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Lou Dobbs Tonight
Show of Unity; Seniority Stripped; Good News on Economy; Cash for Clunkers
Aired May 06, 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. Good evening everybody.
President Obama tries to convince the presidents of Pakistan and Afghanistan to support U.S. strategy in the war against radical Islamist terrorists. Pakistan's future as a nation is threatened by what is quickly turning into an all-out war, the safety and security of Pakistan's nuclear weapons may be in doubt.
Tonight in California Governor Arnold Schwarzenegger says he's open to a controversial idea to help save his state from financial disaster. Legalize marijuana to raise tax revenue -- this as the governor faces his lowest approval ratings ever.
And ratings on our economy rising -- new indications that the rate of job cuts is declining and the stock market moving higher. Three of the country's best economic thinkers join me to discuss today's good news and the chances of recovery.
The chairman of the powerful House Financial Services Committee, Congressman Barney Frank also joins us here tonight to tell us in part why hundreds of billions of taxpayer dollars have been used to bail out banks and some of those banks still need more money.
And we'll have more on the dispute between the newest Democrat in the Senate and the Democratic leadership. Senator Arlen Specter finding out it may not be any more fun to be a Democrat than a Republican.
Well, we begin tonight with a worsening conflict in Pakistan -- a conflict that's testing the will and capability of the Pakistani military to defeat resurgent Taliban forces. At the White House today, Mr. Obama met with the presidents of Pakistan and Afghanistan and declared all three leaders are united by a common goal to, quote, "disrupt, dismantle and defeat both the Taliban and al Qaeda."
The declaration, however, in question, not only is the conflict in Pakistan as intensifying, but as questions mount about the effectiveness of Afghan President Hamid Karzai. Jill Dougherty has our report.
(BEGIN VIDEOTAPE)
JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): A picture of unity -- President Barack Obama, the presidents of two uneasy neighbors, Pakistan and Afghanistan at his side. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We meet today as three sovereign nations joined by a common goal, to disrupt, dismantle and defeat al Qaeda and its extremist allies in Pakistan and Afghanistan and to prevent their ability to operate in either country in the future.
DOUGHERTY: The full court press begins at the State Department, Secretary of state Hillary Clinton at the table not just with military officers but with top civilian officials from all three countries. Part of what the Obama administration now sees as the only way to win. But in Pakistan, thousands of civilians are fleeing the fighting between government troops and the Taliban and U.S. officials still question whether President Zardari's (ph) government is capable of subduing the militants.
PRES. ASIF ALI ZARDARI, PAKISTAN: I'm here to assure you that we should share this burden with you. For no matter how long it takes and what it takes, democracies will deliver. My democracy will deliver.
DOUGHERTY: Secretary Clinton says there are promising early signs but it's not just talk.
HILLARY CLINTON, SECRETARY OF STATE: I told each that coming out of this trilateral meeting, we will basically have work plans. We are going to be very specific. We don't want any misunderstanding. We don't want any mixed signals.
(END VIDEOTAPE)
DOUGHERTY: Now both President Obama and Secretary Clinton have expressed regret for the deaths of civilians who were killed in an attack in Afghanistan. The facts are not yet clear and both countries have launched a joint investigation. But officials say that President Karzai has not requested that President Obama stop U.S. air strikes.
Jill Dougherty, CNN, the White House -- back you to, Lou.
DOBBS: Thank you very much, Jill.
House Speaker Nancy Pelosi today offered President Obama her advice on how to win the war in Afghanistan, but hers is an answer that may confuse rather than clarify the situation. Here is the speaker with her counsel for the president.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: To deal with Afghanistan, you have to deal with Pakistan. To deal with Pakistan, you have to deal with India. To deal with Afghanistan, you have to deal with the other stans (ph) -- Russia, China and also Iran.
(END VIDEO CLIP)
DOBBS: We believe the speaker of the House meant to include Tazistan (ph), Turkmenistan (ph), Uzbekistan and Khuzestan (ph). We don't any reaction from any of those countries however.
President Obama has no shortage of advice. Senator John Kerry, the chairman of the Senate Foreign Relations Committee, also offering the president counsel on Iran. Senator Kerry said U.S. relations with Iran should be based on what he called mutual respect and mutual interest.
(BEGIN VIDEO CLIP)
SEN. JOHN KERRY (D), MASSACHUSETTS: I believe President Obama is 100 percent correct to open the door to direct talks with Iran. We want to join with him here in this committee in seeking a new way forward based on mutual respect and mutual interests.
(END VIDEO CLIP)
DOBBS: Senator Kerry was unclear as to whether or not he considered that mutual interest in any way diminished by Iran's refusal to abandon its nuclear weapons ambitions, its threats to destroy Israel, and its imprisonment of an American journalist.
The FBI tonight faces scathing criticism for the way it's handled the national terrorist watch list. The Justice Department inspector general says the FBI failed to add the names of 35 suspected terrorists to that watch list. The suspects include 12 people who may have entered the United States and moved about freely. The FBI saying it will improve its watch list procedures.
The White House so far has refused to release photos of that low altitude flyover of New York City by Air Force One that sparked fear and some panic in downtown Manhattan. The same White House that chose to release classified memos and torture photos is refusing to release photos of that flyover.
But now White House press secretary Robert Gibbs says there will be a report on the flyover photo shoot blunder that cost taxpayers more than $300,000. Gibbs saying the report might include one photograph from the flyover.
Just days after detecting to the Democratic Party, former Republican Senator Arlen Specter is now accusing the Democratic leadership of breaking a promise. Senate Democrats have decided not to honor Senator Specter's seniority, taking away power that he's built up over nearly three decades.
Democrats saying in effect that rank does not have its privileges, at least when it comes to Senator Specter -- Dana Bash with our report from Capitol Hill.
(BEGIN VIDEOTAPE)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Arlen Specter didn't show up for this Senate Judiciary Committee hearing, but his chair was moved from the head of the days to the very end, a stark illustration of his new junior ranking since Democrats stripped his seniority on all committees. We caught up with Specter who insisted that's not what the Democratic leader promised.
SEN. ARLEN SPECTER (D), PENNSYLVANIA: Senator Reid said that I would maintain my committee assignments and that my seniority would be established as if I had been elected in 1980 as a Democrat.
BASH: The Senate majority leader disputes that.
SEN. HARRY REID (D-NV), MAJORITY LEADER: Senator Specter and his chief of staff always were told that we couldn't interrupt any of the subcommittee chairs or the chairs until the next Congress and his seniority will be determined next Congress.
BASH: But losing his clout now and uncertainty about the future is a blow to Specter because it undermines the central argument we heard him give this week to Pennsylvania voters that he became a Democrat to stay in the Senate because his seniority helps them.
SPECTER: My senior position on appropriations has enabled me to bring a lot of jobs, a lot of federal funding to this stage.
BASH: Specter told us some Democrats complained he would take their spots on powerful committees.
SPECTER: The Caucus has some concerns, some people who would be passed over.
BASH: But another factor may be loyalty. Since becoming a Democrat, Specter voted against the president's budget and suggest that he wants Republican Norm Coleman to win in Minnesota. Democrat Debbie Stabenow told CNN Specter has to prove he's a Democrat before he gets the benefits.
SEN. DEBBIE STABENOW (D), MICHIGAN: People are looking for a sign that he really wants to be part of the caucus, would be a full member of the caucus.
(END VIDEOTAPE)
BASH: Now Specter told us he is sure that he will be able to get back his seniority and the really important power that comes along with that after the next election, but Lou, there's no guarantee that will happen and clearly no guarantee he will win that election, so one thing we do know is that this awkward beginning for Senator Specter as a Democrat is certainly not what he had hoped for -- Lou.
DOBBS: Not what he had hoped for and apparently not planned for. This is remarkable. It appears Arlen Specter has made a -- perhaps a politically fatal mistake here.
BASH: You know he could. It is going to be fascinating to watch what happens in the state of Pennsylvania on so many levels. First of all, whether or not he really will be able to win a Democratic primary, especially given the fact that he is, again, we went to Pennsylvania with Senator Specter making the case that he needs to win, because he has all of this clout here. Well suddenly he doesn't have that. And you know the other factor is that there are Republicans who are talking about a very, very popular guy, Tom Ridge (ph), you know him, of course, the former popular governor of Pennsylvania that he might potentially run against Senator Specter, so there's so many variables that Senator specter probably didn't think about when he decided to make this switch and it was certainly an abrupt decision that he made last week according to a number of sources who know about the switch.
DOBBS: Dana, thank you very much -- Dana Bash from Capitol Hill.
New evidence that all those do-mongers and sayers on the economy were utterly completely and plain wrong and another car crash on a Nicolas Cage (ph) movie set in New York City's Times Square -- just the second this movie this week.
(COMMERCIAL BREAK)
DOBBS: Good news, more good news on the economy today -- the rate of job losses slowing dramatically last month. The number of private sector jobs fell by less than half a million in April, according to a closely watched ADP survey, much less than forecast by economists. Susan Lisovicz is here tonight and has the story for us -- Susan, this is good news.
SUSAN LISOVICZ, CNN CORRESPONDENT: It is good news and Lou, this is -- may be what the end of the tunnel -- the light at the end of the tunnel may look like, really. It's not going to look like an overnight recovery but a significant improvement. The loss of nearly 500,000 jobs in the private sector in April is huge.
But the payroll processing firm ADP says employers cut more than 700,000 the month before. An ADP spokesman says there's a sense here of a turn and that sense that things aren't quite as bad as they were, even very recently is also evident in a separate report today from the outplacement (ph) firm Challenger Gray and Christmas (ph), which said job cut announcements dropped 12 percent in April from March.
These numbers are not coming out of left field. We've seen weekly initial jobless claims coming down off their peak, actual buying in the housing market, improving consumer confidence and an extended rally in the stock market. The Dow has been on a tear since hitting its low in the bear market on March 9th.
The blue chips have gained nearly 2,000 points in two months. Economist Bernie Bomal (ph) told me it's not quite time to uncork the champagne and toss around the confetti yet. He like Federal Reserve Chairman Ben Bernanke and many other economists believes the unemployment rate will go higher even as the economy improves in the second half.
And he says those continuing job losses and the new frugality of American consumers may put off any meaningful economic growth for a considerably longer period. But Lou, in this environment, the sense that things are not as bad as they actually were is a powerful tool. And that's what we saw today as the Dow rallied 100 points, closed above 8500 for the first time since January 9th.
DOBBS: That's what they call progress by any definition and the naysayers can -- well they can just continue to stay on the sidelines for a while, for quite a while. Thanks, Susan Lisovicz.
Well the federal government will release the results of its so- called bank stress tests tomorrow on the nation's top 19 banks, but some details have already been leaked by the Treasury Department. American Express, JPMorgan Chase, and Bank of New York Mellon (ph) among the banks that have passed those stress tests. But sources say three of the country's biggest banks are among those that need more money and a lot of it, especially Bank of America, which may require as much as $34 billion in new capital on top of the $45 billion that Bank of America has already received from taxpayers.
Congressional Democrats today pushing ahead with another piece of legislation to revive the economy to help people buy cars -- it's the so-called "cash for clunkers" bill that would give thousands of dollars to consumers who sell their old cars and buy new fuel- efficient models. Is that the right policy? We'll find out as Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): For $3,500 would drivers trade in their car for one that gets better gas mileage? Driver Chris Robison says yes.
CHRIS ROBISON, DRIVER: More fuel-efficient car, you're going to save money, save gas. That's what it's about. It's about saving money. It ain't about what kind of car you got.
SYLVESTER: U.S. lawmakers have proposed a "cash for clunkers" bill. It would offer drivers vouchers ranging from $3,500 to $4,500 to swap old vehicles for more fuel-efficient ones. The program would last about a year and is meant to jump-start the ailing auto industry.
REP. BETTY SUTTON (D), OHIO: One of the problems that they're facing is moving the inventory and some people need just a little bit of extra help to make that purchase and frankly we all benefit to when older, less fuel-efficient cars are traded in for more fuel-efficient cars.
SYLVESTER: The program applies not just to domestic-made cars but foreign ones as well. What are the most fuel efficient cars? The 2010 Toyota Prius tops the list, made in Japan, 45 miles per gallon on the highway; retail prices starts at $21,000; the 2009 Honda Civic Hybrid made in Japan retailing at $24,320; the 2010 Honda Insight will be made in Japan; followed by the 2010 Ford Fusion Hybrid made in Mexico; and rounding out the top five Ford's Mercury Milan Hybrid also made in Mexico.
When it comes to fuel efficiency, hybrids rule the road, but there are plenty of other fuel-efficient cars outside the hybrid market that are made here in the United States; GM Chevy Cobalt XFE, 37 highway miles per gallon; the Chevy Malibu, 33 highway miles per gallon; and Saturn's Aura, 33 highway miles per gallon.
JEREMY ANWYL, EDMUNDS.COM: Frankly the best way to save fuel is to moderate your driving habits and just to drive a smaller you know four-cylinder engine. There's no real magic to it.
SYLVESTER: But lawmakers hope having a little green will be an incentive to go green.
(END VIDEOTAPE)
SYLVESTER: And the rebate will apply to anyone trading in their cars and trucks, including SUVs that are four years or older and achieve less than 18 miles per gallon. If the new vehicle is rated at 22 miles per gallon or higher, owners would be eligible for cash -- Lou.
DOBBS: "Cash for clunkers", now there's a federal program. Thanks, Lisa Sylvester.
More than $7 billion of taxpayer loans to Chrysler will not be paid back. That revelation included in Chrysler's bankruptcy filings. The Obama administration says taxpayers will receive a stake in Chrysler of some eight percent compared to the United Auto Workers union. However it will receive 55 percent in the company -- Chrysler filing for bankruptcy last Thursday.
The United Auto Workers union, the Italian automaker Fiat, and the federal government all reaching agreement to keep the company in business and put them into bankruptcy. We'd like to know what you think of all this.
Our poll question tonight is -- is it change you can believe in when the federal government gives $7 billion of taxpayer money to a private company then says the company doesn't have to pay it back? Yes or no. Cast your vote at loudobbs.com. We'll have the results upcoming.
A new controversy for Miss California and this one could cost the beauty queen her crown.
(COMMERCIAL BREAK)
DOBBS: Computer hackers are demanding a $10 million ransom for stolen medical records. The FBI and the Virginia State Police say those records of more than eight million patients in Virginia were hacked from a state-run Web site that tracks prescription drug abuse. The online attackers stole that data. They also destroyed the back-up files. And all of this happened last week -- the FBI only now talking about it.
The recipient of the first face transplant in this country made her first public appearance this week. Doctors transplanted 80 percent of her face, her surgery took 22 hours. In 2004 Connie Culp's (ph) husband Tom shot her in the face from a distance of less than 10 feet before turning the shotgun on himself. Somehow both survived. Prosecutors charged him with attempted aggravated murder. He pleaded no contest and was found guilty. Prosecutors pushed for the maximum sentence of 13 years, but the judge referring to a Supreme Court ruling, said he wasn't allowed to sentence the man to the maximum, because this was his first offense.
The prosecution was surprised but the surprises don't end there. Connie Culp (ph) stood up during his sentencing and begged the court for leniency. The prosecutor tells us he was utterly flabbergasted. The judge sentenced him to seven years in prison. He'll be released in 2012, about the same time that Connie (ph) will be completing her medical procedures to restore her face.
Other stories we're following across the country tonight -- in Texas, a gas line rupture causing a large fire at a construction site. Six -- 500-pounds -- rather -- of natural gas were released at the time. The flames could be seen for miles, evacuations ordered. No injuries however were reported. It took fire crews several hours to extinguish the fire.
In New York's Times Square, a second car crash in three days has left more people injured on a movie set. A woman, who is not part of the movie, swerved to avoid a taxi and ran into a parked car. Eight people were injured, none of them seriously, we're told. The first accident occurred Monday, early Monday morning involving a Ferrari jumping the curb during a chase scene in the movie. The film is "The Sorcerer's Apprentice" (ph) starring Nicolas Cage (ph).
In California, a man rescued from a charging mountain lion by his dog. The owner and his wife were walking in a campground when the mountain lion attacked. The couple's dog, Hoagie (ph), leaped at the mountain lion. The couple not injured. Hoagie (ph) had to undergo four hours of surgery, but is OK, as you see here. The couple previously rescued Hoagie (ph) from a shelter. They saved the dog from being put to sleep. That is pay back.
Well here's Miss California, but she's possibly going to lose her crown. Carrie Prejean (ph) told pageant officials that a recent photo released of her in lingerie, the only one she had posed for, but now the Web site TMZ says the photo is actually one of four photos. They will quote, "slowly roll out the other photos."
The co-director for the Miss California pageant says he is stunned and now needs to as he put it, revisit the issue. The controversy surrounding Miss California, of course, caused by a statement during the pageant when she said marriage should be between a man and a woman.
In Maine, the governor has signed a bill there legalizing same- sex marriage -- the governor signing that bill less than an hour after it was approved by the state legislature. Maine is now the fifth state to legalize same-sex marriage. The other four states Massachusetts, Connecticut, Vermont and Iowa.
Former Secretary of State Colin Powell criticizing the Republican leadership and again lashing out at Rush Limbaugh -- Governor Arnold Schwarzenegger his poll numbers at a record low. He's now getting more open-minded.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: ... state of California (INAUDIBLE) genius and you're helping...
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ANNOUNCER: Here again Mr. Independent, Lou Dobbs.
DOBBS: More indications that our economy is improving. The rate of job losses in the private sector are slowing -- rising indications that growth lies ahead. Joining me now Harvey Eisen, chairman and managing partner of Bedford Oak Advisors; Michael Holland, chairman of Holland and Company; and Matthew Richardson, professor of Applied Financial Economics Director of the New York University Salomon Center (ph). Good to have you with us, Professor.
UNIDENTIFIED MALE: Thank you.
DOBBS: The stress test -- as we begin this, the Treasury Department leaking results, trying to play it into the market. The results are not all together good, are they?
PROF. MATTHEW RICHARDSON, DIR., NY UNIV. SALOMON CENTER: No. I mean I think obviously the spin is going to be that they're -- that the sector is healthy, but I think the way to view the stress test are there's 19 banks. The one thing they've done right is they've tried to use consistent methods across those 19 banks, so they're ranking them from one to 19, so when you get down to the bottom of the barrel, you would think that the news would be sort of bad. The fact that the stock market can respond positively maybe they thought it was going to be worse.
DOBBS: Citibank and Bank of America up 16 percent today, Mike. The market seems to say take your stress test and stick it.
MICHAEL HOLLAND, CHAIRMAN, HOLLAND & COMPANY: America has had a ball with the stress test. Even Warren Buffett has said these things are silly. And I think at the end of the day the market is going to be very happy when it's gone. The whole stress test actually (INAUDIBLE) been a waste of time.
DOBBS: Do you agree Harvey?
HARVEY EISEN, CHAIRMAN, BEDFORD OAK ADVISORS: Well look, I mean the estimate was they needed 10 billion. They said they needed 35 billion. Stock went up 15 percent. I think they should have said they needed 80 or 90 billion or 90 billion, the stock would have doubled.
DOBBS: The idea that these banks are too big to fail is now a part of the national psyche at least as it's represented by the federal government, this federal government. Is that psychosis? RICHARDSON: Well, I mean, if you look at the (INAUDIBLE) bank, the large banks is that there's way too much risk on their balance sheets given the amount of leverage they have. So to move forward you have to reduce the leverage or reduce risk. The question is, it's a battle between the taxpayers on one side and creditors on the other. Who will bear the risks, who bears the losses. So put these guys together. At the moment, there's no sort of legal structure to sort of handle these really large complex institutions, so hopefully, the first step would be to create one so you handle a bank holding company.
DOBBS: To give this treasury department more power. Give this government more power doesn't sound like a terrific idea, if I may say, professor. Just given their rather short track record.
RICHARDSON: Yeah, I think the alternative, though, is sort of let them fill on their own, we saw a little bit with the Lehman Brothers case that things can spiral out of control pretty quickly. That's a big worry. So the question is --
DOBBS: Does it worry you?
HOLLAND: Of course. The missteps by the treasury department so far are kind of breath taking, and you raised the right question about is it too big to fail? They're going to have hearings on now. That's an issue that Matt can identify and talk about, but they're also talking in Congress now along with treasury, are they too big to exist or to big to fail? They don't know which side they want to be on. We're getting such mixed messages as a stress test would give mixed messages. They take an hour and I'll do it in two seconds. Stress test confused the markets. One of the reasons, the hoorays is because it will be behind us.
DOBBS: Give us your sense where this market is headed? How secure, confident, or inversely, should investors feel?
EISEN: I -- investors should never feel confident. If you read history books, you'll see that this is now beginning to look like any other typical big decline in the market. In 1929, when the market crashed, which all of these guys are dragging out of the closet. Market rallied 50 percent, plus 50 percent in the next six months. Markets rallied in the next 40 percent. It's the same stuff.
DOBBS: And your sense of the direction itself?
EISEN: The economy lags the market. The economy is improving, they've given the patient so many high-powered drugs that if the patient were dead, it would sit up and say I'm feeling better.
DOBBS: I think we say that 13 trillion dollar, roughly 13 trillion dollars worth of stimulus in a 14 trillion dollar economy is substantial. Would you agree?
RICHARDSON: Big chunk. I think --
DOBBS: Let me rephrase the question then, is there any way in the world we shouldn't expect to see this economy continue to improve this year?
RICHARDSON: It's not all stimulus, right? A lot of it is just sort of lending upon the system. The concern is that it's maybe a little bit like heroin that people get used to it and it's going to be tough to get off once the economy starts improving. It's going to be how do you put the Jeanie back in the bottle. Who knows whether they have a good plan for that?
DOBBS: Do you want to give us the outlook for the economy and market?
HOLLAND: I think the comment about the drugs is appropriate on one end. On the other hand, the Chinese did it right. We spent $13 trillion, $14 trillion a lot of it just wasted. It's our money and it's gone. The Chinese handed out vouchers and they said go spend. They didn't have any Congress or treasury or any silliness going on. Wonder of wonders last night the Chinese government said we're growing very rapidly, we're 7 percent to 8 percent growth this quarter. Those markets are going to the moon right now.
DOBBS: Recovery.gov where President Obama said we should go to watch what happens with the stimulus, we're told it won't be quite ready to October. Maybe that's a leading indicator as well.
EISEN: Did he specific a year?
DOBBS: He did not. Some others in the white house are, the year is next year. Thank you very much, gentlemen, appreciate it.
California's Governor Arnold Schwarzenegger sparking more controversy. The governor said in the past he did not support the legalization of marijuana. Now with approval ratings dropping to a new low, the governor said he's now open to the idea, at least the debate of the idea. Casey Wian has our report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT: Hours before the latest California wildfire started Tuesday. Governor Arnold Schwarzenegger signed an executive order providing resources to firefighters then asked about another kind of smoke, marijuana. A field poll found 56 percent of California voters favored legalizing recreational use and taxing proceeds to reduce the state's budget deficit.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I don't think it's time for that. I think it's time for debate. We ought to study carefully what other countries are doing that have legalized marijuana.
WIAN: Schwarzenegger said he's undecided. In 1975 he smoked a joint in front of camera for the body building documentary "Pumping Iron." He admitted smoking with Tony Chong, from Cheech and Chong's "Up in Smoke." In 2007, Schwarzenegger told a British magazine marijuana was not a drug, but a leaf. The spokesperson later said he was joking. No joke, the governor's plummeting popularity. In December 2007, 60 percent of Californians approved of the job Schwarzenegger was doing. Now 30 percent do, his lowest rating ever.
MARK DICAMILLO, DIRECTOR, THE FIELD POST: Schwarzenegger has long talked about post partisan era in California politics where party politics didn't matter and people should rise above it. In his job ratings he got into a post partisan job rating. Both Democrats and Republicans have equally negative views of the governor.
WIAN: Five key ballot measures designed to solve the state's persistent budget crisis and supported by Schwarzenegger are behind in the polls. Years ago his popularity led to a talk about amending the constitution to allow a foreign-born citizen to run for president. You don't hear that anymore. Now Schwarzenegger tells "The New York Times" he's again considering movie roles.
(END VIDEOTAPE)
WIAN: He also told "The Times" he doesn't really have a plan for his final 18 months in office in part because he prefers operating without a safety net. You can say that's exactly how Schwarzenegger and California's legislature has been running the cash-strapped state -- Lou.
DOBBS: For a very long time. Thank you very much, Casey Wian.
Fighting words tonight between former Secretary of State Colin Powell and radio talk show host Rush Limbaugh. In a gathering of corporate executives this week, Powell said the Republican Party is polarized by people like Governor Sarah Palin and Rush Limbaugh. Powell said, "I think what Rush does as an entertainer diminishes the party and intrudes or inserts into our public light a kind of nastiest that would be better to do without." Powell also had comments about Republican Party future saying, "The Republican Party is in deep trouble. Americans do want to pay taxes for services. Americans are looking for more government in their life, not less." Limbaugh responded, "What Colin Powell needs to do is close the loop and become a Democrat instead of claiming to be a Republican interested in reforming the Republican Party."
A possible Supreme Court candidate under fire tonight for comments she made about the power of the appellate court to make law.
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DOBBS: The Obama administration appears to be bowing to pressure to create a politically correct Supreme Court. Sources tonight telling CNN that the leading candidates are women and Hispanics. On the short list, U.S. appellate court judges, Diane Wood and Ann Clair Williams and U.S. district court judge Ruben Castillo. Another leading candidate, federal appellate court Judge Sonia Sotomayor is under fire tonight for comments she made four years ago. The judge's comments were caught on videotape at Duke University Law School in 2005. Sotomayor is seen and heard telling students that judges do more than interpret laws, they set policy.
(BEGIN VIDEO CLIP) JUDGE SONIA SOTOMAYOR, U.S. COURT OF APPEALS: All of the legal defense funds out there. They are looking for people with court of appeals experience. Because it is -- court of appeals is where policy is made. And I know, I know this is on tape. I should never say that because we don't make law, I know. I'm not promoting it. I'm not advocating it, you know. OK.
(END VIDEO CLIP)
DOBBS: President Obama could begin meeting with potential nominees we're told, as early as this weekend. No word whether he plans to meet with Sotomayor.
A Supreme Court ruling and identity theft could have a significant impact on immigration enforcement. The court ruled that illegal immigrants aren't guilty of identity theft if they don't know they're stealing real people's social security numbers. That was a nine to nothing ruling, by the way, which could be the lead for hundreds of illegal immigrants caught in a raid in Iowa. Louise Schiavone has our report.
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LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Busted 389 illegal immigrants at an Iowa meat packing plant a year ago, most of them accused under federal criminal law of knowingly stealing the legitimate identity of another individual in order to work at the plant but a Supreme Court ruling on a similar case this week determined that there was a critical difference between possession of false documents and the knowledge that a specific identity has been stolen.
ANDREW GROSSMAN, HERITAGE FOUNDATION: What the decision means is that courts and prosecutors will have to pay more attention of criminal intent.
SCHIAVONE: The American Immigration Lawyers Association asserts under the new ruling workers in the Iowa raid could be exonerated and called on the attorney general to seek, quote a review of the facts of each defendant's case with an eye on dismissing the charges. Congressman Zoloft who chairs the House subcommittee on immigration says immigration violators must face the law but she too is calling on justice department to say start from scratch and pretend these cases never happened. This border security advocate said that's a stretch.
JANICE KEPHART, CENTER FOR IMMIGRATION STUDIES: The underlying law stands. That's completely glossed over by those simply looking at this as an excuse to support illegal immigrants, abuse of legitimate Americans' identities.
PROF. JAN TING, TEMPLE UNIVERSITY: We have these millions and millions of illegal aliens in the United States who are working on counterfeit documents. We have a burgeoning counterfeit documents industry in the United States which has been growing every year, ever since the first amnesty was enacted back in 1986.
(END VIDEOTAPE)
SCHIAVONE: Lou some analysts say the confusion is chalked up to vague laws hastily drafted by Congress. The outcome in this case means immigration enforcers will need to find other ways to leverage cooperation from immigration violators. Lou?
DOBBS: Thanks, Louise, appreciate it; Louise Schiavone reporting.
Homeland Security Secretary Janet Napolitano told members of the Senate Judiciary Committee that her department is taking action on border security and illegal immigration.
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JANET NAPOLITANO, HOMELAND SECURITY SECRETARY: We're targeting employers that hire illegal aliens and create the demand for illegal immigration. We're making improvements to the e-verify system. Let me pause there. I believe e-verify is an integral part of immigration moving forward.
(END VIDEO CLIP)
DOBBS: But Obama administration despite the statement of the homeland secretary twice delayed E-Verify's implementation of contractors. It's the single most successful federal program to prevent illegal immigration and the Obama administration and Democratic leadership of Congress are moving to destroy it.
A reminder now to vote in tonight's poll. Is it change you can believe in when the federal government gives $7 billion of tax payer money to a private company? Then says the company, Chrysler, doesn't have to pay it back? Yes or no. Cast your vote at loudobbs.com. We'll have the results in just a few moments.
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 how safe is your bank? We'll learn if some of the nation's biggest banks are passing the government's stress test. Ali Velshi will be here to tell us what he knows and whether your money is safe.
Also, the epidemic of deadly violence taking a toll on Chicago's young people. 35 public school students killed this year. Parents want to know why more isn't being done to protect their children and so do we.
Plus, Governor Sarah Palin's daughter Bristol is now telling teens to say no to sex. She's promoting abstinence as a way for teens to avoid unwanted pregnancies when earlier she said it didn't work. Everyone's weighing in on all of this. We'll hash it out at the top of the hour, Lou.
DOBBS: Thank you very much, Roland. We'll be joined next by the chairman of the powerful house financial services committee. We'll talk about other things, those bank stress tests and the airing of a torture videotape could hold up a nuclear deal between the United States and United Arab Emirates.
(COMMERCIAL BREAK)
DOBBS: The results of the so-called stress test on the nation's top banks will be released tomorrow. Some of the nation's largest banks will need billion, tens of billions dollars to survive. Congressman Barney Frank is the chairman of the financial services committee joins me now to discuss that and the likely direction and a few other initiatives. First of all, Mr. Chairman, good to have you with us.
REP. BARNEY FRANK (D), MASSACHUSETTS: Thank you, Lou.
DOBBS: These stress tests leaked out by the treasury department. Any surprise in it at all for you?
FRANK: It's not an area of great expertise. I got a job making public policy. I have a rule I try to follow. Keep to a minimum the number of times when I tell people more than I know. I'm not expert on the innards of the banking system. They obviously do. One thing I should be very clear, to the extent that they say the banks need more money, we want to maximize the extent to which that's private money and not public money. We want to maximize the extent to which this is capital raised privately, maybe they should sell things off like Citicorp is talking about. I don't think you'll see any public money going in here.
DOBBS: Let's turn to other areas. And let's -- amongst other things, the idea of -- well, eliminating the law, banning online gambling sites. Governor Schwarzenegger saying he's open to an idea you have discussed for some time that's the legalization of marijuana. We can go through all of that. Let's start with -- you've called this ban online gambling sites the stupidest ever, why so?
FRANK: Because adults should be able to do what they want with their own money. And as you and I were just half joking before, the federal government given what we're doing for us to announce that no one else should gamble. Only problem they're gambling with minuscule stakes. Some of my conservative friends have been critical of liberals of what they call the 90 state. John Stewart Mill got it right in the 1950s. When you're doing something that has an adverse effect on me I think you need to regulate that. When you do something that only affects you, it's none of my business whether it's smart or dumb. That goes to my judgment for smoking marijuana. Now we're talking about adults. Let's be clear, you can not have a society if it's bad for children to do it, adults can't do it, then you don't have freedom.
DOBBS: If you start quoting Locke and Adam Smith, I'll be in shock.
FRANK: I think there's a great deal to be said there. John Locke -- one that John Locke said, one way to make sure you have good rules set forward by government the rules have to apply to those who make them. That's why I'm tough on members of Congress, others who are hypocritical and make rules and don't follow them themselves. John Locke got them right. If they allow them to make rules you'll have nasty rules.
DOBBS: Let's turn to the idea of legalized gambling.
FRANK: By the way, I will say, Lou, I'm skeptical of individual mandates. I think there's a problem with whether or not you have to provide other people care. I'm leery of the individual mandate on those grounds.
DOBBS: Governor Schwarzenegger turned to marijuana. Said he's willing to -- with approval ratings an all-time low, one might say or note he ties it's time for a debate on legalizing marijuana. What say you?
FRANK: First of all when people say it's time for a debate. That generally means they are for something that hasn't popped up yet. I'm for the debate. If you're an adult, you decide to smoke marijuana we can't put new prison. I don't think it's a good idea to smoke marijuana, drink alcohol or smoke cigarettes. Are you encouraging people to gamble or smoke marijuana? It's a mistake to divide human activity in two sets. One thing the government encourages. Most human activity ought to be neither. It ought to be up to you to make the choice. You and I think there are people out here in the financial world, maybe you want to be in prison. I want to make room for them by getting the people who smoke marijuana out.
DOBBS: If you use that up appropriately I might be persuade.
FRANK: I have that in mind for the future.
DOBBS: Congressman thanks.
FRANK: Thank you, Lou.
DOBBS: New developments tonight on a torture tape that first aired last week here on CNN. The tape could hold up a nuclear deal between the United States and the United Arab Emirates. That deal signed in January by former President Bush would allow the UAE to buy U.S. nuclear technology. Drew Griffin has our report.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN CORRESPONDENT: Most shocking about the tape beyond the disturbing video you're about to see is that torture was never punished. Why ? It could be because he's a member of the ruling family and that has at least one member of Congress concerned.
The video shot four years ago shows the half brother of the crown prince of United Arab Emirates torturing an Afghan grain dealer accused of stealing from the sheik. He was investigated but no charges were ever filed. Since we aired this tape of UAE announced it's re-launching investigation into the torture but in the meantime Democratic Congressman James McGovern of Massachusetts is calling for a hearing of the human rights commission he co-chairs. He plans to hold that hearing next week.
REP. JAMES MCGOVERN (D), MASSACHUSETTS: I think it's important to shine the light on what's going on here. And I think it's important, especially because the UAE is our ally. It's important because we have a lot of important military deals with the UAE and we're now talking about a nuclear corporation deal with the UAE. I think we need to make it clear to our friends, in the United Arab Emirates that they need to do something about this.
(END VIDEOTAPE)
GRIFFIN: Lou, there's been concern about this nuclear deal even before the tape showed up. The United Arab Emirates trades, as you know, at just about every other country in the Middle East, including Iran. As part of the deal, UAE promised not to share the technology with any other country. Members of Congress want more safeguards than just that promise. Lou.
DOBBS: Drew, thank you very much. Drew Griffin. Well, tonight's poll results and some of your thoughts coming up here next.
(COMMERCIAL BREAK)
DOBBS: Tonight's poll results, 95 percent of you say it is not change you can believe in, when the federal government gives $7 billion of taxpayer money to a private company, that is the owner of Chrysler and says the company doesn't have to pay it back.
Time now for some of your thoughts.
Russ, in Michigan said: "Shame on any branch of the U.S. government that puts the rights of illegal aliens over U.S. citizens."
Patty in Utah: "People who would use someone else's identity know it is not their own, why should it not be a crime?"
Ray in Arizona: "Lou, I would like to know where they found 12 jury members that found that a misfiring gun was the same as having a machine-gun. Are we now a country of fools?" We won't answer that tonight.
Send us your thoughts to loudobbs.com. We appreciate hearing from you. Each of you whose email is read here receives a copy of my book "Independence Day."
And a reminder to join me on the radio Monday through Fridays for the Lou Dobbs Show 2:00 to 4:00 each afternoon on WOR 710 radio in New York City and all across this great country. Go to loudobbsradio.com for your local listings.
Thank you for being with us tonight. Please join us here tomorrow. For all of you, thanks for watching. Good night from New York.
"NO BIAS, NO BULL" starts right now. In for Campbell Brown, Roland Martin -- Roland?
MARTIN: All right. Lou, thanks a bunch.
Folks, we start with breaking news today. As the government gets ready to tell us how stressed 19 of the nation's biggest banks are, which ones need more capital, where we come from, money and how much. Should you be worried about the results? Is your bank safe? As always, our panel is with me to talk about this and other big stories.
