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Lou Dobbs Tonight
President-Elect Obama's Hard Sell; Democratic Backlash; California IOUs
Aired January 08, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Thank you, Wolf.
Tonight President-elect Obama makes his most direct appeal for congressional and public support for his economic stimulus plan, but the president-elect's plan facing rising opposition already from within his own party.
And, tonight, a key committee of the Illinois General Assembly has just voted unanimously to recommend the impeachment of Governor Rod Blagojevich. We'll have the very latest for you.
And, tonight, a new outbreak of salmonella poisoning in this country, it has spread to more than 40 states, almost 400 people have been sickened. We'll have a special report on the outbreak and we'll be reporting on whether anyone in the federal government is trying to protect you from dangerous diseases, all of that, all of the day's news straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, January 8th. Live from New York, Lou Dobbs.
DOBBS: Good evening, everybody. President-elect Obama today warned of dire consequences for this country and our economy if Congress fails to approve his economic stimulus plan. The president- elect said it is time to end the culture of anything goes and it's time to put the interest of the nation first.
But President-elect Obama is already facing a backlash from within his own party on one of his main proposals, for individual and business tax cuts. Ed Henry has our report on the president-elect's hard sell.
(BEGIN VIDEOTAPE)
ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): It turns out sometimes there are two presidents at a time, at least when you have a tight window to sell your economic plan.
BARACK OBAMA (D-IL), PRESIDENT-ELECT OF THE UNITED STATES: It is true that we cannot depend on government alone to create jobs or long- term growth. But at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe.
HENRY: Sounding as if he's already in charge, President-elect Barack Obama used his first speech since the election to make the case the financial crisis is getting worst, blaming it on what he called a culture of anything goes.
OBAMA: We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington D.C. The result has been a devastating loss of trust and confidence in our economy, our financial markets and our government.
HENRY: Mr. Obama made the pitch that trust could be restored if Congress passes his massive $775 billion recovery package though he continued to offer few details about the plan. Republicans say they are encouraged the incoming president seems willing to work with them, but they're raising concerns about the price tag on top of a $1.2 trillion budget deficit.
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Well, given the deficit numbers it really ought not be $1 trillion spending bill. I think we can start by saying that.
HENRY: But New York City Mayor Michael Bloomberg, one of many prominent local officials in the crowd for the speech, said any belt tightening needs to take a back seat to reviving the economy.
MAYOR MICHAEL BLOOMBERG (D), NEW YORK: We have no choice but to ratchet up the deficit at the moment. And the president-elect referenced that and said he would like to do things that have a life span where there is an end to it so that he can then address that issue and bring down the deficits in the future.
(END VIDEOTAPE)
HENRY: Meanwhile, CNN has learned that tomorrow morning the president-elect will unveil his intelligence team, making it officials that Leon Panetta will be CIA director, that Admiral Dennis Blair will be the director of national intelligence and John Brennan will be his homeland security adviser here inside the White House.
Meanwhile, the president-elect also announcing that next Monday, January 12th, he'll be meeting here in Washington with Mexican President Calderon, even though Barack Obama has been talking about one president at a time, especially on foreign policy, this is a tradition dating back to 1980 when Ronald Reagan met with the Mexican president before he was actually inaugurated, so Barack Obama will continue that tradition here in Washington next week -- Lou.
DOBBS: All right. Thank you very much -- Ed Henry reporting from the White House. We'll have much more on that upcoming meeting between Obama and Calderon and calls by the Bush administration now to militarize our border with Mexico -- those developments upcoming.
President-elect Obama's so-called economic recovery plan tonight faces rising opposition, as I said, from congressional Democrats. Those Democrats saying the president-elect's tax proposals do little to stimulate the economy or to create jobs. Dana Bash has our report.
(BEGIN VIDEOTAPE)
(APPLAUSE)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): At the very moment Barack Obama was pushing his economic recovery proposal, several fellow Democrats emerged from a closed-door meeting of the powerful Senate Finance Committee saying they oppose central parts of his tax plan, especially a $3,000 tax credit to businesses for every job they create.
SEN. JOHN KERRY (D), MASSACHUSETTS: I'm not that excited about that.
BASH: Why?
KERRY: Because if somebody is able to hire, they are probably going to hire anyway.
BASH: On the campaign trail, Obama constantly pushed the proposal as an innovative way to create jobs.
OBAMA: American businesses a $3,000 tax credit for every job they create right here in United States of America.
BASH: But many in Obama's own party who will actually craft the legislation disagree and say tax credits to businesses in dire straits won't create jobs.
UNIDENTIFIED MALE: I think it's unlikely to be effective. If you think about it, business people are not going to hire people to produce products that are not selling.
BASH: That's not the only Obama tax idea his Democratic brethren are blasting. Another -- payroll tax cuts, $500 per person and 1,000 per couple earning less than $200,000 a year, amounting to about 10 to $20 per week.
UNIDENTIFIED MALE: Twenty dollars a week...
BASH: Twenty dollars a week.
UNIDENTIFIED MALE: I don't think that will be effective either. I think that is in terms of this economic impact very much like what happened with the rebates.
BASH: Rebates passed last year failed to jump-start the economy since people either saved the money or used it to pay off debt. Several Democrats say they worry Obama's tax cut would suffer the same fate.
SEN. RON WYDEN (D), OREGON: Just giving people 500 and $600, while certainly welcome when there is all of this economic hurt, may not be the best use of stimulus.
(END VIDEOTAPE)
BASH: Now late this afternoon members of Obama's economic team came here to Capitol Hill for a lengthy closed-door meeting with all Democratic senators. Multiple senators told us coming out of that meeting that they really spent considerable time pressing their concerns about Obama's tax plans with his aides. Two of those senators told us that the response was quote, "noncommittal" but one said that they got the message loud and clear -- Lou.
DOBBS: Thank you very much, Dana -- Dana Bash reporting from Capitol Hill.
The president-elect's proposed health care czar, Tom Daschle, today declared that flaws in our health care system threatened the nation's economic security. Daschle on Capitol Hill for the first hearing on his nomination to be secretary of Health and Human Services -- Brianna Keilar reports now from Capitol Hill.
(BEGIN VIDEOTAPE)
BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): Tom Daschle, the man tasked with carrying out President-elect Obama's promise to overhaul the health care system was welcomed to his confirmation hearing by Ted Kennedy, the lion of the Senate back on the Hill despite an ongoing battle with brain cancer, his singular focus, making expanded health care coverage his legacy.
SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Reform is urgently needed and Tom Daschle is just the person for the job.
KEILAR: After meeting with Americans all over the country talking about their concerns, Mr. Obama's pick for Health and Human Services secretary delivered an urgent message to Congress.
TOM DASCHLE, HEALTH SECRETARY NOMINEE: The flaws in our health system are pervasive and corrosive. They threaten our health and economic security.
KEILAR: He told the Senate Health Committee those flaws are a drag on the health of Americans, but also on the economy.
UNIDENTIFIED MALE: The people of General Motors once told us they actually spend more on health care today than they do on steel. The folks at Starbucks told us that they spend more on health care than they do on coffee and that the American family spends more on health care than they do on virtually any other thing but rent.
KEILAR: Daschle spelled out the Obama plan: Lower health care costs, increase access to coverage for the 70 million uninsured or under insured Americans, and improve the quality of care insured Americans receive. He said tackling the often divisive issue of health care reform will mean reaching across the aisle, vouching for Daschle, his former Senate colleague, Republican Bob Dole who introduced Daschle at the hearing.
BOB DOLE, FORMER GOP PRES. CANDIDATE: We have a nominee who understands bipartisanship is best in the long-range, even though with a big Democratic majority, he may not need Republican.
(END VIDEOTAPE) KEILAR: It was Senator Kennedy's hope to start dealing with health care reform right away here in the opening weeks of this Congress, but with the economy being the number one issue and so much money tied up there, there's an understanding now among Senate Democrats that this is going to have to take a little more time, Lou.
DOBBS: Brianna, thank you. One couldn't help but see, as you point out, Bob Dole there, who is a lobbyist now, is vouching for Daschle and Daschle married to a lobbyist. Did Daschle's -- his own past connections to the pharmaceutical industry come up in that hearing today?
KEILAR: It didn't come up in the hearing, obviously the part that we saw on camera, but I was told by an aide to Republican Senator Coburn of Oklahoma that he has submitted a couple of questions about Daschle's connections to a lobbying firm. Now to be clear, Daschle was an adviser, not a registered lobbyist to a firm.
But that's not to say that something like that wouldn't give a firm some bragging rights for their clients. In fact it's understood that it does, Lou, and the situation is this. This is a root, whether it's being an adviser or being a lobbyist that many members of Congress take and there is sometimes reticent to throw stones at each other over -- in a forum like this.
DOBBS: Absolutely. Brianna, thank you very much -- Brianna Keilar from Capitol Hill.
Well as Brianna just said, former Senator Daschle was a special policy adviser to the lobbying firm of Alston and Bird. Alston and Bird did not respond when we asked whether Senator Daschle still has a role at the firm. But today Alston and Bird did have an item on its Web site, bragging about Daschle's testimony, an item that trumpeted the fact that Daschle had served as an adviser at the firm since 2005.
A lobbyist for a defense contractor tonight has been chosen to become deputy secretary of defense in the Obama administration despite the president-elect's repeated criticism of lobbyists and special interests. William Lynn, a former Pentagon official in the Clinton administration, senior vice president for government operations at Raytheon.
The president-elect's transition team strongly defended the choice. An Obama spokesman said quote, "Because Mr. Lynn came so highly recommended from experts across the political spectrum, the president-elect felt it was critical that he fill this position."
However, the appointment is certain to raise more questions about the president-elect's commitment to keep lobbyists away from overbearing influence in his administration.
New developments tonight in the fight over whether to impeach Governor Rod Blagojevich of Illinois, in just the past few minutes a committee of the Illinois General Assembly voted unanimously to recommend his impeachment. Earlier the committee released a draft report that said quote, "The totality of the evidence warrants the impeachment of the governor for cause." The issue goes now to the full State House of Representatives tomorrow. We'll have much more on this development and the fight over whether to seat Roland Burris in the U.S. Senate later here in the show.
Turning now to the war between Israel and Hamas, diplomats tonight saying there is agreement on the wording of a United Nations sponsored cease-fire resolution. It is not clear if and when the Security Council will vote on the resolution. As Israel's offensive against Hamas entered its 14th day, terrorists in Lebanon fired four rockets into northern Israel. Two Israelis were slightly wounded. There was no claim of responsibility for the attack, which was launched from territory controlled by Hezbollah.
Up next here, you won't believe what Governor Schwarzenegger in California is proposing now to tackle his state's worsening budget crisis, also ethics and science, new concerns about parents who choose the sex of their children. Where does it stop?
And a nationwide salmonella outbreak raising new questions about the government's ability, even its willingness to protect American citizens, we'll be right back with those stories.
(COMMERCIAL BREAK)
DOBBS: Choosing the sex of your new baby could become as common place as selecting the color for a new car in this country. But there are rigorous ethical concerns about parents who are using medical technology now to act on their cultural preferences for male children. Ines Ferre has our report.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): The most anticipated moment of pregnancy used to be finding out the sex of a child. But today having a boy or girl is a matter of choice. Especially among some Asian immigrant couples, who often prefer a boy. Fertility specialist Dr. John Zhang says about a third of his patients are Asian. Seventy percent of them want a baby boy.
DR. JOHN ZHANG, NEW HOPE FERTILITY CENTER: Because in many countries the option to a gender selection may not be so easy or popular so when they came here, the first thing they learn, oh, we can do something like that and they all come, so that's why you'll see typically the Asian community, mostly are the new immigrants.
FERRE: It's a trend that's been studied at Columbia University using census 2000 figures, which found that second or third children of Asian, Indian, Chinese and Koreans in the U.S. tended to be male if the first child was a girl.
LENA EDLUND, COLUMBIA UNIVERSITY: Two things are driving this. One is a preference for sons and the other one is a willingness to do something about it.
FERRE: An increasingly popular technology to do this is called PGD, Preimplantation Genetic Diagnosis, part of an in vitro procedure where a cell is taken out of the embryo to look at the sex before being implanted into the mother.
(on camera): PGD is a technology that was initially used to detect hereditary diseases but it quickly became popular in determining gender.
(voice-over): The entire procedure raises ethical questions.
UNIDENTIFIED MALE: Technology always (INAUDIBLE) and our moral standards I try to follow, the rules (INAUDIBLE).
FERRE: The United States is one of the few countries where the use of Pre Implantation Genetic Diagnosis in sex determination is unregulated.
(END VIDEOTAPE)
FERRE: And ethicists say it's difficult to put restrictions on how procedures like these can be used once they are authorized. It's hard to determine what purpose they are being used for and they are also usually privately-paid procedures and fall into the realm of consumer choice, making them harder to regulate -- Lou.
DOBBS: Highly controversial and lots of ethical questions.
FERRE: Definitely and it's not just a certain group that wants to use this. I mean now families are using this to balance their families. There are couples who want to -- who say, you know, I've got two girls already. I want a boy or I've got one boy. I want a girl now.
DOBBS: We're going to have much more on this. Ines, thank you very much.
FERRE: Yeah.
DOBBS: Ines Ferre.
Well, some families are using science to put their children on a path to college scholarship or a career as a professional athlete. A Colorado company is now offering a new test that it says could predict natural athletic ability. The test analyzes the ACTN3 gene to determine whether a child is best suited for power sports like football or enduring sports like distance running or whether the child could be an elite athlete in a number of sports.
A 2003 study discovered a link between the ACTN3 gene and athletic ability. The test is extremely controversial, with everyone from doctors to parents offering varying opinions. Some critics compare the genetic testing to Hitler's desire for a so-called perfect race.
A new outbreak of salmonella poisoning has spread to more than 40 states tonight. Hundreds of people have been infected. The Centers for Disease Control now leading that investigation and has yet to identify the cause or the origin. The Food and Drug Administration widely criticized for its handling of last year's massive salmonella outbreak is assisting the CDC in its investigation. Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): A salmonella outbreak is emerging across the nation. And while there have been roughly 400 sick, including some hospitalizations, government scientists don't know the source of the salmonella. Unacceptable, says this former secretary of Health and Human Services.
TOMMY THOMPSON, FORMER HHS SECRETARY: Seventy-six million Americans have some type of food poisoning every year, 325,000 Americans go into the hospital, 5,000 people die. That's not good enough for America.
SCHIAVONE: The CDC is still trying to confirm individual state counts in this latest outbreak but health officials in Ohio, believed to rank high on the list, tell CNN they have 51 reported cases, assisting in the CDC investigation the Agriculture Department and the Food and Drug Administration whose efforts may be hampered by strained resources.
LADO WILEY, COALITION FOR A STRONGER FDA: We think strengthening the laboratory capacity, strengthening the number of field agents in creating rapid reaction teams are important elements to that.
SCHIAVONE: The House Energy and Commerce Committee discovered that despite their shortage of funds, just last month, the FDA spent $1.5 million on a private contract to boost morale at the battered agency using the services of an Oakland, California group called the Center For Professional Development. Republicans Joe Barton and John Shimkus challenged the FDA in this letter, stating among other things, we note that according to CPD's Web site one of CPD's consultants quote "works with the metaphor of color, symbol, dance and story to help people give meaning to their lives and work" end quote. The outrage is bipartisan.
REP. BART STUPAK (D), MICHIGAN: They spent $1.5 million to make themselves feel good because their track record is so dismal. They are on their way out. They know they are on their way out but I guess they got to have one more pat on the back to make them feel good.
(END VIDEOTAPE)
SCHIAVONE: Lou, for its part one FDA official said that meeting was very positive. And with regard to the latest salmonella outbreak, the agency says it's working closely with the CDC to determine the origin of the salmonella outbreak -- Lou.
DOBBS: Hopefully with greater effectiveness, greater quickness than displayed last year. Louise thank you very much -- Louise Schiavone with our story from Washington.
In New York a bizarre story, a New York surgeon today demanded his estranged wife return the kidney that he donated to her back in 2001. Doctor Richard Batista's wife, Dawnell (ph), filed for divorce in 2005. Doctor Batista says he decided to go public with his demand because he's grown frustrated with the negotiations.
The doctor says he has no regrets about donating his kidney to her, only regrets about the marriage. Batista did concede he would settle for $1.5 million to compensate him for his kidney.
Up next tens of thousands threatened by raging flood waters in our Pacific Northwest. We'll have the very latest for you.
And one state's residents are hoping to pay some of their bills with their tax refunds, but they could be in for a shock from their state government. We'll have that report here next. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: California state government tonight is considering drastic, desperate action in fact to tackle a worsening budget deficit, a deficit that is already out of control. There are new concerns that the state could run out of money very soon and Californians awaiting their tax refunds could be stunned when they open their mail from the state. Casey Wian has our report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): A month ago, Governor Arnold Schwarzenegger said California was heading toward financial Armageddon. Since then, conditions have only deteriorated and now the Golden State is just weeks from running out of money.
JEAN ROSS, CALIF. BUDGET POLICY CENTER: We are missing about one out of every $5 needed to balance the state budget and that comes on the heels of a spending plan to cut billions and billions of dollars out of our public schools, billions of dollars out of health and social service programs. So we are starting from a very dire situation.
WIAN: If there is no deal between the governor and state lawmakers to close California's pending $42 billion budget deficit, people and businesses expecting income tax refund checks will instead receive potentially worthless IOUs starting February 1st.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: For the taxpayers who have been working hard, they've lived by the rules and raised their families, I think that they deserve better than that.
WIAN: Besides sales and income tax increases and cuts to state programs, officials are proposing the elimination of two paid holidays for state employees and mandating two additional unpaid days off through 2010. They are also considering shortening the school year by a week to save $1 billion. At Los Angeles Unified, supervisors sent out more than 2,000 layoff notices this week and have no idea how many more jobs they will be forced to cut.
RAMON CORTINES, LAUSD SUPERINTENDENT: What is devastating to us is that decisions are not being made in Sacramento, so that we can begin the process and we can plan in an orderly way. WIAN: So far, Schwarzenegger has vetoed budgets passed by the Democrat controlled state legislature that attempted to circumvent California's landmark Proposition 13, which requires a two-thirds vote to raise taxes. If the governor does sign such a bill, lawsuits are already waiting.
JON COUPAL, HOWARD JARVIS TAXPAYERS ASSN.: The action of the -- each legislative house in passing them is a violation, we believe, of the state constitution and the federal constitution.
WIAN: With each passing day California's budget deficit grows by $33 million.
(END VIDEOTAPE)
WIAN: Schwarzenegger says the main problem now is neither Democrats nor Republicans and the state legislature are willing to step over what he calls their ideological lines and risk angering their special interest constituents to get a budget deal done -- Lou.
DOBBS: Extraordinary developments, you've been reporting on this crisis throughout and each -- with each report that number, now up to $42 billion increases. California is beginning to look like a dysfunctional government on the verge of outright breakdown.
WIAN: Yeah, I don't know how you could call it anything but dysfunctional. You know for weeks and weeks and weeks, the state legislature and the government -- governor have been trying to put together a deal. They have been unable to do it.
Neither side seems willing to budge. They are meeting again today, Lou, but I'm telling you there's not much optimism out here that anything is going to be done any time soon. The deadline is February 1st. I imagine they will have to get together and get something done before then. But as we said $33 million a day is the price tag for each day that goes by without a deal.
DOBBS: Casey thank you very much -- Casey Wian from Los Angeles.
Well we'd like to know what you think about the situation in California. Here is tonight's poll question. If the state of California is giving IOU refunds, should California taxpayers be able to pay their taxes with IOUs? Yes or no? We'd like to know what you think about it. Go to loudobbs.com to give us your answer. We're going to tell you how the vote comes out here later in the broadcast. Of course, this could catch on nationwide.
Well, let's turn to the northwest where the news is not good. Dangerous flooding there, mudslides and avalanches are threatening parts of the state. More than 30,000 citizens of Washington are being urged to evacuate, eight cities in western Washington. Heavy rains and snow melt have combined to cause record flooding and mudslides.
The National Weather Service has issued flood warnings for about two dozen rivers in western Washington. Some homeowners there are ignoring a voluntary evacuation order. Instead they're staying to battle those rising floodwaters. Weather officials now saying it will be days before the floodwaters actually begin to recede.
Time now for some of your thoughts -- Ed in Florida said, "Rome is burning and those idiots in Congress are playing tidily winks with seating. That's a sad reflection on the electorate." Excuse me.
And Alfred in Tennessee said, "I want to compliment you on your report about the shrinking wages of scientists. I've worked in the Information Technology arena since 1989 and my highest wages were between 1999 and 2001, slowly shrinking ever since. The H-1B visas have been eating away at American computer jobs for years."
Send us your thoughts to loudobbs.com.
Up next here, a federal government program that actually works and the pro amnesty open borders movement, well they don't like this program one little bit.
And an Illinois assembly committee has voted to recommend the impeachment of Governor Blagojevich. Two leading political commentators join me here.
And we'll be examining the president-elect's assertion that this recession could last for years unless Congress passes his huge stimulus plan. We'll be right back.
(COMMERCIAL BREAK)
ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion. Here again, Mr. Independent, Lou Dobbs.
DOBBS: Welcome back. New developments in the investigation into Bernard Madoff's $50 billion Ponzi scheme. Prosecutors now say Madoff planned to hide at much as $300 million from investigators. The Justice Department is accusing Madoff of trying to transfer investor assets to his family, friends and some employees before his arrest. Prosecutors are demanding that Madoff be placed in custody. He's under house arrest in New York City. No one seems to be able to explain why he's not in jail.
Well, news tonight of two other Ponzi schemes. A Pennsylvania investor has been charged of swindling a modest amount, some $50 million from 80 investors. Joseph Forte admits to using as much as $20 million on investor funds to repay other investors. Also admitting to take as much as $12 million in so-called "fees" for his own use. Investigators say that many of his victims were his friends and acquaintances.
In Amherst, New York, a businessman is now charged with running a multimillion scheme there, defrauding hundreds of investors. Prosecutors say Richard Piccoli's investors include Catholic priests and parishioners.
Well, the president-elect today appealed to Congress and the public trying to win approval for his economic stimulus plan quickly. Joining me now to talk about this and the state of our economy are two of the best economic thinkers in the country, Peter Morici, professor at the Smith School of Business at the University of Maryland. Good to have you with us.
And David Cay Johnston, Pulitzer Prize winning journalist, best- selling author of "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense," it's out in paperback, by the way. And it's good to have you with us, David.
All right, well we all listened to the president today. Professor Morici, I'll start with you. There were no specifics. There was dog-gone little in the way of shape or even - but, there was a little, it seemed to me, almost Bushian rhetoric of fear. What do you make of it?
PETER MORICI, UNIVERSITY OF MARYLAND: Well, absolutely. I mean, President-elect Obama was saying that the U.S. economy is in a terrible mess and it's likely to be there for many years to come. He may well be right, but a stimulus package will not sustainable growth path. It might make people feel better for awhile and it might give us worthwhile investments and new roads, bridges and health care and so forth, but the economy will slip right back into the drink if he doesn't fix what is broken, namely, the banks and that terrible trade deficit and all that outsourcing that's destroying all of those manufacturing jobs. He mentioned the manufacturing jobs, but didn't mention doing anything about the culprit, our terrible, dumb trade policy with China.
About the banks, he did mention, and I was cheering about this, the cultural problem on Wall Street and it's connection to the halls of power in Washington, which I read to be the Senate Banking Committee and the House Finance Committee. It'll be interesting to see how he fixes that.
DOBBS: No, he just didn't -- he just forgot, perhaps, to mention Christopher Dodd and Barney Frank by name.
David, your reaction.
DAVID CAY JOHNSTON, PULITZER PRIZE WINNER: Well, I think the big fight you're going to see in the months ahead is whether we just had a stimulus package including the tax cut that are designed to appeal to the Republicans, or it's combined with real serious reform of the kind that Peter is talking about, addressing the structural problems, addressing how we have shrunken back the Wall Street police -- that's why guys like Bernie Madoff got away with what they got away with and handcuffed other...
DOBBS: I think you should be clear, he got away with it four years, not just under this administration, under the Clinton administration, under the Bush, the previous Bush. I mean...
JOHNSTON: This is a bipartisan problem. It is absolutely a bipartisan problem. So, Obama, I was surprised, didn't talk more in terms of the way he did in his campaign about hope. He did, in fact, have this sort of fear aspect to it and that suggests to me that he's encountering problems with his own party. Normally, a newly elected president has a honeymoon and gets what he wants. Looks like this guy is going to have to fight and one of the big issues will be, will the stimulus package be big enough to have a real effect.
DOBBS: All right, let's -- keeping some score here, if I may, we've already seen about $8 trillion pledged, spent, or loaned. We're dealing with a crisis that the American people, no one in government has even bothered -- is deigned to tell the American people precisely what the dimensions of this problem are or how much progress or lack of it is occurring. What in the world are we doing here? The Federal Reserve won't even tell Congress, Peter, what they're doing with that $2 trillion, for example. Where are we headed? Is this really a sign of a government out of control as well as an economy?
MORICI: Well, when you talk about a $1.2 trillion deficit and then you're going to add another trillion dollars to it, you got a Federal Reserve that's loaned out about 50 percent of the GDP to the banks and won't tell us who it's loaned them to and imposes few conditions. Yes, we do have a government that is out of control. And President-elect Obama doesn't seem like he's really going to reign it in. he talks about the culture of "anything goes," well It seems as though all of the money that he wants to spend -- and some of it quite recklessly, for example we tax cuts don't work -- he may be out of control himself.
DOBBS: Well, one state that's clearly out of control is California. And as Casey Wian was reporting tonight, talking about the state returning to taxpayers owed a refund, an IOU, instead of that refund and we were asking our viewers here to respond as to whether they think they should be able to pay taxes with IOUs.
But, I mean, California is perhaps being, certainly is desperate, perhaps one could argue being innovative, but also looks like literally a breakdown of government in that state. I mean, one could be very cute about this, but the reality is that when you cannot control a budget and you cannot control government and you can't control receipts and expenses, what is government?
JOHNSTON: Well, and I think California, as with many other things, is simply at the front edge of the problems we're facing. New York has enormous budget problems, so does New Jersey, we're going to see them occur in the Rust Belt states and this is the first indication we're going to go back to the 1930s solutions here when state governments issued script to people to pay bills and in lieu of their pay checks and for tax refunds.
DOBBS: Is there any possibility, Peter, that that script, as David has said, will be worth more than the dollar?
MORICI: No, I don't think that's a possibility, but I think it's very sad that people will be receiving script and state employees, college professors and so on are being furloughed simply because the state governments can't pay their bills.
You know some of this in discipline. You know, in the good times they increase spending and increase spending as if the bad times would never come again and now they don't know how to cut back. I mean, they don't have to fire policemen, school teachers, and sanitation workers to trim local government. But they behave as if they do and that's really criminal.
DOBBS: Well, as a friend of mine said to me some weeks ago, he hears me report almost every night about layoffs and the cutbacks that private industry are undertaking, but he doesn't hear me report each night about what his local and county and state and federal government doing to cutback in their spending and their jobs and that's true across the country. In fact, one of the stimulus propositions calls for an additional 600,000 federal employees. Gentlemen, thank you very much as always. David Cay Johnston, Professor Peter Morici, thank you.
Up next, a vote tonight to recommend the impeachment of Governor Blagojevich of Illinois. Two journalists close to that story in Chicago join us. And a federal program that actually works. That's right. It works. Oh, and boy, do they hate it. E-Verify helps employers make certain they hire only legal workers. We'll have that special report and we'll tell you why that's really upsetting a lot of people in this country. We'll be right back.
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DOBBS: We learned today the United States government is planning a border surge if Mexican drug cartel violence worsens on our side of the border. Outgoing Homeland Security secretary, Michael Chertoff told the "New York Times" that there is a contingency plan to fight border violence with what he called a surge capability of both Department of Homeland Security and U.S. military personnel.
A DHS official told the "Times" their plan calls for aircraft, armored vehicles and special teams to converge on border trouble spots. More than 5,000 people have been killed in the drug cartel violence in Mexico over the past year and that violence has spread to the U.S. side of the border.
A milestone today for the federal program aimed at keeping illegal aliens out of the U.S. workforce. More than 100,000 employers, all across the country, are now using the E-Verify program. E-Verify allows those employers to use an online database to check to see whether employees are legal in this country and, therefore, eligible legally to work. It's a federal program that actually works, but just 99.5 percent of the time. Bill Tucker has the story.
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BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): The Bratton Corporation in Kansas City, Missouri, is one of the latest employers to start using the federal E-Verify program. The H.R. manager at the construction products supplier explains why.
TERRY YOUNG, BRATTON CORPORATION: We chose to go ahead and use E-Verify and it complements our hiring process by keeping those folks that should be working in our factories at our jobs.
TUCKER: The program is now used by 100,890 employers at nearly 400,000 worksites and the popularity of the online federally maintained service, allowing employers to check the legal work status of employees is rapidly increasing. Advocates say it's an example of a program helping employers.
JANICE KEPHART, CTR FOR IMMIGRATION STUDIES: Determining who's legally there and who's not. No longer a burden on the employer, it's really on the federal government. And that is what the federal government should be doing.
TUCKER: Fifteen states now mandate the use of E-Verify. As of January 15, all federal contractors with contracts greater than $100,000 will be required to use it. The U.S. Chamber of Commerce wants to eliminate that requirement and is suing the Department of Homeland Security. According to DHS, E-verify, which is free to employers, answered more than two million employment verification queries since October. That's almost equal to almost all of the queries two years ago.
Members of Congress who support the program call it essential.
REP LAMAR SMITH (R), TEXAS: We have a situation in America today where there are 10 million Americans who are unemployed, yet we have seven million illegal immigrant workers in this country. So, what we need to do is make sure that we save those scarce, rare jobs for legal American workers.
TUCKER: The program is scheduled to expire in less than two months.
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TUCKER: Last fall, the Senate would only authorize the program until early March. A fight is expected over its renewal, although President-elect Obama has said, Lou, that he does support the program.
DOBBS: It is an example of the audacity, the finality, of the proponents of open borders and amnesty that they attack this program, because it does work and it speaks to the integrity of the U.S. Chamber of Commerce. And I will tell you right now, their opposition to this program is an act disloyal to the United States and they should be embarrassed and every CEO, every board member of every corporation in America should demand that the U.S. Chamber withdraw the objection to E-Verify. It is one of the most repugnant policy positions that -- I am pro-business, but I am so anti-Chamber of Commerce because of their irresponsible public policy positions taken on this and on H-1B visas, that they are beyond disdain and contempt.
Bill Tucker, thank you very much. I appreciate it.
A reminder to join me on the radio Monday through Fridays for the LOU DOBBS SHOW. My guests tomorrow include the head of the U.S. Chamber of Commerce. I'm just kidding. But, you're invited, Tom Donahue, anytime. Instead we'll be talking to Bill Isaac and Gordon Chen. Gordon is the author of "The Coming Collapse of China." Please go to loudobbsradio.com to find the local listings on the LOU DOBBS SHOW on the radio.
Up next, will Illinois Governor Blagojevich be impeached? I'll be talking with two authorities on Illinois politics, here next. We'll be right back.
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DOBBS: Caroline Kennedy's drive to be named the next senator from New York has raised questions about preferential treatment by the media. Alaska's governor, Sarah Palin, Senator McCain's running mate, of course, says the media is giving Kennedy a free pass because of her social standing. Governor Palin talked with conservative filmmaker, John Ziegler.
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SEN SARAH PALIN (R), ALASKA: I've been interested also to see how Caroline Kennedy will be handled and if she'll be handled with kid gloves or if she'll be under a microscope also. It's going to be interesting to see how that plays out and I think that as we watch that, we will, perhaps, be able to prove that there is a class issue here also that was such a factor in the scrutiny of my candidacy versus say the scrutiny of what her candidacy may be.
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DOBBS: Well, perhaps some indications, as well, of some liberal bias in the national media. That interview was posted on YouTube. Governor Palin talked with Ziegler for his new documentary about how Obama got elected.
And Illinois House committee, just a few minutes ago, unanimously recommended Governor Blagojevich be impeached. A full House will consider the recommendation tomorrow. If the House votes to impeach Governor Blagojevich, his case goes to the state Senate for trial.
Joining me now with more on this development and the entire case, syndicated columnist, author, CNN contributor, Bob Greene.
Bob, great to have you with us.
And Bruce Dold, editorial page editor for the "Chicago Tribune."
Bruce, thank you for being here.
BRUCE DOLD, CHICAGO TRIBUNE: Thank you, Lou.
DOBBS: This has been long expected that he would be impeached. What is the likelihood that he'll be convicted?
DOLD: Well, I think the House will vote tomorrow and it will be overwhelming, if not unanimous, there's really no partisanship, you know, that we're seeing in this effort. I think then we're going to see a pause. I think the attorneys for the governor will ask the Senate to delay the trial and, you know, maybe for a couple of weeks, maybe for a few days. But, I think right now there seems to be nobody in the state who's arguing that this is a political witch hunt except for the governor.
DOBBS: All right, I'd like to ask you both, Bob Greene, Roland Burris, today, as you know, met with legislators in Springfield, and if we can put up this full screen, I mean, these developments - "Burris and his lobbying firm contributing more than $20,000 to Blagojevich's political campaigns. Two years ago, Burris hosted a $1,000-per plate fundraiser for Blagojevich. Burris' consulting firm won nearly $300,000 in state contracts over the past four years. The governor's wife, Patty, was hired in September to an $80,000 [a year] job where Burris' lobbying partner is a board member."
Wow! What's going on?
BOB GREENE, SYNDICATED COLUMNIST: They're not measuring him from Mt. Rushmore. He's going to become one, if he is seated, he's going to become one of 100 United States senators and I think the chances are pretty good that he probably won't be the worst of them.
(LAUGHING)
There's not going to be a perfect answer to this. But, what would have happened had Rod Blagojevich, the governor of Illinois, had he said, I'm the only person who can lawfully name the next United States senator and I'm not going to do it. I'm so upset about what's going on, I'm not going to name a senator. There'd be an outcry over that. There is...
That's a terrific point, Bob. That really is.
GREENE: And any of us looking for a happy ending aren't going to find it except as a country we get through a lot and I think it's a pretty safe bet we're going to get through this.
DOBBS: You're take, Bruce, on the same issue.
DOLD: I thing the happy ending would have been the quick impeachment and conviction of the governor and the scheduling of an election. We could be having an election so the people could choose a successor to Barack Obama next month. There's a lot of talk about the cost of that election. The fact is, we're going to the polls for local elections anyway next month. You know, the legislature decided not to do that. The Democrats didn't want to risk losing the seat by putting it up and so I think that's why we got ourselves where we are today.
DOBBS: And for all the world, it looks like. The Senate majority leader, Harry Reid, Bob, with his reports of a the phone calls to Blagojevich, his preference for candidates and objection to three others, I mean, it looks like politics are reaching from Washington to Springfield in Cook county, we're pretty profound and energized. This really looks bad for the Democratic Party, both nationally and in Illinois, doesn't it?
GREENE: Well, I think a lot of the political people, the political professionals lose sight of the fact that the American people are able to hold two thoughts at the same time. They can be disapproving of the allegations of political corruption against the governor of Illinois and they can still want the new president to be able to concentrate on really terrifying times. We spent the Fall presidential campaign and into the transition, crossing the country on the CNN Election Express bus talking to people, and what struck me, in light of what's going on right now, is the utter seriousness of the American people about the things that matter and the things they want the government to do. What sticks in my mind, we were in Cambridge, Ohio and a woman, a bank employee named Paula Smith said to us: you know, I understand that for them, meaning the politicians, it's a contest, but I hope they realize that for us, this is not a game. And I think the quicker that this can get resolved and we get back...
DOBBS: That gamesmanship, though, is underway, Bruce, isn't it? I mean, Harry Reid is playing games, he's putting Burris through incredible inordinate hoops. It looks like the state legislature is playing a little with him. And it also looks like Blagojevich outsmarted Reid and the Democratic leadership including the senior senator from Illinois. Is that a mistaken impression, Bruce?
DOLD: No, I don't think it is at all. You know, Harry Reid, I think, has been floundering in this. I think he's looked awful in how he's handled it. He's gone from resolute to - he doesn't know where to turn and now he's trying to put it back on the Illinois Supreme Court and the secretary of state, who really is the fall guy on this thing.
The only saving grace for the Democrats is that they've handled the impeachment process fairly well. But, I'm telling you, here in Illinois, once we get past Blagojevich, we're looking at a crisis -- a financial crisis like California like other states are seeing, and we haven't been paying any attention to that, but they've got a $4 billion deficit they have to deal with and they can't do it until they have a governor.
DOBBS: Bruce Dold, thank you very much for being with us, editorial page editor of the "Chicago Tribune." Bob Greene, great to have you with us, syndicated columnist, CNN contributor. Thank you, gentlemen.
GREENE: Thank you.
DOLD: Thank you.
DOBBS: Up next, the results of our poll tonight and we'll have some more of your thoughts. Stay with us, we're coming right back.
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DOBBS: Tonight it's poll results, 91 percent of you say you think that if the state of California is giving IOU refunds, California taxpayers should be able to pay their taxes with IOUs.
Watch this story carefully, this may be the beginning of a national development.
Time now for some of your thoughts. Steve in Florida: "Thanks for calling attention to the plight of post-docs in the U.S." Post-doctorate employees and workers across the country, "Imagine spending six years in graduate school and then not earning enough money. It looks like science and I are going to have to start seeing other people."
Lola in Texas: "I am an engineering researcher. I have a Ph.D. and many yours of experience. I have been looking for a job since February, maybe I could get one if I had an H-1B visa. It appears that I have an employment disadvantage because I was born in the U.S."
Ben in Oklahoma: "Lou, thank you for being our voice against the idiocy in D.C."
And Eric in Michigan said, "I want to thank you for keeping listeners aware of the outrageous conduct in Washington as we all brace for a potentially long recession. It is clear that policies of Washington have failed."
Send us your thoughts to loudobbs.com, we love to hear from you. Thank you for being with us tonight, thank you for watching. Good night from New York.
CAMPBELL BROWN: NO BIAS, NO BULL starts right now -- Campbell.
