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Lou Dobbs Tonight
Hard Sell; This is Change?; Buy American; Time's up; Save E- Verify
Aired February 16, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN CORRESPONDENT: Thanks, Wolf. President Obama leaving Washington to sell his so-called stimulus plan to the nation. Now he'll travel west to sign the bill and reveal the plans to fight the foreclosure crisis.
Also, time is up for GM and Chrysler to unveil their survival bids after taking billions of dollars of taxpayer bailouts. Can they save themselves and hundreds of thousands of American jobs? We'll have that story.
Also, why your income tax refund check may not be in the mail, states are facing desperate economic times. They're taking traffic steps. We'll have a special report, all that, all the day's news, much more straight ahead here tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, February 16th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening, everybody. President Obama tonight is taking his stimulus sales pitch on the road. Now the president will try to sell this plan to the American people, saying it will put money in the pockets of hard-working middle class families. But Republicans are still highly critical.
Also, time is up for the carmakers on the drink of collapse. GM and Chrysler will be in Washington tomorrow to reveal their survival plans. The White House says it's anxious to see with those plans whether they could save hundreds of thousands of American jobs. Dan Lothian has our report.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (voice-over): This is the $787 billion stimulus plan on paper, hammered out in a contentious fight on Capitol Hill, but the president isn't planning to sign it in town. He's going to Denver on Tuesday.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Denver would be as good a place as any to highlight some of the investments, to put people back to work, particularly in clean energy jobs and to focus people on those long-term investments that will help our long-term economic growth.
LOTHIAN: A senior administration official says it's not about snubbing Washington but about going to where families are facing financial hardships. At the same time, key Republicans like Senator John McCain are criticizing the administration for what they say was a lack of bipartisanship as the bill was being crafted; political observers say it's a wakeup call for the White House.
EMILY HEIL, ROLL CALL: I think the President Obama has realized that this really lofty goal of bipartisanship isn't necessarily achievable in the way that he thought.
LOTHIAN: A bump in the road for a president who keeps driving his economic agenda forward, announcing a task force instead of a car czar to help the struggling auto industry recover. Aboard Air Force One, spokesman Robert Gibbs said the president thought a team approach would be more effective.
GIBBS: A vast amount of expertise that crosses (INAUDIBLE) governmental agencies and departments that brings in the vast amount of experience that the administration has to deal with, the auto restructuring.
LOTHIAN: This new team will be led by Treasury Secretary Timothy Geithner and Larry Summers, Mr. Obama's top economic adviser and will include nationally recognized restructuring expert Ron Bloom.
LAUREN FIX, AUTO INDUSTRY ANALYST: I think it's a pretty big mountain that they're going to have to climb. And what I think is going to have to happen is we have to cut down on some of the product.
(END VIDEOTAPE)
LOTHIAN: Now Kitty, tomorrow, a senior White House aide tells CNN that the Obama administration plans to hand out the third installment in that $13.4 billion loan to GM that was promised under the Bush administration. That amounts to about $4 billion. And also tomorrow as you were pointing out, both GM and Chrysler will have to come up with that plan, present it to the administration on how they plan to turn things around and how they'll be able to pay back the billions of dollars in federal loans -- Kitty.
PILGRIM: And everyone will be listening very careful -- thank you very much, Dan Lothian.
LOTHIAN: OK.
PILGRIM: Well the carmakers themselves are not the only ones struggling to find a way to survive. The crisis in the auto industry is also having a widespread impact on many other companies, countless American jobs. We will have much more on that story coming up.
A last-minute addition to the economic stimulus bill restricts bonuses for highly paid executives at companies that receive federal bailout money. Now the rules would apply retroactively. Senate Banking Committee Chairman Christopher Dodd inserted the limit saying, "These tough new rules will help ensure that taxpayer dollars no longer effectively subsidize lavish Wall Street bonuses."
Now the amendment says bonuses to top executives cannot be more than 30 percent of their yearly salaries. And this amendment goes further than the Obama administration's plan to limit executive pay. In addition to top executives, it would affect more managers and top level traders.
President Obama promised to work with Republicans to create the so-called stimulus package. But the package went through the House and the Senate with almost no Republican support. Only three Republicans in the Senate voted for the stimulus bill. Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): It's gotten so bad bipartisanship is now a partisan issue.
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I want to thank the members of Congress who came together in common purpose to make it happen.
SCHNEIDER: Came together?
UNIDENTIFIED MALE: If this is going to be bipartisanship the country is screwed.
SCHNEIDER: The economic stimulus plan passed the House with no Republican support and only three Republican votes in the Senate.
UNIDENTIFIED MALE: It was a bad beginning.
SCHNEIDER: Why isn't bipartisanship working? There's real urgency out there.
OBAMA: When you start seeing an economic crisis of this magnitude, everybody's got to chip in; everybody's got to pull together. Politics has to stop.
SCHNEIDER: But it hasn't. The red versus blue divide is still very much alive in Congress. When President Obama allowed House Democrats to shape the initial stimulus plan, it ran right into the buzz saw of old political divisions.
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I think the president should have gotten more involved in trying to bring Republicans and Democrats together to find common ground.
SCHNEIDER: But the plan passed. What difference does it make that it got so little Republican support? It means the stimulus will be a continuing issue of partisan controversy. President Obama is betting it will work.
OBAMA: It will save or create more than 3.5 million jobs over the next two years.
SCHNEIDER: Republicans sound like they're invested in failure.
SEN. JOHN MCCAIN (R), ARIZONA: A lot of this package will not create jobs.
SCHNEIDER: They say they're just concerned.
REP. JOHN BOEHNER (R-OH), MINORITY LEADER: Well I hope this bill works; I really do, for the good of our country. But my concern is, is that the plan that's outlined will not do what we want it to do.
(END VIDEOTAPE)
SCHNEIDER: So the stimulus pass become partisan. If the economy does not improve, Democrats will be held accountable. If things do get better, Republicans could face serious political backlash. And in either case we're going to hear those dreaded words, I told you so -- Kitty.
PILGRIM: Well I think there's a lot of concern to go around. Thanks very much, Bill Schneider.
Well former President Bill Clinton tonight is saying that bipartisanship will return if the president's stimulus plan starts to work. President Clinton defended President Obama and his stimulus plan. But he also said the public support won't last forever.
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: The stimulus is our bridge over troubled water, I'll say again. So when he does that as it starts to work and people see America start moving again, then I think you'll see people open up and we'll see a more bipartisan spirit develop. The public I believe will support him at least for a year in trying to work these things out. And he's been very straightforward in saying it might take as much as two years for the economy to really get in gear again. My instinct is it will happen a little quicker than that.
(END VIDEO CLIP)
PILGRIM: Now President Clinton says President Obama's next major challenge is to present details on how the plan helps homeowners that are facing foreclosure.
Secretary of State Hillary Clinton today demanded North Korea dismantle its nuclear program. Now Clinton is in Tokyo for her first overseas trip as secretary of state. She told reporters on the flight to Japan that quote, "The North Koreans have already agreed to dismantling. We expect them to fulfill the obligations that they entered into." On her trip, Secretary Clinton will meet with the leaders of Japan, China, South Korea and Indonesia.
Well today there are new reports that two nuclear submarines collided in the Atlantic Ocean earlier this month. A British and a French sub were involved, both suffered minor damage. No crew members were injured. Officials said no radioactive material was released in the accident. Now the subs were on a routine patrol, traveling at very low speeds. Both subs carried missiles with nuclear warheads. The leftist anti-American president of Venezuela, Hugo Chavez, is celebrating an election victory today. Venezuelan voters Sunday passed a referendum to eliminate term limit and that would allow Chavez to run for another term in 2012 and beyond. Now Chavez has been extremely critical of the United States. He once called President Bush the devil in a speech at the United Nations.
Still ahead, your income tax check may not be in the mail. Also time's up for GM and Chrysler and they'll present their plans for survival. We'll have a special report.
Also the price tag for the presidential helicopter fleet floors -- soars to $11 billion and we'll tell you where that money may be going next.
(COMMERCIAL BREAK)
PILGRIM: The Pentagon is facing sharp criticism tonight over contracts for a new fleet of presidential helicopters and Air Force tankers, now huge costs overruns, complaints of a flawed bidding process and where will they be built? That's -- those are the issues plaguing both programs. Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The Pentagon under President Bush ordered a new fleet of 28 presidential state-of- the-art helicopters. But the cost has mushroomed from an original $6.1 billion to $11.2 billion. Nearly double the price tag. The cost overruns are so high that it has triggered on automatic Pentagon review. The Obama administration must now decide whether to proceed with the pricey choppers based on a European design or to pull back.
GEOFF MORRELL, PENTAGON SPOKESMAN: We must make tough choices about programs suffering from serious execution problems.
SYLVESTER: The six-year project is not the only one suffering execution problems. The Air Force awarded a $35 billion contract to build the next generation of Air Force refueling tankers to a European consortium, Airbus partnered with U.S. based Northrop Grumman over America based Boeing, but a Government Accountability Office report found numerous problems in the bidding process, prompting the Pentagon to redo that bid expected later this year. Critics say there has not been enough oversight of the procurement process.
LARRY KORB, FORMER ASST. DEFENSE SECY.: We're spending more on defense than the rest of the world combined. And yet our own forces are still suffering shortages of weapons that they need to carry out their job.
SYLVESTER: With the economy hemorrhaging jobs, one labor group says that instead of shopping overseas, the Pentagon should buy American and give credit to contractors that will spur U.S. job creation.
RICHARD MICHALSKI, IAMAW: What we're talking about is real jobs, concrete and mortar, jobs that just won't last or two or three years, but jobs that will take us into the future.
SYLVESTER: The final decision falls to Secretary Gates and his new boss, President Obama. Pentagon spokesperson Geoff Morrell told CNN quote, "The secretary believes the Air Force's top acquisition priority must be a new tanker and hopes that we can restart the competition for a replacement in the coming weeks."
(END VIDEOTAPE)
SYLVESTER: And on the Marine One helicopter issue, White House Press Secretary Robert Gibbs was asked about that at today's briefing and he said, "whenever you have a system that starts at a certain level and ends up costing twice that amount that yes, there are concerns and not just for the taxpayers, but also for the military -- Kitty.
PILGRIM: Yes, I think you'd have to have pretty extreme sticker shock, automatic Pentagon review. How many times do you hear that, Lisa?
SYLVESTER: Yes, you know this is -- we're hearing these programs again and again. And what people are just amazed at is the sheer amount that this isn't just a couple of million here and there. This is twice the amount, from $6 billion to more than $11 billion.
PILGRIM: Thanks very much, Lisa Sylvester.
Well we would like to know what you think and here is tonight's poll question. Do you believe that the helicopters purchased by the Defense Department for the president of the United States should be made in America? Yes or no, cast your vote at loudobbs.com. And we'll bring you the results a little bit later in the broadcast.
Well time is up for General Motors and Chrysler to explain how they're going to pay back billions of dollars in federal loans and keep Americans employed and ultimately survive. And instead of a single car czar overseeing the process from Washington, President Obama has opted to have a task force in charge -- Ines Ferre reports.
(BEGIN VIDEOTAPE)
INES FERRE, CNN CORRESPONDENT (voice-over): President Obama nixed plans to appoint a car czar to help the ailing U.S. auto industry. Instead he's creating a task force to help GM and Chrysler get back on track. The team will be led by Treasury Secretary Geithner and White House economic adviser Lawrence Summers, also on the task force, Ron Bloom, who advises the Steel Workers Union. One Michigan Republican with plenty of auto workers in his district says he wants more local expertise on the team.
REP. THADDEUS MCCOTTER (R), MICHIGAN: We'd just like to see it complemented with other individuals. As you know when your car breaks down, you don't simply hire an academic to replace your mechanic. What we need to see and we'd like to see is if complemented with other people that understand where the auto industry has been where it is and where we all know it needs to go. FERRE: GM and Chrysler have received $17.4 billion in loans so far. It's likely that Chrysler will be asking for more money. The automakers have to update the Treasury on their viability and future plans by Tuesday. In an interview with "Meet The Press" Obama adviser David Axelrod said saving the auto industry is crucial for the U.S. economy but he didn't rule out controlled bankruptcy as a way to restructure.
DAVID AXELROD, SENIOR ADVISOR TO PRESIDENT OBAMA: How that's restructuring comes is something that has to be determined. But it's going to be something that's going to require sacrifices not just from the auto workers, but also from creditors, from shareholders and the executives who run the company.
FERRE: But some industry experts say bankruptcy of one of the companies would make it even harder for them to raise money and it would scare away consumers. If the auto makers collapse, experts say it would have a ripple effect through the economy starting with the part makers. On Monday, Delphi announced almost 800 job cuts in Michigan. More than 40 major parts suppliers filed for bankruptcy in 2008. One-third of suppliers are in distress.
(END VIDEOTAPE)
FERRE: And one of the challenges that the new auto task force will face is how to help the industry on the consumer side. Lack of sales is making the problem worse and with high unemployment and tight credit, consumers are reluctant to buy.
PILGRIM: Ines, you touched on the auto parts makers. What are the projections? How are they...
FERRE: Well they actually just recently sent a letter to the Treasury asking for help. They're saying that they've got about a million jobs at risk and they need help here.
PILGRIM: All right, thanks very much -- Ines Ferre.
Well Sirius XM Radio could lose its signal. That will become a direct casualty of the auto industry mess. Now the nation's only satellite radio company is drowning (ph) $175 million of debt. Its largest customer base is the auto industry. And since the summer it has seen its market value plunge more than 96 percent. Now company representatives say they are prepared to file for bankruptcy tomorrow if they can't find a way to refinance that debt.
Tonight, investigators of the crash of Flight 3407 have their attention on ice and the auto pilot. Now the plane crashed about six miles from Buffalo Niagara Airport moments after the crew reported significant ice buildup. Fifty people were killed in this crash. The plane's deicer was turned on minutes after takeoff from Newark indicating that the crew was aware of the conditions.
(BEGIN VIDEO CLIP)
STEVEN CHEALANDER, NTSB: They did know that they had forecast icing conditions ahead because they were told that before they ever left Newark. So I can only say that he took the conservative approach and turned them on well in advance of getting into the ice.
(END VIDEO CLIP)
PILGRIM: Investigators say the autopilot was also engaged. They're looking into whether this made the crew unaware of just how severe the ice may have been.
A mysterious fireball was seen streaking across the sky in Austin, Texas. It terrified some onlookers. TV crews were recording a marathon yesterday when the fireball was spotted. And it was thought to be falling debris from the two space satellites that collided last week. But officials say it was not satellite debris. It was more likely a meteor.
New comments tonight from Michael Phelps regarding a sheriff's decision not to pursue drug charges.
(BEGIN VIDEO CLIP)
MICHAEL PHELPS, U.S. OLYMPIC GOLD MEDALIST: (INAUDIBLE) I realize that I have made a mistake and a bad judgment and this is something that I need to learn from, I will learn from and have learned from.
(END VIDEO CLIP)
PILGRIM: Now a South Carolina sheriff says there will be no charges against Phelps because there is not enough evidence and Phelps was photographed at a party smoking from a marijuana bong. USA Swimming suspended Phelps for three months. Kellogg's says it will not renew his endorsement deal.
Coming up, with just a few minutes to go, opponents of the border fence say they want construction stopped.
Also the most effective program against illegal immigration is set to expire. We'll have that and more straight ahead.
(COMMERCIAL BREAK)
PILGRIM: There are new efforts today to save E-Verify -- now E- Verify is the single most effective government program to fight illegal immigration. Business special interest groups were successful in making sure the funding for the program was deleted from the so- called stimulus package and now E-Verify is set to expire next month. But supporters have not given up. Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Somewhere between the House and the Senate E-Verify disappeared from the economic stimulus plan.
SEN. JEFF SESSIONS (R), ALABAMA: Now let me ask my colleague, is it the desire of the members of this body that the stimulus money to create jobs, that those jobs should be given to people illegally in the country?
TUCKER: E-Verify is an electronic database run by the Department of Homeland Security that allows employers to check to see if their newly hired employees are legally eligible to work in the U.S., not everyone was upset. Groups like the ACLU and U.S. Chamber of Commerce openly and vocally oppose the E-Verify program.
They were pleased the program was cut calling it expensive bureaucratic and inaccurate. Yet no politician seems to want to take credit for stripping it out of the bill. The Congressional Hispanic Caucus has sent a letter to the congressional leadership opposing E- Verify, but efforts to reach them for comment or clarification by LOU DOBBS TONIGHT were unsuccessful. Some politicians tried to act like they'd support it, even if they didn't. One key senator sounded almost apologetic to Senator Sessions for not including it.
SEN. CHRISTOPHER DODD (D), CONNECTICUT: It's a good idea, it got dropped -- or he didn't get a chance to offer it, I think was the case. I know how he feels.
TUCKER: E-Verify is free to employers and claims an accuracy rate of 99.6 percent, but critics say that's not good enough. Yet supporters highlight it.
KRIS KOBACH, IMMIGRATION ATTORNEY: The accuracy argument is a complete red herring. This is the most accurate database and most effective and efficient program that the United States has ever assembled indeed, that any government has ever assembled. It's ironic that one time when the federal government gets it right and has something that's really, really working, some people in Congress are trying to kill it.
TUCKER: Other expressed reasons for opposition include that it slows the hiring process. But on the E-Verify Web site, it clearly noted that, quote, "the earliest the employer may initiate a query is after an individual accepts an offer of employment", end quote.
(END VIDEOTAPE)
TUCKER: Now the bottom line is the program was cut. And the reason that matters is that E-Verify's current authorization expires on March 6th -- Kitty.
PILGRIM: Bill, will there be a last-minute save? How might this shape up?
TUCKER: Well there is some talk -- and a Republican staffer I spoke with today says they believe there's going to be a stand-alone bill that's going to be put out there in Congress. But she also told me expect a lot of horse trading because Democrats are aware -- in fact a lot of Democrats support this program. But they're going to use it for leverage. So they expect the stand-alone to suddenly become glummed up with a bunch of different amendments on as well.
PILGRIM: And we will keep our eye on that I'm sure. Thanks very much Bill Tucker.
Well as we have been reporting, E-Verify is the single most effective government program to fight illegal immigration. Today, more than 100,000 businesses across the country use E-Verify. Arizona has the largest number of businesses using the program. That's followed by California, Georgia, Texas and Colorado. It's worth mentioning again, E-Verify is highly accurate. The Department of Homeland Security says 99.6 percent of qualified employees are cleared without delay.
Let's look at some of your thoughts. We have our e-mails. Kevin in New York wrote to us. "It takes 24 hours to vote on emergency legislation and then it sits around for three days waiting for the president to sign it?"
Robert in Pennsylvania wrote. "President Obama promised us change. But he is going to sign the stimulus bill with all that wasteful spending. It looks like it's just more of the same old thing."
We love hearing from you. Send us your thoughts, go to loudobbs.com. Coming up why your income tax refund check could be suspended.
Also one Democratic congressman explains why he voted against the so-called stimulus bill, also new efforts to prevent the new fence along the southern border to be completed, all of that next.
(COMMERCIAL BREAK)
PILGRIM: Deadly drug cartel violence exploded again this weekend in Mexico. The youngest victim was just 2 years old. Now the boy was killed when suspected drug hit men murdered a state police officer and 10 members of his family including five children. In Mexico City, police found the decapitated bodies of two women in the trunk of a car and their severed heads were in a cooler on the backseat.
Close to 6,000 people were killed in drug-related violence in Mexico in the past year, and that violence is spilling into this country. The FBI's latest report on gang violence says there are over a million gang members in the United States, many with direct links to Mexican drug cartels.
Well there's new evidence tonight that drug trafficking from Mexico continues to be a threat to our war on drugs. The Mexican Navy this weekend intercepting a fishing boat carrying seven tons of cocaine, all five crew members were arrested and they are being held in Mexico. The drug bust, which was coordinated with the U.S. Coast Guard, is the biggest seizure since 2007, when 23 tons of cocaine were discovered on a ship in southern Mexico.
Efforts on land to stop drug trafficking often begin with the border fence. And some opponents of the fence are now trying to stop the last few miles from being built. They've even taken their case to the Obama administration. Casey Wian has our report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): Build it and they won't come, at least not as many. That's the idea behind 670 miles of new border fencing. The last stretches being completed east of El Paso, Texas.
SALVADOR ZAMORA, BORDER PATROL: I am accountable to the citizens of this country to protect them from narcotic trafficking as well as terrorists. Certainly, building a fence in this particular area makes sense.
WIAN: The Border Patrol says additional fencing, more agents and better technology have reduced illegal alien apprehensions in El Paso from 122,000 in 2006 to just 30,000 last year. Drug seizures are also down. Both according to the Border Patrol indicate fewer illegal crossings. Still, some in Texas are suing to halt fence construction, including the city of El Paso. Mayor John Cook's office overlooks the border and doesn't like what he sees.
MAYOR JOHN COOK, EL PASO, TEXAS: We're not necessarily opposed to the use of fences. But it should always involve the local communities in decisions about fences going in their community. And you should be open to suggestions for alternatives to the fencing.
WIAN: Cook proposed building a dam to keep the Rio Grande full year-round. He says the Bush administration ignored that proposal and the impact on local property owners, the environment and relations with Mexico. Then there's the cost. An average of $3.9 million per mile of pedestrian fence. And a million dollars a mile for vehicle barriers according to the Government Accountability Office.
ZAMORA: We understand of the concerns that citizens have of the price tag on this fence. This was a place riddled with crime up and down this river, there was a lot of drug trafficking, a lot of crime, a lot of sniper fire towards Border Patrol agents.
WIAN (on camera): This fence and a growing force of Border Patrol agents are all that separate El Paso from Juarez, the epicenter of Mexico's violent drug cartel wars. Despite the increase in fencing and the additional number of agents, the FBI says 40 to 60 percent of the drugs entering the United States from Mexico still pass through West Texas.
(voice-over): But less is coming through El Paso. It consistently ranks among the safest cities of its size in the United States. Another reason the mayor says more fencing is unnecessary.
COOK: As soon as they finish this 15-foot-high fence, I predict there will be a maquilo (ph) opened up in Juarez that builds 16-foot- high ladders to get over the fence.
WIAN: The Border Patrol counters the fence is one important tool to divert illegal traffic to areas where it has a tactical advantage. Wednesday night, agents apprehended Saul Pena Gonzales (ph), a Mexican national wanted for murder in the United States. The Border Patrol says he told them he crossed in New Mexico to avoid the new border fence in Texas. Casey Wian, CNN, El Paso.
(END VIDEOTAPE)
PILGRIM: Construction of a virtual fence is expected to begin soon in southern Arizona. The new revamped version of the fence will initially cover about 50 miles along the border. A prototype currently operating in southwest of Tucson has been plagued with problems and the government has spent more than $400 million over the past two years on the virtual fence project.
Outrage tonight after Peanut Corporation of America filed for bankruptcy. Now the company is blamed for the nationwide salmonella outbreak that sickened more than 600 people and caused at least eight deaths. Bankruptcy could shield Peanut Corp. from liability suits filed by the hundreds of consumers sickened by their products or the families of those who died. Consumers' Union says the company's maneuvering underscores the need for Congress to give the FDA more muscle to impose fines and penalties.
And as we have been reporting, the nationwide salmonella outbreak has left nine dead, sickened more than 600 people. Throughout this time, the Food and Drug Administration has failed to protect or even adequately inform the public about the deadly outbreak. A new Harvard survey shows that only 37 percent of Americans said they have confidence in government inspectors to keep the food safe. Meanwhile, 48 percent of Americans have confidence in grocery stores. So that means that more people trust their grocery store to protect them than the government agency created to do just that.
Still ahead, Illinois Senator Roland Burris under fire now, facing accusations of perjury.
Also, why did one Democrat do a flip-flop and voted against the economic stimulus plan? We'll ask him next.
(COMMERCIAL BREAK)
PILGRIM: The recession is hitting the State of Kansas so hard that taxpayers there aren't getting income tax refunds. The state's budget director has suspended refunds and says the budget crisis is so severe that the state may not be able to pay its workers on Friday.
Well, California Governor Arnold Schwarzenegger's attempt to keep his state from going broke is dead in the water tonight. The State Senate is meeting again in a special session to debate the $14 billion in tax increases. Negotiations fell apart last night when one Republican withdrew his support. Democrats say higher taxes are the only way out of a $42 billion deficit.
California, like almost every state in the nation, is counting on the federal stimulus package to keep it afloat. In fact, forty-six states are facing shortfalls adding up to nearly $145 billion. And as a result, at least 40 states are making drastic cuts in education, health and other services.
In one Arizona town, it's so bad, they've decided to cut the school week to four days for the next two years. The school board in Bisbee made the call as a way to save $500,000 a year. To make up for the lost time, they'll add an hour to the school day.
And when the House passed the stimulus bill last week, seven Democrats voted against it. One of those Democrats is our guest. He had been in favor of the plan, changed his mind because the final version contains what he says are excessive tax cuts that take money from education and job creation programs. Congressman Peter DeFazio of Oregon joins us now from Eugene. Thank you very much for joining us, sir.
You voted for the original House legislation and then you did change your mind. Explain to us what the thinking is?
REP. PETER DEFAZIO, (D) OR: Well, I said when the first bill passed after I got a $3 billion added for transit, I said, I'm glad they added that. But the bill is still too heavy on tax cuts. It has to get better in the Senate, it has to get better in conference or I will not support the final version. It got way worse. Look, we're borrowing every penny in this bill. And when you take and you borrow money to give people tax cuts that return, say, 25 cents on the dollar, that's a loser. The next generation is going to be paying and the generation of that is going to be paying back this money that was borrowed. We need to invest it in ways that increase our productivity, rebuild America and put people back to work as soon as possible. That's infrastructure, that's education, things like that. Tax cuts ...
PILGRIM: Yeah, actually, I'll read your quote. I supported the original objective to have a bill that was timely, targeted and temporary. That's really well put. Instead, we ended up with a huge grab bag and there are hundreds of billions of dollars in excessive tax cuts that will do little to stimulate our economy or put our nation on the road to recovery. What do you see ahead? Now that this is through, what do you see ahead?
DEFAZIO: Some good will come of this. We'll begin to catch up with almost one year's deferred maintenance on our highway system. We aren't even going to get to one year of deferred maintenance on our transit system. We're in fact going to lose jobs because there isn't enough money to support transit as is, let alone rebuild it. But I'm worried about is people are going to say, we already took care of the crumbling infrastructure in America. All that money we put in the stimulus bill. That's not even a down payment. In the middle of this debate the American Society of Civil Engineers came out with a well documented report. We need $2.6 trillion over the next five years if we want to begin to have a 21st century infrastructure in this country. The Chinese are going to spend $600 billion on transportation in the next two years for 21st century system. We got about $40 billion in this bill for our service transportation. Nowhere near enough.
PILGRIM: Sorry to interrupt. The size of this is astronomical. What are the intended consequences of passing something like this?
DEFAZIO: Well, the unintended consequences are I think it's going to shake the foundations of the dollar, potentially spur inflation and even worse, when we want to do something real like build a national high-speed rail network, which we need to finance, or our service transportation system or transit system, people are going to say, you strung it out here, you can't borrow any more money. We should have a capital budget and borrow money for real things shouldn't be the same as borrowing money for consumption or to give people tax cuts.
PILGRIM: What does this mean for your state, sir? That was a tough position to take.
DEFAZIO: Well, it's going to help. We're in the top five in unemployment. We've gone up dramatically. Huge budget shortfall. Looking at cutting our school days maybe 20 days off the year here within the next few months. This will help fill some of that hole. But it's not what we need for a longer term recovery, either for Oregon or America, in my opinion.
PILGRIM: When you go back, what's your position now? What will you do to convince people of how to be responsible about this economic crisis?
DEFAZIO: Well, the next thing is the president's budget. I've asked that they put in a very big number for surface transportation reauthorization, that is, our five-year bill due next October to begin to rebuild our roads, bridges, highways, transit systems and commuter rail. We'll see what the president's folks put in that budget. But if they squeeze that number down because they think we've taken care of things in the stimulus we're going to be in trouble.
PILGRIM: All right. Thank you very much. Representative Peter DeFazio, thank you sir.
A reminder to vote in tonight's poll. Do you believe that the helicopters purchased by the Defense Department for the president of the United States should be made in America? Yes or no. Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.
PILGRIM: Coming up, we'll have our guts check tonight. A banker who's giving away money.
And Illinois Senator Roland Burris now fighting off calls for his resignation, also possible perjury investigation.
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PILGRIM: Tonight, Illinois Senator Roland Burris is trying to fend off calls for his resignation. At issue is whether he lied to the impeachment committee that was investigating former Illinois Governor Rod Blagojevich. Brianna Keilar has our report.
(BEGIN VIDEOTAPE)
BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): Under oath just days before taking a seat in the U.S. Senate, Roland Burris told Illinois lawmakers he had spoken to several people in Governor Rod Blagojevich's offices, including his chief of staff. What he left out, conversations he had had with the governor's brother, Rob.
SEN. ROLAND BURRIS, (D) IL: Rob Blagojevich reached out to me in three separate phone calls to ask for assistance raising money for his brother, then Governor Blagojevich. I made it very clear to him that I would not contribute, that it would be inappropriate and a major conflict because I'd expressed an interest in the Senate seat.
KEILAR: That was Burris on Sunday, lawyer by his side, explaining what he revealed in an affidavit he later submit to lawmakers. Monday, he was back at the mikes defending himself again.
BURRIS: There was no change of any of our testimony. We've followed up as we promised the Impeachment Committee. We've done everything here that we said we were going to do.
KEILAR: Still, Illinois Republicans are calling for a perjury investigation.
JIM DURKIN, (R) IL STATE HOUSE: At some point in state government, we're going to have to tell people when you get before a committee and are sworn in to tell the truth, we're going to take it serious.
KEILAR: And for the new junior senator from Illinois about to embark on a five day listening tour across his state, the persistent shadow of Rod Blagojevich could make his stint in the Senate a short one.
MARK PRESTON, CNN POLITICAL EDITOR: This could hurt him. This could draw a primary challenge from the Democratic Party. Democrats don't necessarily want to see a primary because that could, in fact, weaken their nominee against a Republican.
(END VIDEOTAPE)
KEILAR (on camera): Meanwhile, back here on Capitol Hill, Senator Burris continues to be an unwanted distraction for senate democratic leaders. Majority Leader Harry Reid is reviewing Burris' affidavit and awaiting any action the Illinois legislature might take according to his spokesman who also said clearly it would have been better if Senator Burris provided this information when he first testified. Kitty?
PILGRIM: Thanks, Brianna. Joining us from Chicago is Bruce Dolt. He is the "Chicago Tribune's" editorial page editorial. Thanks for being with us, Bruce. You must really have to look at this all the time to keep up with it. Two appearances in two days. That suggests something in itself, doesn't it?
BRUCE DOLD, "CHICAGO TRIBUNE": I think what's important here is that when Roland Burris testified to the impeachment committee, he was still waiting for the U.S. Senate to accept him. And Harry Reid and Dick Durbin essentially said, you go before the committee, you testify fully, tell us about any conversations, any dealings with Blagojevich, and then you're going to be in. And I do think that if he had told us everything five weeks ago, if he had told us everything five weeks ago, if he had told us that the governor's brother had called him three times looking for money, looking for help raising money, at a minimum, I think the Senate would have said, whoa, hold on, and probably delayed the acceptance of him in to the Senate. So this has big ramifications for this state.
PILGRIM: You know, I guess it's truthful and complete are the two words that actually have to be examined. Senator Burris insisted today he never changed his testimony. They caught up with him in Chicago I believe this morning. Let's listen to what he has to say.
(BEGIN VIDEO CLIP)
BURRIS: There was no change in any of our testimony. We followed up as we promised in the impeachment committee. We've done everything here that we said we were going to do.
(END VIDEO CLIP)
PILGRIM: So many including yourself have suggested he may have said as little as possible in that testimony but truthful and complete is necessary, isn't it?
DOLD: This is the third version of events. He followed an affidavit with the committee that said he had no contact, no dealings with any of the Blagojevich cronies about the Senate seat. He goes and he testifies. Now I've listened to that tape over again and I've read the transcript and he was specifically asked about several people close to Blagojevich. He admitted to one of them. There's a pregnant cause during the hearing. He had every opportunity to lay out all of the stuff that he's laying out now.
So, you could say, no, there's nothing untruthful in his testimony, but he wasn't forthcoming with everything that he knew at the time.
PILGRIM: You know, Illinois Republican leaders are now calling for a perjury investigation. How do you see that playing out?
DOLD: I -- I would not be shocked if the U.S. attorney or the state's attorney in Springfield in the state capitol where he gave the testimony at least took a look at this. He would say maybe that's a difficult case to make on this testimony. Maybe on the first affidavit which seems more declarative, he does have a problem. I would be shocked if it goes to a perjury kind of a case. And I would be shocked if the Senate wants to deal with anything more than this. But it's probably - I do think it's a lot of frustration around Illinois and the country when you hear politicians do this time and time again. When are they going to tell us the truth?
PILGRIM: What happens to former Governor Rod Blagojevich now? What do we expect from the U.S. Attorney's Office?
DOLD: The U.S. Attorney's Office has until early April to bring an indictment to the governor. No word on what exact date that's going to be or what's going to be in it. We do expect if we bring an indictment, it will bring far more than the criminal complaint that was brought in December. They've been investigating him for four or five years now. The governor has been quiet for a couple of days, no more Letterman appearances that I know of.
But he did go on radio last week and started talking about womanizing and drinking in the State Capitol. He wasn't naming any names, but the implication seemed to be, I can bring you all down.
PILGRIM: Well, thanks very much for your insights to this considerable story. Bruce Dold, thank you, Bruce.
DOLD: Thank you.
PILGRIM: Coming up at the top of the hour, we have CAMPBELL BROWN, NO BIAS, NO BULL. Campbell, what are you working on?
CAMPBELL BROWN, CNN HOST: Hey, there, Kitty, tonight just four weeks into the term, President Obama is getting ready to make history. He's prepared to sign a massive rescue bill congress passed last week. He'll also begin tackling a foreclosure crisis and the auto industry mess. We'll look at all the challenges ahead. Plus, we've got some incredible photographs taken inside the White House while President Obama was fighting for the economic package. You're not going to miss the revealing intimate portraits of the president at a crucial point in his administration. Also, we've got new information tonight about how what was happening on Flight 3407 in the final seconds before it crashed near Buffalo. It's all ahead in the top of the hour, Kitty?
PILGRIM: Thank you very much, Campbell Brown. Still ahead, our "Gut Check" is next. Plus tonight's poll results and more of your thoughts so stay with us.
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PILGRIM: We have a shining example of an executive behaving well in tonight's "Gut Check". Now Wall Street executives should listen to this one carefully. When Leonard Abess Jr. sold his majority stake in the Miami based City National Bank, he reportedly took $60 million of the proceeds and gave it to everyone on the payroll. Abess paid 399 workers bonuses and tracked down former, 72 former employees to make sure they received their share as well. Some of the bonuses are more than $100,000. Abess said he always wanted to provide an equity share for his employees. Workers were provided for financial counseling and special high rates of certificate of deposit at City National.
Tonight's poll results, 95 percent of you believe the helicopter's purchase by the Defense Department for the president of the United States should be made in America.
And time now for some of your thoughts. We have Larry in Pennsylvania. "I can't believe our government wants to kill e-verify. It seems like they push for open borders, more H1-B visas and more trade policies, who do they work for?" And we have Gregory in Washington. "I am a supporter of President Obama. However, we need to keep the pressure up on the new president. To keep his word, to secure the borders, we don't need to wait for immigration reform to do it."
We heard from Ken in Michigan, "Lou, I'm getting sick and tired to hear our elected officials voting for the stimulus package even though it is not perfect. When it comes to taxpayers' dollars, maybe they should work on it a little longer until they do get it right."
And Patty in Washington wrote to us, "That the U.S. and Congress and the president was signed in to law a stimulus bill without any due diligence is the height of recklessness. Ignorance is not blitz especially when it comes to sticking the taxpayer with this outrageous expense. This is the height of irresponsibility on the part of Congress and the president.
And Jan in Florida wrote, "President Obama convinced the American people that change would take place, but all I see is our government doing business as usual and American taxpayers are paying for it again."
We love hearing from you, send us your thoughts, go to loudobbs.com. Please join Lou on the radio Monday through Friday for the LOU DOBBS SHOW, go to loudobbsradio.com for local listings for the LOU DOBBS SHOW on the radio.
Thanks for being with us tonight. Please join us tomorrow. For all of us here, thanks for watching. Good night from New York. CAMPBELL BROWN, NO BIAS, NO BULL starts right now. Campbell?
