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Lou Dobbs Tonight
Rescue Crews Continue Search for Mudslide Survivors; California Hit With Record Storms; Bush Nominates Federal Judge for Homeland Security Secretary
Aired January 11, 2005 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, HOST (voice-over): A deadly mudslide. Dozens are feared dead. A desperate search is underway tonight for survivors in La Conchita, California.
UNIDENTIFIED FEMALE: He was over there helping the boy get his stuff out of there. But he didn't make it.
DOBBS: President Bush's surprise nomination: a top former prosecutor to lead the Homeland Security Department. We'll tell you why the president's choice caught many by surprise, especially Senator Hillary Clinton.
"Overmedicated Nation," a promise of reform tonight to roll back the powerful influence of big drug companies on both scientific research and oversight of the drug industry.
UNIDENTIFIED MALE: There are plenty of scientists who do not have drug company connections, and those are the ones who should be evaluating the drugs.
DOBBS: And the "China Syndrome": the export of American jobs to China is escalating and fast. Tonight, I'll discuss the rising cost of our exploding trade deficit with China with two people who are tracking the hundreds of thousands of American jobs lost to one of the world's cheapest labor markets.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, January 11. Here for an hour of news, debate and opinion is Lou Dobbs.
DOBBS: Good evening.
Tonight, as many as 40 people are feared missing after a huge mudslide in La Conchita, California. Local residents say between 30 and 40 people remain unaccounted for. That's much higher than the official estimates.
The mudslide swept away more than a dozen homes in La Conchita. At least four people have been confirmed dead.
Ted Rowlands reports now from the scene -- Ted. TED ROWLANDS, CNN CORRESPONDENT: Lou, it is a very emotional scene as you might expect out here. Rescue workers are working desperately to try to find any signs of life. They say they are still optimistic, even though it's been more than 24 hours.
There have been three people pulled out after spending hours in air pockets in this debris, which is estimated to be 30 feet in width and length and depth, as well. They believe there is a chance that there could be other survivors in air pockets.
As you mentioned folks living in this area believe that there could be as many as 30 to 40 people trapped in this area. Many of them are obviously presumed dead. Another body was pulled out within the last hour.
The official count of missing, though, is between 20 and 27. And again, the hope is they can find someone alive.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: And he was over there helping the boy to get his stuff out of there, and they didn't make it. They didn't make it. Oh, they didn't make it.
UNIDENTIFIED FEMALE: It's just too much. I don't know. I just hope everyone's OK. We're just all praying they're all right.
(END VIDEO CLIP)
ROWLANDS: Very emotional scene, as you heard there. Rescue crews, meanwhile, are using listening devices to try to pick up a hint of sounds at all. They were able to pick up some sounds early this morning, and they're holding on to hope that there could still be people in these air pockets, and for that reason they continue to search.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Some are still being found, so there's always hope. It's not my call when they decide to change tactics, but right now with 24 hours and I'm sure for the next day or so, we're definitely up there looking for survivors. That's the goal. I mean, that's why you're here.
ROWLANDS: It's still a rescue effort?
UNIDENTIFIED MALE: Of course.
(END VIDEO CLIP)
ROWLANDS: This area north of Los Angeles and south of Santa Barbara has a history of mudslides, but Lou, nothing on the scale of this. As you can imagine, people here are shocked and desperate and hoping to find signs of life in that debris pile.
DOBBS: Ted, thank you very much. Ted Rowlands reporting from La Conchita, California.
These winter storms lashing California are now being blamed for at least 19 deaths. The storms dumped huge amounts of rain over Southern California.
Casey Wian reports from Los Angeles.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Southern California received a long-awaited dose of what it's famous for Wednesday: sunshine, a welcome sight after the wettest 15-day period in the area's recorded history, produced some horrifying images, none scarier than the sight of a rescue raft carrying an 8-week-old infant and his mother, capsizing in raging flood waters.
CAPT. SAM MALDONADO, U.S. FOREST SERVICE: Her and the baby were again taken under, and I was trying to yell at her as she was moving downstream, "Hold the baby up. Hold the baby up." And every time I would say that, she would actually listen, and she would try to get the baby up, but it was quite hard for her.
WIAN: Firefighters saved the baby and mother. Both are expected to fully recover.
Scores of others were rescued from floodwaters. Still, the storm-related death toll climbed into the dozens.
Property damage also continues to mount. Stranded vehicles litter the landscape. Businesses are flooded. Hillside homes remain vulnerable to collapse. This Orange County road simply washed away.
Here a 25-foot boulder tumbled through power lines in Malibu. This airport runway is better suited for a boat.
Mountain communities in the Sierra Nevadas are now digging out of heavy snow. Schools are closed. Snow clearing expenses have forced some city governments to declare states of emergency.
FRANK MCCARTON, CALIFORNIA EMERGENCY SERVICES: This was a quick- moving storm that brought in a lot of snow very quickly and rapidly. So it took some people by surprise.
As we go throughout the season, I think the melt-off of this particular snow will be a concern for us as emergency managers.
WIAN: As the storm moved east, floods wiped out roads in Utah, sandbags a seemingly futile last line of defense.
(END VIDEOTAPE)
WIAN: Back here in Southern California the forecast for the next several days is more sunshine, but it will be far from a return to normal, especially for those who felt the full effects of these powerful storms -- Lou.
DOBBS: Casey, thank you very much. Casey Wian reporting from Los Angeles.
As Casey just reported, Utah also suffering from severe flooding. The flooding in Utah, in fact, has washed away a number of homes and swamped buildings with muddy river water. Officials say these floodwaters are unlikely to recede until tomorrow at the very earliest.
AT least one death has been blamed on the floodwaters.
In Alaska, part of a remote Arctic village is without power tonight after a blizzard with hurricane-force winds took down power lines. Temperatures have dropped to 60 degrees below zero. Sixty degrees below zero with the wind chill. Two attempts to airlift repair crews into the village have failed because of the severe storm conditions.
And in Florida tonight, a large sinkhole in Orange City has destroyed one house and seriously damaged another. The sinkhole is more than 100 feet wide. No one, fortunately, injured in the incident.
In Washington, President Bush today surprised Congress and many in his own administration with his nomination for the post of Homeland Security Department secretary.
The president nominated U.S. appeals court Judge Michael Chertoff. He's a former assistant attorney general, one of the architects of the administration's counterterrorism strategy in the days and weeks immediately following September 11th.
White House correspondent Suzanne Malveaux reports.
(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The nomination of Judge Michael Chertoff.
SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): President Bush's second pick for homeland security: federal appeals court judge Michael Chertoff.
BUSH: Mike has shown a deep commitment to the cause of justice and an unwavering determination to protect the American people.
MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY NOMINEE: On September 11, 2001, I joined members of dozens of federal agencies in responding to the deadliest single attack on American civilians ever.
MALVEAUX: Chertoff's nomination came as a surprise to most in Washington. He'd been left off the widely circulated short list for the secretary's post. But Sunday morning after the president's bike ride, Mr. Bush quietly called Chertoff from his motorcade to offer him the job.
Bush aides say privately Chertoff is a compromise, considered by administration officials as the anti-Kerik, a reference to President Bush's first pick, former New York police commissioner Bernie Kerik, who withdrew his nomination after the White House vetting process raised questions.
BERNARD KERIK, FORMER HOMELAND SECURITY SECRETARY NOMINEE: To conclude, I want to apologize to my family, my friends, the president, President Bush.
MALVEAUX: The president took no chances the second time around.
BUSH: He's been confirmed by the Senate three times.
PAUL LIGHT, BROOKINGS INSTITUTION: There are going to be no surprises about him, as he moves through this process, and that's clearly an advantage compared to Bernie Kerik.
MALVEAUX: His role as a key figure in shaping the government's legal response to the 11 makes him someone the president can trust.
Chertoff's critics question whether his resume might be too partisan for the job. During the Clinton administration, Chertoff was the chief counsel to the Republican Senate Whitewater Committee that investigated President Bill and Hillary Clinton's Arkansas business dealings, a probe widely seen then as politically motivated.
LIGHT: I don't think it's going to be a major issue. I think the more significant issue is his lack of management experience.
(END VIDEOTAPE)
MALVEAUX: But management experience aside, it is likely he's going to face many other questions regarding his knowledge about responding to emergencies, securing transportation, and protecting the border -- Lou.
DOBBS: Thank you very much, Suzanne Malveaux.
Also today, President Bush called on Congress to pass his proposals for Social Security reform. President Bush warned if Congress fails to act, Americans now in their 20s will retire and find Social Security bankrupt.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The president, in panel discussions, said times have changed since Franklin Roosevelt, and Social Security should change, too.
BUSH: Today, Americans fortunately are living longer and longer. I mean, we're living way beyond 60 years old, and most women are working outside the house. Things have shifted.
PILGRIM: The president's basic argument for change is that the system is eventually going to go broke. In fact, the Social Security system is in no immediate danger. It can pay full benefits until the year 2042.
Some economists say the system needs some adjustments as fewer workers support the large number of baby-boomers who will retire in coming decades, but others point out changes do not have to be on the scale the president is proposing.
MARK WEISBROT, CENTER FOR ECONOMIC AND POLICY RESEARCH: The changes that will be needed, according to the numbers that the president is using, the changes that would be needed just to keep it in balance for 75 years or indefinitely are smaller than the changes we had in each of the decades of the '50s, the '60s, the '70s and the '80s, and people didn't complain then.
PILGRIM: But many Americans are concerned. A recent poll found 71 percent felt the system was in crisis or had major problems, while 24 percent said it had minor problems.
One of the more controversial proposed changes is to allow younger workers to invest some of their Social Security payments into personal invest accounts, but even those who support that measure agree it won't take care of the long-term shortfall and will cost up to $2 trillion to implement.
PETER ORSZAG, BROOKINGS INSTITUTION: One of the other myths is that the private accounts that the president is proposing actually do nothing to help the long-term solvency of Social Security. Instead, he's at least floating the idea of changing the way that Social Security benefits are calculated so that you get less initially when you retire than under the current system. That's what does all of the heavy lifting. The individual accounts are sort of a sideshow from that underlying fact.
(END VIDEOTAPE)
PILGRIM: And President Bush said that investment choices for private accounts would be limited to "steady, reliable stock and bond funds." Critics say the risk of people mismanaging the retirement is simply too great -- Lou.
DOBBS: I love the idea that it's a sideshow, those private accounts, when we're talking about $2 trillion -- as much as $2 trillion -- in transition costs.
Kitty, thank you very much.
Kitty Pilgrim.
Well, the China syndrome. It's already wiped out a staggering 1.5 million American jobs. And guess what? The problem is worsening. I'll be talking with two people tracking this alarming trend.
Also tonight, testing the Pledge of Allegiance. Why some school children don't want to stand for the Pledge of Allegiance.
(COMMERCIAL BREAK) Tonight, an astonishing new study on our worsening trade deficit with China and its crushing impact on working men and women in this country. This study finds our trade deficit with China has risen more than 20-fold over the past 14 years, and, in the same period, 1.5 million American people have lost their jobs.
Lisa Sylvester reports from Washington.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): John Wentworth's family has been making furniture since 1947 in Manset, Maine, but the last five years, he has had to fight to keep his company alive. He let go of 50 employees, a fifth of his staff. The source of the problem: competition from China.
This furniture is extremely cheap. It's inexpensive to produce furniture in China, and they are knocking off all versions of furniture that are presently made in the United States, all styles.
SYLVESTER: A new report finds Maine lost more jobs to China as a share of total state employment than any other state. Arkansas and North Carolina were second and third on the list. Since 1989, the number of job opportunities in the United States lost to China has been steadily increasing, from 95,000 to more than 1.5 million in 2003.
At the same time, the U.S. trade deficit widened. With U.S. imports from China far outpacing U.S. exports. The trade deficit grew from over $6 billion in 1989 to $125 billion in 2003.
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: We're importing almost entirely manufactured goods from China. What we export to them are commodities. We sell them grain. We sell them timber. We sell them scrap steel. So it's like we have become almost a developing country in terms of what we trade with China.
SYLVESTER: But not everyone agrees with the study's findings. The CATO Institute points out the U.S. economy thrived during the '90s.
DAN GRISWOLD, CATO INSTITUTE: What's happened during that time? The U.S. economically has expanded faster than most other industrialized countries. We've added jobs. Our living standards have risen. Trade with China is a blessing to the U.S. economy.
SYLVESTER: ... Or curse for John Wentworth, who each year deals with new struggles for his company.
(END VIDEOTAPE)
SYLVESTER: Outgoing Commerce Secretary Don Evans is leading a delegation in China this week. The administration has signaled its willingness to increase pressure on China to appreciate its currency and increase export tariffs on apparel and textiles -- Lou.
DOBBS: Thank you very much.
Lisa Sylvester.
Coming up next here, how the United States can help deal with the exploding trade deficit with China and save those American jobs. I'll be talking with the author of this important new study, Robert Scott of the Economic Policy Institute and Jack Davis of the Save American Jobs Association.
That brings us to the subject of our poll tonight. The question is: What do you think is the greatest threat to our economic stability -- the federal budget deficit, the trade deficit, Social Security or Medicare/Medicaid? Cast your vote at loudobbs.com. We'll have the results later here in the broadcast.
A surprising story tonight from Spotsylvania, Virginia. Students in the county schools will no longer be required to stand when they recite the Pledge of Allegiance. The school board reached the decision after a 12-year-old middle school student Gabriel Allen refused to stand for recitation of the Pledge of Allegiance because he says he disagrees with U.S. government policies. Virginia law requires the Pledge of Allegiance be a part of each school day, but the law allows students to remain seated if they wish to abstain.
In Iraq, a Marine was today killed by insurgents in the Al Anbar Province west of Baghdad. Insurgents also killed 20 Iraqis in a series of attacks designed to disrupt preparations for the Iraqi elections. Defense Secretary Donald Rumsfeld today declared that just holding elections in Iraq will be what he called an enormous success.
Senior Pentagon Correspondent Jamie McIntyre with the report -- Jamie.
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Lou, on a day when Iraq's president acknowledged that there will be -- in his words -- pockets of Iraq where people will not be able to vote in this month's elections, Defense Secretary Donald Rumsfeld, who last fall famously remarked that not quite perfect elections would be better than nothing, brushed aside suggestions that the elections may not be seen as legitimate.
In a joint appearance today with his Russian counterpart at the Pentagon, Rumsfeld insisted that just having elections in Iraq is what he called an enormous success and victory.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, SECRETARY OF DEFENSE: This has been the coalition's goal, an Iraq run by Iraqis and secured by Iraqi security forces. The Iraqi people in their interim government are making progress in that direction, although there is still a distance to go.
(END VIDEO CLIP)
MCINTYRE: The insurgents are now using bigger, more powerful roadside bombs in their campaign of intimidation. Pentagon sources tell CNN the blast that destroyed a heavily armored fighting vehicle last week killing seven U.S. soldiers came from a 200-pound explosive. Some U.S. officials are now warning of even more spectacular attacks leading up to Election Day, prompting fears that many Iraqis will stay away from the polls.
While the situation in Iraq has some calling for the-- for Iraq to declare victory and go home, Pentagon officials insist their strategy is to win in Iraq, not just to cut and run. One officials tells CNN that the elements of winning include a truly representative government, with a secure economy, strong human rights protections, but he said the most important element remains a capable Iraqi military that can carry on the war against the insurgents.
Now, in today's briefing, Defense Secretary Rumsfeld went out of his way to deny a Newsweek report suggesting that U.S. special forces might be used to train Iraqi death squads to hunt down insurgents, perhaps even crossing into Syria where it's believed some insurgent leaders are directing the attacks. Rumsfeld called that report nonsense, insisting the Pentagon doesn't do things like that. Somebody, he said, has been reading too many spy novels -- Lou.
DOBBS: Jamie, thank you very much.
Jamie McIntyre.
Still ahead here, swept to sea by the deadly tsunami. How this man managed to stay alive in the middle of the Pacific Ocean for two weeks. That's next.
And then, several new proposals to reform Social Security. Does it need reforming? Is it a critical issue? Senator John Sununu will tell us why his plan is different from the others and why he says it is the very best.
(COMMERCIAL BREAK)
DOBBS: An incredible story of survival tonight. An Indonesian man was swept into the ocean by the tsunami, and he survived for more than two weeks, the longest of any survivor who's been found alive at sea.
Andrew Brown reports.
(BEGIN VIDEOTAPE)
ANDREW BROWN, CNN CORRESPONDENT (voice-over): Many ships had passed him by during his ordeal. Finally, this one, the Al Yamamah, spotted him, turned around and delivered him to safety.
Twenty-one-year-old Ari Afrizal walked off the Liberian- registered vessel on to Malaysian soil after spending at least two weeks adrift in the Indian Ocean. On December 26, Afrizal was swept out to sea off Indonesia's Aceh Province after trying to outrun the lethal waves that crashed ashore that morning.
ARI AFRIZAL, SURVIVOR (through translator): The first day, I clung to a piece of wood. The second day, I made it to a small fishing vessel. I was in a small fishing boat for four days before I managed to get on a raft.
BROWN: Afrizal drifted on the raft for more than a week. Although he found water and clothes on board, his spirits began to fade because ship after ship failed to spot him floating helplessly.
Finally, the Al Yamamah came to the rescue.
AFRIZAL (through translator): I then waved at them because I knew I was safe.
BROWN: Safe, but very, very hungry.
AFRIZAL (through translator): I managed to survive on the flesh of coconuts for 12 days. For three days, I didn't get anything to eat.
BROWN: An ambulance was standing by when Afrizal arrived at Malaysia's Port Clang. He sustained leg injuries, but that may be the least of his worries. He doesn't know the fate of his own family. He has yet to find out whether they are safe or lost in the ruins of Aceh.
Andrew Brown, CNN, Hong Kong.
(END VIDEOTAPE)
DOBBS: Next, the future of Social Security. Senator John Sununu has a plan to reform Social Security. Critics call the plan risky. The senator calls it a tremendous opportunity. He's our guest.
And our special report, "Overmedicated Nation." Research made to order? Are the big drug companies wielding far too much influence over scientific research and oversight? Our special report coming right up.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.
DOBBS: In just a moment, Senator John Sununu will join us, but, first, these stories.
These incredible pictures are just in to CNN tonight of a small plane that crashed just outside Orlando, Florida. These pictures taken by our affiliate WKMG from their news helicopter. This Cessna crashed into a utility pole. It narrowly missed cars and homes, as you see there. The plane was trying to make an emergency landing on the golf course. The two people aboard were seriously injured, as you might expect.
In Canada, a second case of mad cow disease has been reported. A second case in two weeks. Officials today confirm the new case in Alberta, but said the animal has been kept out of the food chain. This is only Canada's third case of the disease in a decade.
NASA is making last-minute preparation of tomorrow's launch of the Deep Impact Spacecraft. Scientists hoping Deep Impact will reveal secrets about comets when it collides with a comet, Temple 1, on the 4th of July. This mission includes a six-month, one-way, 268 million- mile trip.
And astronomers are confident the Hubble Telescope has captured the image of a planet beyond our solar system. This new image shows the celestial body which has not yet officially been declared or named a planet.
As we've been reporting, President Bush today promoted his plan to reform Social Security using private investment accounts. My guest tonight has introduced his own proposal to reform Social Security. Senator John Sununu wrote the Social Security Savings Act with Congressman Paul Ryan of Wisconsin.
And Senator Sununu joins us tonight from Washington, D.C.
Good to have you with us, Senator.
SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: Thanks, Lou.
DOBBS: Let's begin before we go to your proposals or even the president's, for that matter, to the issue of just how critical is it that a large, large-scale reform be undertaken right now?
SUNUNU: Well, I think it's important that we address the issue. It's a looming crisis. We all know the demographics. Baby boomers will retire, but we've gone from 30 workers supporting each retiree to just three workers supporting each retiree today. In the next 15 years, that will go down to two.
Those are just facts. It's the demographics. We don't have to deal with it today, but, if we just keep putting it off, we're going to put our children and grandchildren in a very tough position, because the system will be bankrupt in 2042. But more importantly, we start paying out a lot more than we collect in taxes in just about 15 years.
So, look, we can deal with it now or later, but we owe it to our children to take on a tough issue as soon as possible so that we don't have to make a tough decision in a fiscal crisis.
DOBBS: Senator, as you know, the president is out stumping for all the world looking like this an election campaign. For some in the Republican party it may turn out to be just that on Social Security reform. As Treasury Secretary John Snow on Wall Street, talking with corporate America and frankly the reception they're receiving, whether it be Wall Street or corporate America, which stands to profit handsomely, you can decide about the degree from these private investment accounts, they're not thrilled. What makes you think that your plan would be any other sellable than that of the president's to this point? SUNUNU: I don't care what Wall Street thinks about it. I care about whether it's a fiscally sound plan and whether or not it's the right thing for individuals. A big part of the reason to make the changes is because we want a system where people own their own retirement savings, where they can earn a very strong rate of return, much greater than the one percent that a worker today could expect to get from Social Security. We want them to have something they can leave for their children when they pass away, creating wealth and creating real economic opportunity for middle and lower-income workers, that's one of the biggest reasons to take action and one of the biggest differences the kind of proposals I have will make for those workers. Look, Lou, you and I are doing fine. We have IRAs and 401(k)s, but there are a lot of people in America, lower and middle income that haven't had the opportunity to take advantage of these personal retirement accounts.
DOBBS: That's exactly right. The question becomes, with a pledge that is Social Security, for those in this country who have worked throughout their lives for Social Security, every plan, one way or the other has to be affected by either a cut at benefits at some margin, none that I've seen has any -- has any ability to diminish the fact that that will occur, or we have to raise taxes, or we have to take on debt. Which way do you see as the proper way to go with your plan?
SUNUNU: In the proposal that we have, we provide financing through three mechanisms. One, we control government spending, and it may sound like an old idea, but it's the right idea.
DOBBS: I think it's a wonderful idea, Senator, a tremendous idea.
SUNUNU: Instead of growing government at 4.6 percent, we put a legal cap at the growth of government for the next ten years at 3.6 percent, so we're still growing government, but at the rate we had in the 1990s, and I think that's very achievable. Second, when you have higher levels of private savings, you'll have a better interest rate climate, more corporate investment and higher profits. We take those higher corporate tax revenues and put them into the Social Security trust fund. Third, we do have additional borrowing, about $600 billion over the eight to ten-year time frame we needed. I think that's a fair trade to get rid of a $12 trillion unfunded liability, I think your grandchildren or children would say, yes, that's a good financing plan.
DOBBS: We're in a strong, competitive environment, because even though $600 million is a lot, it's better by roughly two thirds than $2 trillion. The other part of this issue, it seems, Senator, that needs to be cleared up is the way in which we are going to guarantee the same level of benefits to those in the system today, as would have received under the existing system. Does your plan do that?
SUNUNU: It does. We keep a guaranteed minimum benefit for those that choose to participate in the personal retirement accounts. It's important to remember that they're optional. If you don't want to participate you don't have to, but for a younger worker, to be able to put aside $2,000 a year, or $1,500 a year for 35 or 40 years they'll have a much greater benefit than the guaranteed minimum benefit and a much greater benefit than they could expect today. We don't make any change in benefits and don't make any options available at all, no changes for anyone 55 or older.
DOBBS: And after the administration and the Senate and the Congress resolve Social Security, you can take on the minor item of all of the issues surrounding Medicare and Medicaid?
SUNUNU: Well, you put on your screen, your poll question for tonight. It's important to remember that, as you point out, Medicare And Medicaid, they're -- the issues of their costs, their near and long-term costs are very great as well. Medicare/Medicaid, Social Security, those are the things that most affect our fiscal solvency. That's why we should take them on. It's a tough issue, I know, a lot of people say you can't get elected talking about it, I got elected, Lindsey Graham got elected, Elizabeth Dole got elected, committed to take on a tough issue like Social Security.
DOBBS: I think that's commendable and one of the most difficult subjects to analyze, to report on, the dialogue, the conversation, the debate is critical to the interests of the country. We thank you, Senator John Sununu.
SUNUNU: Thank you, Lou.
DOBBS: Taking a look now at some of your thoughts on the issue of the flood of illegal aliens into this country, that another issue this administration is taking on -- so-called immigration reform.
Carol Harmon in Palestine, Illinois, "Lou thank you for reporting on illegal immigration and the outsourcing of jobs. Our politicians are selling our country to the highest bidders."
Jackson Franco Handmachen of Norcross, Georgia. "I'm an American citizen who is totally frustrated and disgusted with the amount of money our nation spends to subsidize illegal aliens. From indigent to medical facilities to job losses, illegal aliens are bad for America."
And B. Fairbanks in Fredericksburg, Virginia, "How can we keep terrorists out when we can't keep illegal aliens from crossing the border?"
And Linda McDaniel in Evansville, Indiana, "it is absolutely unfair to all the law-abiding legal immigrants that come to this country to continue to pay subsidized housing, welfare, food stamps, and medical care for those who broke the law to be here. The American dream that illegal aliens are seeking is fast becoming the American nightmare."
E-mail us your thoughts at loudobbs@CNN.com.
Coming up next here the Bush agenda. A former Bush adviser will be here to tell us how the president plans to reform Social Security, reform immigration laws, oh, yes and fix the tax code all the while.
Then the China syndrome, how our exploding trade deficit with China is putting even more American jobs at risk. That is in addition to the million and a half lost. The author of a stunning new study will be here along with a man fighting to keep American jobs in this country.
And overmedicated nation, our special report, how drug companies are influencing research that doctors use to advise their patients, how drug companies are influencing the oversight of the industry itself. Our special report next.
(COMMERCIAL BREAK)
DOBBS: As we reported to you early in the broadcast, an alarming new study out today, a study that finds 1.5 million American jobs lost from 1989 to 2003 because of our trade policies with China specifically. Joining me from Washington is Robert Scott, the author of the study for the Economic Policy Institute, and from Buffalo, New York, I'm joined by Jack Davis as well. He has firsthand experience on the impact of companies choosing to manufacture products in cheap foreign labor markets, founder of the Save American Jobs Association. Good to have you both here.
Let me begin with you, Robert. This study, as you know, we report and have reported here for some time extensively on these loss of jobs to cheap markets, but to qualify this, 1.5 million jobs lost to China specifically over a 14-year period, were you stunned by the scale of what you found?
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: Well, not only is the overall scale shocking, Lou, but the acceleration is just terrifying. The rate of job loss to China per year has doubled just in the last two years since China has joined the WTO.
DOBBS: Well, with that acceleration, and obviously with the second term, the Bush administration means to continue the policies that it carried out during the first term, and which were the same policies carried out by two terms of the Clinton administration. Is there any hope that you can see of a reversal in course here?
SCOTT: Well, I think that there's two things that we can do. First, we can cajole the Chinese into making their currency much more fairly valued. They've been buying up hundreds of billions of dollars to depress the value of their currency. This is not only hurting the United States, it's hurting the Europeans as well. And I think it's time that Europe and Japan and the U.S. got together to put very high levels of pressure on the Chinese to re-value their currency.
DOBBS: Jack, you're a businessman. You employ people, you've lost jobs in business to cheap competition from China. Others call it globalization. I'm sure you have a separate word for it. But you also ran for Congress, trying to save jobs and farms and business, and the voters didn't buy it. Is it your sense that Americans just simply don't care what happens to middle-class working men and women in this country?
JACK DAVIS, SAVE AMERICAN JOBS ASSOCIATION: No, I don't take my failure to win the election had anything to do with that. It was a gerrymandered district with a lot more Republicans in it than Democrats. When I got my message out, they voted for me. I started with very low numbers and ended up with 44 percent of the vote, and over 115,000 votes. So people get the message when you get it out. You are doing a great job. You are my number one fan. We are on the same mission. And let's work together. So keep it up.
DOBBS: Well, I like what you're saying, but I don't think I can get involved in your politics, nonetheless.
DAVIS: No, this is -- Save American Jobs Association is nonpartisan. This is a grassroots organization I've just started to get the message out, and being here tonight helps me, and it helps America. I disagree with...
DOBBS: Let's talk -- sorry, go ahead. Go ahead, Jack.
DAVIS: I say, I disagree with some of those numbers. I thought Bob's number was low. I used the figure of for every $1 billion in sales, we lose 13,000 jobs. So I think we've lost over two million jobs over the last period, eight years or 10 years that Robert presented.
DOBBS: Well, one of the numbers -- and I guess I should let you respond to that, Robert. Jack is, I think, deploring your conservatism in your research here.
SCOTT: That's fine. I'll take two million jobs anytime. I think the point is that we're suffering massive job loss, and even more importantly, China is moving rapidly up the product ladder. Instead of just exporting textiles and apparel to us, now it's advanced technology products and automobile parts. And that's really eating the heart out of American industry.
DOBBS: China accounts for the entire $32 billion of the U.S. trade deficit in advanced technology products. I mean, that is stunning, because many of the U.S. multinationals, economists, part of the great orthodoxy on so-called free trade suggests we are technology-, services-driven economy and we can't be bothered with things like manufacturing and mid-level technology. We're more sophisticated than all of that. That's stunning, Robert.
SCOTT: Well, I think that's right, Lou. And I think the problem is that in particular, the zeal to bring China into the WTO was designed to help multinational companies maximize their profits. And it ignored the national interest of the U.S. as being a location for production and value creation, and the creation and maintenance of good jobs and healthy communities.
DOBBS: Let me ask you both, what do you think must be done right now -- and I'll start with you, Jack -- to reverse this trend?
DAVIS: OK. We need a balanced trade. And to get balanced trade, we need tariffs to balance the trade. If China wants to sell to us, they have to buy an equal dollar value of product from the United States. That would balance the trade and solve all our problems, and create jobs in the United States. One of the other factors here that I wanted to mention, it's not just this money going overseas to China. They're coming back and buying our companies. Last week, it was announced that IBM selling their PC division to China. And there was an article in "The Wall Street Journal" indicating that they may buy Unocal. These are crown jewel companies of the United States, and we're buying trinkets from them and they're buying crown jewels of our corporations. This is wrong.
DOBBS: Jack, I may have misspoken earlier. I may be able to get involved in your politics.
OK, Robert, let me ask you this.
DAVIS: Thank you.
DOBBS: Your best suggestion for a policy change here that will staunch the bleeding and provide some assurance. The idea that our middle class, our working men and women in this country can't compete with labor that is making a 20th or even less than they are, not enjoying the standard of living that we have come to think as our birthright as Americans, what in the world are we going to do?
SCOTT: Well, Lou, we've already talked about the exchange rate. I think that's critical. But beyond that, I think we have to recognize that China is the worst violator of human rights in the world. And they're not paying their people. They're preventing them from joining labor unions. This is a tremendous subsidy to the cost of production, and we have got to compel China to open up its economy to the modern world of free labor rights.
DOBBS: Robert Scott, Jack Davis. Gentlemen, we thank you for being here.
DAVIS: I'd like one comment...
DOBBS: I'm sorry, Jack, we've got to run, partner. I appreciate it.
DAVIS: OK. Listen...
DOBBS: You've been in politics too long already, I think.
A reminder now to vote in tonight's poll -- what do you think is the greatest threat to this country's economic stability? The federal budget deficit, the trade deficit, Social Security or Medicare and Medicaid? Cast your vote at loudobbs.com. We'll have the results coming up right here on the show in moments.
More now on our series of special reports this week on our "Overmedicated Nation." Tonight, conflicted science. The Food & Drug Administration often relies on the National Institutes of Health for scientific information and research, but revelations about NIH scientists and their financial ties to the drug industry have cast doubt on some of their recommendations. Now the NIH is promising big changes in the way it operates, changes aimed at reassuring what is increasingly a skeptical public that its science can't be trusted. Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): The advice a patient gets from a doctor is some of the most important they may ever receive. In the past year, the public has been given reason to doubt some of that advice.
Investigations reveal that the panel which writes the guidelines on the use of cholesterol drugs has financial ties to the makers of those drugs.
MERRILL GOOZNER, AUTHOR, "THE $800 MILLION PILL": Eight out of the nine people who were involved in writing the guidelines had relationships with the very same statin manufacturers. In fact, one of the eight was a high-ranking official at the National Institutes of Health.
TUCKER: Over the last five years, sales of cholesterol drugs have risen by two-thirds, to more than $15 billion, according to IMS Health.
The problem is not limited to NIH's cholesterol panel. Some 200 scientists have relationships with private industry.
JEROME KASSIRER, AUTHOR, "ON THE TAKE": What can we possibly do about this? The first thing I think we should do about it is not allow scientists who are involved in clinical trials of certain drugs have any financial connection to the companies that make those drugs.
TUCKER: Following an internal investigation, the head of the National Institutes of Health, Dr. Elias Zerhouni, promised change, back in May of last year. Eight months later, the NIH says change is coming, soon.
MICHAEL BOTTESMAN, NIH: Within several weeks, we will have regulations which are the strictest that I'm aware of any place. There will be a moratorium on consulting, there will be restrictions on the activities of our highest-level officials. There will be a whole series of changes, which should absolutely reassure the public that even the occasional error made at the NIH will not be occurring in the future.
TUCKER: But don't count the drug industry out just yet. After all, two once tough congressional watchdogs have already been domesticated by the industry.
(END VIDEOTAPE)
TUCKER: Billy Tauzin, former representative from Louisiana, now the head of a drug lobbying group known as Pharma, big, heavyweight group. And former Pennsylvania Rep Jim Greenwood, who was advocating no financial ties between scientists and drug companies back in the summer in Congress, Lou, now works as the top lobbyist for the biotech industry down in Washington.
DOBBS: Providing perhaps a little oversight over Congress on behalf of the pharmaceutical industry? That's not the way it works, is it?
(LAUGHTER)
TUCKER: No, I don't think so.
DOBBS: Thank you very much. And the sooner they can get this fixed, the better off we all are. Thank you, Bill Tucker.
Following up now on a story that we did not report last night. A Mississippi Public Library Board has reversed its ban on comedian's Jon Stewart's satirical book titled "America (The Book)." The library board voted to ban that book, because it contains images of the Supreme Court justices' faces superimposed on nude bodies. The board later reversed its decision after receiving e-mails and calls from all over the country criticizing the ban. Wal-Mart has also declined to stock that book out of its sense of proper taste.
Well, the Bush agenda, when my next guest is here, he'll tell us that doing nothing about Social Security isn't an option. And he'll be explaining the administration's views on immigration reform and what we have to do with the tax code. I'll be talking with former special assistant to the president next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: President Bush has laid out an aggressive agenda for his second term focusing on some of the most controversial issues facing the country. Today the president campaigning for major reforms to Social Security, other of his top priorities include tax reform, tort reform, homeland security. My guest tonight says a critical part of homeland security reform is the need for tougher immigration laws. Ron Christie served as adviser to the president and Vice President Cheney. Joining us here in New York. Good to have you with us, Ron.
This is an ambitious agenda by any definition for a second-term president. The idea, the taking on Social Security we had -- and I'm sure you heard Senator Sununu with his own version of the proposals. This plan, why is he taking it on with this -- with all of the deficits and debt we're facing, $2 trillion for a transition?
RON CHRISTIE, FMR. WHITE HOUSE ADVISER: Because, Lou, the alternative of doing nothing will cost us more over the long haul. Right now Social Security has a $10 trillion unfunded liability that we're going to impose whether we do anything or nothing at all. So what the president has said is that we need to have a comprehensive reform package for Social Security, we need to shore up the system for those who are like my age and your age..
DOBBS: Thank you for including me in your age.
CHRISTIE: I had to, who are still in the workforce and still have many years in the workforce but at the same time making sure that those seniors who were at or near retirement age receive all their benefits. What this issue is all about and why the president has taken this on is it's irresponsible for the government to recognize there's a short fund and unfunded liability and do nothing to reform the system.
DOBBS: What about the unfunded liabilities in Medicare and Medicaid?
CHRISTIE: Let's look at Social Security first.
DOBBS: I mean, does that mean that on the basis of unfunded liabilities, we're going to take on gargantuan challenges here?
CHRISTIE: What the president has clearly articulated today and what he will continue to articulate in the days to come is that it's irresponsible for children and those in the workforce now, who are in their twenties and thirties who will have not anywhere near the same level of benefits as today's seniors. What the president wants to do -- let me finish this...
DOBBS: I don't want to hear a recitation.
CHRISTIE: No, no, it's not a recitation but it's important that younger workers have an ownership and an opportunity to have something...
DOBBS: As we say here that goes without saying.
CHRISTIE: Absolutely.
DOBBS: And here's the Concord Coalition coming out with their full-page ad supported by people -- I know -- I suspect I know I certainly respect these folks, Bob Kerrey, Pete Peterson, Bob Rubin. They're saying, whoa!
CHRISTIE: I agree with a lot of what the Concord Coalition has to say. It's irresponsible to take out more loans to leverage the future without finding a way to have a solvency for the system right now and I think that's what the president is doing.
DOBBS: Let's go to tort reform.
CHRISTIE: Tort reform, if you look at our small businesses, if you look at the costs of health care across the United States, tort reform is necessary to bring down some of these litigation costs. My wife goes to her OB-GYN, she has to pay $10 in addition, they hand her a flier, because they have to have a malpractice insurance premium. It's too expensive.
DOBBS: But why not focus, first, on malpractice itself and what the medical profession is doing. 100,000 people die of medical mistakes every year in this country. Why does it have to start there? Don't you think people should be entitled to be compensated, if one can be compensated, materially for physical damage?
CHRISTIE: Lou, look what we're doing right now. We're having that debate. The president has laid down a marker saying we should have tort liability and tort reform, but I agree with you, medical malpractice is a serious problem, and those who have been harmed and aggrieved should have legal redress in the courts.
DOBBS: Immigration reform, again, condition preceding. Why not border security before we even begin talking about what to do with our immigration laws?
CHRISTIE: You look at border security, I agree with you. I actually had a meeting with the commissioner of the border patrol today who said that one of our number one homeland security issues is making sure that our borders are sealed and we have proper immigration. I agree with that. It's one of those debates we'll have in the days to come in the Congress and with the president leading the way.
DOBBS: I hope on that he is listening well.
CHRISTIE: I trust he is.
DOBBS: Ron Christie, good listening to you, as always.
CHRISTIE: A pleasure being here.
DOBBS: Still ahead, the results of our poll tonight, a preview of what's ahead tomorrow. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The results of tonight's poll, the majority of you, 53 percent say the federal deficit is the greatest threat to this country's economic stability.
We thank you for being with us tonight. Please join us here tomorrow. How the National Guard plans to improve its recruiting while the nation is at war against terror. The head of the National Guard will be our guest in a face-off on the real impact of our trade policies with China. For all of us here, we thank you for being with us. Good night from New York. "ANDERSON COOPER 360" is next.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired January 11, 2005 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, HOST (voice-over): A deadly mudslide. Dozens are feared dead. A desperate search is underway tonight for survivors in La Conchita, California.
UNIDENTIFIED FEMALE: He was over there helping the boy get his stuff out of there. But he didn't make it.
DOBBS: President Bush's surprise nomination: a top former prosecutor to lead the Homeland Security Department. We'll tell you why the president's choice caught many by surprise, especially Senator Hillary Clinton.
"Overmedicated Nation," a promise of reform tonight to roll back the powerful influence of big drug companies on both scientific research and oversight of the drug industry.
UNIDENTIFIED MALE: There are plenty of scientists who do not have drug company connections, and those are the ones who should be evaluating the drugs.
DOBBS: And the "China Syndrome": the export of American jobs to China is escalating and fast. Tonight, I'll discuss the rising cost of our exploding trade deficit with China with two people who are tracking the hundreds of thousands of American jobs lost to one of the world's cheapest labor markets.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, January 11. Here for an hour of news, debate and opinion is Lou Dobbs.
DOBBS: Good evening.
Tonight, as many as 40 people are feared missing after a huge mudslide in La Conchita, California. Local residents say between 30 and 40 people remain unaccounted for. That's much higher than the official estimates.
The mudslide swept away more than a dozen homes in La Conchita. At least four people have been confirmed dead.
Ted Rowlands reports now from the scene -- Ted. TED ROWLANDS, CNN CORRESPONDENT: Lou, it is a very emotional scene as you might expect out here. Rescue workers are working desperately to try to find any signs of life. They say they are still optimistic, even though it's been more than 24 hours.
There have been three people pulled out after spending hours in air pockets in this debris, which is estimated to be 30 feet in width and length and depth, as well. They believe there is a chance that there could be other survivors in air pockets.
As you mentioned folks living in this area believe that there could be as many as 30 to 40 people trapped in this area. Many of them are obviously presumed dead. Another body was pulled out within the last hour.
The official count of missing, though, is between 20 and 27. And again, the hope is they can find someone alive.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: And he was over there helping the boy to get his stuff out of there, and they didn't make it. They didn't make it. Oh, they didn't make it.
UNIDENTIFIED FEMALE: It's just too much. I don't know. I just hope everyone's OK. We're just all praying they're all right.
(END VIDEO CLIP)
ROWLANDS: Very emotional scene, as you heard there. Rescue crews, meanwhile, are using listening devices to try to pick up a hint of sounds at all. They were able to pick up some sounds early this morning, and they're holding on to hope that there could still be people in these air pockets, and for that reason they continue to search.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Some are still being found, so there's always hope. It's not my call when they decide to change tactics, but right now with 24 hours and I'm sure for the next day or so, we're definitely up there looking for survivors. That's the goal. I mean, that's why you're here.
ROWLANDS: It's still a rescue effort?
UNIDENTIFIED MALE: Of course.
(END VIDEO CLIP)
ROWLANDS: This area north of Los Angeles and south of Santa Barbara has a history of mudslides, but Lou, nothing on the scale of this. As you can imagine, people here are shocked and desperate and hoping to find signs of life in that debris pile.
DOBBS: Ted, thank you very much. Ted Rowlands reporting from La Conchita, California.
These winter storms lashing California are now being blamed for at least 19 deaths. The storms dumped huge amounts of rain over Southern California.
Casey Wian reports from Los Angeles.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Southern California received a long-awaited dose of what it's famous for Wednesday: sunshine, a welcome sight after the wettest 15-day period in the area's recorded history, produced some horrifying images, none scarier than the sight of a rescue raft carrying an 8-week-old infant and his mother, capsizing in raging flood waters.
CAPT. SAM MALDONADO, U.S. FOREST SERVICE: Her and the baby were again taken under, and I was trying to yell at her as she was moving downstream, "Hold the baby up. Hold the baby up." And every time I would say that, she would actually listen, and she would try to get the baby up, but it was quite hard for her.
WIAN: Firefighters saved the baby and mother. Both are expected to fully recover.
Scores of others were rescued from floodwaters. Still, the storm-related death toll climbed into the dozens.
Property damage also continues to mount. Stranded vehicles litter the landscape. Businesses are flooded. Hillside homes remain vulnerable to collapse. This Orange County road simply washed away.
Here a 25-foot boulder tumbled through power lines in Malibu. This airport runway is better suited for a boat.
Mountain communities in the Sierra Nevadas are now digging out of heavy snow. Schools are closed. Snow clearing expenses have forced some city governments to declare states of emergency.
FRANK MCCARTON, CALIFORNIA EMERGENCY SERVICES: This was a quick- moving storm that brought in a lot of snow very quickly and rapidly. So it took some people by surprise.
As we go throughout the season, I think the melt-off of this particular snow will be a concern for us as emergency managers.
WIAN: As the storm moved east, floods wiped out roads in Utah, sandbags a seemingly futile last line of defense.
(END VIDEOTAPE)
WIAN: Back here in Southern California the forecast for the next several days is more sunshine, but it will be far from a return to normal, especially for those who felt the full effects of these powerful storms -- Lou.
DOBBS: Casey, thank you very much. Casey Wian reporting from Los Angeles.
As Casey just reported, Utah also suffering from severe flooding. The flooding in Utah, in fact, has washed away a number of homes and swamped buildings with muddy river water. Officials say these floodwaters are unlikely to recede until tomorrow at the very earliest.
AT least one death has been blamed on the floodwaters.
In Alaska, part of a remote Arctic village is without power tonight after a blizzard with hurricane-force winds took down power lines. Temperatures have dropped to 60 degrees below zero. Sixty degrees below zero with the wind chill. Two attempts to airlift repair crews into the village have failed because of the severe storm conditions.
And in Florida tonight, a large sinkhole in Orange City has destroyed one house and seriously damaged another. The sinkhole is more than 100 feet wide. No one, fortunately, injured in the incident.
In Washington, President Bush today surprised Congress and many in his own administration with his nomination for the post of Homeland Security Department secretary.
The president nominated U.S. appeals court Judge Michael Chertoff. He's a former assistant attorney general, one of the architects of the administration's counterterrorism strategy in the days and weeks immediately following September 11th.
White House correspondent Suzanne Malveaux reports.
(BEGIN VIDEOTAPE)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The nomination of Judge Michael Chertoff.
SUZANNE MALVEAUX, CNN CORRESPONDENT (voice-over): President Bush's second pick for homeland security: federal appeals court judge Michael Chertoff.
BUSH: Mike has shown a deep commitment to the cause of justice and an unwavering determination to protect the American people.
MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY NOMINEE: On September 11, 2001, I joined members of dozens of federal agencies in responding to the deadliest single attack on American civilians ever.
MALVEAUX: Chertoff's nomination came as a surprise to most in Washington. He'd been left off the widely circulated short list for the secretary's post. But Sunday morning after the president's bike ride, Mr. Bush quietly called Chertoff from his motorcade to offer him the job.
Bush aides say privately Chertoff is a compromise, considered by administration officials as the anti-Kerik, a reference to President Bush's first pick, former New York police commissioner Bernie Kerik, who withdrew his nomination after the White House vetting process raised questions.
BERNARD KERIK, FORMER HOMELAND SECURITY SECRETARY NOMINEE: To conclude, I want to apologize to my family, my friends, the president, President Bush.
MALVEAUX: The president took no chances the second time around.
BUSH: He's been confirmed by the Senate three times.
PAUL LIGHT, BROOKINGS INSTITUTION: There are going to be no surprises about him, as he moves through this process, and that's clearly an advantage compared to Bernie Kerik.
MALVEAUX: His role as a key figure in shaping the government's legal response to the 11 makes him someone the president can trust.
Chertoff's critics question whether his resume might be too partisan for the job. During the Clinton administration, Chertoff was the chief counsel to the Republican Senate Whitewater Committee that investigated President Bill and Hillary Clinton's Arkansas business dealings, a probe widely seen then as politically motivated.
LIGHT: I don't think it's going to be a major issue. I think the more significant issue is his lack of management experience.
(END VIDEOTAPE)
MALVEAUX: But management experience aside, it is likely he's going to face many other questions regarding his knowledge about responding to emergencies, securing transportation, and protecting the border -- Lou.
DOBBS: Thank you very much, Suzanne Malveaux.
Also today, President Bush called on Congress to pass his proposals for Social Security reform. President Bush warned if Congress fails to act, Americans now in their 20s will retire and find Social Security bankrupt.
Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The president, in panel discussions, said times have changed since Franklin Roosevelt, and Social Security should change, too.
BUSH: Today, Americans fortunately are living longer and longer. I mean, we're living way beyond 60 years old, and most women are working outside the house. Things have shifted.
PILGRIM: The president's basic argument for change is that the system is eventually going to go broke. In fact, the Social Security system is in no immediate danger. It can pay full benefits until the year 2042.
Some economists say the system needs some adjustments as fewer workers support the large number of baby-boomers who will retire in coming decades, but others point out changes do not have to be on the scale the president is proposing.
MARK WEISBROT, CENTER FOR ECONOMIC AND POLICY RESEARCH: The changes that will be needed, according to the numbers that the president is using, the changes that would be needed just to keep it in balance for 75 years or indefinitely are smaller than the changes we had in each of the decades of the '50s, the '60s, the '70s and the '80s, and people didn't complain then.
PILGRIM: But many Americans are concerned. A recent poll found 71 percent felt the system was in crisis or had major problems, while 24 percent said it had minor problems.
One of the more controversial proposed changes is to allow younger workers to invest some of their Social Security payments into personal invest accounts, but even those who support that measure agree it won't take care of the long-term shortfall and will cost up to $2 trillion to implement.
PETER ORSZAG, BROOKINGS INSTITUTION: One of the other myths is that the private accounts that the president is proposing actually do nothing to help the long-term solvency of Social Security. Instead, he's at least floating the idea of changing the way that Social Security benefits are calculated so that you get less initially when you retire than under the current system. That's what does all of the heavy lifting. The individual accounts are sort of a sideshow from that underlying fact.
(END VIDEOTAPE)
PILGRIM: And President Bush said that investment choices for private accounts would be limited to "steady, reliable stock and bond funds." Critics say the risk of people mismanaging the retirement is simply too great -- Lou.
DOBBS: I love the idea that it's a sideshow, those private accounts, when we're talking about $2 trillion -- as much as $2 trillion -- in transition costs.
Kitty, thank you very much.
Kitty Pilgrim.
Well, the China syndrome. It's already wiped out a staggering 1.5 million American jobs. And guess what? The problem is worsening. I'll be talking with two people tracking this alarming trend.
Also tonight, testing the Pledge of Allegiance. Why some school children don't want to stand for the Pledge of Allegiance.
(COMMERCIAL BREAK) Tonight, an astonishing new study on our worsening trade deficit with China and its crushing impact on working men and women in this country. This study finds our trade deficit with China has risen more than 20-fold over the past 14 years, and, in the same period, 1.5 million American people have lost their jobs.
Lisa Sylvester reports from Washington.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): John Wentworth's family has been making furniture since 1947 in Manset, Maine, but the last five years, he has had to fight to keep his company alive. He let go of 50 employees, a fifth of his staff. The source of the problem: competition from China.
This furniture is extremely cheap. It's inexpensive to produce furniture in China, and they are knocking off all versions of furniture that are presently made in the United States, all styles.
SYLVESTER: A new report finds Maine lost more jobs to China as a share of total state employment than any other state. Arkansas and North Carolina were second and third on the list. Since 1989, the number of job opportunities in the United States lost to China has been steadily increasing, from 95,000 to more than 1.5 million in 2003.
At the same time, the U.S. trade deficit widened. With U.S. imports from China far outpacing U.S. exports. The trade deficit grew from over $6 billion in 1989 to $125 billion in 2003.
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: We're importing almost entirely manufactured goods from China. What we export to them are commodities. We sell them grain. We sell them timber. We sell them scrap steel. So it's like we have become almost a developing country in terms of what we trade with China.
SYLVESTER: But not everyone agrees with the study's findings. The CATO Institute points out the U.S. economy thrived during the '90s.
DAN GRISWOLD, CATO INSTITUTE: What's happened during that time? The U.S. economically has expanded faster than most other industrialized countries. We've added jobs. Our living standards have risen. Trade with China is a blessing to the U.S. economy.
SYLVESTER: ... Or curse for John Wentworth, who each year deals with new struggles for his company.
(END VIDEOTAPE)
SYLVESTER: Outgoing Commerce Secretary Don Evans is leading a delegation in China this week. The administration has signaled its willingness to increase pressure on China to appreciate its currency and increase export tariffs on apparel and textiles -- Lou.
DOBBS: Thank you very much.
Lisa Sylvester.
Coming up next here, how the United States can help deal with the exploding trade deficit with China and save those American jobs. I'll be talking with the author of this important new study, Robert Scott of the Economic Policy Institute and Jack Davis of the Save American Jobs Association.
That brings us to the subject of our poll tonight. The question is: What do you think is the greatest threat to our economic stability -- the federal budget deficit, the trade deficit, Social Security or Medicare/Medicaid? Cast your vote at loudobbs.com. We'll have the results later here in the broadcast.
A surprising story tonight from Spotsylvania, Virginia. Students in the county schools will no longer be required to stand when they recite the Pledge of Allegiance. The school board reached the decision after a 12-year-old middle school student Gabriel Allen refused to stand for recitation of the Pledge of Allegiance because he says he disagrees with U.S. government policies. Virginia law requires the Pledge of Allegiance be a part of each school day, but the law allows students to remain seated if they wish to abstain.
In Iraq, a Marine was today killed by insurgents in the Al Anbar Province west of Baghdad. Insurgents also killed 20 Iraqis in a series of attacks designed to disrupt preparations for the Iraqi elections. Defense Secretary Donald Rumsfeld today declared that just holding elections in Iraq will be what he called an enormous success.
Senior Pentagon Correspondent Jamie McIntyre with the report -- Jamie.
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT: Well, Lou, on a day when Iraq's president acknowledged that there will be -- in his words -- pockets of Iraq where people will not be able to vote in this month's elections, Defense Secretary Donald Rumsfeld, who last fall famously remarked that not quite perfect elections would be better than nothing, brushed aside suggestions that the elections may not be seen as legitimate.
In a joint appearance today with his Russian counterpart at the Pentagon, Rumsfeld insisted that just having elections in Iraq is what he called an enormous success and victory.
(BEGIN VIDEO CLIP)
DONALD RUMSFELD, SECRETARY OF DEFENSE: This has been the coalition's goal, an Iraq run by Iraqis and secured by Iraqi security forces. The Iraqi people in their interim government are making progress in that direction, although there is still a distance to go.
(END VIDEO CLIP)
MCINTYRE: The insurgents are now using bigger, more powerful roadside bombs in their campaign of intimidation. Pentagon sources tell CNN the blast that destroyed a heavily armored fighting vehicle last week killing seven U.S. soldiers came from a 200-pound explosive. Some U.S. officials are now warning of even more spectacular attacks leading up to Election Day, prompting fears that many Iraqis will stay away from the polls.
While the situation in Iraq has some calling for the-- for Iraq to declare victory and go home, Pentagon officials insist their strategy is to win in Iraq, not just to cut and run. One officials tells CNN that the elements of winning include a truly representative government, with a secure economy, strong human rights protections, but he said the most important element remains a capable Iraqi military that can carry on the war against the insurgents.
Now, in today's briefing, Defense Secretary Rumsfeld went out of his way to deny a Newsweek report suggesting that U.S. special forces might be used to train Iraqi death squads to hunt down insurgents, perhaps even crossing into Syria where it's believed some insurgent leaders are directing the attacks. Rumsfeld called that report nonsense, insisting the Pentagon doesn't do things like that. Somebody, he said, has been reading too many spy novels -- Lou.
DOBBS: Jamie, thank you very much.
Jamie McIntyre.
Still ahead here, swept to sea by the deadly tsunami. How this man managed to stay alive in the middle of the Pacific Ocean for two weeks. That's next.
And then, several new proposals to reform Social Security. Does it need reforming? Is it a critical issue? Senator John Sununu will tell us why his plan is different from the others and why he says it is the very best.
(COMMERCIAL BREAK)
DOBBS: An incredible story of survival tonight. An Indonesian man was swept into the ocean by the tsunami, and he survived for more than two weeks, the longest of any survivor who's been found alive at sea.
Andrew Brown reports.
(BEGIN VIDEOTAPE)
ANDREW BROWN, CNN CORRESPONDENT (voice-over): Many ships had passed him by during his ordeal. Finally, this one, the Al Yamamah, spotted him, turned around and delivered him to safety.
Twenty-one-year-old Ari Afrizal walked off the Liberian- registered vessel on to Malaysian soil after spending at least two weeks adrift in the Indian Ocean. On December 26, Afrizal was swept out to sea off Indonesia's Aceh Province after trying to outrun the lethal waves that crashed ashore that morning.
ARI AFRIZAL, SURVIVOR (through translator): The first day, I clung to a piece of wood. The second day, I made it to a small fishing vessel. I was in a small fishing boat for four days before I managed to get on a raft.
BROWN: Afrizal drifted on the raft for more than a week. Although he found water and clothes on board, his spirits began to fade because ship after ship failed to spot him floating helplessly.
Finally, the Al Yamamah came to the rescue.
AFRIZAL (through translator): I then waved at them because I knew I was safe.
BROWN: Safe, but very, very hungry.
AFRIZAL (through translator): I managed to survive on the flesh of coconuts for 12 days. For three days, I didn't get anything to eat.
BROWN: An ambulance was standing by when Afrizal arrived at Malaysia's Port Clang. He sustained leg injuries, but that may be the least of his worries. He doesn't know the fate of his own family. He has yet to find out whether they are safe or lost in the ruins of Aceh.
Andrew Brown, CNN, Hong Kong.
(END VIDEOTAPE)
DOBBS: Next, the future of Social Security. Senator John Sununu has a plan to reform Social Security. Critics call the plan risky. The senator calls it a tremendous opportunity. He's our guest.
And our special report, "Overmedicated Nation." Research made to order? Are the big drug companies wielding far too much influence over scientific research and oversight? Our special report coming right up.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.
DOBBS: In just a moment, Senator John Sununu will join us, but, first, these stories.
These incredible pictures are just in to CNN tonight of a small plane that crashed just outside Orlando, Florida. These pictures taken by our affiliate WKMG from their news helicopter. This Cessna crashed into a utility pole. It narrowly missed cars and homes, as you see there. The plane was trying to make an emergency landing on the golf course. The two people aboard were seriously injured, as you might expect.
In Canada, a second case of mad cow disease has been reported. A second case in two weeks. Officials today confirm the new case in Alberta, but said the animal has been kept out of the food chain. This is only Canada's third case of the disease in a decade.
NASA is making last-minute preparation of tomorrow's launch of the Deep Impact Spacecraft. Scientists hoping Deep Impact will reveal secrets about comets when it collides with a comet, Temple 1, on the 4th of July. This mission includes a six-month, one-way, 268 million- mile trip.
And astronomers are confident the Hubble Telescope has captured the image of a planet beyond our solar system. This new image shows the celestial body which has not yet officially been declared or named a planet.
As we've been reporting, President Bush today promoted his plan to reform Social Security using private investment accounts. My guest tonight has introduced his own proposal to reform Social Security. Senator John Sununu wrote the Social Security Savings Act with Congressman Paul Ryan of Wisconsin.
And Senator Sununu joins us tonight from Washington, D.C.
Good to have you with us, Senator.
SEN. JOHN SUNUNU (R), NEW HAMPSHIRE: Thanks, Lou.
DOBBS: Let's begin before we go to your proposals or even the president's, for that matter, to the issue of just how critical is it that a large, large-scale reform be undertaken right now?
SUNUNU: Well, I think it's important that we address the issue. It's a looming crisis. We all know the demographics. Baby boomers will retire, but we've gone from 30 workers supporting each retiree to just three workers supporting each retiree today. In the next 15 years, that will go down to two.
Those are just facts. It's the demographics. We don't have to deal with it today, but, if we just keep putting it off, we're going to put our children and grandchildren in a very tough position, because the system will be bankrupt in 2042. But more importantly, we start paying out a lot more than we collect in taxes in just about 15 years.
So, look, we can deal with it now or later, but we owe it to our children to take on a tough issue as soon as possible so that we don't have to make a tough decision in a fiscal crisis.
DOBBS: Senator, as you know, the president is out stumping for all the world looking like this an election campaign. For some in the Republican party it may turn out to be just that on Social Security reform. As Treasury Secretary John Snow on Wall Street, talking with corporate America and frankly the reception they're receiving, whether it be Wall Street or corporate America, which stands to profit handsomely, you can decide about the degree from these private investment accounts, they're not thrilled. What makes you think that your plan would be any other sellable than that of the president's to this point? SUNUNU: I don't care what Wall Street thinks about it. I care about whether it's a fiscally sound plan and whether or not it's the right thing for individuals. A big part of the reason to make the changes is because we want a system where people own their own retirement savings, where they can earn a very strong rate of return, much greater than the one percent that a worker today could expect to get from Social Security. We want them to have something they can leave for their children when they pass away, creating wealth and creating real economic opportunity for middle and lower-income workers, that's one of the biggest reasons to take action and one of the biggest differences the kind of proposals I have will make for those workers. Look, Lou, you and I are doing fine. We have IRAs and 401(k)s, but there are a lot of people in America, lower and middle income that haven't had the opportunity to take advantage of these personal retirement accounts.
DOBBS: That's exactly right. The question becomes, with a pledge that is Social Security, for those in this country who have worked throughout their lives for Social Security, every plan, one way or the other has to be affected by either a cut at benefits at some margin, none that I've seen has any -- has any ability to diminish the fact that that will occur, or we have to raise taxes, or we have to take on debt. Which way do you see as the proper way to go with your plan?
SUNUNU: In the proposal that we have, we provide financing through three mechanisms. One, we control government spending, and it may sound like an old idea, but it's the right idea.
DOBBS: I think it's a wonderful idea, Senator, a tremendous idea.
SUNUNU: Instead of growing government at 4.6 percent, we put a legal cap at the growth of government for the next ten years at 3.6 percent, so we're still growing government, but at the rate we had in the 1990s, and I think that's very achievable. Second, when you have higher levels of private savings, you'll have a better interest rate climate, more corporate investment and higher profits. We take those higher corporate tax revenues and put them into the Social Security trust fund. Third, we do have additional borrowing, about $600 billion over the eight to ten-year time frame we needed. I think that's a fair trade to get rid of a $12 trillion unfunded liability, I think your grandchildren or children would say, yes, that's a good financing plan.
DOBBS: We're in a strong, competitive environment, because even though $600 million is a lot, it's better by roughly two thirds than $2 trillion. The other part of this issue, it seems, Senator, that needs to be cleared up is the way in which we are going to guarantee the same level of benefits to those in the system today, as would have received under the existing system. Does your plan do that?
SUNUNU: It does. We keep a guaranteed minimum benefit for those that choose to participate in the personal retirement accounts. It's important to remember that they're optional. If you don't want to participate you don't have to, but for a younger worker, to be able to put aside $2,000 a year, or $1,500 a year for 35 or 40 years they'll have a much greater benefit than the guaranteed minimum benefit and a much greater benefit than they could expect today. We don't make any change in benefits and don't make any options available at all, no changes for anyone 55 or older.
DOBBS: And after the administration and the Senate and the Congress resolve Social Security, you can take on the minor item of all of the issues surrounding Medicare and Medicaid?
SUNUNU: Well, you put on your screen, your poll question for tonight. It's important to remember that, as you point out, Medicare And Medicaid, they're -- the issues of their costs, their near and long-term costs are very great as well. Medicare/Medicaid, Social Security, those are the things that most affect our fiscal solvency. That's why we should take them on. It's a tough issue, I know, a lot of people say you can't get elected talking about it, I got elected, Lindsey Graham got elected, Elizabeth Dole got elected, committed to take on a tough issue like Social Security.
DOBBS: I think that's commendable and one of the most difficult subjects to analyze, to report on, the dialogue, the conversation, the debate is critical to the interests of the country. We thank you, Senator John Sununu.
SUNUNU: Thank you, Lou.
DOBBS: Taking a look now at some of your thoughts on the issue of the flood of illegal aliens into this country, that another issue this administration is taking on -- so-called immigration reform.
Carol Harmon in Palestine, Illinois, "Lou thank you for reporting on illegal immigration and the outsourcing of jobs. Our politicians are selling our country to the highest bidders."
Jackson Franco Handmachen of Norcross, Georgia. "I'm an American citizen who is totally frustrated and disgusted with the amount of money our nation spends to subsidize illegal aliens. From indigent to medical facilities to job losses, illegal aliens are bad for America."
And B. Fairbanks in Fredericksburg, Virginia, "How can we keep terrorists out when we can't keep illegal aliens from crossing the border?"
And Linda McDaniel in Evansville, Indiana, "it is absolutely unfair to all the law-abiding legal immigrants that come to this country to continue to pay subsidized housing, welfare, food stamps, and medical care for those who broke the law to be here. The American dream that illegal aliens are seeking is fast becoming the American nightmare."
E-mail us your thoughts at loudobbs@CNN.com.
Coming up next here the Bush agenda. A former Bush adviser will be here to tell us how the president plans to reform Social Security, reform immigration laws, oh, yes and fix the tax code all the while.
Then the China syndrome, how our exploding trade deficit with China is putting even more American jobs at risk. That is in addition to the million and a half lost. The author of a stunning new study will be here along with a man fighting to keep American jobs in this country.
And overmedicated nation, our special report, how drug companies are influencing research that doctors use to advise their patients, how drug companies are influencing the oversight of the industry itself. Our special report next.
(COMMERCIAL BREAK)
DOBBS: As we reported to you early in the broadcast, an alarming new study out today, a study that finds 1.5 million American jobs lost from 1989 to 2003 because of our trade policies with China specifically. Joining me from Washington is Robert Scott, the author of the study for the Economic Policy Institute, and from Buffalo, New York, I'm joined by Jack Davis as well. He has firsthand experience on the impact of companies choosing to manufacture products in cheap foreign labor markets, founder of the Save American Jobs Association. Good to have you both here.
Let me begin with you, Robert. This study, as you know, we report and have reported here for some time extensively on these loss of jobs to cheap markets, but to qualify this, 1.5 million jobs lost to China specifically over a 14-year period, were you stunned by the scale of what you found?
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: Well, not only is the overall scale shocking, Lou, but the acceleration is just terrifying. The rate of job loss to China per year has doubled just in the last two years since China has joined the WTO.
DOBBS: Well, with that acceleration, and obviously with the second term, the Bush administration means to continue the policies that it carried out during the first term, and which were the same policies carried out by two terms of the Clinton administration. Is there any hope that you can see of a reversal in course here?
SCOTT: Well, I think that there's two things that we can do. First, we can cajole the Chinese into making their currency much more fairly valued. They've been buying up hundreds of billions of dollars to depress the value of their currency. This is not only hurting the United States, it's hurting the Europeans as well. And I think it's time that Europe and Japan and the U.S. got together to put very high levels of pressure on the Chinese to re-value their currency.
DOBBS: Jack, you're a businessman. You employ people, you've lost jobs in business to cheap competition from China. Others call it globalization. I'm sure you have a separate word for it. But you also ran for Congress, trying to save jobs and farms and business, and the voters didn't buy it. Is it your sense that Americans just simply don't care what happens to middle-class working men and women in this country?
JACK DAVIS, SAVE AMERICAN JOBS ASSOCIATION: No, I don't take my failure to win the election had anything to do with that. It was a gerrymandered district with a lot more Republicans in it than Democrats. When I got my message out, they voted for me. I started with very low numbers and ended up with 44 percent of the vote, and over 115,000 votes. So people get the message when you get it out. You are doing a great job. You are my number one fan. We are on the same mission. And let's work together. So keep it up.
DOBBS: Well, I like what you're saying, but I don't think I can get involved in your politics, nonetheless.
DAVIS: No, this is -- Save American Jobs Association is nonpartisan. This is a grassroots organization I've just started to get the message out, and being here tonight helps me, and it helps America. I disagree with...
DOBBS: Let's talk -- sorry, go ahead. Go ahead, Jack.
DAVIS: I say, I disagree with some of those numbers. I thought Bob's number was low. I used the figure of for every $1 billion in sales, we lose 13,000 jobs. So I think we've lost over two million jobs over the last period, eight years or 10 years that Robert presented.
DOBBS: Well, one of the numbers -- and I guess I should let you respond to that, Robert. Jack is, I think, deploring your conservatism in your research here.
SCOTT: That's fine. I'll take two million jobs anytime. I think the point is that we're suffering massive job loss, and even more importantly, China is moving rapidly up the product ladder. Instead of just exporting textiles and apparel to us, now it's advanced technology products and automobile parts. And that's really eating the heart out of American industry.
DOBBS: China accounts for the entire $32 billion of the U.S. trade deficit in advanced technology products. I mean, that is stunning, because many of the U.S. multinationals, economists, part of the great orthodoxy on so-called free trade suggests we are technology-, services-driven economy and we can't be bothered with things like manufacturing and mid-level technology. We're more sophisticated than all of that. That's stunning, Robert.
SCOTT: Well, I think that's right, Lou. And I think the problem is that in particular, the zeal to bring China into the WTO was designed to help multinational companies maximize their profits. And it ignored the national interest of the U.S. as being a location for production and value creation, and the creation and maintenance of good jobs and healthy communities.
DOBBS: Let me ask you both, what do you think must be done right now -- and I'll start with you, Jack -- to reverse this trend?
DAVIS: OK. We need a balanced trade. And to get balanced trade, we need tariffs to balance the trade. If China wants to sell to us, they have to buy an equal dollar value of product from the United States. That would balance the trade and solve all our problems, and create jobs in the United States. One of the other factors here that I wanted to mention, it's not just this money going overseas to China. They're coming back and buying our companies. Last week, it was announced that IBM selling their PC division to China. And there was an article in "The Wall Street Journal" indicating that they may buy Unocal. These are crown jewel companies of the United States, and we're buying trinkets from them and they're buying crown jewels of our corporations. This is wrong.
DOBBS: Jack, I may have misspoken earlier. I may be able to get involved in your politics.
OK, Robert, let me ask you this.
DAVIS: Thank you.
DOBBS: Your best suggestion for a policy change here that will staunch the bleeding and provide some assurance. The idea that our middle class, our working men and women in this country can't compete with labor that is making a 20th or even less than they are, not enjoying the standard of living that we have come to think as our birthright as Americans, what in the world are we going to do?
SCOTT: Well, Lou, we've already talked about the exchange rate. I think that's critical. But beyond that, I think we have to recognize that China is the worst violator of human rights in the world. And they're not paying their people. They're preventing them from joining labor unions. This is a tremendous subsidy to the cost of production, and we have got to compel China to open up its economy to the modern world of free labor rights.
DOBBS: Robert Scott, Jack Davis. Gentlemen, we thank you for being here.
DAVIS: I'd like one comment...
DOBBS: I'm sorry, Jack, we've got to run, partner. I appreciate it.
DAVIS: OK. Listen...
DOBBS: You've been in politics too long already, I think.
A reminder now to vote in tonight's poll -- what do you think is the greatest threat to this country's economic stability? The federal budget deficit, the trade deficit, Social Security or Medicare and Medicaid? Cast your vote at loudobbs.com. We'll have the results coming up right here on the show in moments.
More now on our series of special reports this week on our "Overmedicated Nation." Tonight, conflicted science. The Food & Drug Administration often relies on the National Institutes of Health for scientific information and research, but revelations about NIH scientists and their financial ties to the drug industry have cast doubt on some of their recommendations. Now the NIH is promising big changes in the way it operates, changes aimed at reassuring what is increasingly a skeptical public that its science can't be trusted. Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): The advice a patient gets from a doctor is some of the most important they may ever receive. In the past year, the public has been given reason to doubt some of that advice.
Investigations reveal that the panel which writes the guidelines on the use of cholesterol drugs has financial ties to the makers of those drugs.
MERRILL GOOZNER, AUTHOR, "THE $800 MILLION PILL": Eight out of the nine people who were involved in writing the guidelines had relationships with the very same statin manufacturers. In fact, one of the eight was a high-ranking official at the National Institutes of Health.
TUCKER: Over the last five years, sales of cholesterol drugs have risen by two-thirds, to more than $15 billion, according to IMS Health.
The problem is not limited to NIH's cholesterol panel. Some 200 scientists have relationships with private industry.
JEROME KASSIRER, AUTHOR, "ON THE TAKE": What can we possibly do about this? The first thing I think we should do about it is not allow scientists who are involved in clinical trials of certain drugs have any financial connection to the companies that make those drugs.
TUCKER: Following an internal investigation, the head of the National Institutes of Health, Dr. Elias Zerhouni, promised change, back in May of last year. Eight months later, the NIH says change is coming, soon.
MICHAEL BOTTESMAN, NIH: Within several weeks, we will have regulations which are the strictest that I'm aware of any place. There will be a moratorium on consulting, there will be restrictions on the activities of our highest-level officials. There will be a whole series of changes, which should absolutely reassure the public that even the occasional error made at the NIH will not be occurring in the future.
TUCKER: But don't count the drug industry out just yet. After all, two once tough congressional watchdogs have already been domesticated by the industry.
(END VIDEOTAPE)
TUCKER: Billy Tauzin, former representative from Louisiana, now the head of a drug lobbying group known as Pharma, big, heavyweight group. And former Pennsylvania Rep Jim Greenwood, who was advocating no financial ties between scientists and drug companies back in the summer in Congress, Lou, now works as the top lobbyist for the biotech industry down in Washington.
DOBBS: Providing perhaps a little oversight over Congress on behalf of the pharmaceutical industry? That's not the way it works, is it?
(LAUGHTER)
TUCKER: No, I don't think so.
DOBBS: Thank you very much. And the sooner they can get this fixed, the better off we all are. Thank you, Bill Tucker.
Following up now on a story that we did not report last night. A Mississippi Public Library Board has reversed its ban on comedian's Jon Stewart's satirical book titled "America (The Book)." The library board voted to ban that book, because it contains images of the Supreme Court justices' faces superimposed on nude bodies. The board later reversed its decision after receiving e-mails and calls from all over the country criticizing the ban. Wal-Mart has also declined to stock that book out of its sense of proper taste.
Well, the Bush agenda, when my next guest is here, he'll tell us that doing nothing about Social Security isn't an option. And he'll be explaining the administration's views on immigration reform and what we have to do with the tax code. I'll be talking with former special assistant to the president next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: President Bush has laid out an aggressive agenda for his second term focusing on some of the most controversial issues facing the country. Today the president campaigning for major reforms to Social Security, other of his top priorities include tax reform, tort reform, homeland security. My guest tonight says a critical part of homeland security reform is the need for tougher immigration laws. Ron Christie served as adviser to the president and Vice President Cheney. Joining us here in New York. Good to have you with us, Ron.
This is an ambitious agenda by any definition for a second-term president. The idea, the taking on Social Security we had -- and I'm sure you heard Senator Sununu with his own version of the proposals. This plan, why is he taking it on with this -- with all of the deficits and debt we're facing, $2 trillion for a transition?
RON CHRISTIE, FMR. WHITE HOUSE ADVISER: Because, Lou, the alternative of doing nothing will cost us more over the long haul. Right now Social Security has a $10 trillion unfunded liability that we're going to impose whether we do anything or nothing at all. So what the president has said is that we need to have a comprehensive reform package for Social Security, we need to shore up the system for those who are like my age and your age..
DOBBS: Thank you for including me in your age.
CHRISTIE: I had to, who are still in the workforce and still have many years in the workforce but at the same time making sure that those seniors who were at or near retirement age receive all their benefits. What this issue is all about and why the president has taken this on is it's irresponsible for the government to recognize there's a short fund and unfunded liability and do nothing to reform the system.
DOBBS: What about the unfunded liabilities in Medicare and Medicaid?
CHRISTIE: Let's look at Social Security first.
DOBBS: I mean, does that mean that on the basis of unfunded liabilities, we're going to take on gargantuan challenges here?
CHRISTIE: What the president has clearly articulated today and what he will continue to articulate in the days to come is that it's irresponsible for children and those in the workforce now, who are in their twenties and thirties who will have not anywhere near the same level of benefits as today's seniors. What the president wants to do -- let me finish this...
DOBBS: I don't want to hear a recitation.
CHRISTIE: No, no, it's not a recitation but it's important that younger workers have an ownership and an opportunity to have something...
DOBBS: As we say here that goes without saying.
CHRISTIE: Absolutely.
DOBBS: And here's the Concord Coalition coming out with their full-page ad supported by people -- I know -- I suspect I know I certainly respect these folks, Bob Kerrey, Pete Peterson, Bob Rubin. They're saying, whoa!
CHRISTIE: I agree with a lot of what the Concord Coalition has to say. It's irresponsible to take out more loans to leverage the future without finding a way to have a solvency for the system right now and I think that's what the president is doing.
DOBBS: Let's go to tort reform.
CHRISTIE: Tort reform, if you look at our small businesses, if you look at the costs of health care across the United States, tort reform is necessary to bring down some of these litigation costs. My wife goes to her OB-GYN, she has to pay $10 in addition, they hand her a flier, because they have to have a malpractice insurance premium. It's too expensive.
DOBBS: But why not focus, first, on malpractice itself and what the medical profession is doing. 100,000 people die of medical mistakes every year in this country. Why does it have to start there? Don't you think people should be entitled to be compensated, if one can be compensated, materially for physical damage?
CHRISTIE: Lou, look what we're doing right now. We're having that debate. The president has laid down a marker saying we should have tort liability and tort reform, but I agree with you, medical malpractice is a serious problem, and those who have been harmed and aggrieved should have legal redress in the courts.
DOBBS: Immigration reform, again, condition preceding. Why not border security before we even begin talking about what to do with our immigration laws?
CHRISTIE: You look at border security, I agree with you. I actually had a meeting with the commissioner of the border patrol today who said that one of our number one homeland security issues is making sure that our borders are sealed and we have proper immigration. I agree with that. It's one of those debates we'll have in the days to come in the Congress and with the president leading the way.
DOBBS: I hope on that he is listening well.
CHRISTIE: I trust he is.
DOBBS: Ron Christie, good listening to you, as always.
CHRISTIE: A pleasure being here.
DOBBS: Still ahead, the results of our poll tonight, a preview of what's ahead tomorrow. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The results of tonight's poll, the majority of you, 53 percent say the federal deficit is the greatest threat to this country's economic stability.
We thank you for being with us tonight. Please join us here tomorrow. How the National Guard plans to improve its recruiting while the nation is at war against terror. The head of the National Guard will be our guest in a face-off on the real impact of our trade policies with China. For all of us here, we thank you for being with us. Good night from New York. "ANDERSON COOPER 360" is next.
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