Return to Transcripts main page
Lou Dobbs Tonight
Does America Need a Middle-Class Czar?; Will Banks Release Details of Allocation of Bailout Funds?
Aired December 22, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LISA SYLVESTER, CNN CORRESPONDENT: Thanks, Suzanne.
Tonight, an advocate for the nation's struggling middle class, Vice President-elect Joe Biden says he'll make sure working men women are quote, "no longer being left behind." Can a middle class czar actually make a difference? We'll have complete coverage.
And tonight the nation's banks want more of your money but they don't want you to know how it's being spent. We'll have a special report.
And tonight, a deep freeze and blinding snow paralyze parts of the country. Was the weather a factor in a Denver jet accident? We'll have new developments on what caused the fiery crash, all that, all the day's news and much more from an independent perspective, straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, December 22nd. Live from New York, sitting in for Lou Dobbs, Lisa Sylvester.
SYLVESTER: Good evening, everybody. The desperate state of the nation's economy tonight is forcing President-elect Obama to take drastic action. The president-elect and his team are putting together a massive economic plan. They say the plan will create millions of new jobs and rebuild the nation's crumbling infrastructure. Ed Henry reports from Honolulu.
(BEGIN VIDEOTAPE)
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Some rare time out on the golf course for President-elect Barack Obama as he begins almost two weeks of relaxation in Hawaii. But, there's little rest for his transition team. They've been ordered to craft an even bolder stimulus plan to, in the words of Vice President-elect, Joe Biden, prevent the economy from absolutely tanking.
JOSEPH BIDEN, (D-DE) VICE PRESIDENT-ELECT OF THE UNITED STATES: We believe we can do that by investing in, as I said, new technologies, by investing in infrastructure, building roads and bridges. All things by the way that add to the productivity of the country that keep American businesses in America.
HENRY: So transition aides have been huddling with Democratic leaders and Congress to craft a recovery plan of up to $775 billion to try and jolt the economy. Republicans are weary about the price tag, especially on top of Friday's rescue of automakers.
REP. ERIC CANTOR (R), VIRGINIA: I think most American taxpayers now are sort of scratching their head wondering when all this bailout stuff is going to end. And probably, thinking, you know, when is my bailout coming?
HENRY: Now, CNN has confirmed the commercial real estate industry representing shopping centers, hotels and office buildings is also seeking a bailout to stave off foreclosures and bankruptcies. In a letter to Treasury Secretary Henry Paulson, industry leaders say they need billions of dollars in government-backed loans to deal with panic from crushing debt, adding ominously, jobs, small businesses, retirement savings and local government tax revenues are all at stake.
Team Obama is not commenting on whether the incoming president is in favor of, yet, another bailout. But they are saying a massive stimulus plan is desperately needed early next year.
REP. BARNEY FRANK (D), MASSACHUSETTS: If we don't do this, it will cost us even more, this economy is now in the worst shape since the great depression and if we do not respond in a very firm way it gets worse and worse.
(END VIDEOTAPE)
HENRY: Now, CNN has learned that Vice President-elect, Joe Biden tomorrow in Washington will be chairing a meeting of the president- elect's economic advisers try to grapple with this financial crisis and try to move forward on this rescue package. They're going to face a somewhat skeptical audience on Capitol Hill that wants to help fix the economy, but is very worried about the price tag.
It's interesting, because as you noted at the top of the show, Joe Biden has now been named to run a working group in dealing with the middle class. He has been keeping a very low profile since the election, but now he's going to be a key player in terms of trying to sell this stimulus package on the Hill, Lisa?
SYLVESTER: Yeah, Ed, also we are waiting for the Obama camp to release this internal report on Illinois Governor Blagojevich. Any idea when that report will come out and any clue as to what it's going to say?
HENRY: Yes, both. We're expecting it's going to finally come out tomorrow. The Obama team continues to say, look, the only reason why it's taken a while to put it out is that the prosecutor in the case has not wanted this report, the internal investigation about contact between the Obama folks and the Blagojevich folks he didn't want that to interfere with the actual criminal investigation in Illinois.
And the Obama team is playing this as look this is going to be a whole lot of nothing. I just talked to one key Obama adviser and he said there's not going to be any wrongdoing shown in this report and that the media has been spending too much time on it in their estimation. But what we have to remember obviously is this is the internal investigation of the Obama team so it would be surprising if they came out with a report saying there was wrongdoing. The final word is not going to be this report. It's going to be what the prosecutor, Patrick Fitzgerald, eventually has to say as this case plays out. But at this moment, there is absolutely no evidence of any wrongdoing by team Obama -- Lisa.
SYLVESTER: OK, Ed Henry reporting from Honolulu, obviously a tough duty there from the beaches of Honolulu. Thank you very much, Ed, for that report.
HENRY: Thank you.
SYLVESTER: Now a new poll shows the American people have mixed views on the Obama's camp role in corruption controversy. In a CNN Opinion Research poll 43 percent of those polled believe Obama staffers did nothing wrong, but 36 percent believe contact was unethical.
Vice President-elect Joe Biden will add the nation's struggling middle class to his portfolio as vice president. Biden will become the nation's middle class czar heading a team of cabinet secretaries and other officials. His task force on working families plans to create three million new jobs. Louise Schiavone reports.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): For every average American who's cried out "where's my bailout" Vice President- elect Joe Biden says the new team is on the case.
BIDEN: Barack Obama, although the expectations at home and abroad are very high, I think he has the capacity to meet the expectations of getting this economy back on track.
SCHIAVONE: Biden will lead the White House task force on working families telling CNN's Larry King that the new team's goal is to create roughly three million jobs through new technology, shoring up roads and bridges and policies that help the middle class.
BIDEN: All things, by the way, that add to the productivity of the country. That keep American businesses in America. That generate high-paying jobs. That can't be exported.
SCHIAVONE: In Detroit, arguably, ground zero of the economic crisis, this lawyer, now steeped in mortgage and bankruptcy cases says it will be a tall order.
KEN GROSS, ATTORNEY: From the doctors to the plumbers, they have interest payments on their credit cards that have gone from 7.99 percent to 29.99 percent. They have no available credit and they are concerned about the future of their jobs. I've never seen people as upset and angry and scared as they are right now.
SCHIAVONE: A Washington think tank closely associated with Biden's economic team says a lot has to change.
LAWRENCE MISHEL, ECONOMIC POLICY INSTITUTE: The way we've pursued trade. It's the way we've reduced the presence of union. It's the lowering of the minimum wage. It's some of the deregulation. It's the undercutting of labor standards and a lawless workplace in my view.
(END VIDEOTAPE)
SCHIAVONE: But Lisa, for those people who are paying the price of a jobless rate at 6.7 percent and rising, of homes losing value are going into foreclosure, of health care and college years foregone now, the question is, will it be enough -- Lisa.
SYLVESTER: Yeah, I mean people are waiting, as you well know, and so many people say that a key cornerstone of this is taking a look at trade policy, although it's unclear at this point what the Obama administration might do as far as that's concerned. Your thoughts?
SCHIAVONE: Well, these are all policy issues at which the Obama team will be at logger heads with the Bush administration and their ideas that are going of have to turn the ship around. But it's not going to happen you know by next spring. The impact of new trade policies, this is all going to be lagging indicators, lagging effects and we are in for some very tough times.
SYLVESTER: OK, Louise Schiavone reporting from Washington, thanks for that great report.
Now the American people approved of the administration's bailout for the domestic automakers but according to a new poll, the public also says one bailout is enough. Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Does the American public support $13 billion in government loans to major auto companies? They do, 63 percent. President Bush proposed the loans last week, after a rescue plan failed to make it through Congress.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: So today I'm announcing that the federal government will grant loans to auto companies under conditions similar to those Congress considered last week.
SCHNEIDER: But Republicans are divided over the rescue plan. Democrats strongly favor it. What's driving public support? Not sympathy for the auto companies or the union. Most Americans have a negative opinion of auto executives and union leaders, though not of autoworkers.
BUSH: If a company fails to come up with a viable plan by March 31st, it will be required to repay its federal loans.
SCHNEIDER: Do people believe that will happen? They're skeptical. Only 28 percent think the auto companies will be able to pay back all or most of the money and if the auto companies ask for more money next year, 70 percent say let them go bankrupt. If confidence in the auto companies is so low, why does the public support the rescue plan? One word, fear.
BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: I'd like to say a few words about the necessary steps taken today to help avoid a collapse of our auto industry. It would have devastating consequences for our economy and our workers.
SCHNEIDER: Two-thirds of the public believes that if U.S. auto companies go into bankruptcy it would cause a crisis or major problems for the nation's economy. But do people think it would harm them personally? Eighty-two percent say no.
(END VIDEOTAPE)
SCHNEIDER: Several major airlines have gone bankrupt and travelers continue to fly them. Now, would people purchase a car from a bankrupt auto company? Well, nearly two-thirds say, no, they wouldn't. Lisa?
SYLVESTER: Yeah I mean and that is really telling. That you know, that Americans are willing to help out, I guess, if you will, bail these companies out but up to a point, what was it, 70 percent said if they asked for more money then they should go bankrupt?
SCHNEIDER: That's right. Exactly. If next year, which is almost upon us, remember the deadline for them to come up with a plan is March 31st. If they say they need more money, 70 percent said well then let them go bankrupt.
SYLVESTER: OK, Bill Schneider thank you very much for that very telling report.
SCHNEIDER: OK.
SYLVESTER: And it's not just Detroit's big three suffering massive losses. Toyota says today it expects to lose over $1.5 billion this year. It's the Japanese automaker's first loss since 1950. Toyota said they'll sell about 1.5 million fewer vehicles this year.
Well coming up, are companies really cutting benefits to save your jobs or the CEOs? We'll have a report.
And Cheney and Biden exchange words on the role of the vice president. We'll have that story next. Stay with us.
(COMMERCIAL BREAK)
SYLVESTER: Vice President Dick Cheney tonight is taking on his successor, Joe Biden, the vice president has been making appearances defending the Bush administration. Cheney dismissed the vice president-elect, saying Biden's role would not be as important as his. Biden then wasted no time in firing back. Brian Todd has our report. (BEGIN VIDEOTAPE)
BRIAN TODD, CNN CORRESPONDENT (voice-over): How much things have changed since that first meeting after the election. Dick Cheney levels a broad side against Joe Biden on the issue of whether Biden will have as influential role in the West Wing as he did.
RICHARD B. CHENEY, VICE PRESIDENT OF THE UNITED STATES: If he wants to diminish the office of vice president, that's obviously his call. I think the President-elect Obama will decide what he wants in a vice president. And apparently, from the way they're talking about it he does not expect him to have as consequential a role as I've had during my time.
TODD: A spokeswoman for the next V.P. fires back. "What the American people want from a vice president is not boasting about how much power they have. Only Vice President Cheney would think that putting the vice presidency in its proper constitutional role diminishes the office." Joe Biden tells CNN he will have the new president's ear.
BIDEN: My role as vice president is unlike some of the others. I've asked for no specific portfolio, that is, I take care of the environment or one particular area and that I'd be essentially his counselor in chief.
TODD: One historian says it's not really up to the vice president to decide what his role will be.
UNIDENTIFIED MALE: Very much in his first year, the president said, Dick Cheney has a lot of power. That's what I want. I'm delegating a lot to him. I don't think Barack Obama is going to delegate that much to Joe Biden.
TODD: Biden also criticizes Dick Cheney's views on how to keep America safe.
BIDEN: The advice that he has given to President Bush has been not healthy for our foreign policy. Not healthy for our national security. And it has not been consistent with our Constitution in my view.
CHENEY: I think the fact that we were able to protect the nation against further attacks from al Qaeda for seven and a half years is a remarkable achievement. To do that we had to adopt some unpopular policies that have been widely criticized by our critics.
TODD: No apologies from Cheney for his style either.
UNIDENTIFIED MALE: Did you really tell Senator Leahy BLEEP yourself?
CHENEY: I did.
UNIDENTIFIED MALE: Any qualms or second thoughts or embarrassment? CHENEY: No, I thought he merited it at the time. And we've since I think patched over that wound and we're civil to one another now.
(END VIDEOTAPE)
TODD: Now, when asked what advice he might give to his successor who once called him the most dangerous vice president in American history, Dick Cheney said simply that Joe Biden hasn't asked him for any advice. Lisa?
SYLVESTER: Brian, where is public opinion on this? I mean you know Vice President Cheney is not winning many popularity contests here.
TODD: No, not at all. And our latest poll today shows that to be consistent. In our poll he has a very low approval rating. Only one percent calling Mr. Cheney the best vice president ever, 34 percent calling him good, 41 percent calling him poor, 23 percent calling him the worst vice president ever. Very, very low approval ratings here for Mr. Cheney.
SYLVESTER: OK, Brian Todd reporting from Washington, thanks for that report.
And we'll hear a lot more from Vice President-elect Joe Biden later tonight on CNN's "LARRY KING LIVE". In an exclusive prime time interview, the vice president-elect tells Larry how he will change the role of the vice presidency. That's Vice President-elect Joe Biden on "LARRY KING LIVE" tonight at 9:00 p.m. Eastern.
Well coming up, do you want to know how your bailout money is being spent. Well the banks say it's none of your business. We'll have a report. And it amounts to a bailout for illegal aliens. Hundreds of millions of taxpayer dollars spent on health care for people who shouldn't be in the country in the first place. We'll have a special report.
(COMMERCIAL BREAK)
SYLVESTER: Another graphic example of the gruesome violence raging in Mexico and spreading into this country, 12 headless bodies were discovered yesterday in southwestern Mexico. The bodies came with a sign saying for every one of mine that you kill, I will kill 10. Seven of the dead were identified as Mexican soldiers. There have been more than 5,300 deaths attributed to Mexico's war and drug cartels this year alone.
States across the country are struggling to cover budget shortfalls while paying to effectively bail out millions of illegal aliens. One state on the front lines of our illegal immigration crisis just released a report showing the high cost of illegal immigration. Bill Tucker reports.
(BEGIN VIDEOTAPE) BILL TUCKER, CNN CORRESPONDENT (voice-over): Illegal immigration has a nearly $700 million price tag in Texas. That's according to the state's Health and Human Services Commission. In fiscal year 2007, an estimated $80 million was spent on emergency Medicaid payments to illegal aliens, 1.2 million on sheltering illegal aliens in the Texas Family Violence Programs. The agency reports that hospitals in the state provided nearly $600 million in uncompensated medical care in fiscal year 2006 and they were not all border hospitals.
UNIDENTIFIED MALE: No state can continue to afford a burden like this. The cost to our health care system is out of control. The cost to our prisons, our public schools, is a burden that we can no longer continue to bear.
TUCKER: The Texas study focuses on health care costs but a new report in Colorado combines health care, education and prison costs. It puts the total cost to taxpayers in that state at more than $1 billion. The Colorado report was produced by the Federation of Americans for Immigration Reform or FAIR, which favors enforcement of immigration law and reduced levels of immigration. FAIR has done cost studies in 11 states and the author of the reports says there is one theme throughout all of the states.
UNIDENTIFIED MALE: There is a consistent pattern that the fiscal costs of illegal immigration vastly outweigh any taxes that are collected from those -- from those workers.
TUCKER: It's a fiscal fact that becomes harder and harder for states to ignore as they struggle with growing budget gaps. Gaps that force deep budget cuts. Frequently in areas like education and health care.
Bill Tucker, CNN, New York.
(END VIDEOTAPE)
SYLVESTER: Time now for some of your thoughts. Debbie in New York, "Lou, our government is completely broken. It no longer does its job to serve the people. Now it only serves large corporations and special interests."
Jared in Florida. "Hi Lou, I enjoy your show each night. You're the best at looking out for us."
Gerald in Texas, "Bush's pardons list had been released and the two former border patrol agents' names are not on it. I believe this to be a travesty of justice and will certainly be one of the many low points of the Bush legacy."
We'll have more of your e-mail later in the broadcast and each of you whose e-mail is read here receives a copy of Lou's new book, "Independents Day: Awakening the American Spirit", now available in paperback.
Well coming up, if you want to know where taxpayer bailout money is going, don't ask the banks. They think it's none of your business. We'll have a special report.
Also "The New York Times" apologizes to readers and Caroline Kennedy. We'll tell you why.
And federal investigators look for answers in Denver. What caused this plane to crash on take-off? We'll have exclusive new details next. Stay with us.
(COMMERCIAL BREAK)
SYLVESTER: A deep freeze is gripping much of the country tonight. Bitter cold temperatures and record wind chills are reported from the Pacific Midwest all the way to the Northeast after a weekend of massive snowstorms. The winter storm dumped eight to 12 inches of heavy snow in the Seattle area. The storms shut down major highways and canceled hundreds of flights.
Massive nor'easter brought traffic to a standstill in Portland, Maine, a record-breaking 14.5 inches fell on Portland over the weekend. Lots of snow there. Another frigid night is in store for Rochester, New York. Low temperatures will be about minus 10 degrees tonight and lake effect snow could drop an additional six inches of snow on Rochester and surrounding areas.
And things are slowly returning to normal at the Manchester, New Hampshire airport. Hundreds of flights were delayed or canceled at the height of the storm. Certainly a lot of people are trying to get back home today.
Well new developments tonight in the Denver Boeing 737 crash. The plane skidded off the runway Saturday night as it was taking off. The National Transportation Safety Board is now reviewing the cockpit voice recorder and flight recorder and said today it has good data. Susan Roesgen has exclusive new details.
(BEGIN VIDEOTAPE)
SUSAN ROESGEN, CNN CORRESPONDENT (voice-over): For the first time, reporters were allowed to get close to the burned-out plane while investigators in Washington listened to the cockpit voice recorder.
ROBERT SUMWALT, NTSB: We should have some overall characterization of what was said in that cockpit. I don't -- we will not have exact phrases and all but I think we can be able to characterize for you, in general terms, what may have been said in the cockpit of that airplane.
ROESGEN: The Boeing 737 was just starting down the runway for take-off Saturday night. The deep skid marks show what happened next. The plane veered off the runway tearing across a ravine and losing all of the wheels before it stopped, belly-down in the snow. Firefighters say they crawled through the cabin searching for victims, but in fact, everyone had already gotten out on their own. Nearly 40 people were hurt and now we know that one of those injured was the pilot. UNIDENTIFIED MALE: We do want that information as quickly as possible, but we want to make sure that he is -- he or she is mentally ready to be interviewed and physically ready as well.
ROESGEN: Investigators won't say yet what might have caused the accident. Instead, they will continue to collect what they call "perishable evidence", parts and pieces that will lose their meaning once the plane is moved.
UNIDENTIFIED MALE: Our goal is to be very methodical. To do it right. Once the airplane is moved we can't go back and say well how was this switch set or something, so we want to make sure that we carefully document things.
ROESGEN: So for now, planes continue to fly in and out of Denver International Airport from all runways except one, where Continental Flight 1404 remains a reminder of what could have been a disaster.
(END VIDEOTAPE)
ROESGEN: And now we know why the National Transportation Safety Board investigators were not able to interview the pilot. Why they haven't talked to him yet. We have learned -- CNN has learned through an exclusive source that the pilot is among the injured. He is in the hospital, still, in serious condition. Lisa?
SYLVESTER: Yeah, Susan, you look at that wreckage and it really is quite a miracle that you had 115 people who survived that crash, essentially.
ROESGEN: That's true. And also one more thing that the investigators will have to look at, Lisa, is some of the passengers have told us that they were actually told in the gate before they ever got on the plane that there was some kind of mechanical problem. Some problem with the engine and later they were told, no, the plane is fine and you're going to make an on-time departure, so the investigators have a lot to go through and a lot of people to talk to.
SYLVESTER: Yeah. That might be a crucial clue there. Thank you, Susan, for that great reporting.
Well companies across the nation are cutting costs everywhere they can to avoid massive layoffs and that means eliminating overtime and contributions to 401(ks). Hard-working middle class Americans are feeling the effects. Kitty Pilgrim has our report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Forget the company Christmas party. No raise. And you're not going anywhere on the company dime. Corporate cost-cutting is severe, but companies say they are doing what they can to avoid large-scale layoffs.
LAURIE BIENSTOCK, WATSON WYATT: While some organizations are taking the approach to doing layoffs they may be doing so in very targeted areas of their business and along with that looking at other actions they can take to reduce costs.
PILGRIM: They say batten down for a host of other measures that will hurt such as higher health care deductibles. Unpaid holidays. A recent survey found one out of ten employers are cutting matching contributions to their 401(k) plans. Rafael Garcia has been a mechanic with FedEx for more than 16 years and is worried about it's company's decision to temporarily cut the company's its 3 percent match on his 401(k).
RAFAEL GARCIA, FEDEX EMPLOYEE: It means I'll have to work longer and retire later. And have to work longer hours to make the extra money to put into my pension and retirement.
PILGRIM: FedEx points out their CEO took a 20 percent pay cut and managers a 5 to 10 percent cut to try to share the pain.
Other companies are also cutting 401(k) matches including Motorola, Eastman Kodak and the Frontier Airlines. Corporations are scrambling. Back in May, one out of three had no contingency plan in case of an economic downturn. Now, more than half of all companies are looking to freeze salary levels for 2009 and putting a freeze on new hiring.
(END VIDEOTAPE)
PILGRIM: Even with all the penny-pinching many company also still have to cut jobs. It's already showing up in the data. Testimony number of companies doubled from 19 percent in October to 39 percent this month. Lisa?
SYLVESTER: All of these cost-cutting measures like, for instance, stopping the contributions to 401(k), is this a temporary measure? Or is this how companies are going to move forward and do business? It's kind of like what they did with the pensions where you just don't see pensions.
PILGRIM: When they initiated the 401(k) cut on the match, some say it's a year. Other companies say we don't know how long we'll do it. It has to be until business conditions improve there's no real answer.
SYLVESTER: It comes at a time when middle class families are crunched in so many ways. All right. Thanks Kitty for your report.
We have reported extensively on this broadcast on the utter lack of oversight of the trillion dollar bailout of Wall Street. Now there is evidence that these banks are being less than forthcoming about how they're spending your money. In fact, when we tried to find out where your money was going, the banks basically said, it's none of your business. Mary Snow has our report.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT: With investors on edge, Bank of America is among banks trying to seek customers and soothe nerves with ads like these, but what banks aren't so public about is what they're doing with the billions in bailout monies they were given to start lending again. We contacted the banks who are given the biggest amounts. Citigroup, JP Morgan Chase, Wells Fargo and bank of America. Bank of America received $15 billion as part of the troubled asset relief program or T.A.R.P. Where did it go? A spokesman sent us a statement saying we're using the TARP funds to build our capital and make every loan we can. The bank says it anticipates releasing more information. Sarah Binder of the Brookings Institution has been monitoring the bailout money.
SARAH BINDER, BROOKINGS INSTITUTION: The banks have said, largely, we're using the money to stimulate the economy. To get the economy moving. That's far, far too general to know what precisely these banks are doing with the money.
SNOW: Citigroup, JP Morgan Chase, and Wells Fargo, each received $25 billion, the largest. Wells Fargo says it can't provide any details until it releases its fourth quarter statements though it says it intends to use the funds to help customer as void foreclosure. Citigroup says its using T.A.R.P. Money to expand the throw of credit and formed a special committee to oversee the money. JP Morgan Chase points out it recently bought more than $1 million in Illinois bonds and plans to lend five billion to non-profit and healthcare companies. The Associated Press surveyed 21 banks and reports. A republican member of the house financial services committee who opposed the bailout says, don't be shocked.
REP. THADDEUS MCCOTTER (R), MICHIGAN: Unfortunately, a lot of people are disgusted but not surprised. One of the problems with the wall street bailout is the people that caused problem were not called in front of Congress to explain what they had done and what needed to be done.
(END VIDEOTAPE)
SNOW: And Congress did not put conditions on the bailout money and the Government Accountability Office, for one, is calling for more transparency. Critics say now is the time for Congress to act and demand conditions since the second round of bailout money has yet to be distributed.
SYLVESTER: Mary, when people hear stories like this it comes across as pure arrogance on the part of these banks. I'm actually puzzled by it. They received this money, why wouldn't they know where it went and why wouldn't they disclose it?
SNOW: The banks are saying look all this money is in one lump sum. We'll have more details down the line but Congress didn't say specifically, you need to account for this as you go along and that's the problem. The next time money is doled out, everyone says there has to be accountability for this.
SYLVESTER: But the problem is, these are banks. You would think they have accountants that can track where the money is coming and where it's going out.
SNOW: A lot of these answers are very generic. SYLVESTER: Somehow I have a feeling we're going to see another hearing on Capitol Hill for this issue. Thanks Mary for that report.
That brings us to tonight's poll. Should the banks be required to tell you where they're spending your money? Yes or no? Cast your vote at loudobbs.com.
And hundreds of thousands of people apply for jobs in the new Obama administration. We'll discuss that with three of the best political analysts in the country.
And who's responsible for the country's mortgage crisis. We'll talk to the author of the book "Chain of Blame" next.
(COMMERCIAL BREAK)
SYLVESTER: The White House today blasted a New York Times story that blames President Bush for this country's housing crisis. The article entitled "White House Philosophy" says, quote, the story of how we got here is partly one of Mr. Bush's making. The Times story goes on to say as early as 2006, top advisers to Mr. Bush dismissed warnings that, quote, housing prices were inflated and that a foreclosure crisis was looming. Millions of Americans are facing foreclosure and home values are plummeting.
Joining me now is Paul Muolo, the author of "Chain of Blame, How Wall Street Caused the Mortgage and Credit Crisis." He's also the author of the new book "700 Billion Bailout, What It Means to You, Your Money, Your Mortgage and Your Taxes."
Paul, I have to ask you, the white house press secretary, Tony Fratto, pushed back against this Times story and we have some sound from him. Listen to what Tony Fratto had to say.
TONY FRATTO, DEPUTY PRESS SECRETARY: You're always going of the people looking back and second-guessing decisions that the administration makes or doesn't make. Given the severity of the crisis, we would all like of the acted more quickly.
SYLVESTER: OK, first off, Paul, do you think that the Bush administration did help create this housing crisis that we're in right now?
PAUL MUOLO, AUTHOR, "$700 BILLION BAILOUT": Sure. Listen, they're part of the problem; the administration sets the tone for the economy and what's going on in the regulatory apparatus in Washington. Wall Street is front and center here. You have to keep in mind; the Securities and Exchange Commission was asleep at the wheel while Wall Street was creating all these sub prime bonds or asset-backed securities. There was very little disclosure.
SYLVESTER: You talk about the details in your book. You have a book out on the 700 billion bailout and this just passed. How did you get the book out so quickly?
MUOLO: I have a very understanding family. I wrote a book about what happened on Wall Street in the lending industry and this is sort of an addendum to the other book. It's basically to tell the consumers that the bailout is open-ended. The government can use this money for whatever it likes. It can bailout automakers, even states and towns and cities and there's very little oversight at least at this point. I think you mentioned that earlier. There's no strings attached to the money they're giving bank.
SYLVESTER: Some of these problems are now coming to light. Do you think that -- was it Congress? Was it the administration? Who should have made sure that there was some kind of a guarantee that the banks would receive this money and would actually turn around and use it to lend?
MUOLO: Both the white house and the Congress should have stepped in and said, listen we need some guarantees here. But Secretary Paulson of the treasury came to the white house and members of the Congress and said, we have a huge crisis. You have to listen to me and do it my way otherwise we're going of the a complete meltdown in the financial markets, and they bought it. And they passed the bill quickly with very little debate and we have what we have right now.
SYLVESTER: As you touched upon and as we mentioned in our earlier report, banks are saying, look, we don't have to tell you taxpayers what we're doing with the money, thank you very much. We received part of this $350 billion. Do you think they should be required to tell taxpayers and there should be some accounting of what they did with the money they received?
MUOLO: Sure. I think down the road that will come out. But when they first passed this bailout idea they were going to buy troubled mortgages and mortgage-backed securities and work with them. But that got thrown out the window because Secretary Paulson thought it wasn't putting money in quick enough. He felt that would go a lot quicker to helping solve this problem. And lo and behold, they have the money and the economy will struggle longer until we see more job creation. That's the major problem right now. You can talk about all this other stuff but if you don't talk about job creations and job losses it's going to be all about jobs the next two years.
SYLVESTER: Do you think that the Paulson -- that secretary Paulson will tap into the second $350 billion?
MUOLO: Well, he wants it, but -- Congress has to allocate it. They're not going to allocate it unless they see some real progress from the administration on helping consumers avoid foreclosure. He's got the $350 billion. He spent most of it. The last 15 went to the automakers and he's not getting the rest until Congress gets something for the other $350 billion.
SYLVESTER: Paul Muolo, thank you very much for joining us. We appreciate your time.
Coming up at the top of the hour, Campbell Brown "NO BIAS, NO BULL." Erica Hill is sitting in for Campbell.
Erica, what are you working on? ERICA HILL, CNN ANCHOR: Hi Lisa. In just a few minutes we are going to induct some new members into the "NO BIAS, NO BULL" rose gallery. No politicians for you tonight though. These folks took home millions of dollars to run their companies so far into the ground they need taxpayer bailouts to keep going. And they're still taking money home, your money, remember.
And speaking of your money, do you ever wonder where that $350 billion in bailouts really went? Good luck finding out. The government, as we know it to a bunch of banks but nobody seems to know exactly what happened to it after that.
And we'll catch up on the not-so-nice things that Joe Biden and Dick Cheney seem to keep saying about one another.
SYLVESTER: All right, Erica. We'll tune in.
And a reminder to join Lou on the radio Monday through Friday for the Lou Dobbs Show. Tomorrow's guest include Professor Peter Morici from the University of Maryland and Gordon Chang, author of the "Coming Collapse of China." Go to loudobbsradio.com to find local listings for the Lou Dobbs Show on the Radio.
Coming up, the war of words between Vice President Dick Cheney and his successor, Joe Biden.
And "The New York Times" apologizes to Caroline Kennedy. Three of the best political analysts in the country join me for those stories and much more.
(COMMERCIAL BREAK)
SYLVESTER: Joining me now are three of the best political analysts in the country, all CNN contributors. Republican strategist Ed Rollins, Ed was former white house political director under Ronald Reagan. New York Daily News columnist, Errol Louis, Errol is also the host of the morning show on WWRL in New York. And democratic strategist, Hank Sheinkopf. Happy birthday to Hank. It's his birthday today.
Well let's get started. We'll jump right in here. "The New York Times" is reporting that President Bush is responsible for the current housing crisis. The white house today responding, we've got a full screen here. We want to share with you what Dana Perino said, "The Times reporting in the story amounts to finding selected quotes to report a story that reporters fully intended to write on the onset while disregarding anything that didn't fit into their point of view." Who's right here? Hank, we'll get started with you. Is the Times right in its assessment in reporting I mean President Bush was pushing this idea of ownership society? What are your thoughts?
HANK SHEINKOPF, DEMOCRATIC STRATEGIST: When you are the president of the United States and something fails you take responsibility for it. It is not that this was just a single failure. This was a gross financial failure. A failure to regulate financial institutions and real people are going to get hurt. SYLVESTER: In this case, the white house is saying, look; you can't lay the blame entirely on us. The financial conditions. That they started off with a very noble and lofty goal as did the Clinton administration. They wanted people to own their homes and they're not to blame entirely for the mess.
ED ROLLINS, REPUBLICAN STRATEGIST: There's always a period of correction. I say this as a republican. And I think "The New York Times" laid out a very interesting piece and may have overstated but I think, equally as important is the Bush white house is overly sensitive in getting blamed for anything. And they're going to get blamed for a lot. They might as well get used to it because when they leave town it's going to be ten years. When you're running the government and things aren't going well, whatever your noble intention is, you need to correct it. They should have corrected the financial thing. This was predicted by John Snow when he was treasury secretary. He negotiated with the house. The house and senate were controlled by republicans up to two years ago so it's difficult to say Barney Frank did it or Chris Dodd did it when we controlled most of the agenda for the last eight years.
SYLVESTER: Errol?
ERROL LOUIS, NEW YORK DAILY NEWS: My problem with "The New York Times" piece was that it didn't go back far enough. This problem has been brewing for ten years, the Consumer Federation of America, AARP, a number of consumer rights groups have been talking about this for a decade. For them to pick up the last two or three years, whose most to blame? That's not all that important. The one central point they make, is that there are a number of senior Bush administration officials who said that they pulled away a lot of the regulation that might have caught this, might have stopped this. They went to the Supreme Court to fight for the right to take away regulatory power from the states. I mean, they were sued by all 50 attorneys general, republicans, independents, democrats. They all said we've got to keep an eye on these subprime lenders. And the Bush administration wanted to let them do whatever they wanted to so they have a measure of blame they can't avoid.
SHEINKOPF: That's what I said in the beginning. The times -- could we say they overstated their argument? Maybe. Did the Bush administration do all it could have done to protect consumers essentially and others for from the financial institutions? And the answer is, no.
SYLVESTER: You know Vice President Cheney is out. He's doing the circuit right now talking to different media outlets. He's essentially saying, look, our administration vindicated. That history down the road will look back and say they weren't to blame for everything. It's not just that. Vice President Dick Cheney is also taking a look at Joe Biden and essentially saying take a look at his role, that there's going to be a different kind of a role versus the role that Cheney has. We have some sound. We want to listen to what Vice President Cheney had to say.
(BEGIN VIDEO CLIP) VICE PRESIDENT DICK CHENEY (R), UNITED STATES: If he wants to diminish the office of vice president, that's obviously his call. I think that President-Elect Obama will decide what he wants in a vice president and apparently from the way they're talking about it, he does not expect him to have as consequential a role as I have had during my time.
(END VIDEO CLIP)
SYLVESTER: OK. We don't know what history is going to say but there is this whole debate on what should be the proper role for the vice president. Errol?
LOUIS: The constitution question they're also fighting about. I mean one really overlooked thing was that the Bush/Cheney administration really has a certain contempt for Congress. I mean the thing that strikes me about vice presidential power with this administration was vice president Cheney driving to Congress, they had an office waiting for him, he could basically run the republican conference in Congress which I think led to their, the mistakes that let them in the minority in 2006. I mean, if Biden wants to follow that path he's welcome to it. I think this administration has a different sense of restraint. They're not going to look to dominate everything in foreign policy and Congress and everywhere they thank they look. They're not going to try and expand powers. That's probably a good thing.
SYLVESTER: What is the role?
LOUIS: There's a long history between Dick Cheney and Don Rumsfeld, who were the chiefs of staff for Richard Nixon and at a time Nixon was weakened by Watergate, the Congress pulled back a lot of the powers that had been taken over the first to term by Nixon, powers that were obviously abused. During their period in Congress, when Cheney was a leader in Congress and what have, he got indignant about democrats taking powers he thought away from the presidency. Bush for some reason agreed with them, gave them back the powers. The powers are very clear. It's a three-headed monster. We have a supreme court that's not as active on a daily basis as the Congress but there's no place in the constitution that says the vice president has unique powers. He basically presides over the senate and steps in when the president is not able to do the functions of the job. It's not some enormous job that became and he was the most powerful vice president in history and the combination that he and Rumsfeld and their partnership basically what guided the war, guided the economic policy, guided the energy policy. I would hope the next vice president does that.
SYLVESTER: Vice President-Elect Joe Biden will be on "LARRY KING LIVE" later. We have some sound of what he said, of what Biden essentially says his role should be.
(BEGIN VIDEO CLIP)
JOE BIDEN (D), VICE PRESIDENT ELECT: My role as vice president is unlike some of the others. I've asked for no specific portfolio, that is, I take care of the environment or one particular area, and that I be essentially his counselor-in-chief, and thus far, as the camp -- as the administrations begin to unroll, we are rolling out or cabinet, that's the role I'll play. I hope that's the role I'll play for the next four years.
(END VIDEO CLIP)
SYLVESTER: Hank, we know there is a specific role, he's supposed to be this middle class czar. Will this work? Is this a fit for Joe Biden?
SHEINKOPF: Middle class czar, good fit for him. He typifies the kind of voters that frankly Barack Obama will need to hold on to get reelected and keep the Congress going in the direction it should.
Going back to Dick Cheney, improper delegation of authority to a vice president by the president, no question about it and one that we're going to pay a price for, for a long time.
SYLVESTER: OK. We'll have more on the Biden versus Cheney in a bit. We'll have more from our panel in a moment.
We want to remind you to stay tuned with CNN tonight for a Larry King exclusive, vice president-elect Joe Biden is Larry's special guest tonight. He'll talk about Dick Cheney and a whole lot more. That's "LARRY KING LIVE" tonight at 9:00 p.m. eastern right here on CNN.
And a reminder to vote in tonight's poll. Should the banks be required to tell you where they are spending your taxpayer funded bailout money? Yes or no? Cast your vote at loudobbs.com. We'll have the results in a minute and we'll be back with more from our panel.
(COMMERCIAL BREAK)
SYLVESTER: I'm back now Ed Rollins, Errol Louis and Hank Sheinkopf. There are new numbers out there a new CNN Opinion Research Poll out today that compares the opinion of Vice President Cheney compared to other vice presidents. It's just not looking good. 23 percent rated Vice President Cheney the worst ever. 41 percent said poor. 34 percent said good, 1 percent said best ever. Ed?
ROLLINS: Let me just correct that. Cheney and Rumsfeld were President Ford's chiefs of staff, not following President Nixon.
No one has been quite as visible or aggressive as Cheney has. He's been a point of great opposition, much of it because he had the power and obviously he was someone who sort of relished the rules. I'm not surprised by that. Most vice presidents are behind the scenes or more glad-handers or players that don't overshadow a president. They stand behind him. This one overshadowed the president.
SYLVESTER: OK. We're looking to the past. Let's move on to the future here. Caroline Kennedy, do you think she'll get the nod from Governor Paterson? SHEINKOPF: It would not be smart to try to predict what the governor will do but it does not look likely. Her first steps have not been spectacular and who cares what her last name is? She's got to be the senator for the state of New York.
SYLVESTER: Well you know the Politico is says Caroline Kennedy is going on record as far as what her policies are but she is still considered a lightweight by many. Errol, what do you think?
LOUIS: I disagree. Most of the people calling her a lightweight are people who want the job themselves. They have nothing else to criticize her around. So they're just saying well, she hasn't run in a lot of elections. She hasn't put paid her political dues. I don't know that will be effective with voters. It might mean a little bit with the governor but he's got a loft other considerations. He's got to pick a running mate. He doesn't have a lieutenant governor for complicated reasons in New York now. He's got to run with this person as a running mate. It's a great, big state. Proven fund-raising ability and name recognition. That's her main card and she'll play that as hard as she can.
SYLVESTER: I want to turn quickly to Governor Blagojevich. We have this new internal report that Obama's camp will be releasing. What do you think of it? Do you think that essentially, are we making too much of a big deal who had contact with whom?
ROLLINS: If this was an accurate report and I assume it is, then I think Rahm Emanuel is owed an apology by Fitzgerald. He made nothing that was improper. He made one call to the governor, here's who our choice was and talked to the staff about it a couple times but did nothing that was improper and they let him step out two weeks ago and got it behind him.
SYLVESTER: Hank?
SHEINKOPF: Rahm Emanuel deserves an apology immediately.
LOUIS: It seems everybody in Illinois politics, Jesse Jackson, Jr., Rahm Emanuel knew anything about Blagojevich knew number one that he was probably under investigation and therefore wired and number two, he was prone to cut sleazy deals you didn't want any part of.
SYLVESTER: This is going to be, it's giving us a really up-front look at exactly how Illinois politics works. I think you're right, I think that a lot of people are being looped into all of this. Thank you very much to our panel. We appreciate it. Once again, a happy birthday to you, Hank Sheinkopf.
Tonight's poll results, 99 percent of you think the banks should be required to tell you where they are spending your taxpayer-funded bailout money.
Thanks for being with us tonight. Please join us tomorrow. For all of us here, thanks for watching. Good night from New York.
"NO BIAS, NO BULL" starts right now.
