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Lou Dobbs Tonight

Hard Choices; Growing Anger; Chandra Levy's Killer Found?; Bye to Blue Laws; Freedom of Speech

Aired February 23, 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 thanks.

Tonight, President Obama promising to slash the federal budget deficit as he presides over the biggest increase in government spending in history, we'll have a special report on the president's efforts to show that he's no tax, spend, and borrow liberal.

And, tonight, a new assault on our freedom of speech, liberal news organizations apparently refusing to defend the conservative "New York Post" from attacks by the NAACP and Reverend Al Sharpton. We'll have complete coverage.

And tonight what could be a breakthrough in the hunt for the killer of Chandra Levy eight years after she disappeared in the nation's capital, an arrest of a criminal illegal alien could be imminent, we'll have the latest for you, all of that, all of the day's news, and much more coming up here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, February 23rd. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. The stock market today plunged to levels not seen in almost 12 years. The Dow Jones Industrials finishing the day 250 points lower, the Dow closing just over 7100. Investors obviously concerned that the federal government doesn't have a clear plan to solve our economic crisis.

President Obama today said he will slash sky rocketing federal spending by making difficult choices. President Obama said he will cut the federal budget deficit by half by the end of his first term. Dan Lothian reports now from the White House.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (voice-over): It's a rare look inside this administration's effort to clean up the federal deficit and deal with an economy in crisis, the president in a candid, open session with experts, administration officials, and lawmakers -- first up, Mr. Obama's chief rival in the presidential campaign, Senator John McCain.

SEN. JOHN MCCAIN (R), ARIZONA: We all know how large the defense budget is. We all know that the cost overruns, your helicopter is now going to cost as much as Air Force One.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The helicopter I have now seems perfectly adequate to me.

LOTHIAN: The free flowing session also touched on fixing Social Security, tax reform, and the rising cost of health care. Then the president made an announcement.

OBAMA: We have scheduled a health care summit next week.

LOTHIAN: A mostly cordial meeting, but the president got a strong warning about bipartisanship from Texas Republican House member Joe Barton.

REP. JOE BARTON (R), TEXAS: But if you really want consensus, I would encourage you to encourage the speaker to have a true open process. This is a good first step. But if this is all we do, it's a sterile (ph) step.

OBAMA: On the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive.

LOTHIAN: This summit came after a day of meetings with the nation's governors; President Obama is still fighting opposition to the stimulus package.

OBAMA: Most of the things that have been the topic of argument over the last several days amount to a fraction of the overall stimulus package. This sometimes gets lost in the cable chatter.

LOTHIAN: The so-called cable chatter has been growing louder.

UNIDENTIFIED MALE: There is some we will not take in Mississippi.

UNIDENTIFIED MALE: This isn't free money.

UNIDENTIFIED MALE: We're digging yet another hole.

LOTHIAN: Republican governors threatening to turn down some federal dollars like money for unemployment aid. Because, they say, it could lead to tax increases down the road. Speaking to the nation's governors the president said a healthy debate is good but politics should not get in the way.

OBAMA: What I don't want us to do, though, is to just get caught up in the same old stuff that inhibits us from acting effectively and in concert.

(END VIDEOTAPE)

LOTHIAN: Lou, the president will unveil the budget on Thursday. And as you pointed out, he wants to slash the federal deficit in half in four years. That deficit in 2009 is expected to be around $1.3 trillion. Press Secretary Robert Gibbs saying that everyone is going to have to share in the pain. Lou?

DOBBS: Any sense of irony there, that President Obama is holding this summit on fiscal responsibility just a little over a week since signing the largest spending package in the country's history? LOTHIAN: And that's right. And that's what you've been hearing from some of his Republican critics, who say you know this is more spending from this administration. They point that $787 billion stimulus package and now he's talking about fiscal responsibility, so certainly some irony in the eyes of his critics.

DOBBS: What about there, any sense of irony on the part of the staff at the White House?

LOTHIAN: They're not -- if there is, they aren't talking about that. I mean they are lining up behind the president, as you know, that's what the staff members will do. But certainly they have been hearing about it from Republicans.

DOBBS: All right. Dan, let me ask you, we're being told that President Obama's third choice to be commerce secretary...

LOTHIAN: That's right.

DOBBS: ... is likely the former Washington Governor Gary Locke. What have you got for us?

LOTHIAN: That's right. We're told he's the likely choice and that an announcement could be made as soon as Wednesday. And as you probably know, Gary Locke is a two-term Democratic former governor of the state of Washington. He was also a state representative there for many years and he is the third choice.

You know Governor Richardson had to bow out because of the federal investigation into a company that had done business in his state and then earlier this month we saw Senator Gregg having to bow out because he thought the bridge between Democrats and Republicans was too big for him to serve in this administration. So they are hoping here at the White House that the third time is the charm.

DOBBS: OK, Dan thank you very much -- Dan Lothian from the White House.

There are still three unfilled vacancies in President Obama's cabinet. This is the worst record in American history for filling cabinet level posts at least in two decades. As Dan Lothian reported, Gary Locke would be in line for the commerce secretary's position. Hilda Solis' (ph) confirmation as labor secretary has been delayed because of questions about her husband's unpaid taxes and her involvement with what is a lobbying organization for labor. The Health and Human Services position remains vacant after the abrupt withdrawal of former Senate Majority Leader Tom Daschle over his tax problems and his work for a lobbying firm.

Rising speculation tonight that the federal government may increase its stake in Citigroup to as much as 40 percent, that would be in effect nationalizing Citigroup. Published reports say Citigroup is trying to negotiate a deal with the government after its shares plunged to the lowest level in nearly two decades. The federal government giving Citigroup $45 billion in bailout money in return for the equivalent of almost eight percent of Citigroup's preferred stock. The government may also be considering a much bigger bailout for General Motors and Chrysler, approaching nationalization levels there as well. The federal government has already loaned the two car makers more than 17 billion. Now there are reports that the Treasury Department may guarantee at least another $40 billion in private loans for General Motors and Chrysler. And, of course, that guarantee would make them effectively a federal loan.

Meanwhile, Chrysler declining to comment on a report that it may sell manufacturing assets worth some $300 million to communist China. "China Business News" saying Beijing Automotive wants to buy the production equipment and technology from Chrysler.

A new CNN opinion poll shows a large majority of Americans now oppose any government assistance for car makers and banks. The poll reflects growing public anger and frustration with this nation's business leaders. In point of fact, the CNN/Opinion Research Corporation poll shows Americans now trust their elected officials more than they do big business. Bill Schneider has our report.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Business scandals everywhere. Alleged multibillion dollar swindlers Bernie Madoff and Allen Stanford, Swiss banks helping Americans hide their money, huge bonuses for Wall Street executives.

ILENE KENT, "MADOFF SURVIVORS GROUP": There's anger and frustration. I can understand the anger that Bernard Madoff is walking around in a $7 million home and there are some people who don't know where they are going to live next week.

SCHNEIDER: Does the public expect those people to bail the country out? Well no. Our new poll asks people how much confidence they have in different groups to make the right decisions to help the economy -- at the top of the list, politicians. Three-quarters of Americans feel confident the Obama administration will make the right decisions.

Two-thirds have confidence in congressional Democrats. A majority has confidence in Republicans. Labor union leaders don't fair badly. Nearly half the public has confidence in them. But Wall Street investors, bankers and financial executives, auto company executives no more than 30 percent have confidence in them.

Right now, Americans trust political leaders more than business leaders. That's new. And it has consequences. Auto companies are asking the federal companies for big loans. Otherwise, they say they may go bankrupt. Does the public think the government should help them? No.

Do people think the federal government should provide more assistance to bankers and large financial institutions? No. What about homeowners who cannot pay their mortgages?

SEN. CHRISTOPHER DODD (D), CONNECTICUT: Stopping foreclosures must be our top priority. Failing to do so will have devastating consequences for our economy. There are several ways that TARP funds could be used to address the foreclosure crisis.

SCHNEIDER: Well they are different. They are generally seen as ordinary people who made bad financial decisions. The majority says they deserve government help.

(on camera): The Obama administration is planning to unveil a new program that will increase the federal government's influence over the health care system in an attempt to lower costs and expand coverage. The last time the government tried that back in 1994, it didn't work. The health care business put up fierce resistance. And now 72 percent of Americans think a new government health care program would be just fine.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Another of our polls shows President Obama's fear mongering on the economy appears to be making Americans gloomy about the state of our nation. It's an interesting poll. This CNN/Opinion Research Corporation poll shows only 20 percent of Americans surveyed believe things are going well. But at the same time, almost 80 percent of Americans say things are going well for themselves -- President Obama repeatedly talking down our economy and our markets while pushing his huge borrowing and spending plan through Congress.

Up next, our freedom of speech is under attack with the national liberal media refusing to speak out, perhaps because a conservative newspaper is in the line of fire? We'll be talking about that.

And a criminal illegal alien could be on the verge of being charged with the murder of Chandra Levy nearly a decade ago. That story is next.

(COMMERCIAL BREAK)

DOBBS: New developments tonight in the eight-year-old slaying of government intern Chandra Levy. Washington, D.C. police are reportedly tonight on the verge of charging a criminal illegal alien from El Salvador with her murder. The disappearance and the death of Levy gained national attention after former Congressman Gary Condit admitted to having an affair with the 24-year-old intern. Lisa Sylvester has our report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Susan and Bob Levy say they think about their daughter every single day and miss her.

UNIDENTIFIED FEMALE: This has been eight years, eight long, hard years. And there's not a day or a night that is not on our mind.

SYLVESTER: Now police are apparently close to an arrest, a source with knowledge of the investigation tells CNN that the person that they are seeking the arrest warrant for is 27-year-old illegal immigrant Ingmar Guandique (ph). Guandique (ph), who is from El Salvador is serving a 10-year prison sentence for attacking two women at knifepoint in the same park where Chandra Levy was murdered in 2001.

In a pre-sentencing report, one of the women Guandique (ph) assaulted wrote quote, "My attacker was extremely strong and with his hand cutting off my air and the knife at my throat I didn't feel I could struggle for very long." The prosecutor in the case in the same report said quote, "he used Rock Creek Park as a hunting ground, waiting beside popular running trails, selecting victims and stalking them." Guandique (ph) pleaded guilty in both cases. A breakthrough may now link Guandique (ph) to the Chandra Levy murder.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Now there are reports that there is new DNA evidence and perhaps even a jailhouse confession leading to Guandique (ph).

SYLVESTER: Guandique's (ph) name surfaced in the early stages of the Levy investigation but most of the media attention focused on Congressman Gary Condit who was having an affair with Chandra Levy at the time of her disappearance. Condit repeatedly said he had nothing to do with her murder, but lost his bid for re-election in 2002.

(END VIDEOTAPE)

SYLVESTER: And Condit released a statement saying he was glad the Levy family might soon have answers and said an insatiable appetite for sensationalism prevented the search for real answers. Lou?

DOBBS: Well, that's one congressman's opinion, anyway. Lisa, thank you very much -- Lisa Sylvester from Washington.

A federal judge in Texas has pleaded guilty to obstruction of justice charges. In return prosecutors there dropped sex crimes charges against him. U.S. District Court Judge Samuel Kent (ph), also retired from the bench, Kent (ph) was accused of groping two female court employees and trying to force them to perform sex acts. He faces up to 20 years in prison.

A former boyfriend of Nadya Suleman tonight demanding a DNA test, he wants to know whether he is the father of any of her now 14 children including the octuplets born last month. The former boyfriend says he donated sperm to Suleman in the late 1990s because she claimed to have had ovarian cancer.

Coming up next here why the liberal national media apparently isn't speaking out against the latest attempt to muzzle free speech at a conservative newspaper and some states are looking to make money by repealing old laws.

(COMMERCIAL BREAK)

DOBBS: Fifteen states currently have blue laws that ban the sale of alcohol on Sundays and in some cases requires businesses to close. Some states are now desperate as well for ways to add more cash to their tax revenues and they want to repeal some of those laws. Louise Schiavone has the story.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The last vestiges of prohibition partial or complete bans on alcohol sales on Sunday are alive and well in roughly a dozen states. But now in the search for new revenues some lawmakers say there's no time like the present for change and fresh funds.

SETH HARP (R), GEORGIA STATE SENATE: We have had testimony from various grocers, convenience stores and things of that sort and those individuals have told us that they lose a tremendous amount of business to South Carolina, North Carolina, Tennessee, Georgia -- I mean Tennessee, Alabama, and Florida.

SCHIAVONE: Georgia, Indiana, and Connecticut prohibit any retail sale of alcohol on Sunday. Fifteen states ban only liquor sales. The Sunday sales debate is on in virtually every cash-strapped state where blue laws still exist. In Georgia action is expected soon on a proposal to let communities decide whether or not they want to sell alcoholic beverages on Sunday. Georgians we spoke to agreed.

UNIDENTIFIED MALE: I think it's a great idea. I think it's probably a little outdated law and I think the most important point on that is the revenue it's going to generate for the state.

UNIDENTIFIED MALE: You can sell it Monday through Saturday. Why not Sunday?

PETER CRESSY, PRES., DISTILLED SPIRITS COUNCIL: As a practicing Christian myself, I don't think the government should be in the business of determining what day is the Sabbath.

SCHIAVONE: Conservative religious groups though say the last thing society needs especially in stressful economic times is another day to sell liquor.

JIM BECK, GA CHRISTIAN COALITION: I know that the media loves to you know make folks on this side of the issue look like bible thumpers that want to impose their will. Just because something consistent with values express in (INAUDIBLE) religion doesn't make it bad policy.

SCHIAVONE: There's also this. Economists at MIT at the University of Notre Dame found last spring that repealing blue laws restricting Sunday commerce led to a decline in church attendance and donations.

(END VIDEOTAPE)

SCHIAVONE: But advocates of getting rid of remaining restrictions on Sunday alcohol sales say why not let hard-working men and women who bring home the bacon during the week bring home a bottle of wine on a Sunday and deliver some revenues to cash-strapped states at the same time. Lou?

DOBBS: Louise, thank you very much -- Louise Schiavone.

Well the White House has set up a top level task force on the automobile industry, but it turns out that most members of that task force drive in fact, foreign cars. The "Detroit News" reporting that only two of the 18 people who are on the task force or who are advising it actually drive American cars. Those are Gene Sperling (ph), counsel to the Treasury secretary, who owns a Lincoln LS and Rick Wade (ph), senior advisor at the Commerce Department who drives a Chevy Cavalier.

The co-chairman of the task force both own foreign cars. Treasury Secretary Timothy Geithner, an Acura TSX and National Economic Council Director Lawrence Summers, he drives a Mazda Protege. It's unclear to me whether or not that was given to him by Bob Ruben (ph) but that is the name of the car -- most other members also driving foreign cars.

Well time now for a few of your thoughts. June in Colorado said: "Hi Lou, some day I pray American voters will be able to see through the hypocrisy and arrogance that abounds in our so-called representatives." I'm with you.

And Bill in Michigan: "I want to start by probably saying that I'm neither a Republican nor a Democrat. I'm an American who is outraged by the behavior of our supposedly elected public servants who behave like royalty and think they deserve only the best."

Mark in Florida said: "Government needs to stop the infighting and work on getting our country's problems fixed. After all U.S. citizens pay their salaries." Well that's not a very big deal to those folks in Washington, I assure you.

We love hearing from you. Send us your thoughts to loudobbs.com. And up next here, your right to buy and own guns is at risk. I'll be joined by one of the country's leading authorities on gun rights.

And a free speech fight over a cartoon in the "New York Post" is escalating. Top First Amendment attorney Floyd Abrams and Professor Richard Thompson Ford (ph), author of "The Race Card" join me here next.

(COMMERCIAL BREAK)

DOBBS: The controversy over the so-called chimp cartoon in the "New York Post" has turned into a full scale assault on the freedom of speech, the NAACP calling for the editor-in-chief of "The Post" and the cartoonist to be fired. Reverend Al Sharpton wants a full scale federal investigation by the FCC into the paper right down to every employee in "The Post" newsroom. But as Kitty Pilgrim now reports, so far the liberal national media has been all but silent on the issue.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Reverend Al Sharpton and his organization are calling for retribution against the "New York Post" demanding the Federal Communications Commission review allowing its owner News Corps (ph) to own more than one newspaper and TV station in the same market.

REV. AL SHARPTON, CIVIL RIGHTS ACTIVIST: We will be petitioning for an emergency hearing with FCC.

PILGRIM: They claim this cartoon in "The Post" was racist. It showed two police officers standing over the body of a bullet-riddled chimp. Sharpton claims the chimp represents President Obama, a charge the cartoonist calls ridiculous. The "New York Post" says it simply mocks Washington's efforts to revive the economy.

DAVID HOROWITZ, MEDIA COALITION: They are not allowed to shut down a newspaper based on something being said that they don't agree with. The fundamental principle of the First Amendment is not protecting speech is popular. And it's the speech we disagree with, a speech that's unpopular, whether from right or from left, that's the speech that needs protection by the First Amendment.

PILGRIM: In Europe, in 2006, a cartoon depicting the profit Muhammad (ph) prompted Islamic radicals to call for a fatwa (ph) against the cartoonist. Some European newspapers reprinted the cartoonist, but others did not. Then President Jacque Chirac (ph) asked the media to avoid offending people's religious beliefs.

GENE POLICINSKI, FIRST AMENDMENT CENTER: There's no question that this sort of echoes I think that earlier debate over the cartoons with the Prophet Muhammad (ph).

PILGRIM: Many European countries have laws against blasphemy and racial incitement. Most U.S. news organizations including CNN chose not to run the cartoon.

JOAN BURDEN, NAT'L COALITION AGAINST CENSORSHIP: I personally thought it was a mistake not to let people see what the debate was all about and it was -- we posted the cartoons on our Web site.

PILGRIM: Last year, the satirical cover of "The New Yorker" of Michelle and Barack Obama generated a similar firestorm of criticism.

(END VIDEOTAPE)

PILGRIM: Now First Amendment advocates point out the strength of our society is that free speech is protected even if it generates controversy and religious leaders cannot demand censorship or retribution and neither can the government. Lou?

DOBBS: And we should point out that in the case of "The New Yorker", there were quite a few supporters of "The New Yorker's" right and approach in that satirical cover, but of course "The New Yorker" is a liberal publication. Kitty, thank you very much -- Kitty Pilgrim.

Well time now for our poll. We'd like to know do you believe the liberal national media is failing to defend the "New York Post's" First Amendment rights because the paper is conservative. We'd like to hear from you. Yes or no. Cast your vote at loudobbs.com. We'll have the results here later in the broadcast.

Joining me now for more on this controversy over "The Post" cartoon and freedom of speech is attorney Floyd Abrams, the country's foremost authority on the First Amendment in my opinion and from Ithaca (ph), New York, Richard Thompson Ford, great to have you with us, Professor.

Let me turn first to you, Floyd. Are you surprised that there has been silence on the part of the national media? And let me ask you the poll question. Do you think it's because "The Post" is a conservative publication?

FLOYD ABRAMS, ATTORNEY: I think you're leaving out, Lou, half the First Amendment. You are allowed to criticize. You don't have to phrase or defend something that you thing is wrong-headed or even racist and if the government were involved here or as your piece pointed out, people talking about going to the FCC, Sharpton and stuff like that, that's counter to the First Amendment. It's not counter to the First Amendment to be upset at what other people say and...

DOBBS: (INAUDIBLE) leaving out the last half of what Sharpton did then.

(CROSSTALK)

DOBBS: You are acknowledging that he's calling for an FCC investigation...

(CROSSTALK)

DOBBS: Calling for the use of government power...

ABRAMS: Yes, right.

DOBBS: ... over a publication.

ABRAMS: Absolutely...

(CROSSTALK)

DOBBS: Are you surprised that there's been absolute -- I mean look at the editorial pages here, Floyd. I mean you would think that somewhere there would be a resident voice seeking some balance.

ABRAMS: Well, I don't think "The Post" is really being punished too much in all of this. They are getting a lot of publicity, some of which they don't mind, some of which they do. But it seems to me though that we really do have to remember for a lot of people, myself included, looking at that cartoon on the morning it came out, I thought it was racist. I saw a stimulus package. I saw a chimpanzee down who had been killed. I thought of the president and therefore I thought it was racist.

(CROSSTALK) DOBBS: And I suppose that we could -- Professor, let me turn to you. I mean I think we also could -- before we go to the -- well let's go to the race issue since we're there. Your thoughts on whether or not that's germane to the First Amendment issues here, Professor -- Professor Ford.

RICHARD THOMPSON FORD, AUTHOR, "THE RACE CARD": Well, it's not turned into the First Amendment issue. Myself was offended by the cartoon and disturbed by it. Part of living in a free society is people get to say things that avenge them. The part of being in a free society is they get to protest, too, and point out there's disagreement. So that's perfectly legitimate.

DOBBS: Right.

FORD: But the question of media diversification is a separate issue and it would be extremely dangerous if those two were collapsed. If we shouldn't be calling for an investigation of the paper because we don't agree with what is being said.

DOBBS: Absolutely. Well, we say absolutely but what we're watching here, because I could argue this another way. I frankly just thought it was a lame cartoon. I did not have any deem analysis of this cartoon when I first saw it. I'm confessing that to both of you as we speak here. But what I also think one would infer from all of this is if there's any criticism of the Democratic leadership, of the united states congress and stimulus package, that opposition is it as reflected in this cartoon could be an attempt to stifle an honest he did bait. It has nothing to do with President Obama. It refers to the writing of the stimulus package and, of course, the president was not engaged in the writing of it. One would play with the imagery and the words. On the face, that's what it said.

ABRAMS: First of all, it dealt with who the spokesman was going to be, right, for the next stimulus package. Seems to me, it is the president is associated. It is his stimulus package. I don't read the cartoon that narrowly, even at its best, it's broad criticism. Look, it just seems to me, this is a situation in which we have a cartoon. It's not the biggest story in the world. But it's important -- it's important, I agree, for you to talk about. I thought the Danish cartoon was a disgrace the way no one would reprint the cartoon. But you don't have to reprint just because something is in bad taste.

DOBBS: One understands that. But also one doesn't have to fall for the heads of an editor and a cartoonist because they have bad judgment or poor taste or were insensitive. Do you agree, Professor Ford?

FORD: Well, certainly I do agree with that. And more importantly, I think there are -- this is a distraction from larger recent issues. The way we go about taking race in this country is wait for some scandal, like this cartoon, and talk about that and, you know, it's -- eventually I personally don't think that the cartoon is that big of a deal. DOBBS: You know, as I said, I thought it was a lame cartoon and bad taste as well as being insensitive. But certainly this sort of call for a professional by Reverend Al Sharpton seems to be excessive and I imploring the federal government to bring its power against a news organization I think is offensive. I don't understand why it's not more offensive to those in the national media. Personally, I will say this out loud, I think that if the New York Post were a liberal organization, you would see the national liberal media react quite differently.

ABRAMS: That could be. They probably wouldn't have printed the cartoon in the first place.

DOBBS: Are liberals now beyond bad taste and bad judgment?

ABRAMS: Not beyond bad taste at all. But racism like this, I think a liberal would have been more likely to say, you know, that sounds like they are talking about the president and that's not just offensive, it's outrageous.

DOBBS: We have just touched upon Professor Ford's expertise, which is race. It seems to me that the New Yorker was accused of racism. Guide us through the difficult field here that confronts us when it comes to the issue of race.

FORD: Well, it's true that it's difficult and this reminds me in some ways of the controversy over the New Yorker cartoon, which I also felt was something that was blown way out of proportion. In this case, I personally was offended by the New York Post cartoon. My first reaction to it was that it reminded me of the historic association between blacks and that seems to be troubling to me. At the same time, I can see that there's ambiguity there and I can imagine that the cartoonist intent. And so we're now in a situation where we've got to have debate about what this man intended, what's in his mind. I think that's an unproductive way about going discussing racial issues generally. It turns off a lot of people who might otherwise get tired of hearing race has got --

DOBBS: You know, in my interests here, frankly, as well as the racial issue is the First Amendment issue, frankly, professor. And there's a proportionality here. And at a time when the country should be proud of where it's come from and have a retro grade reflux of actions seems misplaced, unseemly, out of the moment.

ABRAMS: Images have impact.

FORD: Right.

DOBBS: Go ahead, professor. Professor?

FORD: Well, I do worry that blowing things out of proportion is ultimately counterproductive and it seems to be in the end this is just a cartoon. To my mind, it's a disturbing cartoon.

ABRAMS: I agree with that. I think it is time for this to be the last discussion of this cartoon. What do you think? DOBBS: I don't think that a First Amendment attorney should ever try to exercise the First Amendment by anyone. By the way, we appreciate the thought and the irony. Thank you very much. Floyd Abrams. Professor Ford, thank you for being with us.

Up next, California refuses to make the hard choices again, instead of looking for easy money from Washington. Oh, they love that easy money. They are going to need a lot of it.

And your right to bear arms is under assault from federal and state lawmakers. Those stories are next. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well, a right of Americans to bear arms, right guaranteed through the second amendment, are being threatened. Legislation has been introduced in congress and in states all across the country that would severely restrict the ability of law abiding citizens to buy and own firearms. Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: You're four times more likely to die in a fire accident than a gun accident. Fire arms have the lowest rate of accidental deaths per 100,000 of the accidental deaths tracked by the National Safety Council but that hasn't stopped efforts to oppose tighter restrictions on gun ownership. In New Jersey, there's legislation pending to limit gun owners to one gun purchase for 30 days. The National Rifle Association says legislation in New York would outlaw firearms based on what they look like and how they are assembled with no testing procedures spelled out. Groups supporting gun ownership say the New York bill would give the police unlimited and arbitrary power. They say to crack down on guns is misplaced.

LARRY PRATT, GUN OWNERS OF AMERICA: Gun control legislation has never been shown to do anything to dissuade criminals from getting guns or to make it difficult for them.

TUCKER: If someone wants to commit a crime with a gun, they don't have to go through legitimate channels. The state that has the most attention at the moment is in Illinois. That bill would require gun owner to carry at least $1 million in liability insurance. The sponsor defends the bill saying --

KEN DUNKIN, ILLINOIS GENERAL ASSEMBLY: We have house insurance. We have car insurance. We have a gun that is one of the most dangerous piece of instruments in our house, or within our lives that can cause and does irreparable damage. Why not have insurance on that.

TUCKER: In addition to legislation at the state level, there is also legislation pending in congress.

(END VIDEOTAPE)

TUCKER: The one that has everyone's attention at the moment is HR-45. Gun owners are alarmed at this bill because it would require every gun to be registered and every registration to be renewed in five years. They simply want to strip away that right by simply making it too expensive and bureaucratic to own guns, Lou.

DOBBS: It's obvious, it's transparent, it's blatant, it's an assault on the second amendment.

TUCKER: Absolutely.

DOBBS: Bill Tucker, thank you very much, appreciate it.

Joining me now is Steven Halbrook. He's research fellow at the Independent Institute. He is the author of the Founders' 2nd Amendment. Great to have you with us.

STEPHEN HALBROOK, "THE FOUNDERS' 2ND AMENDMENT: Good to be on the show, Lou.

DOBBS: The idea of this legislation, whether in congress, state legislators, this is such a blatant assault on the second amendment, the use of taxation, the use of bureaucratic regulation, to stifle the second amendment individual rights of gun ownership. I mean, this is outrageous. Is there a likelihood that any of this would succeed?

HALBROOK: Well, just when you think that we have enough prison population in our country, we have proposals to create land mines for gun owners for exercise of amendment rights. We have an attorney general who advocated five years incarceration for unregistered firearms. In other words, if your papers are not in order, you could go to prison for five year, the same attorney general who in a previous office advocated a pardon of terrorists. So what we're dealing with between that, hr-45, the bill in congress, that would create gun owners in the United States to be registered. If you're not licensed, you could be sent to prison for a substantial amount of time.

DOBBS: Why in the world are we tolerating an individual right guaranteed? I mean, imagine this. If you were to apply these kinds of restrictions against our other individual rights and the bill of rights, I mean, there would be a march on Washington D.C. tomorrow that might be considerably more in terms of a powerful social reaction. Why is this being accepted?

HALBROOK: Well, how would you like it if you had to get --

DOBBS: Why not answer my question first?

HALBROOK: Well, it's crazy if we have a new administration, we have a lot of people advocated prohibition policies in the past to make gun ownership difficult. We had a Supreme Court last term that held the second amendment an individual right. It's like the empire strike back. The District of Columbia creates a law that you have to register a gun every three years or you go to prison if you neglect to do so. Why is this happening now? It's difficult to say. But the proposals get more and more extreme. We get the $1 million insurance proposal in Illinois, for example, and notice what happens if you don't have the insurance. And in that state you have to have an identity card and if you don't have that, it's a felony offense and if you don't get the insurance, your card is invalidated.

DOBBS: I think if the folks in Illinois accept that, you know, then we've got the republic, at least they do, in Illinois that they deserve. You testified against Eric Holder at his confirmation hearing. Why so?

HALBROOK: Well, Mr. Holder advocated policies for gun owners adverse to the second amendment. He signed on to a brief in the Supreme Court saying that nobody has --

DOBBS: Handgun ban overturned by the Supreme Court.

HALBROOK: Right. He said that you, as an individual, have no rights under the second amendment. He supported legislation when he was a member of the Reno Justice Department that would have created not only making private transfers of a gun a felony unless you had a background check. If you give a gun to your son for Christmas, you're a felon if you don't get a background check.

DOBBS: I'm sorry. We're way over here but I appreciate you being here with us.

Coming up next here, record low ratings from last night's Oscar. We'll tell you what happened and why people turned out and off.

And citizens group wanting to get the political leaders out of office. I wonder why? The government is double. They are broke. A few other issues. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: President Obama is promising the nation's governors that the stimulus money will be on the way but there are concerns that the state governments won't bring their spending and costs under control no matter what. Citizens groups in California are planning to take action on their own. Casey Wian has our report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT: California lawmakers narrowly avoided a meltdown last week striking a deal the address the $42 million budget deficit through next year. Governor Arnold Schwarzenegger sounds more optimistic than he has in months.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I think at the beginning of next year we will turn the turned the corner. And I think it's important now that we stay fiscally disciplined and that's why it's very important for us in California to solve this budget crisis.

WIAN: California's financial and economic crises persists. The state lost more than a quarter million jobs in 2008 and the unemployment rate has swelled to 9.3 percent. It's likely to go higher when January's state report is released Friday and hires still went 10,000 state employees went off in July. It includes cash increases. The family of four will pay $1,000 in new taxes. Californians are already saddled with one of the highest state cash burdens in the nation, some help as much as $45 billion over two years coming from the federal stimulus plan.

OBAMA: You're not succeeding despite Washington, you should be succeeding with a hand from Washington. That's what we intend to give you in this administration. In return, we'll expect a lot from you as the hard work of making the recovery plans promise a reality.

WIAN: Yet in California, according to a business group called the Bay Area Counsel, the reality now is California's system of government is fundamentally broken. Our prisons overflow, our water system teeters on collapse. Our once proud schools are criminally poor. Our financing system is bankrupt, our democracy produces id logically extreme legislators to pass neither budget nor reform and we have no recourse in the system to right these wrongs.

(END VIDEOTAPE)

WIAN: Several like-minded groups are meeting in the state capital to plan a citizen's constitutional convention. They want to throw out the state's political leadership and start all over, Lou.

DOBBS: One could perhaps forgive them given the state that -- the state of California is in. The question is, why is there not a broad movement in the state of California, because the Bay Area Counsel couldn't have said it more forthrightly or accurately. Why is there not simply a wave across that state and to change direction and to change leadership?

WIAN: I think the short answer to that Lou is there's been a lack of direction in the past. This group together with several others, there's about seven or eight influential groups in the state of California that are at that meeting tomorrow. They're trying to form late a strategy which they'll try to get the legislature to call for the constitutional convention. Unlikely that's going to happen. They might do away with their own jobs. The next might be to ballot the citizens of California and the approval rating of the state legislature and the poll taken last month was 15 percent, Lou. This idea has a lot of popular support.

DOBBS: How is the governor doing in terms of approval rating?

WIAN: I haven't seen his lately. But I imagine since the budget crisis is over for now, we'll have a temporary spike, Lou.

DOBBS: The spike from where it will be kind of interesting to watch. I love the fact that we're going to have to stay disciplined in the words of Governor Schwarzenegger. Stay disciplined in California? That's an interesting choice of words.

WIAN: It would be a first.

DOBBS: Thanks Casey, Casey Wian.

Nationwide government employment is the only area of job creation. That's right. Government is employing folks. And that is in and of itself remarkable.

Let's go to Campbell Brown and find out what's coming up at the top of the hour -- Campbell?

CAMPBELL BROWN, CNN ANCHOR: They there Lou. Tonight, the stock market melts down even further plunging to levels not seen in a dozen years. Ali Velshi is going to be here with more on that and we'll look at what this could mean for President Obama's rescue plan and for the latest promise to slash the ballooning federal deficits.

Also the president taking transparency in the whole new level in this pretty extraordinary question and answer session with members of Congress from both parties including the former opponent in the race to the White House. How the president pushed the agenda through.

Plus, a special panel of money experts standing by to take your calls and help him figure out how to navigate in this economy the money questions answered at the top of the hour -- Lou?

DOBBS: Thank you, Campbell.

Just to put this in some contrast -- over the last year, 150,000 jobs created in government in the public sector while the private sector lost four million jobs. Where is that recession when it comes to the government? Peculiar little dichotomy we're going. Just thought we'd share that with you.

And a reminder to join me on the radio Monday through Friday for the Lou Dobbs show. Go to loudobbsradio.com to get the local listings in your area for the Lou Dobbs Show. And 2:00 to 4:00 p.m. in New York on WOR 710. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well the Academy Awards may be losing some interest for Americans. This year's -- at least Americans. This year's awards show may be the lowest rated in history. Many of the story no, ma'am named were downright downers and they weren't big hits at the box office. A.J. Hammer, post of HLN ""Showbiz Tonight"" has the story from L.A.

A.J. HAMMER, HOST, "SHOWBIZ TONIGHT": Feel good and joyful not the words coming to mind with several of the films at the Oscars. "The Reader" with Brit Kate Winslet as a former concentration camp gardener in World War II. The meager $23 million take at the box office. World War II also central to the film "Defiance." And not a lot of joy when focusing on one of the most embarrassing moments in our history. Big word of the night, "Slumdog Millionaire." Not void of hope but wow, it's dark and gloomy as you get there. It has a happy ending. All of the critical acclaim and the awards season hype. So the "Slumdog" producers are smiling. Oscar producers, not so much. They were looking for rebound from last year's ratings. Preliminary ratings show a six percent increase through last night through 2008. This is a formula that's not working here.

DOBBS: A.J. thank you as always. Appreciate it.

Tonight's poll results, 82 percent of you say the liberal national media is failing to defend "The New York Post's" First Amendment rights pause the paper is conservative.

Time now for a few of your thoughts.

George in South Carolina said: "With American's mass of economic issues and short fall, why is our leadership jet setting all over the world. It would seem thrift should start at the top." Not in Washington, D.C.

And Bill in Florida said: "In order to bring about change in America, we need to make some changes in congress. We as Americans must do our civic duty and vote out all of the serving senators and congressmen until we find people who will listen to the American people." Thanks for being with us.

Campbell Brown, "NO BIAS, NO BULL" is next -- Campbell?