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Lou Dobbs Tonight
Politics of Fear; Stimulus Showdown; Classic Public Works; Near Zero Emission Energy Plant
Aired February 09, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Wolf, tonight President Obama intensifies his rhetoric of fear, selling his huge borrowing and spending legislation. President Obama says delay will bring deepening disaster, as he put it, we'll have complete coverage tonight.
Transportation Secretary Ray LaHood will be here to explain the Obama administration's position on the so-called economic stimulus bill. Ranking member of the Senate Banking Committee, Senator Richard Shelby joins us to tell us why he believes the legislation could lead to disaster.
Also tonight in "Lou's Line-Item Veto" what critics say is another waste of taxpayer money, a new headquarters for the Department of Homeland Security. We'll have all of that, all the day's news and much more straight ahead right here.
ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and opinion for Monday, February 9th. Live from New York, Lou Dobbs.
DOBBS: Good evening everybody. Within the hour, President Obama will hold a primetime news conference to sell his so called stimulus legislation to the American people. Earlier President Obama used some of his most fearful language so far, abandoning the politics of hope for the rhetoric of fear. Speaking in Elkhart, Indiana today, President Obama declared that if Congress fails to take action the United States may face a crisis that may be impossible to reverse. Ed Henry has our report from the East Room of the White House where the president will hold his news conference within the hour -- Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, good evening. We're told that the president will focus in an eight to 10-minute opening statement exclusively on the economy talking all about the financial crisis and that was the topic he addressed as well earlier today, as you mentioned, Elkhart, Indiana, his first town hall meeting since he took office.
Aides say he picked that town because unemployment there has tripled from five percent to 15 percent in just the past year, and Robert Gibbs, the White House spokesman said the whole point was to get outside the beltway, show lawmakers how much people are hurting and give the president a backdrop to once again call for urgent action to deal with the economy.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: We can't afford to wait. We can't wait and see and hope for the best. We can't posture and bicker and resort to the same failed ideas that got us into this mess in the first place. I can say with complete confidence that endless delay or paralysis in Washington in the face of this crisis will only bring deepening disaster.
(END VIDEO CLIP)
HENRY: Robert Gibbs insisted the president is not back in campaign mode, but I can tell you this morning very early today Gibbs sent myself and a lot of other reporters some polling data from the Gallup Organization showing that the president has about a two-thirds approval rating among the American people in terms of how he's been handling this stimulus issue.
Now Republicans have been firing back with other polls suggesting that the actual substance of the stimulus bill itself is not as popular as the president. That gap between the popularity of the president and his plan is part of the reason why the White House is putting him out there as a salesman, not just with the town hall meeting today. He's going back to Florida for another town hall meeting tomorrow, and then of course he has his prime time news conference right here in the East Room in little less than an hour, Lou.
DOBBS: All right, I'm looking forward to it. Thank you very much, Ed -- Ed Henry.
Well the so-called stimulus package as it now stands will likely cost somewhere around a billion -- $1 trillion. That would work out to about $1 billion a page for the legislation. Just how will it be paid for? Well, we'll have to borrow every dollar of it, much of it of course from communist China. Basically Beijing is now our principal banker.
The interest alone on this legislation would amount to nearly $400 billion. Economists say the plan could at best save or create about three million jobs by the end of 2010. Based on the analysis of the House version of the legislation by Moody'sEconomy.com, the construction industry would see the largest gain in jobs, over six percent by the end of next year.
Natural resources and mining, retail and leisure and hospitality would also see job gains. The overall employment impact of the stimulus would be felt most strongly in states that have been hurt the most -- principally, California. Arizona, Nevada and Florida could also be among the top beneficiaries.
Economist Allan Sinai (ph) points out that the stimulus package is different than previous ones in our history. This one is fueled by government spending. Usually consumer spending leads the way out of recession. And as economist Peter Morrissey points out, once this money is spent and our deficit is even larger, there's absolutely no guarantee that our economy will not fall back into recession.
The White House and Democrats tonight winning a key Senate victory on the so-called stimulus bill, senators voting 61 to 36 to end debate on the legislation and it moves to a final vote tomorrow. But even if the Senate were to approve the legislation tomorrow, there remains a huge fight ahead over how to convince House Democrats to support the spending cuts that have been proposed, if not put together rather obviously by the Senate. Dana Bash has our report from Capitol Hill.
(BEGIN VIDEOTAPE)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): On its face, the Senate economic stimulus compromise, about $827 billion looks a lot like what passed the House, an $819 billion plan. But the reality is there are some major differences, setting up tough negotiations. Senate Democrats...
SEN. MAX BAUCUS (D), MONTANA: This is a compromise across the aisle and it's the finest vision of the Senate.
BASH: Versus House Democrats.
UNIDENTIFIED MALE: If it stays the way it is, then it's all a little bit more challenging for us.
BASH: In the Senate, the only way Democrats could lure Republican votes to pass the plan is by slashing some $100 billion in spending. But House Democrats are balking because a big chunk of the Senate's spending cuts are aimed at education.
For example, the Senate sliced $40 billion in funding to the states, money for local officials to avoid cutbacks in education and other services. The Senate also eliminated $19 billion for school construction and cut Head Start early education funding in half from $2 billion to one billion.
House Speaker Nancy Pelosi warned the cuts her fellow Democrats agreed to in the Senate do quote, "violence to their economic goals". Other House Democratic leaders agree.
REP. JOHN CLYBURN (D-SC), HOUSE MAJORITY WHIP: Sure, part of this compromise does violence. What's wrong with funding Head Start and so what's wrong with funding higher education?
(END VIDEOTAPE)
BASH: But here is the big problem, and that is that House Democrats do force any changes in that spending that may jeopardize support in the Senate from the three Republicans, the only three Republicans who voted yes today and those Republicans are opposed that President Obama really, really needs to keep this going and actually get this legislation to his desk. But for example, one of those three Republicans, Susan Collins, Lou, she told us that if some of those excess spending measures, what she considers excess spending, if that goes back into this compromise, she said she just can't support it.
DOBBS: Well she may not be able to support it, but I can't find the cuts. It's $828 billion in the Senate version, 819 billion in the House version. Look, I'm -- Dana, I'm as used as you are to games being played on Capitol Hill, but when you cut 100 billion and I didn't perhaps do the best in my class in math, I know that the number should go down, not up by nine billion.
BASH: You're right they should. And the reason why is because before those cuts, this bill in the Senate was well over $900 billion, Lou, and the reason is because they added some tax provisions, a tax for the so-called AMT, a tax that really affects middle income people, or at least it affects them more than I think the tax was supposed to be in the first place.
But other -- two other things. One is a tax credit for housing and the other is a tax credit for people who buy American cars. Those are three things that weren't factored bud did pass the original Senate bill, so that's why those particular tax provisions are in and that's why it doesn't look like there are tax -- that there are cuts in the overall number, but there actually are.
DOBBS: OK. I think we can leave it at OK. Dana, thank you very much -- Dana Bash.
Well a new CNN/Opinion Research Corporation poll shows only a small majority of Americans now supporting the president's borrowing and spending stimulus legislation, but that very same poll gives the president himself a much higher approval rating than the most recent other polls. The CNN poll shows 76 percent of Americans approve of the way President Obama is handling his job.
At the same time, only 54 percent of those surveyed approve of the president's economic stimulus package. Forty-five percent oppose that legislation. Well Americans' opposition to the so-called stimulus bill is being driven in part by considerable outrage over measures that would do little or absolutely nothing to stimulate the economy or to create jobs.
One example of utter waste is a proposal that would spend almost $650 million on a new headquarters for the Department of Homeland Security. Lisa Sylvester has our special report in "Lou's Line-Item Veto".
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Top officials at the Department of Homeland Security have been dreaming of a new headquarters for more than three years. The proposal, to consolidate DHS offices now spread out among 70 buildings to one campus located at the former St. Elizabeth's Hospital in Washington, D.C. The only snag, money. But the stimulus package solves that, $646 million earmarked for the project, while proponents including Representative Eleanor Holmes Norton call it a classic public works project that is shovel ready and will put people to work, opponents like the National Taxpayers Union say it's a prime example of what should not be in the stimulus bill.
PETE SEPP, NAT'L TAXPAYERS UNION: The DHS headquarters will be a definite waste of money and certainly it merits consideration on its own rather than being stuffed into a larger stimulus package. This is a lot of money being spent on a federal facility.
SYLVESTER: The Department of Homeland Security officials declined our interview request, but pointed us to a policy statement on the DHS Web site that says quote, "once completed, this project will further unify our components, enhance communication and increase our mission effectiveness ultimately improving our security." Fiscal conservative groups warn though that future taxpayers are on the hook for any money spent.
ROBERT BIXBY, CONCORD COALITION: It's important for people to remember that this money isn't free. We're going to be borrowing heavily.
SYLVESTER: Many Republicans complain that they haven't had much time to examine the stimulus package for items like the DHS headquarters because the legislation has been rushed to the floor.
SEN. JON KYL (R), ARIZONA: We're spending more money than we have ever spent in a piece of legislation in the history of the United States of America and we have only spent one week at it.
(END VIDEOTAPE)
SYLVESTER: And part of that compromise worked on by Senators Susan Collins and Ben Nelson trimmed $50 million from the original price tag for the DHS headquarters, but adds $646 million. The National Taxpayers Union says that still is way too much money for a new headquarters at a time when the country is facing a fiscal crisis -- Lou.
DOBBS: And to hear Senator Jon Kyl talk about $1 trillion and a week's consideration, it would be one thing if indeed a full week had been spent, but hardly half of that time by most of the senators and their staffs . I mean it's -- and the administration demanding quick action because of again, just as George W. Bush said, Barack Obama is now claiming the sky will fall unless they vote on this legislation without further deliberation.
SYLVESTER: Yes.
DOBBS: The parallels are remarkable.
SYLVESTER: Yes, Lou, this is truly an amazing thing for people watching this Democratic process. I mean here you have a Congress that's basically being said here vote on this bill. Many of them, as most of them probably have not even had a chance to read it and we're talking about $1 trillion here, Lou.
DOBBS: Absolutely. Lisa, as always thank you very much -- Lisa Sylvester.
The Obama administration has delayed an expected announcement today about the overhaul of the massive bank bailout plan. Treasury Secretary Timothy Geithner postponed that announcement from today until tomorrow. The Treasury Department says the Obama administration wants to focus on its economic recovery plan first. By one estimate the total cost of dealing with this financial crisis has now skyrocketed to almost $10 trillion, including all of the so-called stimulus spending, government lending and the trillions of dollars of loan guarantees.
Bloomberg News estimating that that's enough to pay off just about 90 percent of the nation's home mortgages at full value as of two years ago. Of course it would be probably well over 100 percent of those mortgages given current market rates.
Much more on the fight over the stimulus legislation ahead. A battle over whether to spend $2 billion on something called zero emission power plants. This is stimulus? This is possible? We'll have the answers for you in our special coverage "Lou's Line-Item Veto".
And President Obama intensifying the rhetoric of fear on this legislation. Will the politics of fear work? Do those politics have any place in this discussion? The president's Secretary of Transportation Ray LaHood joins me here next. Stay with us. We're coming right back.
(COMMERCIAL BREAK)
DOBBS: Opponents of the massive spending plan, the stimulus package say that the legislation doesn't do enough to either stimulate our economy or to create jobs. Transportation Secretary Ray LaHood says this legislation will provide funding for safe transportation projects that will put people back to work and in relatively quick order. Secretary LaHood is one of three Republicans on President Obama's cabinet and joins us tonight from the White House. Mr. Secretary, good to have you with us.
RAY LAHOOD, TRANSPORTATION SECRETARY: Good to be with you, Lou.
DOBBS: This is a full on assault to win public opinion and the -- and sufficient backing for the stimulus package. A lot of talk however, such as today the president talking about even the suggestion that a permanent crisis, that the damage is so severe that fear is the only rational emotional response. This politics of fear could be a bit wearing. Is there some concern that that's being overdone?
LAHOOD: Well look Lou, the president was in Elkhart, Indiana today where the unemployment rate is 15 percent. The RV industry there is pretty much shut down. People there that I talked to are very, very -- I went with the president today to Elkhart -- people are very worried about their jobs. You know I hail from Peoria, Illinois where Caterpillar just laid off 20,000 people.
In my home town of Peoria, people are very worried. For the first time they're worried about whether they're going to be able to pay their mortgages or their kids' college tuitions.
DOBBS: Right.
LAHOOD: This is serious stuff, Lou. I mean we're talking about human capital here. We're talking about people's lives and families. And so there's a crisis in America, there's no question about it.
DOBBS: Yes, it's so serious, Mr. Secretary, there's no reason for you to know this, but for a year and a half, I have been calling for intervention in the mortgage markets and the housing industry in this country because it is the incipient route of this crisis, yet there is so little provision within this $838 billion package for either the -- for stimulation.
There's only five percent of it, it's being styled as a transportation and infrastructure bill. As you know, only five percent of it would go for transportation spending. That seems somehow, at least to many of us, inadequate. What is your reaction?
LAHOOD: Thirty billion dollars on highways is not insignificant, Lou, and what we're saying is that we're going to get the money out the door and people are going to be building roads and bridges this spring, summer and fall, and they'll be in good paying jobs, Lou. And the other point is $12 billion will go for transit, for buses and trains and light rail, again not insignificant.
This is a huge amount of money in a very short period of time to put people to work in good paying jobs rather quickly so that their unemployment does not continue. And I think it's an enormous amount of money, I really do. And I think it's going to create an enormous amount of jobs and these are good paying jobs. So I don't discount it as insignificant at all.
DOBBS: I don't know that I used the word insignificant, if I did I misspoke...
LAHOOD: No, I did...
(CROSSTALK)
LAHOOD: No, I used it...
DOBBS: But I'm saying that it seems like five percent, when it's styled as infrastructure and transportation, five percent of the money for 50 percent of that description seems somehow less than one -- what might expect.
LAHOOD: This is a lot of money, Lou, in a very short period of time. Over the next 18 months a lot of people are going to go back to work. A lot of people are going to go off the unemployment rolls. A lot of people are going to be in good paying jobs. When you start building roads and bridges it's going to help companies that provide the equipment. It's going to help people get off of unemployment and I think it -- I think it's an opportunity for the Congress and this administration to say to people, we're going to try and help you get back to work.
And look, I mean it's a step in the right direction. What are we going to do, sit by and watch people's you know livelihood and their ability to pay their bills? We're not going to do that. This administration has stepped up and we're asking Congress to step up, both the House and Senate have stepped up and soon the president will sign a bill that are going to put a lot of people back to work and that's the way we see this.
DOBBS: All right. Secretary Ray LaHood, Transportation Secretary. Thank you very much.
LAHOOD: Thank you, Lou.
DOBBS: Good to have you with us.
LAHOOD: Thank you, sir.
DOBBS: Up next, a road to financial disaster, that's what Senator Richard Shelby says about this legislation. The ranking member of the Senate Banking Committee joins us here. And in that stimulus plan tonight we take a look at $2 billion for something that some say won't likely exist any time soon. Tonight's "Lou's Line-Item Veto" is coming up next and the rest of the day's news. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: A massive fire today engulfed a new luxury hotel being built in Beijing. Flames shooting out of the top of the 40-story Mandarin Oriental Hotel (ph), the hotel not yet occupied. Meanwhile, in Australia, investigators say some of the deadly wildfires there that have killed dozens and dozens of people have been deliberately set, the fires have swept across half a million acres of southeastern brush land. The region is experiencing the worst drought in a century. At least 170 people have been killed in those wildfires, more than 800 homes destroyed.
Turning now to that massive borrowing stimulus package, the plan includes $2 billion to create at least one near zero emissions power plant, so-called. There are however, concerns about whether the so- called near zero emission plants can actually work or ever be built. Ines Ferre with our special report in "Lou's Line-Item Veto".
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): Two billion dollars of stimulus money could be headed here, a 400-acre corn field outside of Mattoon, Illinois. It's the proposed site of a clean coal power plant called FutureGen. The stimulus bill calls for the funding of such a power plant by the Department of Energy. It doesn't mention FutureGen by name, but Republican Senator Tom Coburn says it's clearly an earmark.
SEN. TOM COBURN (R), OKLAHOMA: The only place this money can go other than small portions of it is to Mattoon, Illinois.
FERRE: President Obama supported FutureGen when he was an Illinois senator and promoted clean coal technology in advertisements during his campaign.
OBAMA: You can't tell me we can't figure out how to burn coal that we mine right here in the United States of America and make it work. FERRE: The plant would store or sequester carbon dioxide underground. But Environment America insists money spent on a near zero emissions plant is wasted.
ANNA AURILIO, ENVIRONMENT AMERICA: This kind of technology doesn't exist right now. It's very risky. It's very speculative and dollar for dollar invested. You're going to get more jobs with cleaner technologies than you are for coal.
FERRE: The Illinois Office of Coal Development estimates that at peak FutureGen would generate 1,300 construction jobs and 3,250 indirect jobs. The plant would take four years to build and create 150 permanent jobs. The Center for American Progress, a liberal think tank supports clean energy, but says FutureGen is not shovel ready.
JOSEPH ROMM, CENTER FOR AMERICAN PROGRESS: I just don't think they have any idea what they're going to be constructing. That's why the Bush administration shut this program down.
FERRE: The Department of Energy supported FutureGen for five years, but in January of '08 pulled its funding saying it was restructuring the program, in short bringing it to a halt.
(END VIDEOTAPE)
FERRE: And the Department of Energy said quote "Secretary Chu is reviewing the FutureGen project along with other options to move this technology forward and added that he hopes that Congress will support the funding for a variety of carbon capture and storage projects". And Lou, Senator Coburn actually introduced an amendment to mix this provision from the bill.
DOBBS: Yes and it's unfortunate when the president himself is saying that there are no earmarks when this is clearly an earmark. It's designed for Mattoon, Illinois. At the same time, with such vast coal reserves in this country, and there was, remember the controversy with President Obama as a candidate saying that you know basically the heck with coal, it can't be done efficiently, so there's some irony here. But if we could learn, if we could create the technology, if we could innovate and really bring coal into a clean, clean energy source standard, we would really solve a lot of problems in this country, wouldn't we?
FERRE: And critics are saying that the Department of Energy shouldn't be footing the bill for so much of this. That this should be more on the private sector rather than DOE.
DOBBS: All right, we have got a lot of folks to please in this country, don't we? Thanks very much -- Ines Ferre.
Well I hope you will consider calling and e-mailing your senators and congressmen and letting them know your thoughts on this pending legislation. Go to -- they love to hear from you so be sure you take the time. Please go to our Web site loudobbs.com. We have all of their contact information for you. You can find the name and address of your congressmen, senators, whatever you want right there on the Web site.
And be sure to join us here tomorrow. We'll be focusing on the nearly $200 million in this stimulus bill for the Filipino veterans of World War II, how will this spending help create jobs and stimulate the economy in the United States? Why is this money even being considered in an economic stimulus package? We'll have some of those answers for you tomorrow in "Lou's Line-Item Veto".
And a reminder to please join me on the radio Monday through Fridays for "The Lou Dobbs Show". Go to loudobbsradio.com to get the local listings for "The Lou Dobbs Show" on the radio, 2:00 to 4:00 p.m. Eastern on WOR 710 in New York City.
Up next, President Obama insists there's absolutely no pork in the so-called stimulus package. We'll have an adjustment to the record right here. I'll be joined by two of the country's best economic thinkers. Also I'll be joined by the ranking member of the Senate Banking Committee, Senator Richard Shelby who says this legislation could lead to disaster. He's my guest here next.
(COMMERCIAL BREAK)
DOBBS: Well, the president's first news conference will begin here in about a half an hour on CNN. President Obama will be making his case directly to the American people to support that so called stimulus plan. One thing he mentioned at least three times today, there is no pork, he said, in this plan.
(BEGIN VIDEO CLIP)
OBAMA: There aren't individual pork projects that members of congress are putting into this bill. Regardless of what the critics say, there are no earmarks in this bill. That's part of the change that we're bringing to Washington.
(END VIDEO CLIP)
DOBBS: But as we have been reporting to you on this broadcast, there is some pork. There are still billions of dollars in pork in this bill, including $50 billion for expansion of the energy loan program at the department of energy. The company's default on those loans, the government picks up the tab. $7 billion set aside for the construction of new federal buildings, $646 million for the new headquarters in Virginia. $850 million for digital conversion. $450 million to NASA. The national endowment of the arts will receive $50 million, $300 million of your tax dollars to be used for a federal fleet of hybrid vehicles. And that amount cut down from the original figure of $600 million.
Joining me now with more on the stimulus package, one of its critics, Senator Richard Shelby, the ranking member of the Senate Banking Committee. Senator, great to have you with us.
SEN. RICHARD SHELBY (R), ALABAMA: Thank you, Lou.
DOBBS: According to the CBO, this bill is now ballooning to about $835 billion. What is your best judgment on this legislation?
SHELBY: Well, I think, Lou, that what we should do -- but we don't have the votes -- we should shelve it. She would put it on the shelf and start over, and attack the real root cause and problems in our banking system, which will create jobs if we can break through it and bring trust back to it and start lending again.
This bill is going to cost nearly a trillion dollars, as you mentioned. It's got earmarks all in it.
The president is the biggest earmarker. Not just President Obama, but President Bush, President Clinton, President Carter. They're the biggest earmarkers of all. Let's be honest with it, you pointed out some. There are all kinds of earmarks in this bill. But it's not going to turn the economy around. Marginally, it's going to help on some infrastructure projects. Are they emergency? None. There's not one thing in here that's emergency.
DOBBS: And about a third of it is tax cuts. Historically, we have seen that monetary policy indeed is critically important to economic recovery, but there is also no basis to believe that tax cuts, as the Republicans have been suggesting, Senator, are in any way any more helpful in recovery from recession, per se, than fiscal stimulative policy. How do you react to that perspective as well?
SHELBY: I basically believe, and I have advocated for years and I have talked with you about basic tax reform. Because I do believe that people earn money, they ought to keep their share of it. And I don't believe we have a fair tax code. And when we can vote a tax cut, I generally support it.
But you're absolutely right, tax cuts by themselves are not going to do it.
I think what will help -- and it's not going to be easy -- is to restore confidence and have a banking system that is working, that people can trust. There are trillions of dollars sitting on the sidelines in this country, but they're not invested in banks, because they're concerned.
DOBBS: The Treasury Department, the Federal Reserve under the Bush administration, putting forward just about $8 trillion direct intervention through the Federal Reserve and the Treasury Department, as you know, last year. This administration in for about, if this goes through as is expected, tomorrow, we're looking at the additional TARP money, about $1.2 trillion.
Here's something that Larry Somers said today on CNN talking about it. And I would like to -- OK, go ahead.
(BEGIN VIDEO CLIP)
LARRY SUMMERS: We want to catalyze the private sector to take responsibility for a situation that in many ways was created in the private sector. If government's going to be putting money at risk wherever possible, we want to make sure that somebody in the private sector is willing to take the same risk the taxpayers are being asked to take.
(END VIDEO CLIP)
DOBBS: What is your reaction to what the president's chief economic adviser is saying?
SHELBY: Basically, the private sector didn't cause all the problems, but they caused a lot. The government caused...
DOBBS: Enough, I think we'd say.
SHELBY: ... a lot of them by demanding that we make loans, that we socialize banking. You can't socialize banking. Banking should be made on the merits, and it wasn't.
DOBBS: And at this point, the president is saying, create or save somewhere near 4 million jobs. Do you buy that with this stimulus package?
SHELBY: Absolutely not. But I tell you what will save jobs in the future and get this around, and I'm going to say it again. If we can make the banking system working again, where they're loaning money to small businesses, we can make America what we want, create American jobs here in America.
DOBBS: How soon?
SHELBY: As soon as people have liquidity in the banking system.
DOBBS: All right. Thank you very much.
SHELBY: Thank you, Lou.
DOBBS: Senator Richard Shelby, ranking member of the Senate Banking Committee.
We extended invitation to Christopher Dodd to be part of this important discussion, he declined to join us. Senator Patrick Leahy tonight is demanding what he calls a truth commission to investigate charges of misconduct as he put it by President Bush and members of his administration. Senator Leahy said "There were lies told American people. A lot of policy was based on those lies." Republicans tonight are furious with Senator Leahy for proposing such a thing. Those Republicans say Senator Leahy is practicing partisan politics.
Tough talk tonight for former Israeli Prime Minister Benjamin Netanyahu. On the eve of the Israeli national election, Netanyahu said no pressure would make him see Jerusalem neighborhoods to, quote, our enemies. Netanyahu could become the next president if he can assemble -- territory recalls and his hard line against Iran, putting him at odds with some of President Obama's views on both the resolution of the Palestinian Israeli conflict and the Middle East.
And you're now looking at the east room of the white house where the president will hold his first prime time news conference in less than 30 minutes from now. Two leading authorities on the economy join me to tell us why the president's stimulus bill doesn't do enough to help our middle class. We'll be right back.
(COMMERCIAL BREAK)
DOBBS: The president is going to take his appeal to the American people direct here in just a few minutes here on CNN. I want to bring in David Smick and David Cay Johnston from Syracuse tonight.
David, let me ask you first since you're out there in front of the carrier dome, how do you rate the president's response to this economic crisis so far?
DAVID CAY JOHNSTON, AUTHOR, "FREE LUNCH": I think he's lost control of the ball. He has not clearly articulated what he wants. He's allowed the Republicans who are opposed to his plan to lard it up with a lot of business tax cuts which we know are not an effective stimulus and he's allowed these various provisions, why they're not a lot in dollars, they create huge opportunities for his opponents to beat him up. It shows his lack of political experience.
DOBBS: And David Cay Johnston, very quickly, without those tax cuts, without a few of those things, do you think this plan would create 4 million jobs in the next year and a half?
JOHNSTON: I don't know whether it will create 4 million jobs or not. There's certainly other things he could do. And the big thing is, they're going to raise unemployment benefits by $25 a week. If you're in Hawaii and out of work, you can get as little as $5 a week in jobless benefits. The quickest thing they could do to stimulate demand is increase unemployment benefits. Remember back in Vietnam? We had a surtax, we would have a sure benefit for those who are out of work due to no fault of their own.
DOBBS: All right. David Smick, your reaction as well. What are you thinking?
DAVID SMICK, AUTHOR, "THE WORLD IS CURVED": He's got the votes. Why are we talking down the economy? I think we ought to just move on. He's going to pass this thing. The question I have is, the consumer, as you know, is 70 percent of the economy, the consumer is terrified because the price of their house is plummeting.
DOBBS: Down about $6.2 trillion.
SMICK: There's not going to be a recovery until we deal with the housing problem and I mean big time. And this plan does not. One of the problems I have with the plan apart from the spending and the potential waste, there is no concept, he needs tonight in this press conference to say, here's my concept, here's why I think this is going to be work as opposed to all the political demagoguery and I think the American people need to hear, this is how we're going to stabilize the falling price of my house. And that is -- the housing price for a typical consumer is more important than his retirement plan by about five times, according to most studies.
As a young reporter, David Cay Johnston, I was taught there's three elements to the economy upon which everything else rotates, housing automobiles and jobs. And the rest of it you can put in any order you want to, but those are primary. Not a lot happening in those three areas in this stimulus package?
JOHNSTON: We need to remember that last year jobs were destroyed at the rate of 2,000 a day. We need to get demand going if we're going to turn the economy around. All this is risky, we're in a very bad situation, and he needs to go back to what the president said he was going to do, laser focus on job creation, sell to the public why his plan is going to do that and get rid of anything, whether it's Republicans or Democrats that isn't laser focused on job creation, sell to the public why his plan is going to do that and get rid of anything whether it's Republicans or Democrats because it's laser focused on job creation.
DOBBS: Is there any way in which we can move forward here without the creation of confidence in our leadership and is that happening now? Or are we just seeing, with so many -- these are deadly words being used by the president, the opposition talking about an enduring crisis, talking about depression.
SMICK: I don't think you need to tell the American people that it's a problem. I think we need to tell them here's the solution. They need to be kind of convinced that there's going to be a paradigm shift toward a new optimism. And I think that's what Obama has to do tonight. The president needs to say, my plan has been misinterpreted, here's my plan with respect to housing.
JOHNSTON: He's not running for office anymore, he's running the country and he needs to change his approach here to one of, yes, there's dangerous out there, but we are moving to address this and persuade people that he's done this. He's allowed his opponents far too much leeway here by not narrowing this down. The smartest thing he could do is to say to the Democrats, we're going to remove those things that are not stimulative, and we're going to take out the tax cuts because those things are not effective for immediate job creation.
DOBBS: Real quickly I'd like to ask both of you, is the Obama administration going to be back before the American people within six months asking for another trillion?
SMICK: And they're going to have to be back asking for help for the banks as well.
JOHNSTON: He should have asked for more in the beginning and scaled back if it wasn't need.
DOBBS: All right. David Cay Johnston, David Smick, thank you both for being here, appreciate it.
Well, President Obama had the kind of day that would give anyone a headache. President Obama didn't help himself when he boarded Marine 1 this morning. The 6'1" president forgot to duck in the doorway of his presidential chopper. During his first week in the oval office, he mistook the oval office window for a door as he was entering the oval office. Many are wondering if the president has to change direction or follow in President Gerald Ford's footsteps.
Hoping for no problems tonight at the white house, our Wolf Blitzer joins me now for a look at CNN's coverage of President Obama's first prime time news coverage. Wolf?
WOLF BLISTER, CNN ANCHOR: It will be an historic night over in the east room at the white house. Reporters now they're getting ready. This news conference that the president has is about to begin right at the top of the hour, we're told he'll have an opening statement on the economy and then answer reporters questions. That should go to the close of the top of 9:00 p.m., close to an hour or so. We'll have analysis. The best political team in television is standing by, Anderson Cooper, Campbell Brown and others, this is going to be a difficult night the Washington and we'll be all over it.
DOBBS: All right Wolf. Looking forward to it.
And we thank you for being with us tonight, CNN's coverage of President Obama's first prime time news conference begins right after this.
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BLITZER: Less than ten minutes away from the first white house news conference in primetime that Obama will host. Welcome to our viewers in the United States and around the world. I'm Wolf Blitzer reporting. Anderson Cooper is here. We've got the best political team on television. This is the night those reporters in the White House have been thinking about for a long time. I remember when I was one of those white house reporters. You know a lot of pressure to ask a good smart question.
ANDERSON COOPER, CNN CORRESPONDENT: Ed Henry will answer the questions as well talking to the president as well as a number of reporters. As you said it is the first prime time news conference. It becomes a critical time for President Obama. He's put a lot today especially behind selling the stimulus package and clearly an effort in primetime to convince the American people not just talking to the American people, but the audience, the American people on the need for this economic stimulus plan.
BLITZER: He got a major win in the U.S. senate, a procedural vote. But a vote that allows the real vote to take place tomorrow. And it looks like he'll get the senate stimulus package passed. Back to the House of Representatives, work out the differences. But if it all goes the way he expects it to go, by this time next Monday, he'll be able to sign that $800 billion plus package into law.
I want to go to our white house correspondent or senior white house correspondent, Ed Henry. He's in the east room of the white house. He's got your questions ready to go. What your questions will be. But set your stage for it. The president's objective tonight is to really get the American public onboard.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well Wolf, you've been here before, this room is packed right now. You can see this behind me. They're closed right now. They were open a few moments ago. There's a long red carpet that the president will walk down as he enters very dramatically. There's a white house domestic staffer a moment ago vacuuming that carpet. No detail to chance to tidy that up. But you're right, he has a lot of work to do to continue the stimulus plan. I spoke with Robert Gates, the white house press secretary and asked how much preparation had he done. He said he hasn't done a lot. The president called in senior staff last evening here to bat around some questions, some topics of discussion. In the words of Robert Gibbs, he got the best preparations today by taking questions at the town hall meeting in Indiana. Getting questions by people hurting right now specifically over the economy. There's an opening statement of 8 to 10 minutes. That entire statement is going to be about the economy. Not a single other issue. Reporters can raise any number of subjects beyond the economy. Two wars going on right now. He inherited a lot of challenges. I can go in any number of ways, Wolf.
BLITZER: Get ready, going over there momentarily. Ed Henry is the man in the east room of the white house. This is the day as we get ready for all of these activities. Anderson here. The best political team on television. Historians will be looking back in this news conference one of these days and they'll be assessing, did he get it off on the right foot?
COOPER: That's what he's hoping to do tonight. I want to introduce for our viewers, let you know who will be covering it with us. Soledad O'Brien is here. Senior political analyst Gloria Borger, Jeffrey Toobin, John King, and the all-important back row, contributor Roland Martin, Alex Castellanos, Jamal Simmons and Ed Rollins.
Campbell, you have some polls -- some surprising numbers of President Obama's popularity and the opinion on the stimulus.
CAMPBELL BROWN, CNN CORRESPONDENT: Yes. We have a new CNN Opinion Research Corporation poll out. You can't deny, with everything going on and everything we've been talking about, a huge ground swell of support for this president right now, his approval rating, 76 percent overall approval rating with 23 percent disapproving. And looking at the stimulus package itself, 54 percent favorable, 45 percent opposed. A little closer there. But we're going to see him do in this press conference and when he takes it show on the road, so to speak, is to use that popularity to try to explain this and sell it to the American people.
COOPER: And that is what President Obama was doing today. That's why he's been out of the white house talking to the American people.
JOHN KING, CNN CORRESPONDENT: People were urging him last week to get out of the white house to get out of the country. He was in Elkhart, Indiana. 15.1 percent the unemployment rate is in that county. It's above 8 percent statewide in Indiana. It's a great state to test the president's standing throughout the administration. He just barely carried wit 50 percent of the vote. That disconnect, the 21, 22-point gap between his approval rating and the approval for the policy is something worth watching. We're getting to know how the new president operates but how the American people judge their new president. He needs to prove that he can use his political capital to move policy. If we see this issue and issues down the road that there's a gap between what people think of him and his policies, very early could be a problem down the road. This is a big test to say I need this one, I need you the pick up the phone, I need you to pick up the phone. I need it fast.
COOPER: What do they feel they're in? Some are pleased they found their voice.
GLORIA BORGER, CNN CORRESPONDENT: They feel that the stimulus package has given them their voice. Clearly, the stimulus package was more popular a month ago when we were talking about it generally. The Republicans you could say have won the spin wars to a certain degree on this because they have been able to cherry pick things out of the stimulus package they call pork and wouldn't necessarily stimulate the economy. While they've been able to do that, the Republican Party if you look at polls hasn't grown itself in popularity. So while people may be listening to what they're saying about the stimulus package, the Republicans vice president done themselves as a party any good. So there's still some trouble here.
COOPER: Less than five minutes away from this news conference, the first primetime news conference the president has given. What do you expect him to accomplish tonight?
UNIDENTIFIED FEMALE: He has to take the message out of Washington, D.C. and reach the people -- 600,000 job losses. That's staggering. He has to connect it. That's where he is. Connect it to real people who are really feeling the pain and making them support it because they can get that, then they can go back and sell it in Washington.
COOPER: Get something from our political analysts, but Jeffrey Toobin, did he lose the message?
JEFFREY TOOBIN, CNN CORRESPONDENT: He got a late start. The message of waste and tax cuts is good for Republicans. What's good about the plan was lost for a while. That's the priority tonight -- what will work in the plan that will create jobs.
COOPER: Ed Rollins, you're a Republican strategist. Do the Republicans run a risk by becoming an insurgent party by voting no?
ED ROLLINS, REPUBLICAN STRATEGIST: At this point, no. We're at the bottom, we have to come up and find ourselves. So my perspective is it's a good thing for them. We have a pulse again. I think to a certain extent, they feel good and unified.
COOPER: Jamal, do you think there's a danger for Republicans?
JAMAL SIMMONS, DEMOCRATIC STRATEGIST: There is a danger. We discovered the old Nancy Reagan line, just say no. Whatever President Obama wants to do, just sort of oppose. If you think about what happened tonight this, is the earliest primetime conference we've seen in a couple of presidents. George Bush gave his first primetime press conference October 11 of 2001, right after 9/11. Bill Clinton didn't give his until June of 1993. He's engaging people earlier.
COOPER: Wolf with the press conference coming up quickly. Wolf?
BLITZER: I want to show our viewer what is we're anticipating. These are the doors in the east room. At 8:30, we'll see the president going down and making his opening statement. All of lit be eight-to-ten minutes, an appeal to the American people to support the economic recovery plan as he's calling it to make sure that he has that popular support and that popular support he's hoping can be translated to direct political pressure on the legislature, the members of the house and the senate to go ahead and pass this plan, a plan that's run into a lot of obstacles. Not one Republican supported just the Democratic version what the president wanted. In the senate earlier today in the procedural vote to end the debate, there were 61 votes, 61 senators in favor. They needed 60. But only three Republican senators went ahead and voted with what the president and the Democrats wanted. We'll be watching all of this throughout the night here on CNN. Our coverage is only getting started.
