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Lou Dobbs Tonight

Obama and the CIA; President Obama's First 90 Days; U.N. Circus; War on the Middle Class; Signs of Recovery

Aired April 20, 2009 - 19:00   ET


LOU DOBBS, CNN ANCHOR: Good evening everybody.

President Obama strongly defending his decision to release the tales of the CIA's interrogation methods before an audience of CIA employees. President Obama rejecting criticism of his decision from former CIA directors. We'll have the story.

Also the United States boycotting a United Nations conference on racism after the Iranian president says the West is using the Holocaust as a pretext for aggression. We'll have a special report on what critics say is another U.N. circus.

And more positive reports on our economy, new indications that we're on the verge of economic recovery. One of the country's leading economists, Nobel Prize winner Joseph Stiglitz (ph) among my guests here tonight.

We begin with the president's visit to the CIA Headquarters in Langley, Virginia. President Obama today declared his controversial decision to release memos on interrogation techniques including water boarding will make this country stronger. The president decided to release the memos despite objections from four previous CIA directors. Ed Henry has our report from the White House.


ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president sharply defended his decision to release previously top secret memos about alleged torture, telling CIA employees the nation will be stronger in the long run.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Don't be discouraged that we have to acknowledge potentially we have made some mistakes, that's how we learn. But the fact that we are willing to acknowledge them and then move forward, that is precisely why I am proud to be president of the United States and that's why you should be proud to be members of the CIA.

HENRY: The defense came just 24 hours after the former Bush CIA director blasted the release of the memos.

GEN. MICHAEL HAYDEN, FORMER CIA DIRECTOR: At the tactical level, what we have described for our enemies in the midst of war are the outer limits that any American would ever go to in terms of interrogating an al Qaeda terrorist.

HENRY: The president argued the techniques had already been reported in the media and ending them will make America safer.

OBAMA: I believe that our nation is stronger and more secure when we deploy the full measure of both our power and the power of our values, including the rule of law.

HENRY: Despite the president stressing the rule of law, his aides are defending his decision not to prosecute officials who may have broken it.

(on camera): The people in the CIA who followed through on what they were told was legal, they should not be prosecuted, but why not the Bush administration lawyers...


HENRY: ... who in the eyes of a lot of your supporters on the left twisted the law, why are they not being held accountable?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president's focused on looking forward, that's why.


HENRY: But a top Democrat tonight is urging the president to not be dismissive of looking back, Senator Dianne Feinstein saying she wants the White House to withhold judgment on potential criminal prosecutions until her Senate Intelligence Committee completes its review. Lou?

DOBBS: And that's expected to take how long?

HENRY: She's saying it could take six to eight months. Obviously a lot of people looking for it to happen a little bit quicker since this has been going on for a long time, Lou.

DOBBS: Ed Henry than you very much -- reporting from the White House.

Well top Republicans today blasting President Obama for releasing those memos on the CIA interrogation techniques. One of those Republicans, Senator Saxby Chambliss, a member of the Senate Intelligence Committee said the Obama administration overstepped its bounds.


SEN. SAXBY CHAMBLISS (R), INTELLIGENCE CMTE.: I think it's unfortunate that those memos were leaked out that were turned over to the press in the way that they were. There are some things that when you operate in the cloak and dagger world of the intelligence community that need to remain within the intelligence community. And I think it's unfortunate that those memos were put out there.


DOBBS: The senator said there's been no al Qaeda attack on this country since 9/11. The senator added however, whatever the previous administration did, it worked.

Reports tonight that the Obama administration is flip-flopping on one of the president's top campaign promises. During the presidential campaign, then-Senator Obama declared he would reopen negotiations on the North American Free Trade Agreement to add labor and environmental protections. But published reports tonight quoting U.S. trade representative Ronald Kirk (ph) as saying that these issues, quote, "can be addressed without having to reopen the agreement", end quote.

The president today called on members of his cabinet to cut $100 million from their budgets by increasing and improving their efficiency. To put that into perspective, there is -- that would be such a tiny proportion of the more than $3.5 trillion budget request, that in mathematical terms, you couldn't round it up. It is the equivalent of zero percent savings.

President Obama today also talked about a competence gap between the Obama administration and the American people and he said the administration has to quote, "earn their trust". Wed like to know what you think. Here's our poll question tonight.

Will President Obama's effort to cut $100 million from his $3.7 trillion budget help earn your trust? Yes or no? Cast your vote at, we'll have the results here later.

President Obama today marked his third month in office with the first full cabinet meeting of his young presidency or at least his first cabinet meeting. Supporters say the president has already delivered on many of his campaign promises, but critics are blasting his policies, saying they are long on rhetoric and short on detail and in some cases even pose a threat to our constitutional rights. Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Nineteen executive orders, 11 bills signed into law. President Obama and his team have been busy -- $787 billion stimulus package, $410 billion omnibus spending bill, an expansion of a children's health insurance program. The Obamas have even gotten a new family dog.

But there are many things that the White House has not checked off its to-do list. President Obama's cabinet is one of the latest to be in place, with one position still unfilled. Governor Kathleen Sebelius (ph) has been tapped to be the Health and Human Services secretary but has not been confirmed and there are many more key level government posts that remain empty.

STEPHEN WAYNE, GEORGETOWN UNIVERSITY: There are almost 500 principal positions in the executive branch that require Senate consent. And at the moment, there are well over 300 -- I think 25 of these positions for which no person has been named. A lot of the government remains vacant.

SYLVESTER: The White House also pushed through a stimulus bill saying it was urgently needed to jump start the economy. But according to data from the government's Web site, only $60 billion of the $787 billion package has actually been allocated so far. Mike Franc with the conservative Heritage Foundation.

MIKE FRANC, HERITAGE FOUNDATION: Federal bureaucracies are very slow moving, are prone to all kinds of mishaps that lead to results that are much different than what Congress may have intended at the time.

SYLVESTER: And the economy continues to dog the president and his advisors. Unemployment continues to rise, and foreclosures are up 24 percent from last year.


SYLVESTER: On foreign policy issues, the president has also set forward an ambitious agenda from setting a withdrawal timeline on Iraq to re-establishing ties with Cuba, but that's also opened him up to Republican criticism, one Republican strategist saying he's trying to get along with all the world leaders and calling him a Kum-ba-Yah (ph) president. Lou?

DOBBS: Lisa, thank you and to put into context, 60 percent of those positions, not even a nomination before the Senate. In terms of filling the cabinet, his administration now the -- this will be the second longest in history, only Jimmy Carter taking longer to fill out his cabinet. Lisa Sylvester, thank you very much.

As Congress today returned to work, there was bad news for the Republican Party in a new CNN/Opinion Research Corporation poll. Almost three-quarters of Americans say that Republicans do not have a clear plan to solve this country's economic problems. Americans also say the United States is better off if Democrats control the Congress.

Only a third of Americans say Republican control of the Congress would be better for the country. One of the biggest national security issues on the Senate's agenda remains the war in Iraq. Exactly two years ago, Senate majority leader, Senator Harry Reid declared that the war in Iraq had been lost.


SEN. HARRY REID (D-NV), MAJORITY LEADER: I believe myself, that the secretary of state, secretary of defense, and you have to make your own decision as to what the president knows, that this war is lost.


DOBBS: Senator Reid's declaration came shortly after the president announced the surge strategy to send an additional five combat brigades to Iraq. Since Senator Reid's comments, U.S. and Iraqi casualties in Iraq have plummeted; violence has decreased sharply. The number of our troops killed in Iraq last month the lowest in the entire war. Senator Reid today did not respond to our request for a comment on his remarks two years ago.

Up next, a barrage of criticism for the president after his apparently friendly meeting with President Hugo Chavez of Venezuela.

And another United Nations circus after what the United States says were vile and hateful comments by the president of Iran.


DOBBS: Outrageous remarks, chaos and a walkout. At a United Nations Human Rights meeting, Iran's president blasted Western governments and Israel, accusing them of racism. The United States boycotted the meeting, but President Obama now says the United States may seek a seat on the U.N. Council. Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): A United Nations meeting or mayhem?


PILGRIM: A circus atmosphere literally as a protester wearing a clown wig was ejected.


PILGRIM: President of Iran accused Israel of having a racist government and committing genocide, some diplomats were cheering, dozens of others collecting their things and storming out. Eight nations have boycotted the week-long anti-racism conference starting today including the United States, Australia, the Netherlands, Israel, Italy, New Zealand, and Canada. A bipartisan group from the House wrote to President Obama applauding the U.S. boycott of the meeting.

REP. MIKE PENCE (R), INDIANA: But even that's not enough. Now we should go one step further and deny any funding whatsoever to the organization of this conference or any future conference under the usage (ph) of Human Rights.

PILGRIM: But despite boycotting the meeting in Geneva, President Obama now says the U.S. may seek a seat on the U.N.'s Human Rights Council.

OBAMA: We think that it's worthwhile for us to go in there and try to make it into a constructive organization.

PILGRIM: The U.N. Human Rights Commission was attacked by critics for allowing Sudan and Zimbabwe to join, both countries accused of countless human rights abuses. Many are concerned how joining the new Human Rights Council would look including the conservative think tank Heritage Foundation.

NILE GARDINER, THE HERITAGE FOUNDATION: The Obama administration's decision to seek a seat on the U.N. Human Rights Council is absolutely the wrong decision to take. This lends the veneer of credibility to a highly discredited human rights organization.

PILGRIM: The United Nations maintains the reformed council is a new opportunity for human rights.


PILGRIM: The new -- the U.N. high commissioner for human rights said she was shocked at the U.S. decision to boycott the conference and when asked why they invited President Ahmadinejad to speak first, the U.N. fell back on their protocol. They said he was the only head of state who had confirmed his attendance. Lou?

DOBBS: Well that's weak to the point of absurdity, isn't it?

PILGRIM: It's insane.

DOBBS: All right, Kitty, thank you very much -- Kitty Pilgrim.

President Obama's receiving mixed reviews tonight after his very friendly meeting with one of the United State's harshest critics. At the Summit of the Americas, President Obama shook hands with Venezuela's anti-American President Hugo Chavez. Chavez gave President Obama a book called the "Open Veins of Latin America: Five Centuries of the Pillage of a Continent". It is a book that is harshly critical of U.S. involvement in Latin America.

The president called the gift a nice gesture. The book then shot up on the list from more than 60,000 to now number two. It falls just below Mark Levin's "Liberty and Tyranny", a conservative manifesto. Chavez just last month said of Obama, "At the very least you could say is a poor, ignorant man.". President Obama defends his meeting with Chavez adding he has openly criticized the Venezuelan president for his anti-U.S. rhetoric.

Still ahead, more good news on our economy, I told you so and I'll be talking with Nobel Prize winning economist Joseph Stiglitz (ph). We'll take a closer look at more encouraging developments in our economy.

Also a startling new study connects a federal visa program with a decline in wages for American workers. Did I say I told you so? The authors of the study are refusing to talk about it. I wonder why. That mystery unraveled here next. We'll be right back.


DOBBS: This broadcast has reported literally for years on the problems and the abuses with the H-1B visa program, that's the federal government program that allows tens of thousands of foreign workers into this country each year. The H-1B program benefits corporate America at -- without question at the expense of middle class jobs. Tonight a new study from two respected universities confirms what we have been reporting here, that the H-1B visa program not only cost American jobs, but it depresses American wages as well. Bill Tucker joins me now and has the story for us -- Bill.

BILL TUCKER, CNN CORRESPONDENT: Well, Lou, there's a hitch to this report tonight. That report is no longer available online. All that is left is the abstract. The researchers declined our interview request, but a copy of the draft report obtained by LOU DOBBS TONIGHT, the researchers found that the use of H-1B visa workers decreases the wages of computer programmers, system analysts and software engineers by up to six percent.

Offshore outsourcing decreases the wages of I.T. workers and managers by two to three percent. The study is a joint project between New York University Stern School of Business and the University of Pennsylvania's Wharton School. A spokesman for the Stern School says the report was taken down after being posted for five days because they were not prepared for the media attention.

And a decision was made to instead put the paper up for peer review, not public scrutiny. The researchers say the research was undertaken because the policymakers need to understand the importance and the impact of the H-1B visa program. And Lou, we should point out that one of the researchers, Tom Bay (ph), from the Stern School of Business has in fact done a meeting interview and appeared in "Computer World", so I don't know why...


TUCKER: ... not quite ready for it today.

DOBBS: Well this is fascinating. Let's back up here a bit.

TUCKER: Right.

DOBBS: One: Who were the two professors who did the study?

TUCKER: Professor Hit (ph) at Wharton and Tom Bay (ph) at the Stern.

DOBBS: And Tom Bay (ph) did an interview with "Computer World" and revealed what?

TUCKER: A very straightforward interview. Five to six percent depression in the wages, two to three percent depression in the -- all the off-sourcing side of this business and talked about why they felt it needed to be done because there's a lack of empirical evidence.

DOBBS: A lack of empirical evidence. We have been reporting here...

TUCKER: Right.

DOBBS: ... for years on it, I wrote a book as a matter of fact in 2004...


DOBBS: ... called "Exporting America" in which we dealt in part with H-1B visas. This looks like absolute censorship by two universities supported by corporate money. What are the universities saying about the appearance of absolutely stripping two authors of their academic freedom? TUCKER: Well, we put that question to them this afternoon and they insist this is independent research, not funded by any corporate money, no technology industry money involved in this study, and it's the insistence of the spokesperson at the Stern School today.

DOBBS: And Wharton School, at the University of Penn -- their response.

TUCKER: The same and then their professor just straight up declined any request for an interview as well.

DOBBS: So two universities on the same day making a decision to take down this research after five days on the Web. This looks straightforwardly, straightforwardly like two institutions succumbing to immense pressure. I am very sorry for these two professors. I am very sorry for the academy for having to confront these kinds of forces. This is absolutely an embarrassment for these two institutions.

It's inexcusable on their part in my judgment. We would be delighted, by the way, to have the heads of both of these business schools join us here at any time. If you don't feel comfortable enough to provide academic freedom to your professors, we would be delighted to have you with us to further discuss it. Extraordinary, but our commendation to the professors for doing the research and let's see where we go and over what period of time. Bill Tucker, thank you very much.

Well as I said, we have been reporting on the outsourcing of middle class American jobs to cheap foreign labor markets for literally years and the push by particularly the Chamber of Commerce, the U.S. Chamber of Commerce for more H-1B visas and other issues facing our hard working middle class for years now. In fact, I have written two best selling books "Exporting America" and "The War on the Middle Class" and here are just a few examples from our broadcasts over the years on this very important issue.


DOBBS: The war on our middle class is real and it is intensifying and middle class working Americans are losing their struggle against special interests. The dominant political power of corporate America in Washington.

Big business interests in this country are pressuring Congress to expand the H-1B visa program. Business leaders couldn't care less that this failed, mismanaged guest worker program is taking jobs away from hard working middle class Americans.

The abundance of cheap foreign labor in this country right now is pushing wages lower for millions of middle class working Americans.


DOBBS: And that was three years ago. We'll keep you up-to-date on the progress at the Stern Business School and the Wharton School at the University of Pennsylvania. Hopefully the standards of those two fine institutions will prevail over some rather misguided policy judgments rendered apparently today, when we simply asked the question like what are the facts.

Up next, rising outrage after an actress -- well, she's a character actress -- well, not much character, but anyway, she's turned activist and she's blasting those anti-tax protesters on "Tea Day", those tea parties. She blasted them as -- are you ready -- racist, tea bagging red necks.

More positive news on the economy -- I'll be glad to tell you about that and I'll be joined by Nobel Prize winning economist Joseph Stiglitz. He'll tell us what we can expect to see as the months proceed and recovery takes hold. I told you there wouldn't be a depression. We'll be right back.


DOBBS: There are more signs of improvement in our economy tonight and let's get started with the good news. According to the National Association for Business Economists, companies are reporting increasing demand and higher profit margins. I repeat, more demand and higher profit margins.

And Bank of America reporting a profit of more than $4 billion, this just the latest bank to post better than expected results, others include JPMorgan Chase and Citigroup, although their earnings are a little controversial. I have been saying here now for some time that there will be no depression and that we will begin to see economic recovery before the end of this year.


DOBBS: There won't be a depression in this country, end of discussion. There will not be. I have said it on this show. I have invited everybody to join me in economic policy. There will be no depression, but we've got to begin it seems to think real terms about the future of this country.

I have said throughout there will be no depression and that economic recovery will begin in the latter part of this year.


DOBBS: Well joining me to -- I'm looking for validation here from a Nobel Prize winner, one of the country's most distinguished economists, Nobel Laureate Joseph Stiglitz (ph). Joe is professor of economics at Columbia University, co-author of the "$3 Trillion War" (ph), about the huge cost of the war in Iraq. Joe it is great to have you with us.


DOBBS: So let me say Professor, you were grinning as you were watching me stick my neck out there. I truly believe that. I don't see any possibility of a depression. I see hyperbolic rhetoric on the part of both the Bush administration when I was saying it in October and now I -- and I have seen it end here in the last few weeks on the part of the Obama administration. But again, hyperbolic rhetoric of fear on the economy, which has ended mercifully. Thank you President Obama. But I don't see -- I don't see depression.


DOBBS: What do you see?

STIGLITZ: Well I don't -- you know in the great depression, we had one out of four Americans out of a job. We're not going to be anything like that, almost surely. But I thought -- I think you were a little bit optimistic to say that things were going to be all over by the end of the year.

DOBBS: I didn't say they would be all over. I said that we would be in recovery.

STIGLITZ: Well the question is and I think this is the real question.

DOBBS: I'm trying to hang on to my B-minus right now, Professor...

STIGLITZ: OK, but...

DOBBS: I feel me sliding to a C-plus.

STIGLITZ: We may have bottomed out. The real question is, what kind of recovery are we going to have? Are we going to have a Japanese style malaise, sort of -- you know sort of going along or will we have a robust recovery and I think there's every reason to believe unless we get things going a lot better than we have that we are more likely than not in line for an extended period of time of slow growth.

DOBBS: All right. Let's talk about that if we may, Professor, a couple of things. One is that there is no comparison between this economy and Japan whatsoever. Japan's economy is absolutely export driven. Our economy trade is negligible. We can offset trade with imports and exports for substitution in this country for manufacturing and replace all of the jobs.

STIGLITZ: There are many differences between the U.S. and Japan, but the fundamental problem is that what had kept the American economy going in the years prior to the crisis, 2003, 2004, 2005 and 2006 was a bubble. A housing bubble and that housing bubble sustained consumption boom, all based on debt, people living beyond their means.

DOBBS: Right.

STIGLITZ: And in fact it sustained the global economy. That particular model is broken.

DOBBS: Could we not, though, say much the same thing of this economy from the late 1960s on in which we saw extraordinary inflation, extraordinary debt levels, extraordinary interest rate levels.

STIGLITZ: Not the debt GDP ratio that we have had in the last two or three years. We took things beyond the normal level and we did it in a way to keep the economy because there was a real underlying weakness in the economy and we tried to paper over the problems. And one of the things, something you have talked a lot about, which is a declining income in the middle classes. If they don't have any income, they can't spend it. Except by borrowing. And that's how we kept our economy going.

DOBBS: And that borrowing is pretty much complete now. Home equity loans, refinancing. We have had, this white house has announced that they are not going to reopen the North American Free Trade Agreement. The real issue here is the business practices of offshoring production, outsourcing jobs on trade policies that are a drag on economic growth that are profound and have been for 33 years. How can we possibly stimulate an economy on the one hand, to the tune even that we are, if we do not alter the practices that have led to a destructive lack of savings and jobs?

STIGLITZ: Well, the fundamental problem is the lack of jobs, the unemployment is growing, jobs are not being created, but what sustained actually the U.S. in some parts of 2008 were our exports? And one of the sources that --

DOBBS: You know what I'm going to ask you is what portion of 2008 were we sustained by --

STIGLITZ: It was mainly the second quarter. But what about in 2008.

DOBBS: But it happened in 2008.

STIGLITZ: It was one source of growth for much of that year.

DOBBS: And how much do you believe that our trade deficit drug down the economy? How much did it eliminate from economic growth?

STIGLITZ: The trade deficit is a real problem and part of that is in part our dependence on oil and as long as we don't break that --

DOBBS: Electronics and computers and technology, 96 percent of our clothing produced offshore. We have altered the nature of this economy so profoundly have we not over the last 35 years, it's very difficult for policymakers to get a hold of what they're doing.

STIGLITZ: That's why we really have to go back to improving our technology, our efficiency. I think the idea of trying to make this a green economy, getting ahead of the ball in a sense, getting ahead of the curve where I think the whole world is eventually going to move into the green economy.

DOBBS: But not a green bubble.

STIGLITZ: But not a green bubble. That's the real risk, that we don't go into a green bubble, but go into a green economy. If we force businesses to pay the real cost of carbon, they're going to have an incentive to restructure investment and that can be the real engine for growth for the next decade.

DOBBS: And if we create real jobs with real wages.

STIGLITZ: That will get real jobs.

DOBBS: And the middle class can once again talk to their children about a better life. That would be an immensely gratifying moment, wouldn't it?

STIGLITZ: I think so. And middle class wages have been going down for a decade and it really has to be reversed.

DOBBS: Professor Stiglitz, it's always great to have you with us.

STIGLITZ: Thank you.

DOBBS: Appreciate it.

One Congressman tonight is feeling a backlash for supporting that massive stimulus bill, tax increases and government bailouts. I keep asking where have all the Republicans gone? We found one. Republican Congressman Gresham Barrett; man, did he get a reception at a South Carolina tea party, about 4,000 protesters booing the Congressman for most of his attempted five-minute speech in Greenville, South Carolina Friday. A number of the protesters even turning their back on him.

REP. GRESHAM BARRETT (R), SOUTH CAROLINA: It's about people being heard. It's about your voice. And I shall promise you one thing, guys, you may boo, you may turn your back, but I have devoted my live to the conservative cause.


DOBBS: I think you can put that crowd down as undecided on the good Congressman, don't you? Well, Barrett voted for spending hundreds of billions of dollars to bail out banks, but he recently introduced a bill called the Taxpayer Empowerment and Advocacy act or T.E.A. act to control government spending.

The hundreds of tea parties that swept across the country last week, most liberals in the national media, simply dismissed them. But some left-wing activists like character actor Jeanine Garofalo went a lot farther. Garofalo was on Keith Olbermann's program last Thursday on MSNBC. She said that tens of thousands of middle class Americans who wanted their voices heard by Washington were what she called a bunch of racist, tea bagging rednecks.


JEANINE GAROFALO, ACTRESS: Let's be very honest about with what this is about. It's not about bashing Democrats, it's not about taxes, they have no idea what the Boston tea party was about. This is about hating a black man in the white house. This is racism straight up. It is nothing but a bunch of tea bagging red necks.


DOBBS: Therein lies a nasty piece of business, don't you think? She had quite a different view when we went back to see how she felt about dissent during the Bush administration.

And when actor Johnny Depp was criticized for making some anti- U.S. remarks, Garofalo had this to say at the time. "It's a very Archie Bunker anti-intellectual, unfairway to treat dissent. I'm in favor of any citizen talking if they want to. I'm in favor of any citizen talking if they want to." Garofalo made those remarks on the very same venue, over on MSNBC in 2003. Apparently dissent and legitimacy depend on who's in the white house. Maybe.

Up next, a state on the brink, California reeling from one emergency to another, debt, unemployment, drought, deficit, a major heat wave, we'll be telling you all about that.

Also support for the second amendment. Tonight we can celebrate a major victory for the second amendment, your right and mine to own and bear arms, from a very unlikely source. That's straight ahead, we'll be right back.


DOBBS: A major victory tonight for our individual rights to bear arms. The ninth circuit court of appeals rules that states must obey the second amendment of the U.S. constitution. The ninth circuit saying states cannot create their own gun laws violating the second amendment. June Ronald Gould wrote, quote, the right to bear arms is a bulwark against external invasion. That we have a lawfully armed populace adds a measure of security for all of us and makes it less likely that a band of terrorists could make head way in an attack on any community. The ninth circuit generally considered very liberal, in fact the most liberal in the country concluded that the second amendment of the constitution is a fundamental right. California's troubles continue to grow, California is now suffering from a heat wave with temperatures pushing into the triple digits. California also struggling with drought emergencies, massive budget deficits and record unemployment. Casey Wian has our report.


CASEY WIAN, CNN CORRESPONDENT: Record heat scorched at least ten California cities Sunday and Monday, with temperatures in places soaring above 100 degrees. While some basked in the summer like conditions t heat is bad news for a state already struggling to cope with a devastating three-year drought. Even the governor is conducting his own version of a rain dance.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: We are here today and together we say, we need water. We need water.

WIAN: Some cities are rationing waters, others raising prices, farmers aren't planting hundreds of thousands of acres of crops. JOSE RAMIREZ, FIREBAUGH, CA CITY MANAGER: This region provides the lettuce, tomatoes, everything you can possibly think of to the entire states.

WIAN: U.S. Secretary Ken Salazar toured California farmland by helicopter and promised $260 million in federal stimulus money to help California survive the drought. Surviving the recession is another matter. California's unemployment rate has now topped 11 percent. 1.5 million people in the state are now out of work, equivalent to the entire population of Idaho. California's massive budget deficit, temporarily held at baby taxes and spending cuts. The city and county of Los Angeles announced budget short falls of their own Monday, totaling near a billion dollars.

MAYOR ANTONIO VILLARAIGOSA (D), LOS ANGELES: The need for shared responsibility and shared sacrifice isn't just redirect, it's reality, a tough and sometimes painful choices are no longer a last resort, they're the only path forward.

WIAN: Under consideration, 10 percent across the board salary cuts, including for previously immune positions such as law enforcement and firefighters and layoffs.


WIAN: State lawmakers are now trying to persuade voters to approve a series of budget reforms that are key parts of the deficit reduction deal they passed back in February. But five of six measures are trailing among likely voters, the only one ahead a proposal to block a pay raise for public officials when they go over budget.

DOBBS: It's hard to imagine California being in more trouble.

WIAN: Yes, it really is. It's amazing to people here that a state with an economy that would be larger than all but six or certain countries can't seem to find a way to live within its means that, we keep electing state leaders that can't balance budgets. The governor and the state legislator are going to have a really difficult selling job try to get this package of budget reform measures through and if they don't pass, we're right back where we started a few months ago in a serious budget hole.

DOBBS: All right. Casey Wian, thank you very much.

Coming up at the top of the hour, "NO BIAS, NO BULL," Roland Martin in for Campbell Brown -- Roland?

ROLAND MARTIN, CNN ANCHOR: Hey Lou. Tonight the president's called to slash $100 million from the federal budget. Does it really mean anything or is this political grandstanding?

Plus, a controversial case heading to the Supreme Court. Should an eighth grader have been strip searched at school? We'll hear from her and her mother.

And on the trail of a mystery illness in Florida that killed 21 horses.

Also, was a Miss USA contestant wrong to speak out against same sex marriage? We're taking your phone calls and comments at the top of the hour -- Lou?

DOBBS: All right. You don't think Donald Trump was trying to drum up any publicity there?

MARTIN: I would never think that Donald Trump would drum up any publicity. He would never do that Lou. I'm ashamed that you even asked that question.

DOBBS: Look forward to it Roland. Thank you.

A fantastically close competition at this year's world cup finals in show jumping featuring the world's best show jumpers, congratulations to the winner, Meredith Michaels-Beerbalmon her remarkable Guilding Shutter Fly. Michaels-Beerbalm is the first one to win. In third place the Netherlands Albert Zoor on his great horse.

Also in the equestrian world tonight, tragedy and shocking tragedy, 21 polo horses mysteriously died this weekend. It happened at the International Polo Club in Florida just before a match. John Zarrella has our report.


JOHN ZARRELLA, CNN CORRESPONDENT: Anne Marie died not long after these pictures were taken. Veterinarians couldn't save her. The horse, one of nearly two dozen all from one team, that suddenly and mysteriously began dying just before a match Sunday afternoon. Equine veterinarians suspect a drug reaction or toxin killed the horse.

UNIDENTIFIED MALE: This is a mistake of a combination of something. Whether the mistake was at the barn, whether the mistake was at the feed company, whether the mistake was at the vitamin company, we don't know. But we're going to find out.

ZARRELLA: Nothing has yet been ruled out. The events at the International Polo Club in Wellington were unlike the world of polo had ever witnessed.

DR. SCOTT SWERDLIN, PALM BEACH EQUINE CLINIC: There's no words to explain it.

ZARRELLA: Luis Escobar played for the opposing team.

LUIS ESCOBAR, TEAM BLACK WATCH: I thought it was something temporarily and I thought it was maybe one or two horses and I thought the vet was going to give something to help them out and it was going to be done. But it wasn't.

ZARRELLA: It just got worse.

ESCOBAR: It got worse, yes and other horses started getting the same reaction.

ZARRELLA: Polo officials say the horses began to exhibit signs of distress as soon as they were offloaded from the trailers. More than a dozen people came in and began to cool the horses down with cold water and some were even given intra venous drips. Tarps were put up blocking the view of the chaotic effort.

JOHN WASH, INTERNATIONAL POLO CLUB: It was chaotic. In a public interest sense, to see the community come together, people just working in tandem with one another, with the vets, trying to help these animals and find out what was going on.

ZARRELLA: Seven of the horses died here on the grounds, the others passed within hours, the gate to the stables were closed Monday, outside the tragedy marked with flowers left by well wishers.


DOBBS: John Zarrella, reporting from Wellington, Florida.

Up next, President Obama's seemingly friendly meeting with Venezuela's strong man Hugo Chavez. What the summit of the Americas could mean for U.S. relations with Latin America. Stay with us. We'll be right back.


DOBBS: The Open Borders Pro-Amnesty League of Latin American citizens is calling on the government of Mexico to interfere with the United States' immigration laws and its sovereignty. The director of the California chapter of Argentina says, quote -- LULAC say it is border was established part of an international treaty that isn't binding.

Joining me now to talk about the president's controversial meeting with Venezuelan president Hugo Chavez at the Summit of the Americas is syndicated columnist, CNN contributor, Miguel Perez. Great to have you here. Ray Walser, senior policy analyst for Latin America at the Heritage Foundation. Ray, good to have you. Let's begin with the hand shake with Chavez. Your reaction?

MIGUEL PEREZ, CNN CONTRIBUTOR: You remember in the old days people used to want to shake your hand and go like, like this, you fool, I wouldn't put it past Hugo Chavez to be blasting Obama all over again because it depends on the mood that the guy is in so I don't take it very seriously. It was a photo opportunity Chavez is looking for because this is the mood he was in this week and doesn't mean --

DOBBS: Was it a mistake on the president's part?

PEREZ: I don't think so. He was trapped into it. Not like he was looking for Chavez. He wanted the photo-op and he got it.


RAY WALSER, HERITAGE FOUNDATION: I think a couple -- one of the things is it's unfortunate that out of the summit of the Americas that this is the image that people will take away, a negative image that people will react to and respond. He shook hands with the guy best buddies with Ahmadinejad, with Bashir of Sudan. That's a bad thing. And secondly, he had a lot of smart people with him on that trip. People who have come up with a counter ploy. For example, a photo opportunity with fellow Democrats.

DOBBS: You want to name names about those people?

WALSER: I don't want to name names. Some are former colleagues at the state department and only person that was sort of clever was Jeff Davidow as special adviser saying, well you know, the reason Chavez wanted that photo? Because he's much more -- because Obama is more popular than Chavez is in Karakas and didn't have an idea. How about the copy of "All The King's Men" for example?

DOBBS: That would be one reaction. The other would be to ask why in the world are we going through this nonsense right now with the Summit of the Americas? We have got all sorts of issues, illegal immigration, border security, two wars. The Cuban, the lifting of restrictions on Cuban Americans and travel. It seems to me and I want to get both of you reactions to this the last time I was in Cuba was 1995 and made great sense to ease the sanctions. It was stopped by the Cuban American community. It was stopped by also the Republican Party. Newt Gingrich referred to me as part of a left wing offensive, for crying out loud which was unpopular discussion. Why is this such a big deal right now and why should it be a matter of that it is not articulated in great detail, openness and debated as a matter of public policy in Miguel?

PEREZ: It should be, Lou. You know, one of the people that has been arguing for a long, long time it is not just us that stopped the embargo from lifting but the Castro brothers. They didn't want it lifted. This is the excuse they have for all the failures over the years. They have said, we keep -- blame the embargo. Blame the embargo. There is no embargo. Cuba can trade with the rest of the world.

DOBBS: And does.

PEREZ: They and does. They buy American products through third countries. That's an excuse.


WALSER: This is the one thing that Obama has followed through on. He made a speech last year in May before the Cuban Americans center and said I'll use the Cuban Americans as the ambassadors to try to open the door. So I think trying to get this people to people policy is a reasonable idea but what you have is all the others in Congress particularly, lift the embargo. Let the American tourists go in. Open up the flood gates.

DOBBS: I'm confused. Use the Cuban Americans as ambassadors. I mean, we're Americans. OK? There's some folks born in Cuba, Cuban American descent. This is a matter of international policy, foreign policy on the part of the United States. We should be doing the right thing. It shouldn't be a matter of a -- catering to the Cuban Americans or the middle class or to the working class or whatever the heck you want to break it into.

PEREZ: As a Cuban American, OK, I can tell you that I was scared to death by Obama doing the primaries when he was talking about talking to Cuba without preconditions. He is now setting some conditions which is a good thing.

DOBBS: All right. Ray, thank you very much. Miguel, thank you.

Up next, we'll have the results of the poll.


DOBBS: Poll results, 87 percent of you say the president's efforts to cut $100 million from his 3.7 trillion budget doesn't earn your trust.

"NO BIAS, NO BULL" starts right now with Roland Martin.