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Lou Dobbs Tonight

Senate Showdown on Stimulus; Jobless in America

Aired February 06, 2009 - 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: Hi there, thanks, Wolf. Tonight a bitterly divided Senate may be on the brink of a deal on President Obama's huge borrowing and spending bill. An announcement could come at any time. Senators could vote on that deal tonight. We'll have complete coverage.

And tonight, the worst job cuts in a generation. Employers slashed more jobs in January than any month since December of 1974. We'll have a special report.

And tonight the president of the company at the center of a deadly salmonella outbreak advised the government on quality standards for peanuts. We'll have a special report. Who is protecting you, all that, all the day's news and much more, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Friday, February 6th. Live from New York, sitting in for Lou Dobbs, Lisa Sylvester.

SYLVESTER: Good evening everybody. Senators tonight appear to have reached a tentative agreement on President Obama's huge so-called stimulus plan. Sources say this deal for a package that would cost taxpayers $780 billion. Earlier the president said it is inexcusable and irresponsible for his opponents to delay this package.

President Obama said the accelerating pace of job cuts means it's time for Congress to take action. The economy lost nearly 600,000 jobs last month. And the unemployment rate increased to 7.6 percent. We have complete coverage from Capitol Hill, the White House, Washington, and New York. We begin with Dana Bash on Capitol Hill for the very latest. Dana?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well the latest, Lisa, is we're waiting to hear from the lips of Democratic leaders and from the lips of these negotiators who have been working on this deal, to tell us the fact it has been done. And more specifically, what the details are of this ballpark, again is $780 billion.

What is happening and has been happening for the past hour and a half or so is that Democratic senators have been behind closed doors as the leadership has been trying to explain the details of this and make sure that all of the Democrats are onboard. They're starting to come out of that meeting, and we are told by a number of Democratic senators that they do believe that they have 60, or maybe even 61 votes, but 60 votes is the threshold that Democrats need to get this done. The Republican from Maine, Susan Collins, has been the one who has been negotiating this. She likely has two Republicans, two or three Republicans who have been also working on this with her, that will vote with her. But most Republicans, we are told, are likely to vote against this. One interesting tidbit, just to make sure that they have their votes, the Democrats are calling back Ted Kennedy, who has not been in the Senate since he had a seizure and collapsed on Inauguration Day. But we're told that he will come back in order to take this vote. And again, we do expect according to Democratic sources that they are going to take this vote tonight. Lisa?

SYLVESTER: Yes and Dana, what are your sources telling you? Senators Collins and Nelson, are they expected to speak on the Senate floor momentarily?

BASH: That's right. That's what we were told, that they are going to go to the Senate floor and explain parts, hopefully, all of this plan. Now what they have been talking about, and we've been talking about this for a couple of days, Lisa, is that the original bill that was on the Senate floor was more than $900 billion. And what Senator Collins and Senator Nelson, and many others, there were nearly 20 Republicans who were working on a deal, they said there's just too much spending in here that did not create jobs, that was not stimulative for the economy.

And this is supposed to be an economic stimulus bill, so they have been really negotiating in an unbelievably frantic way, Lisa, all day long. It has been taking place inside Senate Majority Leader Harry Reid's office all day long, trying to come up with the right balance. One source called it whack amole (ph) trying to figure out what spending provisions they can cut. For example, education, Democrats said that they saw a lot of education programs that these moderate senators wanted to cut because they said it just didn't create jobs.

This is not the way to stimulate the economy. But Democrats, on the other hand, said, you know, it's hard for us to cut funding for education, so that's one example for you of the kind of negotiating that has been going on all day long that led to what, again, appears to be an agreement that will bring this for a vote. It is going to be bipartisan by necessity to get this passed, but you can expect most Republicans to vote no, for a number of reasons. But the biggest reason is because they think it's just too much money to be spending right now.

SYLVESTER: Yes, they started this morning with a package that was more than $900 billion. Somehow they've pared that down to $780 billion. Have Democrats, the Democratic senators, have they had a chance to take a look at this modified package? Because I'm guessing that there may be some pushback from Democrats who say, hey I want (INAUDIBLE) my pet project in there.

BASH: Lisa, that's going on literally as we speak. I mean that has been the meeting that started about 5:30 Eastern Time this evening, Democrats getting together while their leadership went over this with them. And, you know, we're waiting ourselves for some of the details. We've had some broad ideas of some of the cuts from this spending bill that these moderate senators were working towards, cuts in, for example, $870 billion to fight the pandemic flu, that's one example of things that everybody says is a wonderful thing and an important thing to do, but not right now. Not with this kind of measure that is suppose to be to stimulate the economy.

SYLVESTER: OK, thank you, Dana. Stay with us as we want to go now to White House -- to the White House. President Obama tonight is using all of the powers of his office to convince the Congress to pass the borrowing and spending bill before Presidents Day. Ed Henry reports from the White House -- Ed, any reaction yet to the reports of a possible deal in the Senate?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Lisa, they're being very cautious here. The last thing they want to do is go out on a limb and start reacting to it and patting themselves on the back if this falls through. They're obviously hopeful that it all comes together. The president started today by unveiling a new economic recovery advisory board, as he's calling it.

It's going to be headed by former Fed Chairman Paul Volker (ph), a lot of luminaries, CEOs and others who have been through other crises, have helped the nation through other financial calamities trying to reassure the nation. And he also used the dismal jobs numbers today that report that came out to really put more pressure on Congress, saying they really need to act quickly.

For the third straight day he used the word catastrophe to say that a crisis could be a catastrophe if Congress doesn't move forward. So tonight what White House officials are trying to do is monitor developments from the Hill. The White House chief of staff Rahm Emanuel has been involved in these negotiations there on the Hill for the last couple of hours, keeping a close eye on all of it.

And I spoke a few minutes ago to Robert Gibbs, the White House press secretary, he said that Rahm Emanuel has been reporting back what he knows. But Robert Gibbs wanted to caution that he and other White House officials here in this building are still seeking more information. Until, as Dana was saying, you know, Senate leaders come out, and key senators like Susan Collins and Ben Nelson come out and officially confirm it, the White House does not want to get ahead of that.

So instead, they're trying to monitor developments. They're hoping that this will all come together. It has to come together in the next few days to stay in the timeline that the president has set out for a long time now. He's been saying his deadline is to get this final product on his desk by next weekend, Presidents' Day weekend so he can sign it into law.

And if this were to go through the Senate as early as this evening, it still, as you know, has to go back to a conference committee, so the differences between the Senate version and the House version, much different one than passed last week would have to be worked out behind closed doors and then more votes in the House and Senate presumably next week. And so the White House wants to be very careful, because even if there is a break-through tonight, there's still a lot more hurdles before this gets to the president's desk, Lisa.

SYLVESTER: Yes, Ed, why this sense of urgency? I mean obviously we understand the state of the economy right now. But why not take some days, I mean, that's what Republicans have been asking for, let's take some time, let's take a look at this plan and make sure that we are doing this the right way. Why the sense of urgency that we have to get this done by Presidents' Day?

HENRY: Well the president has been feeling, and saying publicly, that the advice from his economic staff is that if you don't move forward very quickly, then the jobs report we saw today is only going to get worse, in the next couple of months ahead. And you know he's been saying that they're forecasting for him privately, they've made some of this information public, that millions more jobs could be lost this year, without quick action.

The other part of it is that the president wants to move on from the stimulus package and handle and tackle a whole bunch of other financial challenges. For example, we've learned that on Monday, the Treasury Secretary Timothy Geithner is going to come out and unveil at the White House his billing as a financial stability package separate from this. It would deal with buying up troubled assets from banks.

It'd deal with the foreclosure crisis, various key parts of this crisis that are not dealt with in the stimulus package. And so part of the urgency is that the president wants to get this part, the spending part, out of the way as quickly as possible, so he can start dealing with a lot of the other problems that are out there. The sooner they can get this one done, the feeling here is at the White House then they can move on to the others, Lisa.

SYLVESTER: Yes and you mentioned that chief of staff, Rahm Emanuel, was on the Hill today. I mean they're essentially spending a lot of political capital on this. This is the first one out of the gate, I'm guessing they want to see a big win here, don't they?

HENRY: Absolutely and obviously because the president already, as you say, has put political capital into this, as his first signature initiative right out of the box, just a couple of weeks in. The last thing he wants, obviously, is to see this fail. The other part of it is that he also set a pretty high bar over the last couple of weeks by saying he wants this to be bipartisan.

And that's why when Dana was pointing out that it could have at least 60, 61 votes, the White House needs that procedurally to break off any possible filibuster, first of all. But secondly, they don't want this to be a 51/49 victory. They don't want it to be just along party lines. The president during the campaign and then during the transition and now as president has been talking about changing Washington, so he doesn't want to just eke out a tiny victory along party lines.

He wants to bring Republicans into the fold. That's why they're watching these developments very closely on the Hill, because if you can get moderate Republicans, some of these conservative Democrats like Ben Nelson on board, that would be something the president can trumpet a lot more than just saying look I squeezed something through with Democratic votes. That would be a much bigger success for this president, Lisa.

SYLVESTER: Yes, Dana, I want you -- to bring you back and ask you, take us through the numbers right now. We know that they need two, possibly three Republican senators. And as you mentioned, they are bringing Senator Kennedy that he is arriving back soon, presumably to take a vote on this. How do the numbers break down right now?

BASH: That's right. We do believe -- you said it exactly right, Lisa that they need two, possibly three Republican senators. I just want to give you a little bit of color as to what has been going on over the past hour or so with regard to trying to get those Republicans onboard. Olympia Snowe, Republican from Maine, I spoke to her office you know just as this was breaking, and they said well she hasn't got the details, but she just got a call from President Obama.

So as Ed was saying, the White House has being intensely involved in this, the president himself intensely involved in this. He spoke at midnight last night to the Senate majority leader, at least once today. Rahm Emanuel, the White House chief of staff, has basically been here most of the afternoon -- I believe he just left -- making sure that this is something that they can agree on and probably getting it over the finish line.

But with regard to those numbers, what is so fascinating about this, and we'll see what the final vote is, but is that you know Democrats, and even the White House, had been saying when the president was inaugurated and as they were coming in, we want to get you know 60 -- excuse me, 70, 80 votes on this. We want this to be a big bipartisan vote to show that we -- in a bipartisan way -- are going to figure out how to stimulate the economy.

Democrats have been very public about the fact that they've given up on that. That's not going to happen. They are just looking for as many Republicans as they can to pick off to pass this. Because the problem for the White House and for Democratic leaders over the past several days is they just didn't have the votes.

So you know, you are probably going to hear from many Republicans if this vote goes the way we think it will, which is just over the filibuster proof majority, 60 or 61, or even 62 votes, you're going to hear Republicans say that's not really bipartisan. That's just picking off a couple of Republicans and that's not what you promised, President Obama.

SYLVESTER: Yes, I think at this point they're going to take what they can get.

(CROSSTALK)

SYLVESTER: Now joining us in our Washington bureau, we want her to join the conversation, senator -- senior political correspondent Candy Crowley -- Candy, definitely a change in tone for the president here. What's driving that?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, listen, what's driving it are a couple of things. First of all, remembering where he was when we really saw him go hard at the Republicans. And that is he was in front of House Democrats. So that is certainly an audience that needs to get him revved up.

And there has been some concern on the House side that in fact the president was willing to give too much to Republicans. There is no sign at all that the president is going to be hurt by not having a big bipartisan deal here. In fact, the latest polling that we've seen is that 81 percent -- this is a CBS poll -- 81 percent of Americans think he has reached out to Republicans.

They do not say the same of people on Capitol Hill. They think less than half of them think that Democrats have tried to be bipartisan, even less than that Republicans. So there's no real price for the president politically, if he doesn't get a huge bipartisan vote on this bill. What was driving some of the let's move, let's move, is I think what you heard the president say, which is we've got to act quickly.

But the other part of that is since the American public has seen some of the details of this bill you have seen a falling off of support. Again, the same CBS poll shows that support for the stimulus bill, not a big generic one, but this particular stimulus bill fell by 12 points in over a month. So the White House certainly was looking, seeing some of that public support fall away.

And as you know, one of the president's main tools that he has is all that goodwill out there by voters, some who voted for him, and some who voted against him that are now behind him on this stimulus bill. He needed to keep that together.

SYLVESTER: All right, Candy, Ed and Dana, we are going to take a break, but we will be back in just a short while.

Still to come, we'll have the very latest on the Senate showdown over the borrowing and spending bill and reports of a compromise live from Washington.

Startling new details about the company at the center of the nationwide salmonella outbreak, we will have a special report.

The captain of Flight 1549 gives his first major interview on his successful crash landing in the Hudson River in New York. Stay with us.

(COMMERCIAL BREAK)

SYLVESTER: Senators tonight appear to have reached an agreement on the stimulus package. We are waiting now for Senators Ben Nelson and Susan Collins to go to the Senate floor to announce WHAT -- the exact details of that compromise. But first, we want to bring you a story, the hero pilot of US Airways Flight 1549. He is speaking out about the moment the engines of his aircraft died. In an interview for CBS' "60 Minutes", Captain Chesley Sullenberger (ph) told Katie Couric what went through his mind at critical moment in the January 15th flight.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It was the worst, sickening pit of your stomach falling through the floor feeling I've ever felt in my life. I knew immediately it was very bad.

UNIDENTIFIED FEMALE: Did you think how are we going to get ourselves out of this?

UNIDENTIFIED MALE: No. My initial reaction was one of disbelief.

(END VIDEO CLIP)

SYLVESTER: All 155 people on the plane survived after the plane splashed down in New York's Hudson River. Sullenberger and his crew will be Larry King's guests next Tuesday night. That's "LARRY KING LIVE" Tuesday, February 10th at 9:00 p.m. Eastern right here on CNN.

Dramatic pictures of a violent collision in the Antarctic Ocean today, a boat carrying anti-whaling activists collided with a Japanese whaling ship trying to bring a whale onboard. A spokesman for the anti-whaling group said the collision was unintentional. A Japanese official said the act was quote, "a deliberate ramming." No one was injured in the incident.

Bank of America CEO Kenneth Lewis (ph) is buying his company's stock in an effort to boost confidence in his company's future. Lewis (ph) purchased nearly $1 million of his company's shares this week and more than $1 million worth three weeks ago. The company stock has lost nearly 75 percent of its value since Lewis (ph) took the helm in April 2001. Bank of America shares traded below $4 this week, the lowest level since 1984.

More than 200,000 state workers in California are off the job today. Many of them turned out to protest a two-day month furlough, that furlough was mandated in an attempt to reduce California's massive budget gap. Governor Arnold Schwarzenegger and the legislature have been unable to reach agreement on how to address the state's $42 billion shortfall.

More now on those worse than expected unemployment numbers today, employers cut almost 600,000 jobs in January, the most in 34 years. And the unemployment rate at 7.6 percent was the highest in 16 years -- Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In the last three months, nearly two million people have had to pack up their desks, clean out their lockers and go home. And in the last year, 3.5 million people have been shown the door at factories and offices, construction sites, department stores, hotels, restaurants, and other service businesses. JOHN SCHMITT, CTR. FOR ECON. POLICY RESEARCH: To put this in perspective, you have to go back to World War II, to the end of World War II when we laid off a lot of workers at the end of the war as we cut back on the manufacturing production to see this kind of job loss in such a compressed period of time.

PILGRIM: In one way, the 7.6 percent unemployment rate is half the story. Economists say the rate is more like 13.9 percent if you count the people who have been unemployed for more than six months and have stopped looking for work, along with the so-called underemployed, who are holding a part-time job when they really want full-time work.

ANDREW STETTNER, NAT'L EMPLOYMENT LAW PROJECT: It just became bleaker and bleaker out there, especially (INAUDIBLE) been out of work for a long time that are facing the end of their unemployment benefits.

PILGRIM: In the past year the federal government has extended unemployment benefits and the stimulus bill would increase benefits and help the unemployed with health insurance. But right now, the chance of getting a job is scarce. There are deep pockets of unemployment in the Midwest the heart of manufacturing.

The unemployment rate for those industries is 10.9 percent. On both the East and West Coasts, because of the housing slump, the unemployment rate among construction workers is 18 percent. Unemployment rates are 10 percent and higher for the leisure industry, hotel workers, professional and business service workers, eight percent and higher for transportation and utility workers and wholesale and retail trades.

(END VIDEOTAPE)

PILGRIM: Now women have had fewer cuts than men in the latest round of layoffs, in part because they tend to be paid less than male workers. There are a handful of industries that have managed to hold up more than other industries in this economy, health care, education, government jobs, at least on the federal level. Lisa?

SYLVESTER: Yes and that's certainly playing in this debate that's going on with -- on the Senate with senators keenly aware of those numbers. All right, Kitty, thank you very much for that report.

And senators are speaking right now on Capitol Hill about the stimulus deal. There you see Senate Majority Leader Harry Reid. Let's listen in.

SEN. HARRY REID (D-NV), MAJORITY LEADER: ... the economy turned around. Now, Ms. President, I think the process here has been very good. We've had a large number of amendments debated and voted on. Managers have worked very hard, Senators Baucus and (INAUDIBLE) with their counterparts to move through a lot of amendments. It's been an open process.

Some of the votes have been difficult votes to take. But now we're at a point where people of goodwill are going to move forward and complete work on this. A question of when we do it is certainly something we are concerned about. But we're going to do it, if not tonight, in the next day or so. I want to express my appreciation to a senator on our side of the aisle, Senator Ben Nelson, who took this difficult assignment on our side to come up with something that we could pass, the best way to say it.

There were a number of senators who worked with him on this side of the aisle, a number of senators who worked with Senator Collins on the other side of the aisle. I'm not going to run through all the people that worked on this, but from my perspective, the two people who got us to where we are, are Nelson and Collins, with great work by others. And I hope I don't offend anyone by not mentioning them.

But from my perspective, tonight, there are four people who need to talk about this. Because but for them, we would not be in a position where we could move forward to try to help the American people. That is Senator Ben Nelson, Susan Collins, Arlen Specter and Joe Lieberman. And so I would ask unanimous consent and I certainly if the Republican leader cares to say anything, I would just like to get this consent entered if I could. And if he wants to say something before the time begins on these other individuals, he certainly has that right.

He can do it beforehand if he wants, but I would like to get this out of the way. I ask unanimous consent that Senator Ben Nelson be recognized for 10 minutes, that Senator Susan Collins be recognized for 10 minutes, Senator Arlen Specter be recognized for 15 minutes, Senator Lieberman be recognized for 10 minutes and that the Republicans following these statements by these four senators have equal time.

There is 45 minutes to be divided any way that they feel appropriate. And I would ask that consent to be approved, and approach it by saying that I would ask if Senator McConnell has anything to say before the time starts running on these four individuals, and the other individuals, it's just going to be about 90 minutes, so I'm sure that he does, but I have asked consent that following the statement of the Republican leader that this consent be granted.

UNIDENTIFIED MALE: Madam Speaker?

UNIDENTIFIED FEMALE: Is there objection?

UNIDENTIFIED MALE: Madam Speaker? Reserving my right.

UNIDENTIFIED FEMALE: The senator from Louisiana.

UNIDENTIFIED MALE: Reserving my right to object and I may not object, but I'd like to ask the distinguished majority leader if we could alternate speakers over that same period of an hour and a half.

REID: Well, I would say to my friend that we really are alternating. We have four people that have put this arrangement together. I think it would be appropriate for the whole Senate to listen to what the agreement is. It would certainly be, I think more understandable to do it that way. And we have two Republicans and two Democrats, so I think that would be fair. And so if my friend would allow us to do that, I think it would be good for the body.

UNIDENTIFIED FEMALE: The senator from Louisiana?

UNIDENTIFIED MALE: Still reserving my right to object. I would just point out that that's certainly not alternating speakers in terms of position on the amendment. And I would again suggest we do what we virtually always do and alternate speakers with regard to the pending issue, which is this new amendment.

(CROSSTALK)

UNIDENTIFIED FEMALE: Majority leader...

REID: I would say through the chair (ph) to my friend, wouldn't it be better that people who responded to these four senators had some idea what the agreement was? It would seem to be so much more logical and I would hope that my friend would allow us to proceed in that manner. And I would also -- before I know that my friend stood for -- to be recognized.

You know Madam President, we have gone out of our way to protect everybody's rights and we haven't tried to blindside anyone. We've listened to all the amendments. We've been fair in all the time...

SYLVESTER: OK, Dana Bash, I want to bring you in on this discussion. Clearly we hear procedural points. You've got Senator David Vitter there, who says, hey, Republicans want to have an equal say. They want to be able to give their side -- and their position on this. What do you make of the process so far?

BASH: Well, that was actually very telling what we just heard from David Vitter. It was a little bit of process, jargon I think for people out there, but what it told us was that Harry Reid had -- and the Democrats had wanted to take a final vote tonight. But because of the fact that Republicans like David Vitter and many other Republicans, it appears according to sources I'm e-mailing with want to offer additional amendments and have additional chances to change this bill.

It might not happen tonight. It might not happen until over the weekend, so they're trying to work out the process. Initially, when I was e-mailing with a Democratic source saying, what's going on, the response was we're trying to line up our votes. Now it might be part that and it might be -- and also in part that Republicans, because most of them aren't going to vote for this. They want to maybe slow the train a little bit and make clear that they have other ideas in how to do this.

(CROSSTALK)

UNIDENTIFIED FEMALE: Nelson is speaking.

SYLVESTER: Right, we're going to go to the Senate floor right now where you see Ben Nelson. SENATOR BEN NELSON (D), NEBRASKA: Layoffs, job losses, poor earnings, business closings, state fiscal problems, foreclosures, global financial troubles, and the worried faces of so many Americans. Our great nation is mired (ph) in the worst economic downturn since the great depression. My state of Nebraska, usually late to recessions, has been caught by the crisis, too.

Thousands of Nebraskans have lost their jobs or been laid off. Many business owners are worried and the economic downturn is affecting everyone's budget and wallet and outlook. One of the strongest Nebraska values is our work ethic, but right now a lot of Nebraskans just want to show up for work tomorrow or hope for a better job in the future.

That's why I've been pleased to work with my good friend Senator Susan Collins, and a bipartisan group of senators to address this crisis now. To find a plan that creates jobs and restores America's economic strength. We've reached an agreement on a bipartisan plan that does that. With so much at stake, however, and the cost to our children and our grandchildren so high, it is important that we get it right.

The economic recovery bill we support today fuels two powerful engines, major tax cuts for the middle class and to create jobs and targeted investments in America's infrastructure and job growth. Our bipartisan group worked long and hard going line by line, dollar by dollar...

SYLVESTER: OK, we've been listening to Senator Ben Nelson. We're going to take a little break here. Coming up, we'll continue to monitor the Senate floor. We'll have much more on the fight over the stimulus package. The Senate has reached a tentative deal for a $780 billion stimulus package and we will have the very latest.

And the FDA's approach to food safety is an utter failure. Is the government doing anything to protect you from unsafe food? We'll have that special report coming up next.

(COMMERCIAL BREAK)

SYLVESTER: New developments tonight in the nation's Salmonella outbreak caused by tainted peanut products. The FDA says that Peanut Corporation of America knowingly shipped products contaminated with Salmonella. The outbreak has resulted in at least eight deaths, hundreds have been sickened and thousands of products have been recalled. American consumers are frustrated by the inability of the federal government to protect them from unsafe food. Louise Schiavone reports.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN NEWS CORRESPONDENT (voice-over): Seven- year-old Christopher Meunier had some peanut butter crackers around Thanksgiving last year and found himself among the hundreds of Americans fighting Salmonella Typhimurium. Hospitalized for a week, very sick and very scared. CHRISTOPHER MEUNIER, SALMONELLA VICTIM: Yeah, I was and it was really painful. One time when I went to the bathroom, I had so much pain I wanted to die.

SCHIAVONE: His parents turned to agencies who might know something about it and learned nothing.

GABRIELLA MEUNIER, MOTHER OF INFECTED CHILD: Who is tracing down these food-borne illnesses? Was it the Centers for Disease Control, was it the FDA and who was in charge of the whole process? And I don't think that there was really one person in charge and I think that that's what needs to happen.

SCHIAVONE: Congress is talking about creating a separate agency charged solely with food safety so that outbreaks are caught early on, or at least beefing up FDA's budget for more inspectors.

Good idea, says the lawyer for Christopher's family.

BILL MARLER, ATTORNEY: This particularly outbreak began before Labor Day and was essentially not really announced until almost Inauguration Day. You know, for all intents and purposes, this outbreak was over before the CDC made any announcement.

SCHIAVONE: Stewart Parnell, the president of Peanut Corporation of America, distributor of the product believed to be at the root of the epidemic, had been serving on the Agriculture Department's Peanut Standards Board since 2005.

C MEUNIER: We should make him test all the peanut butter that was tested for Salmonella.

SCHIAVONE: Agriculture secretary, Tom Vilsack, has now removed Mr. Parnell from that board. The company insists it had been visited regularly by state and federal inspectors. But, it's now the focus of a criminal investigation and behind one of the largest food recalls in history.

(on camera): The CDC tells CNN that it's committed to keeping people safe and to working with its partners to prevent and monitor the spread of diseases. The latest CDC count shows 575 sickened across 43 states, as you noted, Lisa, with almost a quarter hospitalized and eight fatalities -- Lisa.

SYLVESTER: OK, thanks very much, Louise, for that report.

And for more information on the Salmonella outbreak and recalled peanut products, go to our Web site at loudobs.com.

Coming up, rising controversy over $7 billion of so-called stimulus money for the Pentagon that is not for front line troops. A special coverage "Lou's Line-Item Veto".

And we'll have the very latest on reports of a compromise in the Senate showdown over the so-called stimulus legislation. There you see Senator Susan Collins from Maine speaking, a key GOP dealmaker, live from Washington, coming up next.

(COMMERCIAL BREAK)

SYLVESTER: We're monitoring the Senate where senators are talking about reports of a tentative compromise on the huge so-called stimulus package. Sources tell CNN the compromise will cost taxpayers $70 billion. There, you see Susan Collins, the senator from Maine. Senate majority leader, Harry Reid, he indicated there will not be a vote tonight, again, not a vote tonight. And we will keep you posted on the latest developments.

Turning now, the Department of Homeland Security is close to completing 670 miles of new border fencing, months behind schedule. And joining me now with more on the critical issue of border security and illegal immigration is our guest, Henry Cisneros, former HUD secretary under President Clinton and former mayor of San Antonio, Texas. He's also the editor of the important new book "Latinos and the Nation's Future."

Welcome, thank you for joining us. I want to first start to get your thoughts on this stimulus package; you used to head up HUD. And so many people think that this crisis that we're in started with housing, and that in order to fix it, you have to end with housing that you have to address that issue. What are your thoughts?

HENRY CISNEROS, EDITOR, "LATINOS": Lisa, it is true that the origins of this crisis wee housing. And one of the really major developments this week that's not in the stimulus story itself is the $15,000 tax credit for people who buy a home this year, which is really major. I just heard a version of it on CNN earlier; that described it as in addition to the stimulus. It's an additional bump beyond the $780 billion being talked about now. But that should have a very dramatic effect.

Just at the moment that some of these jobs are taking hold, and just at the moment that some of the credit issues are being worked out, which we hope is the story of 2009, if people buy within that year, they will be able to get this $15,000 credit, which is really substantial when people are working through their down payment and housing costs.

So, I'm hopeful that the housing sector helps lead the economy back. It's hard to imagine this economy coming back strongly without the 20 percent of GDP that is housing construction, housing finance, appliances, transportation, materials, all of the things that surround the housing sector.

SYLVESTER: OK, I want to turn briefly to your new book that you've got out, it's "Latinos and the Nation's Future." In this book, you make a compelling case. You say that there are, despite that there are compelling reasons for closing the border, illegal crossings, drug smuggling, you have taken a more open approach. Tell me why.

CISNEROS: Well, the approach I take really has to do with the future and building for the future. And the thesis of the book simply is this, the Latino population, as the fastest growing segment of the population in America today, principally because of its youth, is going to be a huge part of growth going forward. Maybe as much as 50 percent of all growth, new population in the United States between now and 2050 is going to be Latinos. So, it's hard to imagine the country being strong for the long haul as we want it to be without integrating this population into the mainstream of American life.

SYLVESTER: Yeah, and that's quite understandable, but do you make a distinction, in your mind is there a distinction between people who are here illegally, illegal Latinos who are here living in the country illegally and those who followed a path and took the path of citizenship?

CISNEROS: Absolutely. This is principally about people who are here legally. But the fact of the matter is that sometime in the next few years, there's going to have to be an immigration reform that deals with border security, deals with the guest workers, the people who are here now, and need to be made legal in some format and then some eventual earning of citizenship for those people, so we don't have a secondary class who are here as workers, but never have the opportunity to be citizens. And when that happens, it just adds to the stock of workers, contributors, taxpayers, citizens for the long haul.

SYLVESTER: Yeah. You can't -- you know, you take a look at these numbers, 598,000 people losing their jobs last month. You know, how do you reconcile that with, you know, opening up the borders to allow even more workers who will be competing for those scarce jobs?

CISNEROS: Well, no one's talking about opening up the borders. I'm a believer in the right of a sovereign nation, secure its borders. And we have to do that as a country. It's hard to consider yourself a nation if you can't secure your borders, but we also do have the workers who are here.

This is principally about the long haul when this economy is strong and operating full tilt, we know we're going to need those workers. We need them in many parts of the country today, you know, in food lots in western Nebraska and Kansas, textile workers in Georgia, furniture workers in North Carolina, all over the country, this is an important part of our work force.

SYLVESTER: All right, we're out of time. I wish we could have had a longer conversation, but really appreciate your joining us. Henry Cisneros, thank you very much.

CISNEROS: Thank you, Lisa.

SYLVESTER: And coming up next, more than $7 billion of the economic stimulus bill is for military spending, but how will it be spent? We'll have the answers in "Lou's Line-Item Veto."

And we'll continue to monitor the very latest on the Senate floor on a possible deal on the stimulus bill. And I'll be walking with Michael Steele, newly elected chairman of the Republican National Committee. (COMMERCIAL BREAK)

SYLVESTER: We are watching senators on Capitol Hill talking about reports of a $780 billion compromise on the so-called stimulus package. We are also examining every detail of this package in our special series "Lou's Line Item Veto." Tonight we are focusing on more than $7 billion allocated for military spending, but a fight is brewing over how to spend that money. Chris Lawrence reports from the Pentagon.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN NEWS CORRESPONDENT (voice-over): The U.S. military could get billions of dollars for barracks and buildings. The stimulus package would allocate an estimated $3 billion for housing and facilities, more than $4 billion for hospitals and clinics and $360 million for childcare centers. The Pentagon says these projects fit the guidelines it was given by the White House.

DOUG LAMBORN (R), ARMED SERVICES CMTE: There are defense projects that could be funded right now.

LAWRENCE: Republican Doug Lamborn says too much of the Pentagon's share is going to renewable energy research and Corps of Engineer construction.

LAMBORN: Really nothing for the weapons and the tools that our troops on the front lines actually need.

LAWRENCE: Lamborn and others argue there's a backlog of repairs, for equipment worn out in two wars.

GORDON ADAMS, NATIONAL SECURITY EXPERT: Additional money there isn't really going to produce any impact.

LAWRENCE: Gordon Adams advised the Obama administration during the transition and says those kind of contractors are at full capacity.

ADAMS: They're already adding third shifts. They've already go full up on the production line. They can't go any faster, they can't go any bigger.

LAWRENCE: Adams says it would take years to ramp up production. And the rules of the stimulus package stipulate speed over actual need.

WINSLOW WHEELER, FMR GOVERNMENT ACCOUNTABILITY OFFICE: Just throwing money at the thing is a bad idea, both for economic stimulus and it's a bad idea for the feds.

LAWRENCE: Winslow Wheeler is a former executive at the Government Accountability Office. He says the Pentagon is not a good fit in the stimulus package because it's known for high overhead costs and money that gets paid out slowly.

WHEELER: If you're talking about stimulus, DOD (PH), if you're going to be smart, is not the place to spend your money.

(END VIDEOTAPE)

LAWRENCE: Again, the stimulus package really restricts how the Pentagon can spend this money and there is no doubt that new hospitals and housing will help a lot of military families, but these projects don't even have to be the most needed hospitals and housing, just what they can break ground on the fastest -- Lisa.

SYLVESTER: Yeah, some of these things, it just doesn't seem to make sense, I'll tell you that, Chris. Thank you very much for that excellent report.

Well, coming up, we continue to monitor the Senate floor for more on a tentative deal on the stimulus bill. And next, I'll be joined by the new chairman of the Republican National Committee, Michael Steele. Stay with us.

(COMMERCIAL BREAK)

SYLVESTER: Joining me now for more on the possible Senate deal on the stimulus bill and other issues, the newly elected chairman of the Republican National Committee, Michael Steele.

First let me start by saying congratulations on your new post.

MICHAEL STEELE (R), RNC CHAIRMAN: Thank you.

SYLVESTER: And we are very glad to have you with us.

STEELE: I appreciate it. Thank you.

SYLVESTER: Let's first start, breaking news, $780 billion compromise, apparently, on the stimulus package. We have some sound from Senator Ben Nelson from just moments ago when he spoke on the Senate floor. I want you to take a listen to that and then react to it.

STEELE: OK.

(BEGIN VIDEO CLIP)

SEN BEN NELSON (D), NEBRASKA: Our bipartisan group worked long and hard going line by line, dollar by dollar, to reduce spending from the original bill. We trimmed the fat, fried the bacon, and milked the sacred cows.

(END VIDEO CLIP)

SYLVESTER: OK, so we don't know the details of exactly what was cut out, at this point in time, but what are your thoughts?

STEELE: OK, sure. The devil's always in the details with these guys. And this has been reduced from, what, $805 billion down to $780 billion, doesn't sound like there was a whole lot of trimming going on. You know, I still have a great deal of concern about this package because when you've got one third of it going to tax cuts and those things that can actually do something to stimulate the economy, then you topped that with 2/3 spending you're really kind of throwing out of the whack. So, we'll wait and see what the compromise is before we can really say whether they've done all the things that are necessary for House Republicans and Democrats, alike to get on board.

SYLVESTER: Yeah, we see now, Senator Arlen Specter, he's on the Senate floor, right now, talking. We can continue our discussion. Can you call this a bipartisan bill? I mean, you've got essentially maybe two or three, Senate Republicans. You didn't have any Republicans on the House voting for this? Still bipartisan?

STEELE: No, Lisa, it's not. And the reason is -- on the House side, the bill was drafted, it was negotiated among the Democrat caucus and then given to the members on the Republican side at the time to vote. So there was no real input, there was no discussion, there was no give and take with -- with the House leadership of the Republican house leadership.

On the Senate side you have, I guess, a representative sample of Republicans. But again, there's not a whole lot of effort to say: let's roll up our sleeves, in a really, truly, bipartisan way, given the impact that this is going to have on the nation's economy and on our families and businesses, to work through this thing.

SYLVESTER: Yeah, congressional Democrats and the president, they have been saying, though, take a look at the numbers that we see today from last January, we've got to do something. Agree with that, that something needs to be done?

STEELE: We've got to do something, but the question is what is that something? And I don't think that something is -- and certainly the House Republicans don't think that something is more spending. What you need to do is free up capital and credit. You need to create a market for small business owners and risk takers out there to reinvest in this economy, to take the risk of going out into the markets for capital and credit so that they can hire and expand and grow the economy.

This is not the way to do it by creating more spending because this is the problem, Lisa, everybody is not talking about the fact that in a few short years, 18 months or so, there's an inflationary effect that we're going to have to deal with from all this money getting into the system.

SYLVESTER: Right, and Michael Steele, we're out of time, but we really do appreciate you're joining us and hopefully you'ill come back and we can have a longer discussion.

STEELE: Absolutely.

SYLVESTER: All right, thanks, Michael.

Well, coming up at the top of the hour, CAMPBELL BROWN: NO BIAS, NO BULL.

Campbell, what are you working on?

(AUDIO GAP)

CAMPBELL BROWN, CAMPBELL BROWN: NO BIAS, NO BULL: ...deal, as you know, was hammered out just a short time ago after hours of tense negotiations and after new reports, today, of staggering job losses. We've got the best political team on television, they're going to break it all down for you right here. We're also going to take things a step farther and look at just how close this comes to actually putting people back to work. How much of it is real job creation? All that at the top of the hour -- Lisa.

SYLVESTER: All right, thanks, Campbell.

And still ahead, "Heroes."

(COMMERCIAL BREAK)

SYLVESTER: In "Heroes," we honor Chief Warrant Officer Jonathan Harris for heroism in Afghanistan. His heroism, much like his father's bravery in Vietnam, a generation ago. Philippa Holland has their remarkable story.

(BEGIN VIDEOTAPE)

PHILIPPA HOLLAND, CNN NEWS CORRESPONDENT (voice-over): Chief Warrant Officer Jonathan Harris was in command of a Blackhawk helicopter last July when it took a direct hit from an insurgent's rocket propelled grenade in Afghanistan.

CWO JONATHAN HARRIS, US ARMY: As soon as we landed, the first RPG impacted at about the 10:00 position in front of the aircraft. The second round impacted the cabin was on fire, the tail was on fire, the seats were on fire, so we got to fly our crippled aircraft, probably, 900 meters away before we had to get out.

HOLLAND: The crippled helicopter, now abandoned, Harris took a position between his wounded crew chief and advancing insurgents.

J HARRIS: We all assembled at the front of the aircraft and no more than we had been on the ground we started receiving small arms fire, again. And the people inside the vimage just collapsed onto the aircraft.

HOLLAND: In the fight of their lives, Harris and his crew held off advancing insurgents until an Army Chinook helicopter crew moved in to rescue them.

J HARRIS: To this day, I still say those guys are the true heroes of the battle, because we actually had to stop firing so they could land and they positioned themselves between us and the advancing enemy and we all got loaded up and we took off out of there.

HOLLAND: Last November, Chief Warrant Officer Jonathan Harris was awarded a Silver Star for his actions in the firefight. It was an honor he wanted to share with a man he had long revered as a hero.

A generation ago his father, Gary Harris, fought in Vietnam and was awarded a Silver Star for saving the lives of men in his squad. But instead of a ceremony, he received his medal in the mail.

SGT GARY HARRIS, US ARMY (RET): I didn't feel like a hero, I just felt like I did what I had to do at the time. You had to either fight or you was going to die. All we were thinking about was trying to come out of there alive and take care of each other. I think Jonathan is a much better soldier than I could have ever been.

HOLLAND: At his son's request, the elder Harris participated in the medal ceremony via satellite, receiving both a Silver and Bronze Star for his actions in Vietnam.

J HARRIS: I always thought of my dad as a hero, you know, Vietnam was just -- one of those forgotten wars that nobody really wanted t mess with. I have seen a big change in my father since this has all taken place. What better thing can you do for your country than go to war for them?

HOLLAND: Two soldiers, separated by a generation, but united by a sense of service and duty to country.

Philippa Holland, CNN.

(END VIDEOTAPE)

SYLVESTER: Amazing story. CAMPBELL BROWN: NO BIAS, NO BULL, starts right now.