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Lou Dobbs Tonight
Giuliani, Edwards Out; Contest Down to Four Major Candidates; More Attempts to Stimulate the Economy
Aired January 30, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Wolf, Thank you.
Tonight Rudy Giuliani, John Edwards abandoning their pursuit of the presidential nomination, the presidential contest now has four principle candidates, two from each party, and Ron Paul, of course. We will have complete coverage of all that, the best political analysis anywhere, all the day's news and much more straight ahead here tonight.
ANNOUNCER: This is a special edition of LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, January 30. Live from New York, Lou Dobbs.
DOBBS: Good evening everybody. Over the past hour, Rudy Giuliani has dropped out of the Republican presidential race and endorsed Senator John McCain. Giuliani's announcement comes after his defeat in the Florida primary, a primary that Senator McCain won and tonight Senator McCain and his chief rival, Mitt Romney, face off right here on CNN in the final GOP debate before next week's Super Tuesday contest.
In the Democratic race, former Senator John Edwards today ended his fight for his president's -- his party's presidential nomination. Edwards did not endorse any candidate. We have extensive coverage for you tonight and begin with Dana Bash on the Republican race at the Ronald Reagan Presidential Library in Simi Valley (ph), California, the site of tonight's debate -- Dana.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well Lou it is the site of tonight's debate and as you can probably see behind me the California governor, Arnold Schwarzenegger is actually addressing reporters here. Interesting to note we are talking about endorsements, CNN is told that Arnold Schwarzenegger is likely to actually endorse John McCain or at least he's in discussions with the McCain campaign about giving him an endorsement.
It could be obviously a huge, huge thing for John McCain if that happens in this enormous Super Tuesday state of California, but the big news that we do know about of course is what happened here today, and that is a very, very different race right now with regard to the Republican presidential race because as you said Rudy Giuliani officially ended his bid for the White House and he threw his weight behind his good friend John McCain.
(BEGIN VIDEO CLIP) RUDY GIULIANI (R), FORMER PRESIDENTIAL CANDIDATE: I'm hopeful that we can secure his nomination very soon so we can unite our party and then begin the process of uniting our nation. So I am very proud to endorse my friend and fellow Republican, a hero, John McCain or Arizona for president of the United States of America. God bless you, John.
(APPLAUSE)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I not only thank him for his friendship, I want to thank him for his leadership of America. I want to thank him as we race (ph) to struggle to secure the presidency of the United States. It will be a clear choice this November and I believe that my life has prepared me a life of service and a life of dedication to lead this nation in the transcendent challenge of the 21st century, the great threat of evil of radical Islamic extremism.
(END VIDEO CLIP)
BASH: Now there you heard John McCain talking as if he is getting closer to the Republican nomination. Obviously, he is not there yet, he has a long way to go in terms of the 21 states that will be voting next Tuesday. But what is important and one of the many things that are important, Lou, about this endorsement that he got from Giuliani is the fact that Giuliani has a very large organization in a lot of these key states that will be voting in New York, in New Jersey, in Connecticut, in Missouri, and Giuliani made very clear today in public as we're told he has done in private that he is going to work very hard to get all of those people, whether it is people who raise money or people who get out to vote, to get behind John McCain and that is one of the main reasons why it is so crucial for John McCain to get this nomination, to get this endorsement, I should say, today -- Lou.
DOBBS: Now Dana I think we also should be perhaps a little clearer on the fact that based on the mathematics and the way these delegates are going to break out, that as we start in the media continuing to sort of press for a definitive candidate from either party, the reality is, there won't be the delegates to declare any one of these candidates as having succeeded in winning the party's nomination as a result of Super Tuesday. The mathematics just don't hold up, do they?
BASH: Well it's going to be interesting to see. It's pretty unclear. You're right in that you know right now it's pretty close in terms of the numbers of delegates, but there are over 1,000 delegates at stake on that day. Some have to bore our viewers with numbers, but...
DOBBS: Well go ahead, bore us because I think those numbers are very important. Those numbers are very important.
BASH: OK.
DOBBS: The reality is that in that race Super Tuesday, we are going to see the on the Democratic side, still a close contest, arguably one that will be even tighter than it is today and the same with Mitt Romney and John McCain. It's highly unlikely, certainly I guess it's reasonably possible that we see a swamp, but highly unlikely, don't you think?
BASH: It is going to be close, there's no doubt about it, you know and as I started to say some of these states like New York and New Jersey are winner take all like we saw in Florida yesterday. This state where I am in California is much, much, much more complicated in terms of how the delegates are appropriated, but you know what is interesting you mention the fact that Mitt Romney and John McCain, one thing that we shouldn't forget about is that there is still another person in this race and that is Mike Huckabee and even if you talk to Mitt Romney's campaign officials, they admit that part of the problem for Mitt Romney is that because Mike Huckabee is still in the race and he is campaigning as the Christian conservative now Mitt Romney is doing the same to be all alternative to John McCain, that could sort of split the vote, at least siphon some votes off of Mitt Romney, so that could change the dynamic on Super Tuesday. There's no question.
DOBBS: And we should not forget Ron Paul either.
BASH: We should not forget Ron Paul, that's a very good point, and he has been chipping away at votes from all of these candidates throughout all of these contests.
DOBBS: A reminder, when you're worried about being dull or boring with those numbers, this is the broadcast, remember our audience wants us to dare to be dull just so we're enlarging the body of public knowledge and we thank you for doing so here tonight. Dana, thank you very much, Dana Bash.
BASH: Any time.
DOBBS: Governor Mitt Romney today declared he is confident of winning the backing of some of Giuliani's supporters, Romney telling CNN he believes he can unite the Republican Party around his candidacy. Romney also emphasizing he thinks he is best qualified to tackle the country's economic problems. Despite Romney's confidence, exit polls from the Florida primary show he is in a very tough battle with Senator McCain. Romney and McCain next week face the biggest test of the campaign so far, Super Tuesday. Bill Schneider has a look ahead.
(BEGIN VIDEOTAPE)
(APPLAUSE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): John McCain's victory in the Florida primary was highly personal. He did well among Florida voters who said personal qualities were more important to their vote than issues.
MCCAIN: I will always put America, her strength, her ideals, her future before every other consideration. SCHNEIDER: Republicans were voting for him. That could be a problem for McCain as the campaign moves forward to Super Tuesday. Voters across the country may not know a lot about McCain and he may not have the resources to reach them. McCain won Florida without carrying conservative voters, that's a problem. Mitt Romney has the resources to sell himself across the country as a conservative alternative to McCain. He did it in Florida where it almost worked.
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Select somebody who can win, but just as important select somebody who can bring together the streams of conservative thought to (INAUDIBLE) successful party and a successful nation.
SCHNEIDER: Notice how the Democratic contenders have been running under the banner of change? Well guess what, a lot of Republicans want change as well. A third of Florida Republican voters said they were dissatisfied with President Bush. Anti-Bush Republicans went big for McCain. That could be a problem for McCain in the Republican primaries where Bush retains the loyalty of most Republicans. But if McCain were to win the nomination, he might try to present himself as a candidate of change. No easy feat for a Republican.
(END VIDEOTAPE)
SCHNEIDER: The polls also shows McCain has some issue problems, one illegal immigration where Republicans give him very low ratings although the exit polls showed he did very well with Latino voters in Florida. The other is the Iraq issue, that wasn't a big issue in the Republican primaries, but if McCain gets the Republican nomination it will put the Iraq issue right in the center of the General Election campaign -- Lou.
DOBBS: Bill Schneider, is it time, if we're going to continue in the national media to parse the black vote, the Latino vote, evangelical Christians? I mean are we going to get to the point here now that we're going to start talking about the white male vote, the Catholic vote, you know the barbarian vote? I mean where are we in the national media headed with this slicing and dicing and to what degree are we adding to this sort of a caldron of group and identity politics that is becoming something of a revolting approach I think on the part of many voters or likely voters in this country?
SCHNEIDER: You are quite right. The voters are revolting against this and there is a very powerful demand this year for a uniter. Someone who can deliver what Bush promised and really failed to deliver. He said he would be a uniter not a divider. That is part of the reason why McCain has done very well in the Republican primaries because he is seen as someone who can reach across all those barriers and that's one reason Obama has a lot of appeal to Democrats. Because he is not a very partisan figure, he's a post partisan figure, to use the jargon. They are both, Obama and McCain, both figures who cut across all of those barriers, those lines that turn out to be not very big barriers at all.
DOBBS: Bill Schneider, you have to forgive me. When I hear the expression post partisan, it's almost as if we are describing Senator John McCain and Senator Barack Obama as not being members of either two principle political parties. They haven't renounced their partisanship, have they?
SCHNEIDER: They have not renounced their partisanship, but they are both making efforts to show that they can reach beyond it. They are not limited by their partisanship.
DOBBS: Well hallelujah. It's about time. Bill Schneider, to the end that you're correct, we salute you and we thank you, Bill Schneider, Simi Valley (ph), thank you.
Senator McCain, former Governor Romney, former Governor Huckabee, Ron Paul -- Congressman Paul all facing off tonight in their last debate before Super Tuesday, final preparations now underway for the debate in the Ronald Reagan Presidential Library there in Simi Valley. The debate will be moderated by CNN's Anderson Cooper, which begins at 8:00 p.m. Eastern right here on CNN and tomorrow night, live coverage of the Democratic debate from Los Angeles.
Well as we reported, former Senator Edwards today announcing he is suspending his race for the Democratic presidential nomination. In fact, he is ending it all together. Senator Edwards saying it's time to step aside so history can blaze its path, as he put it. His withdrawal leaves Senator Clinton, Senator Obama as the Democratic Party's front-runners and they are squaring off. Suzanne Malveaux now reports from New Orleans where Edwards made his announcement.
(BEGIN VIDEOTAPE)
JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Today I'm suspending my campaign for the Democratic nomination for the presidency.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): Full circle John Edwards ending his campaign where it began, the Ninth Ward in New Orleans devastated by Katrina.
EDWARDS: And I say to all of those who are struggling in this country we will never forget you. We will fight for you. We will stand up for you.
MALVEAUX: His central themes fighting poverty and corporate lobbyists in the end didn't gain the attraction he needed to win. I asked him why bow out now?
EDWARDS: I think we pushed issues that otherwise not have been prominent in the campaign and I thought we had come to this point, this historical point where it's time for me to step aside, as I said in the speech, and let America make history and let my party make history.
MALVEAUX: Aides say he and his wife, Elizabeth, decided together Wednesday morning to call it quits, acknowledging he didn't have the votes or the delegates to make a difference. He made the announcement with her and his children by his side. He reassured supporters he was not stepping down because of his wife's battle with cancer. EDWARDS: Elizabeth's health is actually very good and she feels good, her spirits are good. My kids are doing well. I just thought we had reached the place (INAUDIBLE) the right thing to do.
MALVEAUX: Tuesday, Edwards called his two rivals, Senators Barack Obama and Hillary Clinton, to tell them he was considering bowing out. He says they agreed to his request to make fighting poverty central to their campaigns. Now he says he is deciding whether to endorse one.
EDWARDS: This is a conversation that needs to take place in private. This cause is the cause of my life and I need to be satisfied about if I'm going to endorse which one will be committed to the cause.
(END VIDEOTAPE)
MALVEAUX: And Lou, I asked him what is next for him and he said well he is going to have to try to figure all of that out. What is not likely is that he will become a candidate's running mate, it's a kind of been there done that scenario, but as long as he holds a potential endorsement in his hand, he still is a powerful political player -- Lou.
DOBBS: Suzanne thank you very much, Suzanne Malveaux from New Orleans.
We will have more on the presidential campaign later here including a special report on an issue that most of the candidates are doing their very best to ignore. Casey Wian has our report -- Casey.
CASEY WIAN, CNN CORRESPONDENT: Lou, although all of the leading presidential candidates say they support border security, the amnesty agenda remains alive and well. I'll have details coming up -- Lou.
DOBBS: Yeah, they're not only users, they're pushers. Thank you very much. We'll look forward to that report, Casey.
Also outrage over reports that illegal aliens, yes, illegal aliens will be receiving tax rebates if the current economic stimulus package holds up, if the president signs it. We'll have that special report. You're going to love it.
And the Federal Reserve cutting interest rates again, will it be enough to help the economy, help our struggling middle class working men and women in this country? Former Federal Reserve Governor, White House economic adviser Lawrence Lindsey (ph) joins me here. He's among our guests tonight. Stay with us. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: Well, there are now four major candidates as of today in these two parties. The withdrawal of John Edwards and Rudy Giuliani assuring that and all three of the senators in this race now, Senator Hillary Clinton, Senator Barack Obama and Senator John McCain all have voted for the failed so-called comprehensive immigration reform legislation, which would have given amnesty to literally millions of illegal aliens, but with illegal immigration now a top issue in this campaign, whether acknowledge or not by the candidates, calling for amnesty and calls for border security are without question mixed signals that may, just may, lack sincerity. Casey Wian has our report.
(BEGIN VIDEOTAPE)
(APPLAUSE)
WIAN (voice-over): Three of the four leading presidential candidates support some form of amnesty for illegal aliens now living in the United States. Senator Hillary Clinton wants tighter border security and a path to legalization.
HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I believe that having people, 12 to 14 million of them here undocumented is just a recipe for exploitation, for abuse, for demagoguery. We need to tell people they come out of the shadows, we register them.
WIAN: Senator Barack Obama also speaks of bringing illegal aliens out of the shadows. This week he got the endorsement of one of the co-sponsors of the Senate's failed amnesty bill, Senator Ted Kennedy.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Latino voters understand that I have been a champion of comprehensive immigration reform. I didn't stand on the sidelines on that issue. I was working alongside Ted Kennedy and John McCain and others to actually move that legislation forward.
WIAN: Senator John McCain, the other co-sponsor, now says he's heard the message of the American people.
MCCAIN: Sir, I will secure the borders. The American people want the borders secured first. They will have the borders secured first.
WIAN: But many long-time border security hard-liners have little faith in McCain's conversion, a vulnerability exploited by Mitt Romney, who points out how previous amnesties have been followed by huge increases in illegal immigration.
MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Just recently they came out with another bill that would have given people effectively amnesty again and the American people said no. They said it's time to actually end illegal immigration, not give illegal immigrants amnesty.
WIAN: Romney is the only major candidate who clearly rejects a pathway to legalization for illegal aliens.
(END VIDEOTAPE)
WIAN: Here in California that has not helped Romney close what is now a 13-point gap behind McCain among likely Republican voters -- Lou. DOBBS: And Obama is -- reports that he is supporting drivers' licenses still for illegal aliens and trying to use that in California to help him with the so-called Latino vote.
WIAN: Yeah, apparently most of these candidates, Lou, believe that the only way they can win the Latino vote is by supporting some form of amnesty for illegal aliens and in some cases outright pandering for more rights for illegal aliens such as drivers' licenses.
DOBBS: So the reality is the American people may be given a choice come November, at this point, of amnesty irrespective of the candidate in the Republican or Democratic Party, amnesty for illegal aliens, lip service in terms of border and port security, in other words, more of the same.
WIAN: Absolutely, and they're not going -- it doesn't look like they are going to get much help from the Senate or the House based on their past record on this issue -- Lou.
DOBBS: It's going to be interesting to see how this unfolds and I love the fact that the national media and some of the pundits are trying to suggest that illegal immigration is no longer an issue for these candidates to worry about. That's going to be interesting to see how that unfolds as well. Casey, thank you very much, Casey Wian from Los Angeles.
That brings us to the subject of our poll tonight. The question is do you believe that any one of the U.S. senators still vying for their party's nomination can be trusted to stop illegal immigration and to actually secure our ports and borders? Yes or no. We'd love to hear from you. Cast your vote at loudobbs.com. We'll have the results upcoming.
A major loophole in the economic stimulus package that has been passed by the House and now awaits action by the Senate could grant tax rebates to illegal aliens. The Internal Revenue Service doesn't check immigration status of those who file tax returns. Unless the Senate closes the loophole, illegal aliens using a taxpayer I.D. number could actually end up receiving some of your tax money. Bill Tucker has our report.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Illegal aliens are not supposed to be eligible to receive a tax rebate check under the economic stimulus bill, but...
REP. DUNCAN HUNTER (R-CA), HOUSE ARMED SERVICES COMMITTEE CHAIRMAN: The reason an illegal alien can receive a rebate check is because there is no way to -- for the government right now to discern between folks that are legal or illegal on that 1040 when they send the rebates back.
TUCKER: And some illegal aliens do file for and receive tax returns. They do so using an ITIN (ph) or an Individual Taxpayer Identification Number. Under IRS rules, a person citizen or alien, resident or nonresident can get an ITIN (ph) if they don't have a Social Security card. And you don't have to be in the country legally. The IRS doesn't specially say that but proof of legal residence is not required.
SEN. JOHN ENSIGN (R), NEVADA: There is a technical glitch in the law that needs to be fixed that would allow somebody who has been here for a certain amount of days in 2007, as long as they were here in the country whether legally or illegally, if they were working they can get a tax rebate check.
REP. JOHN CAMPBELL (R), CALIFORNIA: In many cases it would be fraud, but illegal aliens have broken the law by being here so committing this additional fraud may not be a big problem, but commit that fraud and get that check back.
TUCKER: And if a fraudulent Social Security number is used, the chances of being caught are very low. The Internal Revenue Service does not check with the Social Security Administration about the validity of a Social Security number.
(END VIDEOTAPE)
TUCKER: And to keep illegal aliens from receiving a rebate check, Senator Ensign has introduced an amendment that would require recipients have a Social Security number and that the IRS would then run a check on that number with the Social Security Administration before any rebate check was cut and then mailed out. But based on the brief discussion in the Senate Finance Committee today, Lou, it is far from certain that that amendment is going to stick on this bill.
DOBBS: The American people right now this Congress, this -- these Democratic presidential candidates, are serving if not some of the Republicans, surviving Republican candidates for president are serving notice that we are about to watch more of the same. They are going to tell the American people to go to hell on the issue of illegal immigration, border security.
It's becoming crystal clear. I will exempt Mitt Romney and Mike Huckabee from that statement and Ron Paul. But this is starting to look like a very serious, serious continuation of elitism in this country and stripping away the fundamental tenant of our democracy, which is the will of the majority. It is to me one of the most troubling developments that we've seen in some time.
TUCKER: Well it was interesting watching that brief discussion in the Finance Committee today, Lou. The amendment came up, there was some outrage by Senator (INAUDIBLE) among others, Senator Grassley (ph) and then it was tabled. They didn't want to discuss it any further and there were objections raised to the amendment, which was surprising to me, but there you have it. So I don't know if it will make it out of committee or not.
DOBBS: This campaign to this point, if this is inspiring trust on the part of the American people for their elective representatives for the highest office in the land, I mean I would be utterly stunned. This is troubling. It's unsettling and it's frankly discouraging I think for all us. Bill Tucker, thank you very much.
Well coming up here next, an under staff and under funded Food and Drug Administration failing to protect all of us from unsafe drugs and food in this country. We'll have details of a shocking new report here next.
And more government efforts to ease the economic burden on working men and women and their families, this country's middle class. We'll have that report and a former top Bush economic adviser and Fed Governor, Lawrence Lindsey (ph) joins us here to access the degree to which we need public policy changes in this country and our economy and the degree to which we should all be very concerned. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: The federal government agency responsible for protecting you from unsafe food and unsafe drugs in this country is severely under staffed. It is severely under funded. New government watchdog report show that the Federal Drug Administration is now simply incapable of protecting American consumers from the flood of unsafe drugs, medical devices and food now being imported into this country. Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): If you thought your food and medical equipment was 100 percent inspected, think again. Government reviews show the FDA to be under funded, under staffed, under performing and under inspired.
MARCIA CROSSE, GOVERNMENT ACCOUNTABILITY OFFICE: We found that from medical devices just as for drugs FDA has not met the statutory requirement for domestic inspections.
LISA SHAMES, GOVERNMENT ACCOUNTABILITY OFFICE: FDA regulates about 80 percent of the food supply, but receives about 20 percent of food inspection resources.
SCHIAVONE: The Food and Drug Administration has lots of problems according to a series of reports from the Government Accountability Office, problems the FDA commissioner owned up to only reluctantly.
REP. BART STUPAK (D), MICHIGAN: The report cites (INAUDIBLE) problem within the agency, so there is clearly from my point of view a need to address the morale and the needs of the people at FDA.
SCHIAVONE: Commissioner Von Eschenbach declared U.S. foods and medicines the best reviewed in the world.
ANDREW VON ESCHENBACH, FDA COMMISSIONER: We should be proud of the performance of FDA, as it remains the world's gold standard as a regulatory agency.
SCHIAVONE: An assertion repeatedly challenged by lawmakers. STUPAK: We'll measure success when I don't come here with 21 pages of recalls. If we don't have the resources, we'll continue with 21 pages of recalls of food, fish.
REP. HENRY WAXMAN (D), CALIFORNIA: I agree that we need additional resources. We have seen illnesses and even deaths associated with unsafe foods, drugs, and medical devices.
SCHIAVONE: The FDA commissioner conceded his agency needed more funds but would not reveal to Congress how large a budget he had requested from the president.
(END VIDEOTAPE)
SCHIAVONE: Lou, the GAO found that despite statutory requirements, it might currently take the FDA 27 years to inspect critical medical supplies like syringes, defibrillators, and heart and pacemakers -- Lou.
LOU DOBBS, CNN ANCHOR: We have seen what has happened and not regulates and policing our financial markets, our financial institutions. We are watching very clearly, thanks to Congressman Stippack and his committee. And the various watchdogs, the Food and Drug Administration is a joke. The people running it should be fired. They are an embarrassment to the country and carrying out their duties to the very important watchdog agency. It's incredible they are tolerated. Somebody should be taking sense. We're talking about -- they are talking about American lives being lost and they are talking like it's a discussion of insurance premiums for god's sake.
SCHIAVONE: Their budget is only $2 billion. It hasn't changed since 1988 and they have had 100 new statutes, 100 new responsibilities placed on them. They are unable to do what they should be doing.
DOBBS: Thank you very much, Louise Schiavone from Washington.
Let's take a look now at some of your thoughts.
Victor in Louisiana, "Lou, if Bush has an approval rating of about 25 percent, how come I got a headache and got sick watching 100 percent of the audience get up and down, every second, clapping and congratulating Bush when he opened his mouth when this country is in a downward spiral?" An interesting question and perspective.
And Teddy in New York, "The applause after every five words the President spoke made me realize just how broken and delusional our government is." And how delusional are we to tolerate it?
John in Idaho says, "Lou, I see the White House is blaming you for the failed immigration bill. At least you didn't take any lobby money. President Bush just doesn't get it, does he? Keep up the pressure, Lou." Well, we hope you will keep up l pressure along with us. This country is going to need every concerned American focusing on the issue as we go into more of the same in presidential politics. Nancy in Maryland said, "Lou, why aren't Americans expressing outrage at the fact that their primary vote will not count in those state penalized by their party's 'leadership'? Since when can the political machine stop our voice from being heard and counted?" First of all, they are partisan races, so you haven't heard your voice very often in 30 years in the country and the fact is that the Democratic Party and the Democratic National Committee, the Republican Party and the Republican National Committee, they are arrogant elitists but if they have the guts to deny those delegates in Michigan and Florida, I will be shocked and surprised and you should indeed be outraged.
We'll have more of your thoughts here later in the broadcast. Each of you whose e-mail is read here receives a copy of my new book, "Independents' Day: Awakening the American Spirit." I sure how we can.
And up next, the Federal Reserve taking bold new action today trying to avoid an economic slow down. I will be joined by one of the country's most respected economists, former fed governor, former White House top economic adviser, Lawrence Lindsey.
And the republican and democratic parties disenfranchising millions of voters in Michigan and Florida, a leading political strategist joins us.
And what will the departure of Edwards and Giuliani mean for the others? I'll be joined by three of the smartest political analysts and we'll be looking forward to tonight's republican presidential debate right here on CNN. It begins in just a few minutes. Well, actually at the top of the hour. That's about 26 minutes. Be patient. Stay with us. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: Well, the Federal Reserve Open Market Committee today took dramatic action as expected after the three-quarters of a percentage point cut in the fed funds rate some nine days ago. Today, slashing that rate by half a percentage point. Christine Romans now reports on whether or not that will be sufficient in an effort by this government to turn away the impact of a significant economic slow down.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT: The president just after the Federal Reserve dramatically slashed interest rates.
PRES. GEORGE W. BUSH, UNITED STATES: Inflation is down. Interest rates are low. Productivity is high. Our economy is flexible. It is resilient.
ROMANS: Yes, there is short term pain. The president is characteristically confident on the economy.
The nation's central bank is telling a different story. In just eight short days, the Federal Reserve has slashed interest rates by one and a quarter percentage points, virtually unprecedented.
DEAN BAKER, CTR. FOR ECON. POLICY RESEARCH: The fed doesn't make rate cuts like this unless it's very scared and we have seen a huge amount of write downs of bad debt mostly stemming from the sub-prime mortgage meltdown and there is clearly more on the way.
ROMANS: In its statement, the fed said "Financial markets remain under considerable stress. Credit has tightened further for some businesses and households." There is deepening of the housing contraction and softening in labor markets. The fed lowered its key interest rate to 3 percent.
ALAN BLINDER, FMR. FED GOVERNOR: The problem there is that the Federal Reserve's medicine works slowly. If the economy starts deteriorating very rapidly in front of your eyes, the fed can act quickly but it won't actually give the economy a boost.
ROMANS: That is way the administration and congress are scrambling for fiscal stimulus to give the economy a boost. As foreclosures skyrocket, homeownership rates are falling for the first time in 20 years and the economic growth in the final three months of 2007 slowed dramatically, the weakest growth in five years.
(END VIDEOTAPE)
ROMANS: As for inflation, the fed says it is monitoring the situation closely. It's a fear that the fed maybe too late. They worry that would be a crippling combination.
DOBBS: I have to say, all of the second guessing the fed, moving a full 125 basis points, a full in the quarter, nine days, it will it be sufficient to stop where a $13 trillion economy is headed? No. But this is dramatic. It is the best and most effective action they could take in my opinion and the second guessers on Wall Street and so forth, they are going to be there gnawing at the edges. You know the fed is mortal like the rest of us.
ROMANS: It is really remarkable the size, in eight or nine days what they have done, really unprecedented when you look at the history of the central bank, the modern history of the central bank.
DOBBS: Let's hope there is help. I would agree with the critics who say it's necessary but not sufficient. Much more has to be done, monetary policy only one part of the equation. Christine Romans, thank you.
The Federal Reserve aggressively cutting that interest rate today. The Fed Funds rate, the discount rate is 3.5 percent. The president is pushing for the economic stimulus package now in the senate. The housing crisis worsens and joining me now to make sense of all of this, Lawrence Lindsey. He is the former top economic adviser in the Bush White House, author of "What A President Should Know and Most Learn Too Late," also I shouldn't point out, a former fed governor. Lawrence Lindsey, good to have you with us.
LAWRENCE LINDSEY, FRM. WHITE HOUSE ECON ADVISER: It's great to be here, Lou. Thanks for having me.
DOBBS: This is a mess by any standard. The reality is we have anyone clucking in the national media, Wall Street, in corporate America. What does Lawrence Lindsey, one of the most respected in the economist in the country, if not the world, how do you describe our current situation?
LINDSEY: Well, I would describe it as skating on thin ice. I think the fed did the right thing. I think the stimulus package, if the Congress can speedily pass it, is going to help as well and they may get us over the rough patch. The main is the credit markets. Unfortunately, there the government isn't helping. We have regulatory actions that are shutting down new credit lines. I do think people are over expended and they should make a judgment based on their own finances whether to cut back or not but a lot of people are being closed out of the credit markets involuntarily and that is something we have to pay attention to.
DOBBS: You are talking about people going to the banks and seeking loans, commercial credits, correct?
LINDSEY: Absolutely. But even for an auto loan, it's harder to get an auto loan and people who are lending to them are having trouble getting them money. That unfortunately is created by the FDIC which has been under political pressure from Congress and the unions as part of an anti Wal-Mart campaign. It's collateral damage for a side political issue.
DOBBS: You have touched upon ideology. Let's get straight to it. The fact is this administration, the previous administration bought into a lot of nonsense from the business roundtable, the U.S. Chamber of Commerce, the principal business lobbyists and have let capitalism reign unfettered in the markets like the financial markets and financial institutions and this credit crisis I think when we talk honestly between ourselves, no one is paying attention to you Larry Lindsey and me, just you and me, that is a major part of the problem is that the federal government advocated an important role in regulating and policing the institutions that have taken advantage of the unfettered capitalism as a tenant of this so-called Mr. Market philosophy that has been reigning in Washington, in my opinion, 20 years and too damn long.
LINDSEY: Well Lou, I think you've got a point there. I'd point out though that the government isn't blameless. I was in charge of housing and consumer affairs at the fed for 5 1/2 years.
DOBBS: Right.
LINDSEY: I'll tell you, I was never lobbied by a bank or a business man to ease credit conditions. I was lobbied by lots of politicians to lower credit standards to let more and more of their constituents get mortgages. I don't think the political class should be casting the first stone.
DOBBS: I don't either. And by the way, they can't get the first stone because we are hurling them every night right here, Larry. I want to say, a very important book. Larry Lindsey, "What a President Should Know" and I think the viewers would appreciate the line below it, but most learn too late. It could also be said I think perhaps of us as voters in this country and the citizens. Larry Lindsey, I hope you come back soon.
LINDSEY: Thanks very much, Lou.
DOBBS: Lawrence Lindsey.
Up next, voters without a vote, both political parties disenfranchising or least trying to millions of their voters; I get so sick of these parties. Democratic National Committeeman Robert Zimmerman joins me. He's a good guy just in bad company.
And who will win the support of departing candidate, John Edwards? I'll be joined by three of the country's best political analysts. Stay with us. We're coming right back.
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DOBBS: Super Tuesday now less than a week away, the campaign for president, full swing, except if your name is John Edwards or Rudy Giuliani. It remains hard to believe that millions have already been disenfranchised by their political parties in Florida and Michigan.
Joining me now, Democratic National Committeeman and Senator Hillary Clinton supporter Robert Zimmerman. Good to have you with us, Robert.
ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Great to be with you.
DOBBS: Let's start with this you know everyone in the Obama campaign, and some on the network trying to say there is no way those candidates will be able to sit their delegates in the democratic convention because of the rules committee that made the decision on Florida and Michigan. Do you agree?
ZIMMERMAN: Let's be clear. These delegations from Michigan and Florida are going to be seated at this convention and they are not going to be the margin of difference. This convention is not going to be decided in August by 100 or 200 votes. I know it's fantasy baseball for political pundits to extrapolate those theories. But the reality is Super Tuesday is this coming Tuesday, February 5th, is when the country begins.
DOBBS: OK. The delegate count starts. The big numbers start rolling in. Senator Clinton, all the focus right now, and on Senator Obama how is she going to do and can someone emerge as a strong frontrunner, after in your judgment, the Super Tuesday primaries?
ZIMMERMAN: Well you know I am supporting Senator Clinton.
DOBBS: I do know that and we are talking to you anyway.
ZIMMERMAN: Exactly. And I still can be objective and still support her. DOBBS: Well you can be semi-objective.
ZIMMERMAN: OK. Fine. I'll give it my best shot. Here's the reality of it. The Florida vote was very significant in the fact that even though there were no delegates at stake, 1.5 million democrats showed up and in every category, Hillary Clinton scored major success, in fact got more votes than John McCain who spent millions of dollars there. My point simply is it shows there is a strong coalition she's been able to amass and I think it's going to play well for her Super Tuesday. No one is going to wrap it up though Super Tuesday.
DOBBS: Well, we're going to put you -- I happen to agree with you, by the way, putting me and you at odds and me at odds as some of savants on CNN, but we will see. The reality is that either Obama or Clinton, both supporting are comprehension immigration reform. Obama is supporting drivers' licenses for illegal aliens. We are seeing precisely the same nonsense. We are watching Senator John McCain on the republican say he is the biggest free trader of them all, the biggest populist in the race. John Edwards has just dropped out, the man talking with great passion and clarity about the issue of free trade and its impact on working men and women in the country. American people, working people are again screwed in this deal because what we have are two political parties, republican and democrat. Whoever emerges is going to be just more of the same.
ZIMMERMAN: This is where I differ with you.
DOBBS: That's why I want you to differ.
ZIMMERMAN: Obviously, I have strong differences with democrats and republicans that support so-called comprehensive immigration reform. I think the proposal is a sham. But putting that aside for a moment --
DOBBS: A sham supported by Obama, Edwards, McCain.
ZIMMERMAN: And Clinton as well.
DOBBS: I meant to say that. Thank you for objectively pointing that out.
ZIMMERMAN: You have serious proposals going forward on education.
DOBBS: No, wait a minute. I'm talking about comprehensive immigration reform. Border import security. We are watching pandering.
ZIMMERMAN: You are seeing Hillary Clinton advocating the fence along the Mexican border. John McCain seems to be showing that he's the least responding to the pressure of public will. That should not been underestimated by the voter.
DOBBS: Why should we believe that any one of these candidates right now, republican or democrat, is going to do what they say? We have watched the democratically lead Congress in Washington over the past year - I mean it's rating is lower than that for crying out loud that the republican president.
ZIMMERMAN: We also have seen them put through major pieces of legislation to expand education funding, to increase the minimum wage.
DOBBS: Look I think George Miller is one of the best Congressman we have.
ZIMMERMAN: He sure is. Look, I have even greater frustrations with you with the way the direction of this Congress and also with the direction of our country. My point simply is the electorate has an extraordinary power and they are exercising it by the record turnouts we're seeing in both parties, by the level on contributions coming in on small checks, by the viewer ship of the debates. This is going to be a significant year.
DOBBS: I hope you're right. Do you promise you're right?
ZIMMERMAN: And we're taking on the political establishment.
DOBBS: You better believe it. Who is?
ZIMMERMAN: Both of us.
DOBBS: OK. All right. Thanks a lot. Robert Zimmerman, it's great to see you. Thanks.
Up next, three of the best political analysts will sort through this. Stay with us. We're coming right back.
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DOBBS: Joining me now, three of the best political analysts. Here in New York, Pulitzer Prize winning columnist, "New York Daily News," Michael Goodwin; democratic strategist Hank Sheinkopf, from Politico.com Jonathan Martin, good to have you all here. We have two folks out now. It's effectively with two front-runners, what's the impact?
HANK SHEINKOPF, DEMOCRATIC STRATEGIST: The impact is the American people are having a sigh of relief there is less people to worry about and frankly when Obama meets Hillary and when McCain meets Romney, they're so filters. It's mono to mono, as they say. No on is going to be - they're just going to be one to one and they're going to have to start explaining things in real terms.
MICHAEL GOODWIN, NEW YORK DAILY NEWS: I love the process. I love to see them wandering out. I think that you know the Edwards and Giuliani and all the others certainly had their shot. We're down to a real struggle and I agree with what you were saying earlier with Robert, Lou. I don't think it's going to be decided on February 5th, certainly not among the democrats and probably not among the republicans.
DOBBS: Do you agree, Jonathan?
JONATHAN MARTIN, POLITICO.COM: I think on the GOP side, Lou, there is a very good chance that this thing actually will be wrapped up on February 5th. John McCain got Rudy Giuliani's endorsement today just about a half an hour ago here at the Reagan Library in California. That will be huge in New York and New Jersey but more importantly here in California, Arnold Schwarzenegger came into the room after Giuliani and McCain and broadly hinted that tomorrow, Lou, he will endorse John McCain. That is going to be a huge, huge endorsement for John McCain in this state. Back to back, that could be enough to really help McCain secure the nomination next Tuesday.
DOBBS: Break the time, Hank Sheinkopf, February 5th.
SHEINKOPF: February 5th, republicans over, democrats probably over. I don't see it doing all the way we are talking about delegates. We're not talking about popular this or that, delegate counts. And when delegate counts get struck, you know what you got. You will see what who is in the lead.
GOODWIN: Can I make a point? I think that Huckabee is an interesting player. He has adopted a southern strategy and it's seems to be designed to help McCain by taking votes from Romney in the south. So effectively you've got Huckabee and McCain ganging on Romney which will make it tougher for Romney but Romney has the money.
SHEINKOPF: Romney has no shot in the south, ever, on day one never.
DOBBS: Let's go to another ...
MARTIN: What's fascinating guys is John McCain has gotten help from so many of his rivals; Fred Thompson in South Carolina, Mick Huckabee certainly, still in the race and Rudy Giuliani in Florida. Those three candidates are a huge aid to John McCain.
GOODWIN: They like him. They all like him.
DOBBS: Let's get to the issue right now that concerns me more. As you know I have boiling distain for both political parties. And the reality is we are going to see more of the same. No matter who emerges here it appears right now, with the possible exception of Mike Huckabee, should that happen, or Mitt Romney. The reality is that all of these candidates are going to support comprehensive immigration reform irrespective of what they're saying right now. They are not going to do anything about border security. They are not going to do anything about port security. They are all free traders, every one of them, and the working man and woman and their family in this country is being treated to another partisan delight in which you have indistinguishable results. I'm laughing at the idea that these are candidates of change, referred to as post-partisan candidates. How absurd is this? How crazy is the national media to go along with it?
SHEINKOPF: Well, you're right. These are not candidates of change. These are candidates of polls. This is very different. Polls don't change. Polls are numbers and polls determine strategy and outcome to a large extent. People function off what they think people want to hear. At some point, and it may happen this cycle, if not the next one in the mid term, people look at congress and say it's time to take blood. The American people did it in 2006. They may do it in 2010. But we are not going to get change this cycle.
GOODWIN: Lou, I think one of the things that the voters have to keep in mind and all of us in the media do too, elections aren't the end of the something. They are the beginning of something. And so I think when you're going to have a new president, it really is incumbent on the public just as the public spoke out about immigration reform and derailed a bill. It looked like it was a done deal and the public got involved. They have to stay involved. They can't just vote every four years and said I did my job.
DOBBS: How many people, Jonathan Martin, have voted at this point? This thing will be over February 5th in the primaries from the beginning of January to February, it's suddenly in the flash you have it over, Jonathan?
MARTIN: Well, that's exactly right. I think you are going to have maybe 30 states or less weigh in. Which is far more than in the past and that is because of the Super Tuesday next week. You do have more folks weighing in this time around but I do think we're going to be in store for a long, long general election in the weeks ahead.
DOBBS: Let's look at what is happening with this economy. Senator Clinton today coming out again on the issue of home foreclosure being diligent and I think actually offering up some good ideas on the staunching of the flow of blood for at least 2 million Americans. We are far from any real public policy platform from the candidates that makes any sense at a granular level. Are we going to see real leadership, in your judgment and I just want to - you guys have all covered this. You've been part of the process. You talk about it's the beginning, not the end which is poetic but I think that based on who we choose, I mean we've come perilously close in my judgment over the past eight years under Bush frankly to the end.
GOODWIN: Well I think though in terms of the economy, Lou, you're not going to hear the kind of straight talk that we all need simply because it's unpleasant.
SHEINKOPF: We'd better hear it and that's what the mono to mono thing is about.
DOBBS: Jonathan?
MARTIN: Lou, Ralph Nader said today that he may get back in this race so if you want a changed candidate, there you go.
DOBBS: Well, I don't want a change candidate. I don't even want to hear that stupid rhetoric. I want somebody who I really believe and who I can trust. Right now I don't see it. Thank you folks. I appreciate it.
92 percent of you saying that not one of the U.S. senators still vying for their parties can be trusted to stop illegal immigration and secure our ports and borders.
Thanks for being with us tonight. The CNN republican presidential debate begins right now. TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com
