helpful.

She's thought to be more hawkish and maybe would be for or is inclined to be for more troops. So she is definitely in the mix, but I would be -- I do want to add that I don't think there's anyone who believes that she is as close to the president or has his ear as much as some others who are inside the White House.

DOBBS: Two points if I may -- one is that the secretary of state's civilian employees were directly referenced by the president in talking about the risk in Afghanistan, he specifically mentioned those civilian U.S. government employees there. And secondly, if no one has been asked directly what they would do in Afghanistan that means that only Vice President Joe Biden would have offered direction to this point. Could that be correct?

CROWLEY: Well, I think probably sitting in those meetings the president absolutely does have a pretty good idea -- certainly where the military is coming from and probably where others are coming from. Joe Biden's position has been pretty well known outside those meeting rooms. So I just think that we may just be parsing words here as to whether he's directly gone around the table (INAUDIBLE) what should I do. It's not as I understand and certainly not on the campaign trail how this president made decisions. He sort of took in a lot of information and then at the end began to show his cards.

DOBBS: What do you mean we? I had to do that (INAUDIBLE). On health care, what do you -- and I have to ask you this because I can't wait for your answer. What do you make of the complaints by some Democrats that Senator Olympia Snowe is now too powerful?

CROWLEY: Well, too powerful is one word, but I do think that in fact if you were going to compare Olympia Snowe's power in the Senate versus Nancy Pelosi's power in the Senate, that Olympia Snowe wins that when it comes to that side of Capitol Hill. Having said that, I think when you look at this whole thing and sort of step back and take the 50,000 foot view, looking over at the Senate, what you are watching now is everybody publicly negotiating.

And you were hearing those hard lines from Nancy Pelosi, there has to be a public option. This has to be there. You're hearing this from Chris Dodd. You're hearing this from Schumer in New York. We had to have this public option. But the fact of the matter is that for Harry Reid to get a bill out of the Senate that can actually go into a meeting with the House, he's going to have -- it's going to be far easier for him to pull his liberals to the right than to pull his moderates to the left.

So it's going to -- it's very difficult for me to see an avenue through which a public option, just a flat out public option gets into a Senate bill. May be the trigger, because Harry Reid has sort of said he thought it was a darn good idea at some point, so may be a trigger. But this bill is going to be more moderate than what the House is going to put out and probably a little more liberal than what the Senate puts out. But not a liberal -- it won't be looked at as a liberal bill I think at the end because I don't think that either House side leader is going to talk to them believes that a liberal bill can pass.

DOBBS: All right, Candy, thank you very much. Appreciate it -- Candy Crowley.

Questions about the swine flu outbreak, 81 children have now died, most of them perfectly healthy. What is the government doing? Why is the government not telling us what's going on? What should you be doing to keep your family as safe as possible?

Home foreclosures are not receding, in fact, they have hit record highs. President Obama promised help for homeowners, where is that relief?

And our economic panel tonight, where is this economy right now? Where are the jobs, where is the growth, is the stimulus package even influencing this economy? That is next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Good news on the economy, the number of Americans filing new unemployment claims falling last week to the lowest level since January -- the Labor Department reporting first time claims fell by 10,000. It's the fifth decline in six weeks, a sign that the pace of layoffs could be slowing.

The White House today unveiled the first hard data on how many jobs the stimulus package has actually created. The number according to the government, you may want to write this down, 30,383. That is the total number of jobs created by companies that received just over $2 billion in stimulus money. That works out to a cost of $71,500 of taxpayer money for each job apparently created.

The Obama administration downplayed the report, however, saying the newly released numbers represent only a small portion of the stimulus money that has been spent, only about a quarter of the $787 billion has been paid out so far. Home foreclosures at a record high in the third quarter, nearly a million homeowners going into foreclosure, it's now seven months after the Obama administration promised help for struggling homeowners and launched it's foreclosure prevention program. Many are asking where is that help -- Casey Wian with our report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Another 937,000 homeowners were the target of foreclosure filings in the third quarter of this year, a 23 percent increase from the same period last year, and the highest quarterly number on record. Adjustable mortgages and other risky loans continue to be a concern, but rising unemployment among homeowners is quickly becoming the biggest problem.

RICK SHARGA, REALTY TRAK: We think sometime in 2010, the dynamic will shift and those types of foreclosure problems will actually be the primary reason for foreclosures. And as unemployment continues to increase, you're going to see a subsequent increase in the number of homes in foreclosure.

WIAN: California leads the way with more than a quarter of a million foreclosures. Nearly two-thirds of the national total were in six states, California, Nevada, Arizona, Illinois, Michigan and Florida. In March the Obama administration launched a $75 billion program to encourage lenders to modify the terms of loans facing foreclosure.

This month officials announced the making home affordable program has helped more than half a million homeowners enroll in trial loan modifications. But as of the end of September, only 16 percent of the more than three million eligible loans were participating in the government's program. Low income housing advocates say the program needs more teeth.

TRAM NGUYEN, CALIFORNIA REINVESTMENT COALITION: Ordinary Americans, ordinary homeowners they're really struggling and meanwhile the banks are you know projecting this profitability yet they're not -- they're not turning and helping, you know, and doing what they said they would do in terms of participating in the government's modification program in helping borrowers.

WIAN: Among the lenders with the largest number of customers facing foreclosure, Citi Mortgage leads with 33 percent of loans undergoing trial modification, followed by JPMorgan Chase at 27 percent, Wells Fargo at 20 percent, and Bank of America at just 11 percent.

(END VIDEOTAPE) WIAN: Now Mortgage Bankers Association defended its members, saying the government's program is just one tool lenders are using to help borrowers stay in their homes. The Obama administration's Housing and Urban Development secretary said last week we believe we are absolutely moving in the right direction, but we are nowhere near the finish line yet. Lou?

DOBBS: Could you imagine the same blather if they were referring to large commercial banks or what once were brokerages on Wall Street?

WIAN: No, I couldn't, Lou. I mean it's really an incredible situation. It's clear that this program has gotten off to a very, very slow start. Only the Obama administration says they're going to stop about seven to nine million homeowners from being foreclosed on.

DOBBS: But Casey...

WIAN: Only a half million now less than 10 percent of the way.

DOBBS: But Casey, (INAUDIBLE) just saying. We're getting off to a slow start here. We're talking about a million people losing their homes and this is the response from an administration that said that it was about change. All right, Casey, thank you very much. Appreciate it so much.

We'll have much more on what is happening with our economy later here in the broadcast. I'll be joined by three of the country's top economic thinkers.

Next, the Democrats' health care overhaul plan, can such a plan created behind closed doors possibly be in the American people's best interests and medical researchers looking for why so many healthy children are coming down with and dying from the swine flu. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: There are more concerns now about the rate at which the swine flu is infecting our children. Doctors once believed that the swine flu virus would cause only severe illness in children with underlying medical conditions. But out of the 81 children who have died since the beginning of this outbreak, many of them were perfectly healthy -- now the Centers for Disease Control trying to find out why -- Kitty Pilgrim with our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Children's Hospital in Boston is bracing for an influx of swine flu cases, saying it is moving north. Joanne Cox is the head of Children's Hospital Primary Care Center. She's been with Children's Hospital for 24 years and was initially skeptical that swine flu would be anymore more serious for children than seasonal flu, but after the outbreak last spring she changed her mind.

DR. JOANNE COX, CHILDREN'S HOSPITAL BOSTON: This is something that needs to be taken quite seriously. I think myself I wasn't sure what would happen in the spring when we first heard about the swine flu say in May, and I just saw how rapidly very huge numbers of children got very, very sick and it happened fast and it happened in large numbers and that really changed my mind.

PILGRIM: Dr. Cox says swine flu is more contagious than seasonal flu and can leave children much sicker and more vulnerable to other bacterial infections such as pneumonia. According to the Centers for Disease Control, 30 percent of the people who died of swine flu also contracted pneumonia. The CDC is now looking at why so many children have died of swine flu, 81 in the U.S. since the outbreak began. The CDC estimates that 20 to 30 percent of children who died of swine flu had no underlying medical condition.

DR. ANNE SCHUCHAT, CDC: I think it is sobering that some totally healthy people suffer this very rapid deterioration from the H1N1.

PILGRIM: In California, the spring swine flu season never ended. Dr. Yvonne Maldonado, director of Infectious Diseases at Lucile Packard Children's Hospital says the hospital saw cases all summer and is now banning children from visiting the hospital because of fears that children are carriers of the disease.

YVONNE MALDONADO, LUCILE PACKARD CHILDREN'S HOSPITAL: The median age of infection in the U.S. has been about 16 for the last several months. Now that could change and children are a much higher risk group for becoming infected. They can shed virus for longer periods, even after they're asymptomatic. And so we're trying to prevent transmission within our hospital from our visitors.

(END VIDEOTAPE)

PILGRIM: Now, Lucile Packard hospital has been part of the clinical trials for the injectable vaccine. However, it has not received the supply of the injectable vaccine for their patients. They only have the nasal spray. Boston Children's Hospital also does not have the injectable vaccine.

Now that is a problem, because children under 5 with asthma or anyone with an underlying medical condition is told to wait for the injectable version of the vaccine, Lou, and there's still no information from the CDC on what the scheduled delivery is. They are supposedly supposed to give more information tomorrow, but right now we don't know.

DOBBS: This is trouble, and we're also hearing nothing from our political leadership on the issue, not President Obama, not the Congress, not the Senate. The Centers for Disease Control, where are the National Institutes of Health? The principal public health organizations at the state level and local level, I mean, they are left at an absolute quandary, to say nothing of the people so dependent.

People with children who are in the highest risk group with underlying conditions, who cannot use this nasal spray and need the injectable vaccine, what in the world are they to do? PILGRIM: They really -- they have to wait, and we're talking to the hospitals that deal with children and they said they really are very stressed about this that they...

DOBBS: Well, tomorrow I would like us to make certain of this if I may, that we ask the president, we ask the White House press secretary, we start -- we start finding out why we're not getting answers. Because if what is happening here is, if there is a problem that is unknown to us and the American people, it's certainly time for that public awareness to take place, don't you think? All right, thank you very much, Kitty. This is very distressing. Thank you.

Well, I'll have a few more thoughts about the swine flu, what our public health agencies and our political leadership is doing about these issues. Also about the war in Afghanistan, the time it is taking to come up with a strategy on an eight-year long war without achievement or success and a petition that I would like you to go to on loudobbs.com.

Join me on the radio Monday through Friday for the show at 2:00 to 4:00 p.m. each afternoon on WOR 710 radio in New York and again go to loudobbs.com to get a local listing on your area. I would like you to read that petition on our troops overseas, and please subscribe to our daily free podcast. Also please follow me on Lou Dobbs News on twitter.com.

Up next, our economic panel, what happened to the recovery, and what happened to those jobs? And Democrats, split over the so-called public option. You know, government health care. And why doesn't anybody call it government health care? Why does everybody call it the public option? Does that bother you? Is that annoying? We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well, joining me now for more on the Obama-Baucus health care plan and what will ultimately emerge as health care legislation, Bob Master, he's from Workers of America, district one. Good to have you back with us, Bob. Wendell Potter, who is from the Center for Media and Democracy. Well, good to have you. And Hendrik Hertzberg of the "New Yorker." Good to have you back.

Failure isn't an option according to the senators working on the health care reform proposals. Independents and moderates according to polls remain unlikely to support, quote/unquote, "the public option". Where does that leave us? We have just heard from our reporters that there's considerable consternation about the role of Olympia Snowe.

HENDRIK HERTZBERG, THE NEW YORKER MAGAZINE: Well, that's a byproduct of essentially of the filibuster. It's because of the filibuster that one or two senators, three or four senators at most is where all the action is. That's -- it's a crazy system.

I wish that -- do you remember the nuclear option?

DOBBS: Indeed I do. HERTZBERG: I think the Democrats made a big mistake back then when they didn't take the dare and just say, OK, nuclear option, no more filibusters.

DOBBS: (inaudible) last night was going to rewrite the Constitution. Tonight, he's going to contort history a bit for us and bring it up to date. We have the filibuster. We have a 60-vote rule. We have a Senate majority leader who said this will be a government- run health care at least in part, and declared it to be such when it emerges from the conference committee.

We have a speaker of the house, who has made the same in her case more of a demand than a declaration. It hasn't been supported at all, that approach, in the Senate. What will happen if the Democrats proceed, boldly as you suggest, and put together a government-run health care plan and define it as such in the conference committee, what will be the political consequences?

HERTZBERG: Well, I don't think they'll do it unless they're pretty sure they can get it through. I mean, don't you think?

DOBBS: Well I -- my first...

HERTZBERG: I mean that's what the negotiations are all about.

DOBBS: ...I always take politicians at their word, when they tell me there is something I always believe them. But what do you think, Wendell?

WENDELL POTTER, CENTER FOR MEDIA AND DEMOCRACY: I think the long-term consequences will be dire for the Democrats if they don't have a public option in the health bill that emerges from the Congress. And a public option is, you're calling it government-run health care, and if I were still in my old jobs at the insurance company I would do a high-five with my colleagues because we'd use the term. That's exactly what we want - we would have wanted you to have said, and want the American public to think.

The public option would just give people in the middle class the same options.

DOBBS: I want (ph) to examine where you're making your money now.

POTTER: We can do that, OK, and I'll be very happy to. But the senior citizens have the option of enrolling in a private plan, why shouldn't the rest of us have the option of enrolling in a public plan? That would be self sustaining and operating the same as the Medicare program.

It's self-sustaining would be -- would operate on with premiums that come from people who would enroll in those plans. It's not the same kind of the government plan that Medicaid is or Medicare is either.

DOBBS: Although the president has said, think Medicare. Well, he said that in speech after speech.

POTTER: I think he said that just so people would understand that there's just what - there's nothing else quite like it -- the public option that's being proposed. It's somewhat like the Medicare program that it would be possible...

DOBBS: Does someone know the discussion about? Do you call me a progressive or do you call me a liberal? Do you call me a conservative or do you call me a Republican? I mean, these labels get to be kind of interesting at the end of the day. We're talking about taxpayer money, we're talking about removing the profit motive from part of the health care industry, are we not, Bob? A public option?

ROBERT MASTER, WORKERS OF AMERICA, DISTRICT ONE: Look, I think that first of all, the labels aren't very helpful in moving the conversation forward.

DOBBS: Well, the public option, I think you'll acknowledge is one of those labels that was intended to be obfuscatory (ph) rather than illuminating.

MASTER: I don't really think so and I think...

(CROSSTALK)

DOBBS: Then let's use it. I am in an easy mood tonight.

MASTER: I think -- what we're suggesting with the public option is that there are certain things that the government has to step into the breach to accomplish, whether it's taking care of people who need Social Security...

DOBBS: Absolutely.

MASTER: ...who need some kind of retirement security, people who need healthcare when they get to be 65...

DOBBS: Absolutely.

MASTER: ...and what we're seeing now...

DOBBS: That is what we call settled law.

MASTER: ...Exactly. And it's worth remembering...

DOBBS: We're probably the only ones that call it settled law.

MASTER: ...It's worth remembering that 40 years ago when Medicare was established, people were talking about this as socialized medicine, as Ronald Reagan famously said, in our sunset years we'll remember when people were free in America, and you know, we'll lament the past time if Medicare goes into effect. Now the Republicans are cloaking themselves in Medicare and trying to use that in a sense to undermine, you know, Obama's proposal.

DOBBS: By the way, as you put up the string quarter behind Ronald Reagan's words, I think we have to acknowledge that Medicare right now represents $38 trillion in unfunded liabilities, along with -- and adding in Medicaid, and adding in Social Security, we're talking almost $60 trillion in unfunded liabilities. I'm not suggesting that that is determinant whether one has quote/unquote the public option or not, but it is the context for what we're discussing, right?

MASTER: Those problems need to be addressed. But on -- but on the other hand, I think that you know, we would acknowledge that the private insurance system as it's currently constituted has failed millions and millions of people. Now Harvard just released a study that said 45,000 people died last year because they did not have health insurance. That's the fundamental problem.

DOBBS: That's an extrapolation of an assumption that isn't in any way validated because the numbers underlying it could be anywhere from zero to 40 -- actually 45,000.

(CROSSTALK)

DOBBS: ... but the number itself...

MASTER: We know the lack of health insurance for 45 million people is a crisis.

HERTZBERG: And on this matter of terminology, Lou, and correct me if I'm wrong, guys, because you guys are the experts...

DOBBS: I think they will.

HERTZBERG: It's not government-run health care that we're talking about really. We're talking about a government-run insurance program. Health care is still going to be private. It's still going to be your doctor, your private doctor. This is not like the British system.

This is not the government taking over the health care system.

DOBBS: How do you know?

HERTZBERG: Because that's what's proposed. Because what's being proposed is not the VA.

DOBBS: The director of the Congressional Budget Office says he can't even begin to put together a solid estimate, because nothing exists.

HERTZBERG: But we know that the outlines of this is not going to be like the VA, it's not going to be like the VA.

(CROSSTALK)

It's not going to be a bunch of government-run hospitals...

DOBBS: All right. HERTZBERG: ...and government employed doctors. It's just the government helping people get some insurance which they don't have now. It's that 44 million people.

POTTER: You're right that it doesn't exist right now because there are different ways to get to a public option. There's no final version yet of the bill that will reach the president that will create it, and hopefully it will create it.

But the numbers that are indisputable -- there are about 25 million people who are underinsured, and if we don't have something that counters the influence and the power of Wall Street on the private companies, we'll have more and more people in the middle class going into the ranks of the under insured.

DOBBS: When you say 25 million people under insured, are you talking about the status quo or are you talking about?

POTTER: I'm talking right now about the under insured. The people who have insurance, but when they really need it, they're finding out that's inadequate. They're having to pay so much money out of their own pockets that it is just not what they thought it would be, and we're going have a lot more people in that same category in years to come unless we have something that balances the private health insurance system.

DOBBS: We're going to stay with your terminology, public option -- very quickly. If you will, (inaudible) over here. Do we see this legislation for the president's signature this year?

HERTZBERG: If I had to bet big money on it, I would say probably not.

DOBBS: Wendell?

POTTER: I would say yes.

MASTER: I think we're getting a bill.

DOBBS: Those ads are working, eh?

MASTER: I think the time has come.

DOBBS: All right. Thank you very much, Bob.

MASTER: Thank you.

DOBBS: Thank you, Wendell. Appreciate it. Thank you.

And let me say, please come back again soon. We want to continue this conversation.

Up next, where is the Obama recovery? Why isn't that stimulus program creating jobs, for more than 30,000 at least? Where is this economy headed? I'll be joined by three of the country's best economic thinkers here next. Stay with us. (COMMERCIAL BREAK)

DOBBS: Where is our economy headed? Joining my now is Michael Holland. He's chairman of Holland and company, president and founder of the Holland Balance Fund, and Adam Lerrick, professor of economics at Carnegie Mellon, is a visiting scholar of the American Enterprise Institute Harvey Eisen, chairman and managing partner of Bedford Oak advisors.

Is the recovery at hand? Is it underway -- Harvey?

HARVEY EISEN, CHAIR, BEDFORD OAK ADVISORS: Of course.

DOBBS: Of course. What a silly question for me to have asked.

EISEN: There is only one problem -- nobody knows it because nobody has a job.

DOBBS: And at this point we're seeing the market above 10,000. You have got to be excited. That has to demonstrate clearly that jobs are going to be created soon and all is good again.

MICHAEL HOLLAND, CHAIR, HOLLAND AND COMPANY: I wasn't around in the 1970s, Lou, as you were.

(LAUGHTER)

But it actually happened before. The stock market did go up a lot and we had a pretty lousy economy and a pretty lousy political system behind us at the time. So it's happening again.

And the good news is that there are some companies around the world who are doing very well, and they actually deserve it. China, for example, we have talked about that before. Their stimulus has worked. They are doing great. There's companies like IBM, Google, who are doing great here.

DOBBS: And Google says the worst is behind us.

What does it mean? China has $2.5 trillion in hard reserves. We are continuing to borrow capital at an extraordinary rate. Most taxpayers have to work just about five months a year to simply pay for the interest on our national debt. What does the future look like here, given all this?

PROF. ADAM LERRICK, CARNEGIE MELLON UNIVERSITY: Lou there's a very famous economist who has a very good sentence -- unsustainable trends end. And we're in the middle of an unsustainable trend.

(CROSSTALK)

DOBBS: You've never seen my recall actually work, have you.

LERRICK: Not recently.

DOBBS: Let's turn to these unsustainable trends. We have approximately $60 trillion in unfunded liabilities, $7 trillion external trade debt, $12 trillion in national debt. We have a budget deficit for fiscal 2009 that looks like it's $1.5 trillion at minimum.

In this context we have a debate raging on national health care "reform" in which the Senate majority leader today, professor, said --

LERRICK: It would be $2 trillion.

DOBBS: It would be $2 trillion. And don't bother about capping malpractice claims because that would only save $54 billion.

LERRICK: Lou, there's a problem. We don't have an economic policy in this country. We have social policy disguised as economic policy.

And the problem is social policy is about redistribution, and redistribution doesn't raise productivity and it doesn't drive economic growth.

HOLLAND: That's a great description of the stimulus plan here.

LERRICK: That's what they're doing. They're calling it a stimulus plan. It's not a stimulus plan. It's about redistribution. It's about fairness. And they're willing to sacrifice growth for fairness.

HOLLAND: By contrast, in China they spent almost as much money, and they have a blisteringly growing economy right now. It's spectacular.

DOBBS: Well, short of moving to China, what do we do?

HOLLAND: Harvey?

(LAUGHTER)

EISEN: Well, all I can tell you is I must be living on a different planet, because I just saw a couple of minutes ago you talking about housing and all these poor people losing their homes. So how does that correlate to Wall Street clowns getting all this money? Give me a break.

DOBBS: It's a lousy $140 billion, an all-time record after the American taxpayer bailed out all of the principle institutions.

EISEN: I am so behind you on this one. I mean, normally I like to give you a hard time, but you got it right this time. All these people losing their homes, this is unbelievable.

DOBBS: It's over two years ago I recommended that we spend $200 billion and intervene in the housing market which would have staved off one million foreclosures and saved $3 trillion to $5 trillion in housing values.

EISEN: How can you have Wall Street have record bonuses and people losing their homes? Explain that one to me. DOBBS: OK. I will, because we have a compensation czar who is fully in control now. And we --

EISEN: What a joke.

DOBBS: It's a joke, but so are the $140 billion in bonuses. What are we doing, Michael?

HOLLAND: At the end of the day, as Adam was saying, we're not identifying the problem. With all due respect to Harvey, the fact that some people make --

LERRICK: Don't make me mad.

(LAUGHTER)

HOLLAND: God bless him -- we really have to focus on making things better. And we're not -- the economics plan is not anywhere to be seen. The housing thing is part of social policy right now, and it's not getting solved.

So with all due respect, to Harvey's worry about people on Wall Street making too much money, rather than focus on them, let's focus on the people who have real problems and help them get out from this foreclosure situation.

EISEN: Losing your home is not a real problem?

HOLLAND: No, I'm saying that is the real problem. That is the real problem.

EISEN: I think that is the problem right now.

DOBBS: He always does that.

Let me ask this -- $140 billion in bonuses. Compensation czar -- the issue here, could it be this simple? Those people getting the $140 billion aren't earning the money through the creation of real products and services that will be both sustainable and create wealth in this country. That's for sure.

Well, we're going to have to leave the rest of this for just a moment.

EISEN: Who pays the politicians?

DOBBS: Well, we'll also be talking about all of the corporations and special interests as well when we come right back.

(COMMERCIAL BREAK)

DOBBS: We're back. And give us your outlook as quickly as you can, what you think people can expect here.

EISEN: Look, the economy is getting better. Unemployment is the lagging indicator. It's going start to pick up. There's a lot of money being made.

You can't get any return on riskless securities, so the government is incenting you to go out and buy stocks. There's a buying panic in stocks. And things are fine for the time being.

But down the road we're going to get the consequences that we had in the '70s. We're going to get huge inflation, rising interest rates, and we're going to be on the show talking about it. We're laying the seeds right now.

DOBBS: Professor?

LERRICK: Lou, we have trillion dollar deficits as far as the eye can see. We're printing money at an extraordinary pace, and there's no exit strategy. Harvey is right, we're looking at inflation, we're looking at rising unemployment, or high unemployment for quite some time.

And the fact is more and more Americans are going to be in competition with India until we reform our education system.

DOBBS: You have the last word here.

HOLLAND: We're in the early stages of a cyclical recovery. It has very little to do with the stimulus package that came out of Washington.

The Federal Reserve here and central banks around the world have put a tremendous amount of money into the system, got huge fiscal stimulus, and we're going to have a recovery.

Jobs will lag as they always do. The stock market right now is seeing that's what's happening. I think it's going to continue for a while.

And we don't know how bad it's going to be when we come out the other side with inflation and everything else because we've never had this series of events that we've just had the past 12 months.

Right now it looks pretty good, but stay tuned.

DOBBS: All right, we will. Thank you, gentlemen. Appreciate it. Come back soon.

Thank you for being with us tonight. Join us here tomorrow. For all of us, thank you for watching. Goodnight from New York.

Coming up next here on CNN, Campbell Brown.

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