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CNN TONIGHT

Deal or no Deal; Party of One; California in Crisis

Aired December 15, 2009 - 19:00   ET

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


(BEGIN VIDEOTAPE)

JOHN ROBERTS, CNN ANCHOR (voice-over): Tonight deal or no deal. President Obama says we are this close to finally getting health care passed. But is it the right plan?

California dreaming, now an economic nightmare, their golden state hitting rock bottom -- tonight we begin a special series "California in Crisis."

Also, should the boss be able to read your personal text messages? The Supreme Court will decide just how private the text messages you send from work really are.

(END VIDEOTAPE)

ANNOUNCER: This is CNN TONIGHT live from New York. Here now, John Roberts.

ROBERTS: Good evening and thanks for being with us this evening.

President Obama tonight claims to be on the brink of passing a massive overhaul of the health care system. The president met with most of the 60 Senate Democrats to get everyone on the same page. There had been major clashes within the party over key parts of the plan. Howard Dean, the former Democratic Party chairman, today came out against it.

He says without a public option, it is just not worth it. Sixty, of course, is the filibuster-proof magic number of votes the Democrats need and have struggled to get. A possible break for the Democrats, Independent Senator Joe Lieberman now signaling he would be willing to get onboard.

We have two reports tonight. Ed Henry is at the White House and Dana Bash is on Capitol Hill for us. First to Ed Henry and Ed, just how close to a deal are we?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well good evening, John. Very close to a deal, but also very close to it all falling apart. It has been like that during many important moments in this debate but I spoke to a senior adviser to this president who told me this is finally the critical moment in the debate. They know that and that's why the president invited most of the Senate Democrats over here today.

Basically I'm told behind closed doors the president wasn't demanding anything. He wasn't threatening anybody. He wasn't lashing out at moderates like Joe Lieberman. Instead, he was about reaching out, trying to cajole them along because he realizes he's pretty close to the finish line. And threats at this point may backfire. That's why he was all about reaching out both in the meeting and in his public comments afterwards.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The final bill won't include everything that everybody wants. No bill can do that. But what I told my former colleagues today is that we simply cannot allow differences over individual elements of this plan to prevent us from meeting our responsibility to solve a longstanding and urgent problem for the American people. They are waiting for us to act. They are counting on us to show leadership. And I don't intend to let them down and neither do the people standing next to me.

(END VIDEO CLIP)

HENRY: And that's why the president was reaching out during this meeting. In fact, even after that large meeting broke up, we are told the president had a one-on-one meeting with one of the key moderates, Ben Nelson of Nebraska. He did not, however, have a one-on-one meeting with that other key moderate, Joe Lieberman. Perhaps that will come a little later down the road -- John.

ROBERTS: Ed, you also have some exclusive reporting tonight on a new commission that the president is considering. What can you tell us about that?

HENRY: That's right. Officials here at the White House confirming to CNN first that the president is privately considering signing an executive order that would create a deficit commission to try and tackle in 2010 what kind of tax changes might be needed, what kind of big spending changes to major programs affecting all of our viewers like Social Security and Medicare. This is an idea first pushed on the Hill by Senators Kent Conrad (ph) and Judd Gregg (ph) because they think the process is broken on the Hill.

It's impossible to enact this major change. To bring this big debt back in line, balance the budget. Some people, critics are already saying this will just punt it to an outside commission. But there are people here at the White House that believe this may be the only way to really come up with some serious solutions moving forward to fix this debt crisis -- John.

ROBERTS: All right. Ed Henry for us at the White House -- Ed thanks so much.

Back now to the case of Connecticut Senator Joe Lieberman -- the Democrat turned Independent now enemy number one to his former colleagues for playing spoiler on health care. Many say that Lieberman single-handedly killed any chance of a public option passing. Party leaders are not happy. A congressman from his home state wants him recalled from office. Dana Bash is with us from Capitol Hill. Dana, is Joe Lieberman the most powerful man in Washington right now?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Today the answer to that question, John is yes. Because the bottom line is at this point he has pretty much gotten what he wants. Democrats here on Capitol Hill with the coaxing of the president and his aides are poised to bow to his demand, not just to take out the public option, but a compromise idea, to allow people 55 and older to buy into Medicare.

Now Democrats are doing that for one reason and one reason only. They believe without his vote they are not going to get health care through, especially in the time table that they have. That is though making a lot of Democrats pretty angry at him. Democrats who have become increasingly angry at Joe Lieberman, Democrat turned Independent over the years. So at the White House meeting Ed was talking about today with all Democrats and the president Lieberman told me that he actually stood up and addressed all of those people in the room. Here's what he said.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: I said quite honestly to my colleagues that I knew some of them were upset about positions I had taken, but like each of them I didn't get elected by telling my voters in Connecticut that I would follow the majority of my caucus even if I thought on some things they were wrong. We each have to do what we think is right.

BASH: You talk to a lot of Democrats and there is a fundamental feeling among many of them that there -- you have animist (ph) toward the president, that you have animist (ph) towards your former party and that they say that this is all about Joe Lieberman.

LIEBERMAN: Well that's just poppycock. I mean this is all about what I think health care reform should be. President and I have a very good mutually respectful relationship. If I had any sense of indebt against the Democratic Party I wouldn't be in the Democratic caucus today.

(END VIDEO CLIP)

BASH: Now remember, the reason why these feelings are so sore beyond that, John, is of course, because Joe Lieberman was the Democrat's vice presidential candidate in 2000. I also asked him about how that feels to go from that high among Democrats to being, frankly, quite despised among many in the base and he said that obviously he doesn't enjoy that.

The fact his wife who has come under attack and people are calling for her to be removed from the Planned Parenthood board. He is not happy about that. Or the fact that he's you know feeling this way from his colleagues especially, but he said look, I can't try to please everybody. I'm doing what I think is right for the American people and the people of Connecticut.

ROBERTS: Dana, what about charges that this is all posturing for Lieberman's political future? What did he have to say to that charge? BASH: Well he says, of course that it is all based on his philosophy and his approach towards government and not making government any bigger, especially at a time of deficits, but there was one very interesting moment. An answer I was surprised by frankly, John, and that is I asked him about when he runs for re-election in 2012, whether or not he would consider running as a Republican. Listen.

(BEGIN VIDEO CLIP)

BASH: Any chance Joe Lieberman would run as a Republican?

LIEBERMAN: I don't know what I will run as. I like being an Independent. So that's definitely a possibility. But I would say that all options are open.

BASH: Really?

LIEBERMAN: Yes. It is unlikely that I would run as a Republican. But I wouldn't foreclose any possibility.

(END VIDEO CLIP)

BASH: Now he went on to say the more likely thing is I would run as an Independent but he also said it depends where I am, so I think for those liberals out there and those Democrats who are not very pleased with him now, they are probably going to be even more displeased when they hear that.

ROBERTS: All right Dana Bash for us in the Russell Rotunda (ph) -- Dana, thanks so much.

In just a few minutes I'm going to be joined by two key senators, Senator Ben Cardin and Senator Judd Gregg (ph) with more on the debate over health care legislation. Are we really on the precipice of passing health care reform?

Also coming up, California goes bust. Why the golden state is no longer the land of golden dreams. Our special series on California's sinking fortunes.

And Tiger Woods gets more bad news. Now his former doctor is under investigation allegedly for helping athletes with performance enhancing drugs.

(COMMERCIAL BREAK)

ROBERTS: One of the most widely used medical tests, the CAT scan, could be far more dangerous than anyone thought. Two startling new studies suggest that millions of CT scans given each year expose patients to unacceptable levels of radiation. The researchers say overuse of the test actually leads to tens of thousands of new cases of cancer and death. In fact, a full two percent of all cancers in the United States have been linked to CAT scans. The irony, of course, healthy patients looking for hidden illness could be making themselves very sick. Now to some concerns about the swine flu vaccine given to children. The Centers for Disease Control is recalling 800,000 selected batches made by Sanofi Pasteur (ph). Safety is not the issue. Officials were told the vaccine was not potent enough to protect against the H1N1 virus. The recall involves doses for infants and toddlers age 3 to 6 years old. Only children who got the vaccine via a prefilled syringe are affected. Parents are being told to not do anything. The vaccine is still expected to help protect against exposure.

Another recall that parents should be even more concerned about tonight. The government has announced a massive recall of over 50 million Roman style shades and rollup blinds because the cords can strangle children. Eight kids have died since 2006 and more injuries have been reported. The Consumer Product Safety Commission says cordless blinds are best for homes with children or at least make sure that any cord is not reachable by your child.

Well tonight we begin a special series called "California in Crisis". The golden state has been devastated by budget shortfalls, layoffs, rapidly deteriorating public schools and political chaos. Our Casey Wian examines why California is in such a mess and why it matters to the rest of the country and the rest of the world.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Cindie Fonseca (ph) is six weeks away from the unemployment line. The Riverside, California, single mother has worked for 16 years in the state prison system teaching inmates graphic arts and printing.

(on camera): What are you going to miss about it most, do you think?

UNIDENTIFIED FEMALE: I'm going to miss the fact that I -- I can make -- help people make a difference and make a change in their life, you know. And really get a second chance.

WIAN (voice-over): Now Fonseca (ph) is one of thousands of state employees who've received layoff notices because of California's persistent budget crisis. They have already endured 15 percent pay cuts for most of this year.

CINDIE FONSECA, CALIFORNIA STATE EMPLOYEE: We knew that there was going to be cuts, right? And we -- I think you have to live in some kind of cave not to see what's happening in our state and in our country right now, but we didn't think it was going to be this significant.

WIAN: State job cuts are the result of lawmakers' efforts this year to close a record $60 billion two-year budget deficit and another $21 billion shortfall over the next two years. The private sector is faring no better. Overall California has lost more than a million jobs since the summer of 2007. Its unemployment rate is above 12 percent. Underemployment, including people who have given up looking for work or settled for part-time jobs is now above 20 percent. ROSS DEVOL, MILKEN INSTITUTE: This really was the perfect storm for the California economy. We got hit by it all. You go from the subprime mortgage crisis to the foreclosures that led to the decimation of the housing market, trade collapse, 30 to 35 percent. California got hurt domestically from the rest of the country cutting back as well as the rest of the word.

WIAN: Jobs aren't California's only problem. The state has a water shortage. Some cities are resorting to rationing while lawmakers want voters to approve $11 billion in new borrowing for water infrastructure. Federal judges have ordered California to release more than 40,000 prison inmates to relieve overcrowding. Its people are increasingly undereducated. California ranks next to last in the nation in adults with a high school diploma.

UNIDENTIFIED FEMALE: (INAUDIBLE)

WIAN: Presiding over it all, Governor Arnold Schwarzenegger and the state legislature. Only 27 percent of Californians approve of the governor's job performance. The legislature fares even worse with an approval rating of 13 percent.

(on camera): Thirteen percent approval rating, what was the reaction up here in Sacramento to that poll?

ABEL MALDONADO (R), CALIF. STATE SENATE: What's my reaction? I'm embarrassed that 1.3 out of every 10 people like us. That's a sad state of affairs. That must change.

WIAN (voice-over): State Senator Abel Maldonado is in the eye of California's perfect storm. He is a Republican who is ostracized by his own party after siding with Democrats on a deal to break a budget stalemate the governor compared to financial Armageddon.

UNIDENTIFIED MALE: My father and my mother didn't raise me to not pay my bills. And California wasn't paying its bills. We were sending IOUs to taxpayers and number two they didn't raise a son to bankrupt a company and we were on the verge of bankruptcy, so we did the best that we could do under the circumstances that we had.

WIAN: Those circumstances include a state legislature bitterly divided along party lines and a governor elected on the promise of solving California's budget mess only to see it spiral further out of control. One of the workers most affected has this message for the governor.

UNIDENTIFIED FEMALE: Come walk a day in our shoes and see what we do for the citizens of California. Come walk a day in our shoes and see how these furloughs and layoffs are impacting us.

(END VIDEOTAPE)

WIAN: Coming up, we will explain how California's economic and political crises should hit home no matter where you live -- John.

ROBERTS: Looking forward to that, Casey. We will be right back with you and we'll be right back. Stay with us.

(COMMERCIAL BREAK)

ROBERTS: Continuing now with our special series "California in Crisis". As we reported earlier, California is paralyzed not only by a fiscal crisis and record unemployment but by political gridlock as well. And one state lawmaker has put his political career on the line to cast a controversial vote. As Casey Wian reports, the outcome could lead to long overdue reforms or perhaps even more chaos.

(BEGIN VIDEOTAPE)

WIAN (voice-over): In February, California State Senator Abel Maldonado knew he was taking a risk.

MALDONADO: It's either my political career or the people of this state.

WIAN: The Republican voted with Democrats on a package of tax increases and spending cuts to end a budget stalemate that had California on the brink of bankruptcy.

MALDONADO: And failure is not an option for California as long as I'm here and several of the members that are here that are willing to put politics aside and put the state first no matter what the political ramifications are.

WIAN: For Maldonado the ramifications have been a vow by California Republican Party officials to withhold their support in future elections. But as a reward, Governor Arnold Schwarzenegger himself no friend of the GOP stalwarts nominated Maldonado for the vacant lieutenant Governor's job.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Please welcome Abel Maldonado.

WIAN: Now the same Democrats who needed Maldonado's vote to win the budget battle are threatening to block his nomination as lieutenant governor. There's even speculation the governor would retaliate by support a ballot measure to turn state lawmakers into part-time employees. Welcome to politics, California style.

MALDONADO: The problem we have here is that it just seems like everything has become personal. I mean, even the small committee vote is personal and that must end. Let's stop focusing on (INAUDIBLE) parties and growing our economy in this state.

WIAN: David Crane is a special adviser to Governor Schwarzenegger on jobs and economic growth.

(on camera): Explain why California, being an economic success is important for the rest of the country.

DAVID CRANE, SPECIAL ADVISOR TO GOV. SCHWARZENEGGER: I would take it further. It is important for the rest of the world. California is important because great ideas come out of California and get implemented in California. And you'd have to look through our history in terms of you know whether it was Walt Disney moving here and starting his programs in the 1920's to companies you know creating bio-engineer products and then semiconductor products and computer products and information technology products to today all the new energy products. Those sorts of things will drive development in the rest of the world.

ROBERT HERTZBERG, LEADING CALIFORNIA: California has always been both the envy of the world and the laughingstock of the world.

WIAN (voice-over): Bob Hertzberg is a former speaker of California's Assembly. He's now leading one of several groups seeking to reform the state's political process.

UNIDENTIFIED MALE: When you're issuing IOUs from California there is just no excuse. Everybody at every corner of the planet, every one of your listeners whether they're in Uganda or in Cincinnati, all look at what the heck has happened to California.

UNIDENTIFIED GROUP: (INAUDIBLE)

WIAN: Perhaps surprisingly one thing that's happening is an emerging generation of politically active young Californians determined to clean up the mess. Kelsey McQuaid (ph) is a sophomore political science major at U.C. Davis just outside the state capital. Despite Sacramento's problems it is where she wants to make a career.

(on camera): It's gridlock. It's budget deficits. It's completely mismanaged. Why would you want to work in a system like that?

KELSEY MCQUAID, UC DAVIS STUDENT: Well, my idea is -- have you to be within the system to fix the system. So if I can get involved and get in the system and work within it to try to change people's ideas and change how we do things, then, you know, I think that's a good way to start.

WIAN (voice-over): First she must finish her education, which is now in jeopardy because of education funding decisions made by Sacramento's current generation of lawmakers.

(END VIDEOTAPE)

WIAN: Tomorrow we'll look at California's public education system which was once the model for the world. Today it is plagued by budget cuts, teacher layoffs and poor performance. Student protests on campus not seen since the 1960's are back -- John.

ROBERTS: Great look at what's going on there. Casey Wian tonight -- Casey, thanks.

So what can be done to fix California's fiscal and political problems? Here with some possible solutions is Ethan Pollack of the Economic Policy Institute and author of a report called "Dire States" (ph). He says more stimulus money could help desperate states. Ethan, let's get to that in just a second. First of all, looking at Casey Wian's report, what's going on there in California, do you see that as a policy problem or is it a problem caused by political gridlock?

ETHAN POLLACK, ECONOMIC POLICY INSTITUTE: I think it's definitely caused by political gridlock. Basically what you have in California is you have got essentially a filibuster on steroids. In the State Senate and the State Assembly, it requires two-thirds of the members to even pass a budget. So while in our -- in our Senate on the federal level, it is 60 votes, it is even more so and it's in both Houses on the state level.

So essentially it means that you have got about, you know, 60 percent of each house is Democratic. But they need to pick off, you know, one or two Republicans every single year and you know essentially bribe them in order to, you know to vote for the budget. And those Republicans know that their careers are then over, as you saw with Abel Maldonado and many other Republicans before him.

ROBERTS: Well conservatives who have written about this say that California's budgets have ballooned over the past decade. Spending has increased to the point where it is so difficult to manage and that they never should have gotten to this place in the first place.

POLLACK: Well, look, California's budget problems have -- I mean, California's budget has definitely been mismanaged, but it's because essentially what's happening is Californians are electing -- you know electing officials and then tying both hands behind their back. They are electing Democrats in record numbers every single year. And then what happens is they don't allow them to actually make policy.

And the same thing is happening on the federal level. What you're seeing is that you know you have this huge mandate for change on the federal level. You know Barack Obama was elected in a landslide victory. Congressional Democrats were elected in a landslide victory. And, you know, the voters showed that they wanted you know action on climate change.

They wanted you know large jobs programs and you know they wanted health care reform. And what's happening is that they -- the Democrats are increasingly unable to do any of these things not because they don't want to but because the deck is so severely stacked against them that they are not able to do the people's work.

ROBERTS: Of course California is not the only state in the union that's facing a budget crunch. What options do states have when they get into that fiscal ready (ph) -- they have to balance their budgets. They can't go spending their way out of a recession like the federal government can.

POLLACK: Exactly. Yes, no, states are constrained by the fact that -- with the exception of Vermont they have to budget their -- balance their budgets. Local governments, too -- we can't leave out local governments from this problem. Essentially the recession has hit the entire country. It's not just hit you know California, so you are seeing, you know tax revenues they're down dramatically. And they essentially need to raise taxes and cut spending.

Now, within that the best thing for the economy for them to do is really raise taxes on high earners. And the reason is because high earners are more likely to -- basically if you raise taxes on the low earner then they're going to essentially take money out of the economy about a one to one -- dollar for dollar. So if you raise taxes on them by a dollar, they will cut their spending by about a dollar.

But if you raise taxes on high earners, they will cut their spending by only, you know, about half of that or so. So in terms of effects on aggregate demand, which is really the -- you know that's really the ball game in terms of getting out of a recession, you know, states need to be relying on mainly raising taxes on high earners. But cutting spending and tax increases overall, you know, still really hurt the economy.

ROBERTS: But how much of a burden can you put on high income earners? You know they are talking about paying for the war on the backs of high-end income earners. They're talking about paying for health care on the backs of high-end income earners. A lot of people who make a lot of money can do things like instead of taking all of their income in a single year, take deferred income and therefore tax revenue goes down again. Does it require a broader solution than just taxing the rich?

POLLACK: You are absolutely right. No, I mean there's no way they can fill their entire budget holes just by taxing high earners. And yes, especially during a recession. You know like even high earners, you know they can only get squeezed so much. In the end what we need is action on the federal level.

The federal government in the Recovery Act allocated about $144 billion to state and local governments. Unfortunately, that was only -- that only filled about a quarter of the shortfalls the state and local governments will face. So while the federal government is enacting you know hundreds of billions of dollars of expansionary fiscal policy, state governments in the next you know couple of years are going to be enacting hundreds of billions of dollars of tax increases and budget cuts and that's going to hit the economy right at the moment that the economy is trying to recover and right at the moment that it is most fragile.

ROBERTS: And let's take this back and close the circle here -- for the state of California how long before they get their head above water that the legislative analysts office has predicted $20 billion deficits in that state for years to come.

POLLACK: Yes, I mean I -- I'm a Californian. I'm a graduate of UCLA. This issue is very personal to me. I really think that the only solution is going to be something like a constitutional convention where they really rewrite the California Constitution because right now it is stacked in such a way that the political system will be -- you know is already -- it has been dysfunctional for the last couple of decades. The political system hasn't been able to address you know issues that Californians face for the last few decades. And the only way to do that is, you know, is political reform.

ROBERTS: Ethan Pollack of the Economic Policy Institute, good to talk to you. Thanks for dropping by.

POLLACK: Thanks a lot, John.

ROBERTS: And be sure to join us tomorrow night for more of our special series "California in Crisis". Tomorrow California's troubled school system.

Still ahead tonight, President Obama says we are this close to finally getting health care passed. I will be joined by two key senators coming up next.

And will Tiger Woods be dragged into another scandal? Now a doctor who treated his knee is facing criminal charges for allegations that he gave performance enhancing drugs to athletes. How much more can Tiger take?

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN TONIGHT. Live from New York. Here again, John Roberts.

ROBERTS: Senate majority leader Harry Reid has found that he's going to get health care legislation passed by Christmas. Will he? Here now with more on the debate over health care legislation, two key senators. Senator Ben Cardin, Democrat of Maryland and Senator Judd Gregg, Republican of New Hampshire.

Senator Cardin, the president says that Congress is on the precipice of passing meaningful health care reform. Do you agree?

SEN. BEN CARDIN (D), MARYLAND: I'm more optimistic today. I think we had a good day. The president met with the Democratic caucus members and I think he brought more unity in our caucus. I think we are prepared to understand the underling bill.

It's critically important to America and health care reform and it will help make health care affordable to millions of Americans who currently don't have health insurance and stays within the budget without increasing the deficit.

I think those points have been now made very clear. And we are going to sort of realize that there are some individual issues we would like to see, more progress but this bill is critically important to get done.

ROBERTS: And of course one of the latest moves is that independent Senator Joe Lieberman of Connecticut effectively took out that provision that would have allowed people between the ages of 55 and 64 to buy into Medicare.

Senator Gregg, are you still just as opposed to this new bill as you were before with that provision taken out?

SEN. JUDD GREGG (R), NEW HAMPSHIRE: Well, yes. We never actually got to see that provision. That was just -- we never saw any language at all because quite honestly this bill is being written in camera behind closed doors. But the bill has basic problems. It expands the size of the government, it explodes the size of government by $2.5 trillion when fully implemented.

Cuts Medicare by half a trillion dollars the first 10 years, $3 trillion over 20 years. Takes that money and creates a brand new entitlement for people who aren't on Medicare and that aren't seniors. Increase the cost curve of health care by $235 billion in the first 10 years.

Forces 17 million people out of their coverage that they presently have today on to some quasi public plan, whatever it ends up being. And basically will end up being a plan that our country can't afford from a fiscal standpoint and will significantly in my opinion negatively impact the health care, a lot of American citizens.

So, yes, do I continue to oppose it and I do think the term precipice was a good choice of words, John. They are about to take us over precipice with this bill.

ROBERTS: Senator Cardin, Senator Gregg has just outlined what seemed to be a number of problems here. Particularly in a bad economy and at a time where deficits are bigger than we have seen in any time that any of us can remember.

Does he have a point?

CARDIN: I think Senator Gregg has described the current system. If we don't do something about it, we're going to see health care insurance premiums double in the next 10 years. We have an unsustainable system today. We've got to bring down the growth rate of health care costs.

Now the Congressional Budget Office is our objective score keeper. The Congressional Budget Office says for the overwhelming majority of Americans are going to find that they're going to have better insurance coverage, that will cover more, and their premiums will either remain the same or go down.

It also says that we're going to put 31 million more Americans who currently don't have health insurance are going to have health insurance. And they also say we're going to do it by reducing the federal deficit.

And that's the Congressional Budget Office. And we all can interpret this. But the point is the health care is not static. It's going to change. And if we don't do anything, the status quo means that health care is going to become more unaffordable for more and more Americans, more small businesses are going to lose their coverage, more Americans are going to be paying more and more of their income for health care.

We've got to do something to change this system to make it affordable to all Americans.

ROBERTS: There seems to be little question...

(CROSSTALK)

ROBERTS: I was just going to say that there seems to be little question, Senator Cardin, that there are a lot of problems with the health care system, you know, particularly in terms of the number of people who are insured here. What would you do differently?

CARDIN: What would I do differently?

ROBERTS: Mm-hmm.

CARDIN: I'm for the bill.

ROBERTS: No, no, no. I'm sorry, Senator Gregg. Senator Gregg, what would you do differently?

CARDIN: OK.

GREGG: Well, we -- I actually have a proposal which I think would accomplish much of what needs to be done without this massive expansion of the size of government. Let me give you four, five points of it. First, I would address abusive lawsuits and reduce the cost that they drive up in the system.

You know, expensive medicine...

(CROSSTALK)

ROBERTS: But that -- that doesn't take care of the whole problem though.

GREGG: No. You can't do this in a massive attempt. That's the problem here. You cut Medicare by $500 billion over the first 10 years and take that to create a new entitlement, which is just going to cost $2.5 trillion, you basically put in place -- locked in places a government growth process here which is unsustainable and which inevitably going to significantly impact seniors and basically put us in a position where we will not able to afford the health care system that's being put on the books.

They are talking about an explosion here the size of government. And, you know, this idea that you bend the cost curve, their own actuary -- the government's actuary said that's not what happens. It increases health care spending.

So I'll give you four, five points if you've got time by starting with the abusive lawsuits, which would then (INAUDIBLE) care issue, cost issue. And further, if you want to insure everyone, you shouldn't put everybody under a massive new insurance program which basically requires people to buy insurance they don't need or forces them off their private plan which they happen to enjoy.

What you should do instead is create different types of insurance products for people in different types of situations. For example, between the ages of 20 and 40, they ought to be able to buy a catastrophic plan or should be required basically to buy a catastrophic plan which would essentially insure them if they get into a serious accident or they have a serious health care event, so the rest of the country or the rest of the community doesn't have to support them.

That does not require nationalization of the system or this explosive growth of the size of government. That can be done with reasonable costs. So you do it step by step approach to this issue and you resolve the issues that you can resolve in an effective way rather than basically creating this incredible -- an extraordinary expansion of government at the expense of Medicare and at the expense of the American taxpayer and especially small business.

ROBERTS: Senator Cardin, do you want to respond to that? Particular on this point that Senator Gregg made about -- that this would force people out of the health care plans that they enjoy now.

CARDIN: People have health insurance that they like today through their employers. If they have the plans they're going to be able to keep those plans. And there's a better chance that those benefits will be expanded rather than contracted and the employer now is pushing more and more of a cost on to the employees.

Let me just give you the circumstances in Maryland which is similar to most states. Seventy-one percent of the people that have private insurance in Maryland are in one of two companies. We don't have enough competition today.

These exchanges that we put into the law will offer more choice to small businesses and individuals so that they'll be able to find an affordable plan, they'll have more choice to have the type of plan that they want. Today small businesses have virtually no choice of what type of insurance that they can get.

ROBERTS: It's...

GREGG: Of course, John, that's not what the president's actuary said. His letter came out this week. It said very specifically...

CARDIN: The Congressional Budget Office says it.

GREGG: You know, if you don't believe your own actuary, fine. But your own actuary said -- and that's the CMS actuary who is the specialist in this area -- said 17 million people would lose their private insurance. It also said that health care would go up, premiums would go up.

It also said that Medicare recipients would find that 20 percent of the Medicare providers, that's the hospitals, the doctors, would not able to continue to practice because of the cuts which would be incurred as a result of this $500 million cut in Medicare.

And therefore there'll be less providers available for seniors and you'd find the seniors don't get as good a care as they're getting today. These were actuarial findings by the senators -- not the senators, but by the president's actuary. The CMS actuary. So...

(CROSSTALK)

GREGG: That's the fact.

ROBERTS: Senator Cardin, final word to you because we started with Senator Gregg. Go ahead.

CARDIN: The Congressional Budget Office...

GREGG: Actually we started with Senator Cardin.

CARDIN: ... is the objective score keeper. And the Congressional Budget Office says that the insurance premiums are going to go down for the overwhelming majority of Americans. That's the facts and the actuary say that we're going to extend the life of Medicare for 10 years. That's the facts.

(CROSSTALK)

GREGG: No, that's not what the actuary said, Ben. You know that's not what the actuary said. What the actuary said...

CARDIN: They did say...

GREGG: ... that you can only do that if you don't create a brand new entitlement. They said when you put this major new entitlement in place...

CARDIN: What new entitlement in Medicare?

(CROSSTALK)

CARDIN: There's no new entitlement in Medicare.

GREGG: It's not a Medicare entitlement. You're taking Medicare funds and you're funding the brand new entitlement for people who don't have insurance today. And it's a massive entitlement.

ROBERTS: Gentlemen...

GREGG: $2.5 trillion expenditure.

ROBERTS: Gentlemen...

GREGG: They made it clear you couldn't afford that and it would affect Medicare.

CARDIN: That's not...

ROBERTS: Gentlemen, I hate to use these words but we are going to have to leave it there.

And Senator Gregg, you're right. We started with Senator Cardin so you get the last one in there.

GREGG: Thank you.

ROBERTS: Appreciate it. Thanks for joining us tonight.

CARDIN: Thanks for fairness.

ROBERTS: All right. You could you call it Gitmo North. President Obama has ordered the federal government to buy a maximum security prison in Thomson, Illinois. The empty jail is to house some of the inmates facing terrorism charges and who are currently behind bars at Guantanamo Bay.

Jeanne Meserve reports it's all part of the president's plan to close the notorious prison in Cuba.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): The maximum security prison in Thomson, Illinois is only eight years old. Largely empty. With some strengthening of perimeter security, the Obama administration argues it will be the perfect place to put as many as 100 Guantanamo detainees and hold military commissions. It doesn't hurt that some of the state's key political players support it.

SEN. RICHARD DURBIN (D), ILLINOIS: We believe this is in service to our country to make certain that Guantanamo is phased out and the threat that it currently poses to us around the world is eliminated.

MESERVE: On Capitol Hill a Republican blitzkrieg of criticism.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: They're going to move these prisoners from Gitmo to northwest Illinois because of some campaign promise that was made in the dark. I just think this is a very bad decision. The American people do not support it and will not support it.

MESERVE: But in tiny Thomson, Vickie Tregor watched the news and was pleased at the prospect of 3,000 new jobs in her community.

UNIDENTIFIED FEMALE: The impact is going to come more from the new people coming into the area, new residents, new visitors, new tourism. Restaurants will be full.

MESERVE: Others fear that the Thomson facility will become Gitmo North. A target of al Qaeda propaganda and possibly attack.

UNIDENTIFIED MALE: Changing the address of Gitmo will not eliminate the hate that these terrorists have for our country.

UNIDENTIFIED FEMALE: Gitmo is surrounded by waters and sharks and Thomson, Illinois is surrounded by melon fields, soybeans and corn.

UNIDENTIFIED MALE: Illinois becomes actually the ground zero for international terrorism. MESERVE: The administration claims the Thomson facility will be more secure than the Super Max in Florence, Colorado where terrorists like shoe bomber Richard Reid are held.

At maximum security prisons, there is usually one guard for every two inmates. But Defense Department officials told a member of Congress there will be 10 soldiers for every one terrorist detainee at Thomson.

(END VIDEOTAPE)

MESERVE: The White House may have put the cart before the horse. Senior White House officials acknowledge that current law does not allow them to bring detainees to the U.S. who are going to be held indefinitely rather than tried in court or military commissions.

And because the administration acknowledges that some detainees will indeed need indefinite detention, some civil liberties group say moving them to Illinois really doesn't make much of a difference.

John, back to you.

ROBERTS: Jeanne Meserve tonight. Jeanne, thanks so much.

Here is a question for you. What are your rights when it comes to text messaging on a company or government pager?

Coming up the Supreme Court takes up a highly unusual case involving your privacy.

And now one of Tiger Woods' former doctors is facing criminal charges for allegedly providing athletes with performance enhancing drug. That story is coming up next.

(COMMERCIAL BREAK)

ROBERTS: Turning now to the Tiger Woods scandal. The world's best golfer may have another public relations problem on his hands. "The New York Times" reported today that a doctor who treated Woods after his surgery on his knee is now under investigation. Suspected of giving performance enhancing drugs to athletes.

The dock is well known for pioneering a procedure that helps speed up post-surgical recovery.

Inez Ferre is here to fill in some of the blanks for us tonight.

Hi, Inez. What's going on?

INES FERRE, CNN CORRESPONDENT: Hello, John. OK, well, yes. "The New York Times" reported this, that this doctor who had treated Tiger Woods in the past is under investigation for possible links to performance enhancing drugs.

Now Canadian doctor, Anthony Galea, treats many top athletes. Galea's lawyer says his clients' office in Toronto was raided after an assistant was stopped at the U.S./Canada boarder. That assistant reportedly was carrying human growth hormone and Activegen derived from calf's blood which is illegal in the U.S.

Now Galea has said he's never given HGH or Activegen to professional athletes. This doctor is well known for helping pro- athletes recover faster from surgeries using a method called platelet- rich plasma therapy or PRP. A blood sample is put into a centrifuge which helps release healing proteins when the blood is re-injected.

Now Galea's lawyer Brian Greenspan says the controversy surrounding Galea has nothing to do with Tiger Woods.

(BEGIN VIDEO CLIP)

BRIAN GREENSPAN, ATTORNEY FOR DR. ANTHONY GALEA: Tiger Woods happened to be a patient to the assistant and rehabilitation program after his surgery. And apparently according to all reports was very successful in assisting Tiger Woods to return to golf earlier than was anticipated.

(END VIDEO CLIP)

FERRE: Now, Tiger Woods' management came out saying "The Times" reporting was, quote, "flat wrong" adding, "No one at IMG has ever met or recommended Dr. Galea nor were we worried about the progress of Tiger's recovery, as the 'Times' falsely reported. The treatment Tiger received is a widely expected therapy. And to suggest some connection with illegality is recklessly irresponsible.

"Apparently, the 'Times' like so many other news outlets on the Tiger Woods story has abandoned principles."

Now the "Times" replied to this statement saying, quote, "Mr. Steinberg's statement is insulting and off base. Dr. Galea told us he treated Mr. Woods and that Mr. Woods had been referred to him by IMG and this was confirmed by another source."

Now Dr. Galea faces charges in Canada. Those are expected to be outlined this Friday. His lawyer says no charges have been filed here in the U.S. And as far as any FBI investigation, the FBI today, John, said no comment.

ROBERTS: All right. Ines, thanks.

As Ines just reported, platelet-rich plasma therapy or blood spinning, as it's sometimes known, is a common practice among professional athletes and weekend warriors who are recovering from surgery.

Dr. Jonathan Glashow, an orthopedic surgeon, he's co-director of Sports Medicine in Mt. Sinai Medical Center here in New York. He's been at the forefront of American doctors who are offering this treatment.

So what exactly, Doctor, is platelet-rich plasma therapy? DR. JONATHAN GLASHOW, ORTHOPEDIC SURGEON: Platelet-rich plasma or sometimes called autologous condition plasma which means taking your own blood and taking a fraction of that blood and putting it in the area where it's most needed.

This is a concept that has been around for many years. It's become easier to do and it's a simple office procedure where we would just draw your blood and have a typical syringe like this which in the case that I use...

ROBERTS: Hold it up just a little higher so we can see it.

GLASHOW: This is an ACP or autologous condition plasma syringe. And it's such a compact device where we actually draw the blood out of the patient and we pulled back on the syringe and we just take a little bit, 10 CCs is a very small amount. We put this device with the cap in a centrifuge which just spins down and as a means of separating.

We take the good parts out of the blood and the bad parts we just discard. We then are able to take one syringe out of the other and we generally get about three, four CCs of this platelet-rich plasma or healing factors or factors that enable the body to heal faster.

We're not putting anything in the body. This is not doping. This is not outside drugs. This is actually just your own growth factors in the area where you need it.

ROBERTS: How effective is it when treating joint conditions?

GLASHOW: You know, I have used that on a number of professional athletes. Oftentimes on the professional athletes I operate on, golfers or football players, it's the buzz among the athletes is they want it. And their response is it makes a big difference. It's just not a one-off. It's several injections, three or four injections over a period of week and its preliminary data is actually very promising.

ROBERTS: How much does it speed recovery?

GLASHOW: Well, you know, there are several studies and it depends where you're looking at. For instance, in certain knee injuries it has been shown to speed recovery 30 or 40 percent.

A number of the Super Bowl athletes had this procedure done. And anecdotally reported it's made a big difference on your ability to go back to the playing field more quickly. There is a lot of data that has to come out, there's a lot of science and a lot of clinical investigations going on right.

And over the next couple of years I think we'll learn a lot more but it's very different than doping. It's very different than HGH. It's not a drug.

ROBERTS: Although we should point out that the World Anti-Doping Agency says it's OK to do this inside a joint space but you can't inject this into muscles because the growth factors may actually enhance muscle growth.

GLASHOW: You know, I think there's some debate about that. It's certainly accepted in Major League Baseball, it's accepted in the NFL. And I've heard that Wada has come out and say you cannot give it intramuscularly.

ROBERTS: Right.

GLASHOW: And that's probably for the image of keeping it perfectly clean. But I don't think there's any legitimate data that shows that the IGF growth factor which increases muscle mass actually has any effect when injected into a muscle. But to be safe one shouldn't. But most of the injuries we use it for are not into muscle anyway.

ROBERTS: And one of the things that Ines mentioned was this Activegen, which apparently was found in the possession of the assistant of Dr. Galea. What exactly is that and how does it work, and why is it banned in this country?

GLASHOW: Well, just to be clear. Activegen and all these growth hormone factors have nothing to do with plate-rich plasma or autologous condition plasma. It's apples and oranges.

I'm not familiar with it because I don't use any of these drugs. But it's apparently a method by which one can stimulate one's red blood cells and sort of cheat to get the body to respond faster. It is a drug, unlike PRP or ACP, which is not a drug. Very different things.

ROBERTS: Dr. Jonathan Glashow, good to see you tonight.

GLASHOW: Good to see you.

ROBERTS: Thanks so much.

GLASHOW: Thank you.

ROBERTS: Coming up, the Supreme Court takes up texting. If you text message from your work, is your privacy protected? Do you even have privacy rights? We'll ask those questions and try to get you some answers coming right up.

(COMMERCIAL BREAK)

ROBERTS: Americans send some 3.5 billion text message each and every day. Many of those messages are from employees who use company- issued phones or pagers. Come on. Admit it. You've done it, haven't you?

As Bill Tucker reports now, the U.S. Supreme Court will decide whether those text messages are protected by privacy laws.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Texting has already changed the social scene and the work place. Now it's about to change the legal landscape. The Supreme Court has agreed to hear a case involving an Ontario, California police officer who used a government- issues texting pager to send private personal texts, some of which were explicitly sexual.

Department policy allowed for personal use so when the police department requested records of those texts, the officer, Sergeant Kwan, sued saying his privacy had been violated. His lawyer explains.

MICHAEL MCGILL, ATTORNEY: They never put out a policy in writing that would explained to them unequivocally that it does apply, that there is a no-privacy policy.

TUCKER: Kwan lost his first trial. But California's Ninth Circuit Court of Appeals overturned the decision, agreeing with the sergeant. Now the Supreme Court is stepping in and putting the case on their calendar for next year.

ORIN KERR, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL: This will be the first case that the Supreme Court has ever taken which will give the court an opportunity to apply the constitution to text messages and by extension to the Internet. So it could be an extremely important case.

TUCKER: At the core of the case the question of an expectation to a reasonable right to privacy. Should or can an employee expect his or her private communications to stay private? Lawyers arguing for employers say the expectation doesn't exist for employees working on company-issued equipment.

SHERYL WILLERT, CIVIL DEFENSE ATTORNEY: If I have a piece of equipment, whether it is a telephone, whether it is a computer, whether it is a video monitor and it belongs to me and I allow you in the furtherance of your performing a job for me for which you were hired, I should clearly have the ability to monitor what is going on.

PHILIP GORDON, EMPLOYMENT ATTORNEY: Employers need that ability. It is important to the way employers run their business.

TUCKER: Privacy advocates argue that while the equipment belongs to the boss, the content of an employee's personal text don't.

(END VIDEOTAPE)

TUCKER: Now what everyone does agree on is that the court's ruling is highly anticipated and hopefully will add some clarity to an area of law that the Supreme Court so far, John, has yet to tread.

ROBERTS: But, Bill, let's take a look at this because this was a pager that was owned by law enforcement.

TUCKER: Right.

ROBERTS: So you can see that the Fourth amendment might apply here. But does that necessarily extend to private companies? TUCKER: No. No. Unfortunately, a private company can basically do away with the Fourth Amendment by declaration, by simply saying whatever you send and receive on this device which we own we have a right to see.

ROBERTS: Fascinating case, though.

TUCKER: No question about that.

ROBERTS: Bill Tucker, thanks so much.

Coming up at the top of the hour, Campbell Brown. She joins us now with a sneak preview.

Hi, Campbell.

CAMPBELL BROWN, CNN ANCHOR: Hey there, John. Tonight we're going to continue our special series, "Band of Sisters." You're going to meet a single mom who answered the call to serve in Iraq but not without sacrifice on both fronts.

Also tonight, you may have heard of "sexting" where people send racy images back and forth on their cell phones. Well, authorities are taking that very seriously when it comes to our kids. And you're going to meet a teenager who found out the hard way and learned just how many others could be making the same mistake.

Also this could be a defining week for President Obama in terms of his presidency on a number of front. Health care, climate change, the economy. So much on his plate. We're going to break it down for you why this is so crucial, these next few days in just a few moments -- John.

ROBERTS: Looking forward to it, Campbell. We'll see you at the top of the hour.

BROWN: See you soon.

ROBERTS: And still ahead on CNN TONIGHT the Golden Globe nominations were announced today. We will tell you who the early favorites are. That's coming up next.

(COMMERCIAL BREAK)

ROBERTS: Nominees for the 67th Annual Golden Globes Awards were announced today. The George Clooney film "Up in the Air" led away with six nominations, including Best Motion Picture Drama and Best Actor. Along with "Up in the Air," the others Golden Globe nominees for Best Picture are "Avatar," "The Hurt Locker," "Inglorious Basterds," "Precious."

But the second highest number of nominations with five went to the musical "Nine." The winner will be announced on January 17th.

Thanks for being with us tonight. Please join us again tomorrow evening and I will see you bright and early tomorrow morning beginning at 6:00 a.m. eastern on "AMERICAN MORNING." Coming up next tonight here on CNN, "CAMPBELL BROWN."

ANNOUNCER: CNN Primetime begins right now.