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CNN TONIGHT

Reid under Fire; Race and Politics; Trading Privacy for Security; Same-Sex Marriage; Health Care and Taxes

Aired January 11, 2010 - 19:00   ET

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


(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Tonight, racially insensitive remarks about the president send the Senate majority leader into a desperate fight to restore his reputation.

UNIDENTIFIED MALE: I've apologized to the president. I've apologized to everyone that is within the sound of my voice.

YELLIN: But will saying sorry save Harry Reid's job?

Gay marriage goes on trial in California. A federal case that's likely to go all the way to the U.S. Supreme Court, also the big return of the economy car but less of everything else at a subdued Detroit auto show.

(END VIDEOTAPE)

ANNOUNCER: This is CNN TONIGHT live from New York. Here now, Jessica Yellin.

YELLIN: In politics, when you're caught making racially insensitive remarks, the only thing to do is apologize, a lot. And that's exactly what Senate Majority Leader Harry Reid has been doing ever since a new book quoted him as saying that during the presidential race, Barack Obama benefited from being a quote "light- skinned African-American" with quote "no Negro dialect unless he wanted to have one."

Democrats, including the president, rushed to Reid's defense, but the Republican opposition is not going to let go of this one. Dana Bash is following the apologies and the attacks tonight.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): At home in Nevada, Harry Reid's clean energy event turned into an attempt to clean up a political mess of his making.

SEN. HARRY REID (D-NV), MAJORITY LEADER: I've apologized to the president. I've apologized to everyone that -- within the sound of my voice that I could have used a better choice of words. BASH: In the new book "Game Change" Reid is quoted as saying then Senator Obama could get elected president because he's quote "light-skinned with no Negro dialect unless he wanted to have one." Reid tried to put his own explosive quotes in context recounting his early private support for Obama.

REID: I can still remember the meeting that took place in my office with Senator Barack Obama, telling him that I think he would be elected president.

BASH: Reid's brief appearance was his first in public, but day three of an intense Reid strategy to save his job as majority leader. Starting with a quick apology to the president Saturday, followed by a public Obama statement accepting, saying the book is closed. Eric Holder, the first African-American attorney general, now says he forgives Reid, too, telling CNN, I don't think that there is a prejudiced bone in his body. In fact, when news broke late Friday night, Reid started calling a slew of African-American leaders. So far, they're backing him, saying his support for civil rights issues outweighs a poor choice of words.

ELEANOR HOLMES NORTON (D), DC DELEGATE: We judge the source, and the source here is somebody who has been on our side for his entire political career. Why should we throw him overboard?

BASH: But Republicans are pounding Reid, demanding he step down as majority leader. Calling it a double standard since Republican leader Trent Lott was forced out in 2002 after making racially insensitive remarks. But the reality is Lott was pushed out by fellow Republicans, trying to quell the damage. And it would have to be Democrats who oust Reid. So far, Democratic sources tell CNN Reid still appears to have Democrat support as Senate leader.

(END VIDEOTAPE)

BASH: Now even if Reid hangs on as Democratic leader, he was already in big trouble in his re-election bid for Senate this year. He's behind in the polls with low personal approval ratings. And that's why Democratic strategists, including Reid advisers, privately say they worry even if Nevada voters don't see him as racist using antiquated and offensive words like Negro, reinforces the perception back home that people already have according to the polls and that is that he is out of touch and insensitive, and of course prone to embarrassing verbal missteps -- Jessica.

YELLIN: Dana, let's look at his majority leader post for a minute, given the fact that it's only Republicans publicly calling for him to step down, what's the likelihood he'll relinquish that post?

BASH: At this moment and time, zero. He said that publicly, and then -- and more importantly in talking to Democrats in the Senate, and around Washington, it looks like he's OK. He does have a very deep reservoir of support, Jessica, among Democratic senators. He's certainly not an orator. Everybody in his world will tell you that, but he is leader in the Senate, the Democratic leader because he is a very good back room dealer and he does have a lot of loyalty in the Democratic caucus.

YELLIN: Great, Dana, thanks so much.

And President Obama has accepted Reid's apology and to no one's surprise, says he wants to close the book on this. The president made that clear today in an interview with CNN political analyst, Roland Martin.

(BEGIN VIDEO CLIP)

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: Harry Reid is a friend of mine. He has been a stalwart champion of voting rights, civil rights. He's spending a lot of his political capital in the middle of an election to provide health care to every American. And that's going to have a great impact on African-Americans and Latinos around the country. This is a good man who has always been on the right side of history.

For him to have used some inartful language in trying to praise me, and for people to try to make hay out of that, makes absolutely no sense. He's apologized, recognizing that he didn't use appropriate language. But there was nothing mean-spirited in what he had to say. And he's always been on the right side of the issues. And the fact that we spend days on this instead of talking about the unemployment rate, or talking about how we deal with critical issues like energy and health care, is an indication of why I think people don't understand what's happening in Washington.

I guarantee you the average person, white or black right now, is less concerned about what Harry Reid said in a quote in a book a couple of years ago, than they are about how are we going to move the country forward. And that's where we need to direct our attention.

(END VIDEO CLIP)

YELLIN: Roland Martin's interview will air next Monday in a Martin Luther King Day special, "Living the Dream" at 8:00 p.m. Easter on TV-1 (ph).

Well clearly the president wants this controversy to go away, but as Suzanne Malveaux reports, it may be an issue that the president just can't ignore.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): Some want the president to step into the controversy.

PROF. MICHAEL ERIC DYSON, GEORGETOWN UNIVERSITY: We can't have an open honest real discussion about race in this country. And I think this is quite frankly one of the failures of our new president. He's a remarkable man. He's an insightful man, but I think he's loathed to speak about race.

MALVEAUX: He avoided the issue throughout the campaign until he was forced to address it after his pastor made racial remarks. In July as president Mr. Obama tried to cool off a hot confrontation between a black professor and white police officer.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: President Obama clearly cannot have a beer summit every time there's problems or the issue of race come up as he did last year when the situation involving Professor Gates and Officer Crowley.

MALVEAUX: But could this be another teachable moment?

UNIDENTIFIED MALE: We don't expect Mr. Obama to speak to this issue of race because he's a black man. We expect him to speak to the issue of race because he's the president. We have a teachable moment here but the professor will not come to the classroom.

MALVEAUX: Many believe President Obama is uniquely suited to take on the issue of race, being biracial, a strong communicator, with a bully pulpit of the presidency. But Americans struggle to talk about race in an open and honest way. Black leaders say, sure, Senator Reid's comments were offensive to call Mr. Obama appealing for being light-skinned with no Negro dialect, but they also say he's speaking the hard truth.

UNIDENTIFIED MALE: Ninety-nine percent of the people in this country who heard that probably and readily understood what he meant. And the question is how can we get beyond some of this vicious epithet in name calling and get to some of the deeper issues.

MALVEAUX: Deeper issues like the reality that light-skinned blacks are sometimes favored.

BRAZILE: I come from a very large family. I am -- I'm darker. My skin is -- my tone, my complexion is much darker than some of my siblings. And yet as a child growing up in the segregated Deep South, we often talked about whether or not we could succeed given the complexion of our skin.

MALVEAUX: And how one speaks.

UNIDENTIFIED MALE: We know what Harry Reid meant. He doesn't have the typical intonations of African-American culture. But a lot of black people don't do that. They get accused of sounding white.

MALVEAUX: The problem some believe is Americans still either cannot or do not want to talk about race.

BRAZILE: We don't have the common language to discuss issues, especially issues like racism and the sensitivity around discussing race and because of that people often, you know, trip over themselves.

UNIDENTIFIED MALE: This is Mr. Obama's Achilles heel as well and I think we need to call him on this.

MALVEAUX (on camera): And just a little tidbit. It was the first lady Michelle Obama and a group of close friends who gave the president a little bit of a nudge to get involved in that racial incident that led to the beer summit back in July. The general feeling now is that Reid's comments are generating a little less heat -- Jessica.

(END VIDEOTAPE)

YELLIN: All right Suzanne Malveaux reporting from the White House and there's a lot more to say about this story. We'll dive into it with a panel of top cultural and political minds. That's still ahead tonight.

Also tonight new questions about those full-body scanners the TSA wants in airports around the country. The government wants to install those scanners to provide better security at U.S. airports, but privacy advocates say the government is misleading the public about just what those scanning machines can do. Homeland security correspondent Jeanne Meserve has this exclusive report.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): The images produced by whole body scanners don't leave much to the imagination. But the Transportation Security Administration has said repeatedly even on its own Web site your privacy will be protected.

UNIDENTIFIED MALE: The system has no way to save, transmit or print the image.

MESERVE: A 2008 press release says the machines have zero storage capability. But a TSA document written just three months earlier, spelling out requirements for potential manufacturers, said the machines had to have the capability to capture images of non- passengers for training and evaluation purposes. The procurement document was recently obtained by EPIC, the Electronic Privacy Information Center.

MARC ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: We think it's obvious the machines are designed to store and record images.

MESERVE: The TSA has been lying?

ROTENBERG: Yes, I would use a more polite word if I could, but it would be less accurate.

MESERVE: The documents specifies that to protect privacy during passenger screening there will be no storage or exporting of images. But EPIC fears that the ability to save images during the test mode leaves open the potential for abuse by insiders and outsiders. The document says the machines must have hard drives for storage and USB ports and Ethernet connectivity that could allow downloading of images. An unspecified number of users, including TSA headquarters, maintenance contractors and so-called super users have the ability to export raw image test data and can also change the 10 privacy settings built into the machines.

ROTENBERG: I don't think the TSA has been forthcoming with the American public about the true capability of these devices.

MESERVE: TSA officials tell CNN, yes, the machines can retain and export images when they are at TSA testing facilities. But it says those functions are disabled by the manufacturer and machines are delivered to the airports without the capability to store, print or transmit images. The TSA says there is no way for someone in the airport environment to put the machine into the test mode or change the privacy filters. The TSA says all images are deleted from the system after they're reviewed by a remotely located operator and it says the machines are not networked and cannot be hacked.

(on camera): But EPIC isn't satisfied. It wants to see the documents that prove these steps are being taken, that they are effective, and that privacy is fully and completely protected. Until those questions are answered, EPIC says the deployment of the machines should be halted.

Jeanne Meserve, CNN, Washington.

(END VIDEOTAPE)

YELLIN: So just how do Americans feel about the use of body scanners at airports? And how do they feel about the way the president responded to the failed Christmas Day attack? Well according to a new CNN/Opinion Research poll, most have no issue with the scanners or with the president. Nearly eight of 10 Americans would like to see the scanners in use at U.S. airports. And 57 percent approved of how the president responded to the failed bombing attempt.

Still ahead tonight, the cold that just won't go away, it's still making life a frozen hell in the south, also one of baseball's greatest homerun hitters admits the obvious, yes, he used steroids. So why tell us now?

And a case that could go all the way to the U.S. Supreme Court, gay marriage goes on trial in California. We'll have that story and a debate on this divisive issue.

(COMMERCIAL BREAK)

YELLIN: While parts of the country start to warm up a bit this week, the Deep South remains in a deep freeze. Miami tied then broke a low temperature record of 37 degrees. It was set in 1927. The state's citrus crop is taking a beating as temperatures hover around the freezing mark throughout much of the state. And for the first time in 20 years, Miami's Metrozoo closed to the public because it was too cold.

The man behind Colorado's balloon boy hoax is behind bars tonight. Richard Heene turned himself in this morning to begin a 90- day jail sentence. Heene says he pleaded guilty to the hoax to appease the court and he now says he truly believed his 6-year-old son was inside the escaped balloon that captivated the nation on live TV. Heene's wife faces a 20-day jail term for filing a false report, her sentence starts after his ends. The couple must also pay up to $48,000 for the rescue efforts to get the balloon down safely.

Well Mark McGwire is finally coming clean, admitting he was on steroids when he broke baseball's homerun record in 1998. McGwire said he used steroids on and off for nearly a decade. In 2005, McGwire refused to answer questions during a congressional hearing into steroid abuse. The St. Louis Cardinals hired McGwire as a hitting coach in October. And he said then he would address the issue before spring training. Today he broke his silence, calling it a foolish mistake.

If you're gay and you want to marry your partner, does the U.S. Constitution protect that? That question is at the heart of a ground- breaking trial now under way in California. It's the first federal case to determine if states that ban same-sex marriage are violating the Constitution. Dan Simon is in California, San Francisco, with the latest on a battle that may wind up going all the way to the U.S. Supreme Court.

(BEGIN VIDEOTAPE)

DAN SIMON, CNN CORRESPONDENT (voice-over): He's a staunch conservative who backed same-sex marriage, yet Ted Olson says there's nothing inconsistent about that.

TED OLSON, FORMER SOLICITOR GENERAL: This gives us an opportunity -- they call it a teaching moment these days.

SIMON: Ted Olson's teaching moment will take place on the 17th floor of the federal courthouse in San Francisco. It's where the former solicitor general began arguing that Proposition 8, which banned same-sex marriage, violates the U.S. Constitution.

UNIDENTIFIED MALE: Well the first thing to think about is that the right to marry is a fundamental right in the United States. It's a right that's protected by the Constitution. The Supreme Court has held over and over again that it may be one of our most fundamental rights to unite with the person that you love to form a partnership.

SIMON: But a majority of California voters reached a different conclusion, narrowly approving the ban in November of 2008. Though the California Supreme Court upheld the vote, it said those who had already gotten married, 18,000 couples, could remain so in the eyes of the state, little consolation to these backers of gay rights who gathered in front of the courthouse.

ELLEN PONTAC, MARRIED TO LONG-TIME PARTNER: To be able to say, this is my wife, to introduce Joey (ph) as my wife makes all the difference in the world. It's -- everyone knows what it means. It's just a completely different feeling.

SIMON: Defending Prop 8 is a group called Protect Marriage, the group that sponsored the initiative.

ANDREW PUGNO, PROTECTMARRIAGE.COM: Seven million Californians voted to preserve or restore what has -- marriage has meant since the beginning of time. And if they're not permitted to do something as basic as that, then there's something really wrong with our system.

UNIDENTIFIED GROUP: (INAUDIBLE) SIMON: The fiery case has attracted even more attention because of Ted Olson's co-counsel, his one-time adversary David Boies. Does the case Bush versus Gore ring a bell? Olson represented Bush; Boies represented Gore. Hollywood filmmaker Rob Reiner helped bring the two together and came to the first day hearing.

ROB REINER, FILMMAKER: We have one group of people living in this country that are living as second-class citizens and it's just not what the founding fathers envisioned. We talk about life, liberty and the pursuit of happiness for everyone.

UNIDENTIFIED MALE: Everybody understands that this is the first stop and that regardless of the trial outcome here in San Francisco, this will move on to the Ninth Circuit Court of Appeals and ultimately to the U.S. Supreme Court.

(END VIDEOTAPE)

SIMON: Well, under a pilot project, this hearing was supposed to be televised with the testimony uploaded to YouTube. But the U.S. Supreme Court has delayed things a bit. It wants to discuss that concept further. In the meantime, this case was supposed to last two to three weeks -- Jessica.

YELLIN: Thank you, Dan -- Dan Lothian (ph) in San Francisco.

And coming up, a dire warning to the White House over health care and taxes, and it's not from the right, it's from the left.

And good-bye "American Idol" -- one judge says I'm out of here.

(COMMERCIAL BREAK)

YELLIN: The U.S. Senate wants to fund its health care reform plan with taxes on what it calls Cadillac policies. That is policies that are expensive and generous in their benefits. But the Senate is facing a new hurdle in paying for reform. As Bill Tucker reports, the plan is drawing stiff opposition from the nation's unions.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): At first glance, it would seem pretty easy to tell a Cadillac from a Chevy. They're different products aimed at different buyers. In the case of health care insurance, the Senate plan makes the distinction clear. Cadillac has been referred to as any health care plan for a family that costs more than $23,000 a year or a plan that costs more than $8,500 for an individual.

To help control costs and fund health care reform, the Senate proposes a 40-percent tax on any cost above those established lines. For example, a plan that costs $25,000 is $2,000 above the line. The tax would be $800, which is 40 percent of that $2,000 difference. Advocates of an approach like this say it will help control costs because it will make companies and people aware of the cost of health care. KAIL PADGITT, THE TAX FOUNDATION: What was the cost of your last physical? Then what was the cost of your last tune-up to your automobile? You know, we know the price of the tune-up, we don't know the price of the physical, because we've become detached from those costs.

TUCKER: The AFL-CIO is standing up against the plan, saying it is a bad idea that will catch a lot of lower priced health care buyers in the net.

RICHARD TRUMKA, PRESIDENT, AFL-CIO: Instead of taxing the rich, the Senate bill taxes the middle class by taxing workers' health plans, not just union members' health care plans. In fact, most of the 31 million uninsured -- or insured employees who will be hit by the excise tax are not union members.

TUCKER: It's not unlike the problem of the alternative minimum tax, a tax crafted by Congress in the late "60's directed at a handful of millionaires who escaped paying any taxes. The AMT now affects far more than millionaires. While the Senate health care plan does index for inflation, the concern among critics is that over time many plans will fit the definition of an upscale plan.

STEVE ELLIS, TAXPAYERS FOR COMMON SENSE: Because health care costs have traditionally exceeded inflation on a year-by-year basis, then essentially by pegging this increase of the exception to inflation plus one percent means it's going to end up capturing more and more Americans as time goes on.

TUCKER: The Congressional Budget Office estimates that such a tax will collect $140 billion over 10 years.

(END VIDEOTAPE)

TUCKER: And according to the folks at the Tax Foundation and the Taxpayers for Common Sense, the bulk of that revenue will come in the last five years as more health care plans become subject to the tax -- Jessica.

YELLIN: Bill, this is the left against the left. I mean the unions are one of the most...

TUCKER: True.

YELLIN: ... solidly Democratic blocks. So what do you think the chances are that their opposition will kill the Cadillac tax?

TUCKER: Pretty good, pretty good because they've been solid. They've been reliable and when guys like Trumka get up and say this isn't flying with me or my membership the Democrats have to pay attention...

YELLIN: They may have to find another way to pay for it.

TUCKER: Right, exactly.

YELLIN: Great. Thanks, Bill Tucker reporting.

And Sarah Palin will now be putting her oratorical skills to use in a new forum. The former Alaska governor will become a contributor to FOX News. She stepped down as Alaska's governor last July and she is considered a potential contender for the 2012 Republican presidential nomination.

NBC over the weekend announced it will cancel Jay Leno's primetime show. The move was seen as a tacit admission of one of the worst programming decisions ever made by television executives. The network now wants to move Leno back to late night a pared-down half- hour version would air after station's local news. Conan O'Brien who took over Leno's late night spot would follow Leno just after midnight and then Jimmy Fallon would air after Conan.

Sound confusing to you? Well apparently many NBC affiliates would prefer the confusion to the disastrous ratings performance by Leno at 10:00 p.m. About a third of NBC's affiliates said Leno's poor ratings hurt their local news viewer-ship.

And in other news today, Simon Cowell is leaving "American Idol". Yes, get out your tissues. Cowell announced today that this season will be his last as judge on "American Idol". Instead Cowell will be the executive producer and a judge on a new show called the "X Factor" that will launch on FOX next fall. He's already the executive producer and a judge on the British version of the show, which has been a huge success in the U.K. So you will get plenty of your Simon Cowell.

And coming up, Senator Harry Reid's racially insensitive remarks open up a new debate over race, but what should President Obama's role be in that debate?

And Detroit unveils its new cars, but will they help revive the American auto industry?

(COMMERCIAL BREAK)

YELLIN: Senate majority leader Harry Reid is apologizing to everyone within the sound of his voice, as he puts it, for racially insensitive comments he made about President Obama during the 2008 campaign. Here's the quote from the new Book Game Change. "On his oratorical and believed the country was able to embrace a black presidential candidate, especially one such as Obama, a light-skinned African-American with no Negro dialect unless he wanted to have one," as he said privately. Reid was convinced in fact that Obama's race would help him more than hurt him in a bid for the Democratic nomination.

Joining us to talk about the fallout from those comments are Columbia University Professor Marc Lamont Hill, Joe Conason from Salon.com, and Dayo Olopade from the Root. Thanks to all of you for being here.

Professor Hill, this has triggered a firestorm. Republicans have called for Harry Reid to step down. It's been all over cable and talk radio. Is it warranted?

PROF. MARC LAMONT HILL, COLUMBIA UNIVERSITY: I don't think it's warranted. I think a public policy is definitely warranted. And I think a public conversation about race which is the one thing we're not doing. We're so busy trying to call for his firing we're not having the real conversation about race. I think those are the things we need to have a public conversation and a public apology. But to call for the Senate majority leader to step down because of one bad comment in the entire history of supporting civil rights and civil rights organizations I think is a bit short-sighted.

YELLIN: Your view on this has been that this is a matter of language. I'm curious, I haven't heard anybody in all the chatter today that said what Reid said was actually incorrect. Do you think it was the case of the wrong guy saying that?

DAYO OLOPADE, THE ROOT: I think that Negro is a perfectly legitimate historical term. You can use it to talk about baseball leagues. You can use it to talk about the United Negro College Fund. It's a word that has a history in America and has a specific meaning. I think if he had used the word black might have been more accurate or more sort of contemporary. But ultimately, I think that he was spot on about the politics of what he was saying. And the semantics of the use of the word Negro is probably most alarming in that he's supposed to be the leader of the progressive party in America and hasn't learned the right vocabulary.

YELLIN: Part of what Dayo is pointing to is that this story line that Reid is out of date, Negro is an old-fashioned term. Joe I'm curious, do you think this is the case of a white guy saying something that a black man maybe could have gotten away with saying it?

JOE CONASON, SLAON.COM: A black man could have gotten away with saying it, especially if he was a black comedian I mean making fun of a white guy but look what he said was kind of a political truism in terms of discussing a crossover politician, especially one running for president to be the first black president. I don't think anybody would dispute what he said was basically true, even if it's an uncomfortable truth. But the way he expressed it was out of date, insensitive, all the things that Reid said about himself.

The comparison with Trent Lott, however, that the Republicans have tried to make, I think is completely off-base for two reasons. One is, Trent Lott was saying that if the segregationist party had won in 1948, America would have been better off. Harry Reid has never been associated with any sentiment like that in his life. The other is that Trent Lott had a long history of association with segregationists and, I don't know how to put this, racially charged organizations in the south. And again, Harry Reid has no associations like that.

YELLIN: I'd like to speak to the history of the two parties. But let's play that Trent Lott sound byte. People said if a Republican said something like Reid said, they would get the treatment Lott got.

(BEGIN VIDEO CLIP)

TRENT LOTT, FORMER SENATOR (R-MS): When Strom Thurmond ran for president, we voted for him. We're proud of him. And if the rest of the country had followed our lead, we wouldn't have had all these problems over all these years either.

(END VIDEO CLIP)

YELLIN: Marc, I'm curious, Lott had to step down from his leadership post after that. Does the Republican Party have a different burden because of the post-race history is this?

HILL: Absolutely. Part of what people defend Harry Reid is they say he's a deep record of supporting black causes, black people, civil rights and so forth. Many times the same Republicans calling for Reid's resignation are black and brown people and so when we don't reduce people to a sound byte and we look at someone's entire career, many Republicans don't have the burden of proof in their favor. That's really the issue here.

YELLIN: You say that this isn't a debate we should be having, we should be having a conversation about race. What should we be discussing?

HILL: I think we should be talking about what it means to talk about Negro English, what it means to talk about black English or vernacular English, we need to talk about the type of hypocrisy that exists within the black communities where light-skinned people get more favor than dark-skinned people. I think this is a moment where President Obama could exercise some type of presidential leadership and be courageous around race rather than ducking and denying race.

YELLIN: Do you think the president's missing a teachable moment here?

OLOPADE: I disagree with you, Marc. I think the president should probably focus on the job of governing this unruly country. As he pointed out in the interview, it's something that is enormously distracting. I think that's the reason you've seen Democrats sort of close ranks and stop the conversation around this as best they can. Not simply because, as Joe point out, it behooves him politically, but because there's no tie to the sort of segregationist that Trent Lott exhibited. There are people who are trying to politically benefit from it. I don't see a real reason for the president or anyone else to be dwelling on this much longer than today.

HILL: But the challenge is President Obama has intervened in the conversation. It's not as if President Obama has decided not to say anything. He's come out and said I forgive Harry Reid, that this is no big deal, we need to get over it. He's understating the offensive of the comment. This is a pretty consistent pattern. This is playing to mainstream white voters that he's above the racial fray that doesn't get down in the muck of what the rest of us are still concerned with because it's important.

YELLIN: We're going to continue this conversation on the other side of the break. We have a lot to say.

Coming up, we'll have more from the panel. And also ahead, a Yale student from China donates more than $8 million to the university. So why is he under fire at home? We'll have that story.

And the Detroit auto show is under way as the industry tries to convince the public that its new breed of fuel-efficient cars can compete. Polar depression...

(COMMERCIAL BREAK)

YELLIN: We're back now with our political panel. We're talking about the controversy from Senate majority leader Harry Reid's racially insensitive remarks about President Obama. Back with me now are Mark Lamont Hill, Joe Conason, and Dayo Olopade.

I want to go straight back to the president, and how he's responded. He immediately got Harry Reid's back. We've noticed a pattern since he's become president that he mostly tries to pivot away from talking about race. This is a sound bite from him at a press conference a few months ago when a reporter asked him about the unique suffering African-Americans are suffering during the recession. Here is his response.

(BEGIN VIDEO CLIP)

PRES. BARACK OBAMA, UNITED STATES: My general approach is that if the economy is strong, that will lift all votes, as long as it is also supported by, for example, strategies around college affordability, and job training, tax cuts for working families as opposed to the wealthiest, that level the playing field and ensure bottom up economic growth. And I'm confident that that will help the African-American community live out the American dream, at the same time as it's helping communities all across the country.

(END VIDEO CLIP)

YELLIN: Marc, you're shaking your head. What?

HILL: Everything you said hinges on the absence of racism. He's essentially offering solutions to what is partially a racial problem. If you say that a rising tide lifts all boats, that's true, but the problem here is that there are certain issues on race and racism around civil rights enforcement that undermine the prosperity of African-American people even if they have the same access to the door, like it's harder for black people to get callbacks. Black people with a hole in their boat, until we address that hole, Obama's class solutions won't work.

YELLIN: Joe, the last time the president tried to address race directly he ended up with a beer summit which he really didn't need politically. Is this the president's responsibility?

CONASON: I think the people who are happiest if we continue to discuss this in terms of race and trying to box the president into presenting himself as a leader of the black community, and not the nation as a whole, are the Republicans who are attacking Harry Reid right now and who want to keep this story in the news and keep this going as a way of trying to narrow the president's base of support. He doesn't want to fall into that trap. That's his point. Now, if you said to the president, don't you think we need civil rights enforcement? Don't you think we need to try to make sure black men coming out of prison have a fair shot at a job, have their right to vote restored? I have no doubt President Obama would say, of course we have to do those things.

YELLIN: He has led on race before, Dayo. He made a race speech during his campaign. You were there when he made the comments about Skip Case.

OLOPADE: I don't think any of those were instructive toward moving toward the economic prosperity he's trying to enact from the white house. Making the argument that a rising tide lifts all boats is completely legitimate. It's actually probably true, and while there are issues related perhaps to the jobs relations bill, it will target communities where most of the population might be people of color, it's just not something the president needs to get into. And also, the class argument probably has more traction. If you look at the comments about Reid saying light-skinned, there are class elements to that. When Rod Blagojevich said he was blacker than President Obama this week, it was because he had a working-class background. I think we talk about race and economics, have to overlap. For the president, he should probably stick to the former.

YELLIN: OK. This conversation doesn't end here but our panel does. Thanks to all of you for being with us here tonight.

Coming up, the Detroit car show goes green. Is this a new direction for the American auto industry and will the consumers go along for the ride?

China tries to lure back its best and brightest to build up its economy. What does that mean for the U.S.?

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YELLIN: A record-setting donation to Yale University is sparking wide debate and criticism in China. A Chinese graduate has donated more than $8 million to the school. Ly Zahn is one of thousands of students left China to study in the U.S. and as Kitty Pilgrim now reports, the donation comes as China steps up to bring the graduates back home.

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KITTY PILGRIM, CNN CORRESPONDENT: Prestigious Yale University just got a lot richer thanks to a wealthy graduate. On its website, Yale University said $8,888,888 was donated to the school by a Chinese national, Ly Zahn. All those eights are considered an auspicious number in Chinese culture. Yale University responding, "Zahn's pledge made less than 10 years after his graduation from Yale also represents the largest gift to date from a young Yale University alumnus." The gift has generated criticism from some Chinese blogs which say the Beijing financial entrepreneur should have given the money to Chinese institutions. Derek Scissors is an expert on China's economy with the Heritage Foundation.

DEREK SCISSORS, HERITAGE FOUNDATION: What this guy is doing is saying, my education at Yale was really important to my success. And I want to acknowledge that. And what the Chinese reaction is, how can you take money out of our poor country and give it to a rich country.

PILGRIM: The booming Chinese economy has created a wealthy class of people anxious to educate their sons and daughters in the United States. The Chinese government helps poor students who wish to study in the U.S. Chinese students are the second largest group of foreign students now in the United States, behind those from India. Up 21% in the last year for a total of 98,510. But China wants to bring those students home again, according to Ken Lieberthal, head of the China Center.

KEN LIEBERTHAL, BROOKINGS INSTITUTE: They need scientists. They need people to understand complex systems, engineering and so forth. So they're encouraging students to go abroad where they get entry to major universities in the United States but to go back to China either directly from graduate school or after they worked in the U.S. They see this as a long-term investment to pay off handsomely.

PILGRIM: China's so-called thousand talents plan unveiled last year provides a generous relocation allowance and competitive salaries for researchers and educators to come back to China.

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PILGRIM: Until the last decade many students who came to the states did not want to go back to China, and now with China as a center of growth highly regarded professionals are considered a trip back to China. Recently professors from Princeton and Northwestern to return to China to work at Chinese institutions.

YELLIN: What's the profile of the typical Chinese student who comes to the U.S.?

PILGRIM: There's two groups. One is very, very wealthy Chinese, and there are very many because of the economy is booming, and there are some students subsidized by the Chinese government. They want them to come back.

YELLIN: Thank you, Kitty Pilgrim.

A Tacoma, Washington blood bank is trying to bring in more donors by offering free beer. The Blood Center has teamed up with local pubs and breweries for give blood, get beer promotion. Any person over the age of 21 who donates a pint of blood gets a coupon for a free pint of beer. The program has been so successful it's being expanded to other areas. Just have to hope they get the beer after they give the blood.

Straight ahead the Detroit auto show is in full swing. Are this year's hot cars gas guzzlers or more environmentally friendly.

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YELLIN: American auto makers hope the market bottomed out last year and will begin to improve in year. The North American International Auto Show kicked off in Detroit today and the theme is green and lean. David Champion with Consumer Reports joins us live from Detroit tonight.

Hi, David. Thanks for being with us. You saw the cars and you know the U.S. gave American auto companies billions in bailout money. Are we getting our money's worth?

DAVID CHAMPION, CONSUMER REPORTS: We're seeing many more cars that are really -- people have asked me what I thought of the show. I think it's the most sensible Detroit show I've seen in a long time. A lot of the cars, Ford released the new Ford Focus, an important fossil fuel efficient vehicle that resonates with consumers. GM has the new Cruiser there. I think going forward a lot of cars we see at the show are hitting the consumer with cars that are really good and fuel efficient at the same time.

YELLIN: How much of a shift is that from past auto shows?

CHAMPION: Well, in the past we'd see auto shows where they'd -- this is 500 horsepower and the biggest in class, this is the best that we've built. It's going to cost $200,000. Those were the cars that really made the smash in the show. Those were the big icons that they brought out. The cars that they're releasing now are cars that consumers will buy rather than just these exotic cars.

YELLIN: So the gas guzzlers are gone, but is there a sense this is going to become suddenly the most popular car among consumers at least in the U.S., that the green will go nationwide fast?

CHAMPION: Well, I think, you know, fuel economy since 2008 when gas prices soared has really been on the mind of the consumer. Currently gas prices are relatively low, but I don't think everybody feels those gas prices will stay this low for a long period of time. The industry is betting on higher gas prices and these are fuel efficient cars hit the marketplace.

YELLIN: What's your bet that this green trend will revive the American auto industry? Can that do it?

CHAMPION: The American auto industry, now they have some good products coming out. Ford has a lot of good products. The reliability is really good according to "Consumer Reports." GM has good cars coming out, the new Regal and Cruise. Both relatively fuel efficient, spacious cars that will be a success for General Motors.

YELLIN: The speaker of the house was there at the auto show today. Did you happen to see her? What did you think of her remarks?

CHAMPION: I thought they were pretty good. I would like more emphasis put on sort of really increasing the cost of gasoline to really push the marketplace in many ways. YELLIN: I have to ask this because I know past auto shows had huge performances and big expensive parades. Please tell me that after the U.S. has poured so much money into the car companies it was pared down this year?

CHAMPION: It's pared down. It's a casual show. There aren't as many people there this year. It's a much more low-key show. We're interested in the product coming up, and this year it's much more important to us.

YELLIN: You're excited for the consumer after this show. Can you tell us what as a consumer we should look for with the new cars out there?

CHAMPION: I think when you go out to buy a car think of the time you're going to own that car. You're going to buy the car now and maybe keep it four, five, six years. You want to make sure that that car you buy will fit your lifestyle in those number of years. You're also looking at reliability. You need to find a car that's going to be reliable over the long run. When you come to the fourth, fifth year of ownership, you're not paying out for repairs because the warranty has run out. If you get a reliable car, those cars are worth more in the used car market.

YELLIN: Away from reliability, I heard that some of these cars are showing internet access on the dashboard. Is that true?

CHAMPION: A lot of these cars show the latest technologies that really pair your cell phone or interactivity into the dashboard. We've seen text messages and driving distraction is a huge issue these days. It's a very difficult issue to look at.

YELLIN: All right. Driver distraction has to be huge the dashboard. Thank you for joining us.

Thanks for being with us tonight. Please join us tomorrow. Coming up next on CNN, "THE CAMPBELL BROWN SHOW."