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Lou Dobbs Tonight

Obama's Overseas Trip; Health Care Reform; AIG Bonuses; Small Business Bailout; Cemetery Outrage; Racist Swim Club?

Aired July 10, 2009 - 19:00   ET



Tonight, President Obama is on the last leg of his overseas tour, but as the president travels abroad, his domestic agenda here at home from health care to the environment has setbacks.

Also AIG is once again the object of taxpayer scorn. The insurer kept afloat with your money has new plans to pay millions of dollars to bonuses to executives.

And a group of black and Hispanic children thrown out of a suburban Philadelphia swim club receive an apology. But they aren't allowed back. Accusations of racism against the club are being investigated.

Plus the NAACP turns 100 this year -- is the civil rights organization still relevant? That is the topic of our "Face Off" debate tonight.

But, first, President Obama is in Africa tonight and the president arriving in Ghana, just a short while ago. He left Italy this morning following the G-8 summit. Now, this is the last leg of the president's weeklong overseas trip. At the summit, the president and other G-8 leaders set a deadline for Iran and promised aid to developing nations. Suzanne Malveaux reports from L'Aquila, Italy.


SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): President Obama wrapped up the G-8 economic summit, a popular figure...


MALVEAUX: ... but admittedly, a bit weary.

BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: The one thing I will be looking forward to is fewer summit meetings.

MALVEAUX: This would be his third international summit during his first six months in office -- meetings that have grown from the leaders of eight of the world's richest nations to more than 40 heads of state, all trying to get a piece of the action.

OBAMA: What I've noticed is everybody wants the smallest possible group, smallest possible organization that includes them. So, if they're the 21st largest nation in the world, then they want the G-21.

MALVEAUX: Mr. Obama suggested it wasn't the most efficient way of getting things done, but it did produce some results. A September deadline for Iran to show whether it will negotiate giving up its nuclear program.

OBAMA: The international community has said here's a door you can walk through that allows you to lesson tensions and more fully join the international community.

MALVEAUX: And $20 billion in aid for struggling farmers to feed the poor. The president made the pitch to his counterparts, using a story about his own Kenyan roots.

OBAMA: And now I have family members who live in villages. They, themselves, are not going hungry, but live in villages where hunger is real. And so this is something that I understand on very personal terms.

MALVEAUX: But Mr. Obama also acknowledged some disappointments.

OBAMA: We did not reach agreement on every issue and we still have much work ahead on climate change.

MALVEAUX: The president failed to get developing countries who are also big polluters, like China, India and Brazil, to commit to a specific goal in lowering greenhouse gas emissions.

(on camera): As for the global crisis affecting all of these countries, world leaders were cautious, giving more time for their economic policies to try to turn things around.

Suzanne Malveaux, CNN, L'Aquila, Italy.


PILGRIM: Now following the G-8 meeting President Obama met with Pope Benedict at the Vatican and the president spent about a half an hour with the Pope. They discussed abortion, stem cell research and U.S. immigration reform was also discussed. Now, the Catholic Church has been critical of U.S. immigration policy and efforts to enforce immigration law. Earlier in the week, Pope Benedict blasted capitalism. He denounced practices that he said led to the global economic crisis.

President Obama at the G-8 summit said developed nations have a responsibility to take the lead on climate control. The president said the U.S. should do more to fight global warming. And he said, quote, "I know in the past the United States has sometimes fallen short of meeting our responsibilities. So, let me be clear -- those days are over."

President Obama left Italy this morning after his meeting with the Pope, and the president's next and final stop on his seven-day trip, the African country of Ghana. Now, the president and his family arrived in Ghana just a short while ago. Ghana is the only African stop on the president's trip. And tomorrow, the president will meet with Ghana's president and address the country's parliament.

New developments just in on the president's domestic agenda -- House Democrats tonight are proposing a new tax on wealthy Americans to pay for the president's health care plan. Now, this plan would impose a one percent tax on individuals making over $280,000 a year. Individuals making over $400,000 a year would be taxed at an even higher rate.

The plan is not yet finalized, but the president's health care proposal is still facing tough opposition from some members of his own party. And tonight, 40 House Democrats are withholding support. Brianna Keilar reports from Washington.


BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): President Obama is telling Congress the clock is ticking on health care reform.

OBAMA: I never believe anything is do or die. But I really want to get it done by the August recess.

KEILAR: A tall order for congressional Democrats who have missed self-imposed deadlines. In the House, 40 fiscally conservative Democrats, including Arkansas' Mike Ross, sent a letters to leaders, concerned Congress isn't doing enough to cut ballooning health care costs.

(on camera): Could you vote for the House health care bill as it stands right now?

REP. MIKE ROSS (D), ARKANSAS: No. This is the biggest domestic issue that we will tackle this -- this century. And so we think we need to slow it down a little bit and do it right.

KEILAR (voice-over): So far there are two prevailing ideas. One calls for a government-run health insurance plan favored by House Speaker Nancy Pelosi.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: The only debate on that is what it will be called, a patient option, (INAUDIBLE) option, write in your suggestions.

KEILAR: The other is a nonprofit health cooperative, with less government involvement. But after hours and hours of negotiations, lawmakers are still struggling with how to pay for it. In addition to cutting costs, Congress will have to raise taxes to foot the trillion dollar bill. Democrats on the House Tax-Writing Committee agreed Friday evening to increase taxes on individuals who make more than $280,000 and on couples earning 350,000 or more.


KEILAR: Democrats are hoping that this will bring in $540 billion in tax revenue, and they've already taken off the table or all but taken off the table a couple of other proposals to tax employer- provided health benefits and things like sugary drinks or sodas -- Kitty?

PILGRIM: Brianna, this is not the only tax being discussed, is it?

KEILAR: No, it's not the only tax proposal being discussed especially in terms of ones that would hit the wealthy. In the Senate, for instance, they're considering a few different ones, additional taxes on capital gains of wealthy investors, limiting the itemized deductions that the wealthy Americans get, and for the super rich, a so-called millionaire's tax, Kitty, not set in stone, but certainly on the table.

PILGRIM: All right. Thanks very much. Brianna Keilar -- thanks, Brianna.

Well President Obama's ambitions to deal with climate change here in the United States is now stalled on Capitol Hill. Democratic Senator Barbara Boxer is chairwoman of the House Environment Committee has decided to put off action on the cap-and-trade bill until after the Senate's August recess. And that breaks an early August deadline Boxer had set for a committee vote. Now, the House had approved the cap-and-trade bill last month by just seven votes.

There is new controversy tonight as insurer AIG plans to pay out millions of dollars in executive bonuses. Now, this is the company that wouldn't exist if not for a series of massive taxpayer bailouts. AIG has asked for a consent from the Obama administration's compensation czar to make the payout to key employees. AIG is apparently trying to head off a repeat of the outrage when it paid out bonuses earlier this year. Brian Todd reports.


BRIAN TODD, CNN CORRESPONDENT (voice-over): More bonus payments to top AIG executives are due on Wednesday -- $2.4 million for 43 employees. But Congress' bailout watchdog has this warning...

ELIZABETH WARREN, TARP OVERSEER FOR CONGRESS: Look at unemployment. Look at what's happened with everyone's 401(k), look at how many people are losing their homes and there are people who think they can still take taxpayer money and pay fabulous bonuses. I just -- it's a two-universe problem here. There's going to be trouble over this.

TODD: But an attorney who representatives some of AIG's executives says denying them bonuses would break the law.

JOHN SINGER, ATTORNEY FOR AIG EXECUTIVES: These folks had contracts. Then that's the prevailing law of the land. They're legally entitled to get the bonuses and it really doesn't matter what she or people think.

TODD: Taxpayers have already made available to AIG a $180 billion bailout.


TODD: There was an outcry earlier this year when the company said it had to pay out $165 million in bonuses, even to executives of the disastrous AIG unit that caused the company's near collapse. And over $200 million in bonuses AIG says were agreed to before the bailout are still supposed to be paid out next year.

A source close to the matter tells CNN AIG is asking Kenneth Feinberg for guidance on that set of bonuses. Feinberg is the Obama administration's pay czar who will vet bonuses at seven companies getting big taxpayer bailouts. AIG declined to comment, but published reports say the company has also asked Feinberg to weigh in on next week's $2 million payment as well. Will there be a renewed outcry?

A.B. STODDARD, COLUMNIST, THE HILL: I think it's smart of AIG to ask the administration for approval because it does provide them political cover if the administration blesses the bonuses. I think it's tricky for the administration to get -- to put some skin in this game.


TODD: The Treasury Department declined to comment, but said that overall when Kenneth Feinberg reviews bonus proposals "bailout companies will need to convince Mr. Feinberg that they have struck the right balance to distort excessive risk taking and reward performance for their top executives." That's a quote -- Kitty.

PILGRIM: Brian, but let's talk about basically Kenneth Feinberg is on behalf of the government is only reviewing the future bonuses and isn't this set on bonuses from previous contracts?

TODD: That's absolutely right. These upcoming bonuses for next week are based on previous contracts, as are the $200 million bonuses set to be paid out next year. Now he -- that means Kenneth Feinberg will not necessarily rule on them. If he does not, AIG will have to face the heat alone on this. And remember the scale of these, next week's bonuses only $2.5 million. The remaining $200 million scheduled to be paid out next year also from a previous contract. That's probably going to spark even more outrage.

PILGRIM: Well given it's all taxpayer money, it's definitely...

TODD: Right.

PILGRIM: ... still going to create a reaction.

TODD: Absolutely it will and get ready for that next year. Next week is relatively small in comparison -- next year, $200 million.

PILGRIM: Unbelievable. Thank you very much. Brian Todd -- thanks, Brian.

TODD: Thank you. PILGRIM: Well coming up, an apology to black and Hispanic kids kicked out of a suburban swim club. They still can't go back.

Also employees at an historic African-American cemetery face felony charges. They're accused of digging up remains and reselling the graves.

Also new developments tonight for small business owners who say the stimulus plan has passed them by. The Obama administration is now considering bailing them out. We'll have that story, next.


PILGRIM: This just in -- the White House is considering a small business bailout. Now, this proposal will use some of the $700 billion in the bank rescue fund to offer low-interest loans to small businesses. It's not a done deal yet. And no matter what happens with the idea, it will be too late for many businesses, who say until now the administration has ignored them. Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Nathan's has been a Washington, D.C. landmark in Georgetown since 1969 -- a place where power brokers and regular Joes rubbed shoulders over a good beer and a burger. But the family owned restaurant is shutting its doors for good Sunday, a casualty of the weakened economy.

(on camera): What effect has the economy had on your business?

JON MOSS, NATHAN'S GENERAL MANAGER: It's killed us in every possible angle. D.C. people eat out less. There are fewer tourists in the district, and business travel has fallen as well.

SYLVESTER (voice-over): Manager Jon Moss loses his job that day, along with the other employees. The restaurant is just one of many small businesses that have been shuttered in the recession. That will make it tougher to turn the economy around. The Small Business Administration says small businesses employ half of all U.S. workers in the private sector and account for 60 percent to 80 percent of new job creation over the past decade. The National Federation of Independent Businesses says many small business owners are wondering where's the stimulus that was supposed to come from the $787 billion stimulus package Congress passed in February.

BILL DUNKELBERG, NATL. FED. OF INDEPENDENT BUSINESS: What they were expecting was some immediate stimulus to the economy. So, the small businesses were pretty much in support of something like, you know a tax holiday for six months that would take a few hundred billion dollars up and put money immediately into the hands of consumers.

SYLVESTER: Customers are now flocking to Nathan's in the final days before last call.

MICHAEL SCHWANDT, NATHAN'S CUSTOMER: Sad, very sad. This was like my first, like grown-up bar I ever went to.

UNIDENTIFIED FEMALE: Lots of memories, yeah, we used to come here in groups and dates and all of that, so it was a lot of fun.

SYLVESTER: Now they're trying to get their last fill of memories.


SYLVESTER: When the stimulus package passed on February 17th, the unemployment rate was 8.1 percent. Last month, in June, the unemployment rate had climbed to 9.5 percent. The chief economist for the National Federation of Small Businesses says companies will only start to hire when the customers go back to buying. But so many people are skittish about the direction of the economy, so they're saving more, not spending -- Kitty?

PILGRIM: Lisa, the help for businesses has really been focused on Wall Street up until now, big bailouts for big, big companies. We're starting to see some movement towards maybe helping small businesses. How likely are we going to see that follow through?

SYLVESTER: Well, what you have is you have this unemployment picture where you just see the numbers start to rise, and that has the attention of the White House and the administration. So, what they're trying to do right now is to try to come up with a plan, and they are looking at that plan that would extend loans through the Small Business Administration to companies that are trying to survive essentially a line of credit.

Now, we spoke to the Treasury Department. They said that it is only one option on the table, but something that is getting serious discussion and a serious look at -- Kitty?

PILGRIM: Well, it can't come too soon. Thanks very much. Lisa Sylvester -- thanks, Lisa.

PILGRIM: To hear Lou's thoughts on this and a lot more, join him on the radio Monday through Friday for "The Lou Dobbs Show" 2:00 to 4:00 p.m. each afternoon WOR 710 Radio New York. Go to to find the local listings for "The Lou Dobbs Show" on the radio. You can also follow Lou on Twitter, loudobbsnews.

Tonight in "Law & Order", a manhunt is under way after a Florida couple was murdered in their home while eight children were in the house. Now police say it was a home invasion. Both parents were shot multiple times. The children ranged in age from 8 to 11 years old. None of them were injured. The couple had 16 children in total, 12 were adopted and were well known in the area.

Also in Florida, a funeral service was held today for ex-NFL star Steve McNair's girlfriend Sahel Kazemi. It was a private service for friends and family. Police say the week -- this week confirmed that Kazemi was -- shot and killed the married McNair before shooting herself. Now, the two had reportedly been dating a few months. Suspended NFL player Donte Stallworth was released from jail today. He served 24 days of a 30-day sentence for DUI manslaughter. Stallworth was driving in Miami when he struck and killed a construction worker. And when police arrived, Stallworth admitted to hitting the man and a breathalyzer showed that he had been drinking. Now he is suspended indefinitely from the NFL and will serve two years under house arrest.

Still ahead, the president of a suburban Philadelphia swimming pool speaks out after accusations of racial discrimination -- also more disturbing revelations tonight about an alleged grave-robbing scheme at one of the nation's most historic cemeteries -- also a 15- year-old African-American girl making aviation history.


PILGRIM: Four people are facing felony charges for reselling cemetery plots in a historic black cemetery, where several famous African-Americans are buried. They're accused of digging up hundreds of graves and hiding their remains. Ines Ferre has the very latest developments on this disturbing story -- Ines.

INES FERRE, CNN CORRESPONDENT: It's unbelievable, Kitty. Since this news broke, by the way, some 2,000 families had gone to Burr Oak Cemetery to see if the graves of their loved ones have been affected. Authorities say that the suspects dug up about 300 caskets, possibly more. The remains were either reburied or dumped in the back part of the graveyard.

The plots were then resold. The suspects all worked at the cemetery and often took cash payments for the transactions. Today Sheriff Tom Dart announced the discovery of 30 more plots that were violated.


SHERIFF TOM DART, COOK COUNTY, ILLINOIS: People have gone to the grave site where a different person is there now. People have gone to grave sites where it's clear that something has been removed and moved.


FERRE: And the historic cemetery is the final resting spot for blues singer Willie Dixon, jazz singer Dinah Washington and some Negro League baseball players. Also buried there, Emmett Till, a 14-year- old whose slaying in 1955 helped spark the civil rights movement.

The sheriff says the original casket where Till was buried was found in a dilapidated garage. It had wildlife living inside it. Emmett Till was reportedly buried in a different casket after his body was exhumed in 2005 as part of an investigation, but authorities are questioning, Kitty, why was the original casket not in a museum. Why was it in a garage?

PILGRIM: This is a horrifying story. How is the investigation going to continue...

FERRE: I mean it's -- this is going to take, he said, about weeks and months, possibly because a lot of the records were destroyed. I mean the FBI is investigating as well, but they don't have a lot of these records, a lot of the deeds that were given (ph) out, copies of them...

PILGRIM: It's really too, too grotesque a story actually. Thanks very much, Ines.

Well some other stories that we're following tonight across the country. Illinois Senator Roland Burris says he will not run for a full term in 2010. Burris made the announcement today, saying that the burden of raising campaign money would take him away from state issues. If you recall, Burris was appointed to President Obama's vacant Senate seat by former Governor Rod Blagojevich and Blagojevich has been accused of trying to sell that seat. The appointment was challenged even by members of his own party and Burris had to face court battles and a perjury investigation.

In Milwaukee, a teenage pilot is making history -- 15-year-old Kimberly Anyadike will be the youngest African-American female to pilot a transcontinental trip. She started her trip in Compton, California, flew to Virginia, and she's stopping in Milwaukee on her way back home.

Still ahead -- what officials of a suburban Philadelphia swimming pool are saying tonight about allegations of racism -- also, our "Face Off" debate -- on its 100th anniversary, has the NAACP become irrelevant?


PILGRIM: A swim club in a Philadelphia suburb is under increasing pressure tonight over an alleged case of racism. Now, the question is whether a group of children were kicked out of the pool because it was too crowded or because of the color of their skin. And tonight, the president of the swim club is speaking out. Susan Candiotti has our report.


SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): Kids whose parents belong to Valley Club were back in the water and having summer fun one day after controversy kept them away. And youngsters, who got to use that same pool for only a day, got an apology from the swim club, but no invitation to return.

JOHN DUESLER, VALLEY CLUB PRESIDENT: It's just really unfortunate, and we apologize deeply. We regret deeply that this had to happen.

CANDIOTTI: Here's what happened. A day care center catering to mainly minority black and Hispanic kids paid $1,950 for the kids to use the pool once a week for an hour and a half. But after one visit, their check was returned and summer swim trips canceled. DUESLER: We severely underestimated the number of children and our capacity to handle these groups. We were not prepared for it. And that's the only reason. It was a safety issue and that's the only reason that the children, we felt it was not safe for them to be here.

CANDIOTTI: The day care center calls that a lie. It claims the club pulled the plug because of racist complaints from some white members.

ALETHEA WRIGHT, DAY CARE CENTER DIRECTOR: The children came running down the hill, saying Miss Wright, Miss Wright, those people up there are saying what are those black kids doing in the pool?

MARCUS ALLEN, CAMPER: This is kind of like sad that white people are still thinking like this, when I felt like these days were over.

BERNICE DUESLER, CLUB PRESIDENT'S WIFE: If someone said that, I don't know. I didn't hear it. People are going to say things, but it's not our -- one person saying it is not the position of the club or the board. Certainly not how we raise our children.

CANDIOTTI: The club flatly denies it discriminates and says two other day care centers were also canceled after one visit.

J. DUESLER: It's just unfortunate that this had to turn into such a firestorm, because this has been totally misrepresented in terms of our club and how welcoming we are.

UNIDENTIFIED FEMALE: He doesn't deserve this.

UNIDENTIFIED FEMALE: He is a kind, tolerant person that would do anything for anyone and teaches our children -- teaches me you know that everything can be resolved with conversation.

CANDIOTTI (on camera): But considering the gap between both sides, conversation alone may not resolve this controversy.

Susan Candiotti, CNN, Huntington Valley, Pennsylvania.


PILGRIM: Now, Pennsylvania's Human Relations Commission is investigating the pool incident outside of Philadelphia. It's stepped in after requests by the NAACP, which has been fighting discrimination for 100 years. But, as it begins its annual convention, here in New York tomorrow, some voices inside the black community are asking if the nation's oldest civil rights group is relevant anymore and that's the subject of our "Face-Off" debate, tonight.

So, joining us now is Jimi Izrael, an opinion writer for and he says the NAACP has lost its focus. He's also the author of the upcoming book "The Denzel Principle."

Also with us is Hilary Shelton, the organization's vice president for advocacy. Gentlemen, thanks for joining us. I'll have to start with you, Mr. Shelton. I looked up the numbers, the NAACP has about 500,000 members. There are 37 million African-Americans. You certainly can't claim to represent all African-Americans with that kind of a demographic, so tell us what you're doing to become more relevant.

HILARY SHELTON, VP, NAACP: Well, we continue to move forward in building our membership base, but keep in mind, even though there are 500,000 we can document, there are many, many forward of that number that believe that they are members of the NAACP and certainly the influence goes far beyond that.

You see, the NAACP is a very helpful tool in moving issues forward. The biggest problem we have with relevancy is not what we're doing, it's how we're selling what we're doing or promoting what we're doing in the broader community. It's certainly something we're working very hard to address. To utilizing a lot of the new media to promote many of the things we're working on and how we're working on them and better ways of engaging, not only our membership, but communities throughout the country.

PILGRIM: Mr. Izrael, your thoughts on that?

JIMI IZRAEL, THEROOT.COM: Well, you know, I think it's important they are finally getting on the boat and they've discovered the Internet and they're engaging young people, but you know, the NAACP has had some challenges with focus. They've had some problems with admitted fights -- infights in administration.

And you know what? Only 52 percent of the money that they take in goes to -- to actual programs. The rest of it goes for administrative overhead. You know what? I think that for me personally, organization like the NAACP, they kind of encourage people to run towards them and not think for themselves. But I think thinking for yourself is less expensive and has less administrative overhead.

SHELTON: Well, first, the administrative overhead issues are very interesting when you're talking about an organization whose overhead, of course, is how it does business. That is, overhead is staffing, overhead is infrastructure, overhead is making sure that the information can get out, utilizing the media itself. So, when you talk about 52 percent, you're really inaccurate in very many ways.

But, what's very important about the NAACP and something we actually argue, we talked about why it was so important for even George Bush, when he was president, to spend time with us, is that we have an infrastructure that allows the real issues and concerns of the community to come up, recognize that everything in this country gets done at one of three levels or some combination thereof, that is, everything is through the federal at the national level, it's statewide at the state level or its municipal, community or whatever the case may very well be, as we talk about the community and city level.

So, very well, we have an infrastructure that very well supports that kind of approach. That's why we have been so successful in reauthorizing the Voting Rights Act and passing legislation to address issues like hate crimes and need to move beyond that. Our ability to be able to make sure that people can actually vote with election reform issue concerns. We're advancing issues around opportunity and access to health care, education.

And we were the first ones, quite frankly, to come out and begin talking about the housing crisis, the mortgage crisis that we understand it to be today. When we met with Ben Bernanke two years ago and sat down and told him we needed a moratorium on foreclosures before Wall Street started screaming, we talked to him about addressing the issues because, like so many other times in the past, the African-American community is proven to be the canary in the mine shaft. We saw this breakdown coming and we moved to address it.

PILGRIM: One, brief point. But, you know, I have to tell you, while we're talking about all the social issues that you addressed, let me bring up a couple of them, and there are enormous challenges in the African-American community. And we have 38 percent of prison inmates are black, compared to 37 percent which is are white.

The high school dropout rated among black students, 8.4 percent compared to 5.3 percent for whites. The unemployment rate for blacks in June was 21.4 percent, the rate for white, 8.7 percent. Let's talk about the organization's ability to address some of these social ills and connect with, actually, people that are experiencing these in the communities. How is the NAACP doing this now?

SHELTON: At a number of different levels. No. 1, making sure that there's fairness in how hiring is done, actually no disproportion in any given day. If you look at the unemployment rate, you'll see that even as we're creeping up in two digits with the overall community, the African-American community spent over twice that, beyond that, before that. We recognized that and moved to adjust concerns to make sure, No. 1, there is fairness and but also to make sure that there's job opportunities and education opportunities that gateway into employment and other things that are important as we looked at the African-American community...

PILGRIM: I hate to cut you off, but I need to get Mr. Izrael in.

Do you think they're doing an adequate job -- Mr. Izrael.

IZRAEL: You know what? The NAACP does a lot of good and I wouldn't be honest if I didn't say that wasn't true. My problem is that there's a real lack of focus. You hear them talking about they are doing all these things at once. And you know what? You can only do so many things at once well.

You know, I'm really encouraged to hear Ben Jealous talk about they're going to be focused on education and criminal justice. You know, I'd like to see them focus on education, because education leads to criminal justice issues, you know, and the NAACP has always just lacked this focus. You know, and he's letting you know that right now, he's telling you they got all these different irons in the fire, you know, but just focus on doing one thing really well and eradicating one problem. One point at a time.

PILGRIM: Gentlemen, I think we agree that the goals are the same and the methods are different. Hilary Shelton and Jimi Izrael, thank you for very much for both being with us.

SHELTON: It's a pleasure.

IZRAEL: Keep rocking, Kitty.

PILGRIM: I will.

Just ahead, President Obama and the pope on immigration reform. Will their discussions carry any weight in Washington? We'll have that topic, and much more, with three of the country's best political minds.

Also, GM car czar, Bob Lutz, he's staying, reversing his decision to retire, and he'll join me next on GM's first day as a new company.


PILGRIM: A new, slimmed-down General Motors, today, emerged from bankruptcy protection. Now, this company will sell or close some of the best-known brands, that includes Saab, Saturn and Pontiac. Now, one of GM's most prized assets, however, will be staying. Vice chairman Bob Lutz deciding not to retire as planned. Bill Tucker has our report.


BILL TUCKER, CNN NEWS CORRESPONDENT (voice-over): After a six- week sprint through bankruptcy, general Motors emerged a new company. The new GM, a leaner, more focused company.

FRITZ HENDERSON, CEO, GENERAL MOTORS: Our vision is clear, to design, build and sell the best vehicles in the world, by focusing on, for example, in the U.S., four core brands: Chevrolet, Cadillac, Buick, and GMC.

TUCKER: The changes mean GM's U.S. workforce will shrink, to 64,000 by year's end, down from 91,000 at the start of the year. Henderson also announced sweeping management changes. The man who championed the development of the Dodge, Viper, the new Chevy, Malibu, the new Camaro, the Cadillac CTS, is back at GM.

HENDERSON: I'm happy to announce that today we're unretiring Bob Lutz.

TUCKER: The 77 years old, Lutz is something of an anomaly in today's post-bailout car world. His nearly 50 years in the business at Ford, Chrysler, BMW and GM is in stark contrast to the lack of car- building experience of GM's new chairman, or the government-appointed car czar, whose an investment banker, and before that, a journalist, but never a manufacturer. Industry experts applaud the news.

JOHN WOLKONOWICZ, GLOBAL INSIGHT: Bob Lutz is GM's secret weapon. CEOs that have never built cars are not a good thing. Maybe the -- the business school textbooks say they are, but I'm not one for textbook anything. This is the real world and experience pays off in the real world. Bob Lutz is probably the best, most qualified auto executive on the face of the earth, today.

TUCKER: Qualified and controversial. Bob Lutz is the man who once said global warming is a total crock of (EXPLETIVE DELETED). He stands by that statement, and yet he's also the driving force behind the extended-range electric vehicle, the Chevy, Volt, and its non- electric companion vehicle, the Chevy Cruze, which is expected to get 45 miles per gallon.


Now, in the announcement today, CEO Fritz Henderson said that GM deeply appreciates the support and money it's received from taxpayers. The new company will keep 3,600 of its 6,000 U.S. dealerships and, Kitty, it will close 14 U.S. plants.

PILGRIM: Thanks very much, Bill Tucker. Thanks, Bill.

Well, joining me now from Detroit, Michigan, the unretiring General Motors vice chairman, Bob Lutz.

And thanks for being with us, sir.

LUTZ: Hey, thanks for having me and that was quite a eulogy and my parents would have been proud if they were still around.

PILGRIM: Oh, well, Bill Tucker, I think, told it well. You know, you are the ultimate car guy. Tell us what you think the GM is going to look like? It came out of bankruptcy very, very quickly, tell me what it's going to look like going forward.

LUTZ: Well, it's going to be a very fast-moving company. It's going to be a lot much risk averse. It's going to be run, rather than being run by several large committees, like the North American Strategy Board, the Automotive Strategy Board, the Automotive Product Board and so forth, all of those committees are going to be gone and it's going to be run by a small executive committee of about seven members.

We're going to deal with all customer, market, and product decisions once a week in Friday meetings. We'll achieve very fast decision making and, you know, when you move fast, you're going to make some mistakes, but when you move slowly, you produce only mistakes, because by the time the decision is made, it's -- it's -- it's beyond its best-buy date.

PILGRIM: You know, let's talk about government in this equation. Government's pumped $30 billion into GM, it will pay $20 billion by the end of this year to get it through the reorganization. I mean, is the government effectively running GM at this point?

LUTZ: No. No. And that's a -- that's a common misperception that now that we're -- we have received equity from the government, we're going to be having to do what the government says. We are -- we are -- we are being run like any other automobile company, except that the government, instead of giving us loans on which we would have had to pay expensive interest, which would have sapped our earning power, gave us the money in the form of equity, which the government over time will sell down that equity in order to repay themselves and we'll replace it with an IPO, with fresh equity.

But I want to make it -- I want to make one thing perfectly clear, the automotive task force that I -- all of us have met with several times, I have the ultimate respect for these. Whether it's Steve Rattner, Ron Bloom or Harry Wilson, these are -- OK, they're financial re-engineering or they're workout people, but they know their jobs, and they really learned about the company and they made sure that the new -- the new General Motors that they were helping to craft would be lean, debt free, focused on what it has to do, and now that -- now that we've got a new board, we've emerged as a new company, the whole government influence is going to fade into the background...


PILGRIM: Yeah. How long it -- how long will it -- sorry, how long will it be until taxpayers own this company -- I mean, the Treasury has -- is the biggest stockholder, right?

LUTZ: Yeah. Yeah. Of course, they've got 70 percent, but that's very hard to predict, because it depends what the economy is going to do. You know, right now the selling rate in the United States is about 9.8 million, seasonally adjusted rate. A couple years ago we were at 17 million, so, the market is down by 50 percent almost. And I want to -- I want to remind everybody, it's not just General Motors' sales that were down, everybody's sales are down 50 percent, including the vaunted -- the vaunted Japanese.

I mean, Toyota is bleeding cash and money faster than we are. They just started out with a bigger pile. So, if the economy doesn't recover, it's obviously going to be longer for us to be able to pay it back. If we have some sort of recovery and go to 12.5 million or 13 million units, we will make a lot of money and we'll pay it back very fast. And I'll tell you, all of us are focused on one goal, including the government, we want the same thing, they want this company reprivatized, highly effective, debt free with a very competitive wage rate.

PILGRIM: We wish you every success for the -- for the benefit of your company and for America. Thank you very much for being with us.

LUTZ: Yep.

PILGRIM: GM Vice Chairman Bob Lutz. Thank you.

LUTZ: Thank you very much.

PILGRIM: Still ahead, confirmation hearings for Supreme Court nominee, Sonia Sotomayor underway next week with a preview with three of the country's best political minds, we'll discuss it, next. (COMMERCIAL BREAK)

PILGRIM: Joining me now are three of the country's best political minds. We're joined by James Taranto, editor of the; political analyst and "Huffington Post" contributor, Keli Goff, and Democratic strategist, CNN contributor, Hank Sheinkopf.

Thanks for being with me. Let's talk about next week, spin it forward a little bit. Sotomayor confirmation hearings, is this going to be a circus? Hank, what do you think?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: The Republicans had better hope it's not a circus. I mean, Southern Republicans may want to make their points across to protect their own constituencies, but everybody else, not a good place to have a war. Bad field of battle.

PILGRIM: You know, we have Justice Ruth Bader Ginsburg said: it's ridiculous people have made such a big deal about Sotomayor's comments about Latino women and their experience. Keli, as a woman, what do you think?

KELI GOFF, HUFFINGTON POST: Oh, as a woman, I think that Justice Ginsburg is correct. And I hate to break it to the GOP, but not only have they not been able to find any skeletons in Sotomayor's closet, it thing that looks like it's been kept by someone who has OCD, that's how clean it is. So, I think that this is going to be something where she pretty much sails through. I think that -- in "Politico" they even said that it's (INAUDIBLE) among most Republicans that this going to be smooth sailing for her.

PILGRIM: Certainly she'll be confirmed because there are 60 Democrats. I would like to see them question her.


JAMES TARANTO, OPINIONJOURNAL.COM: Well, certainly she'll be confirmed because there are 60 Democrats. I'd like to see the Republicans question her in an aggressive, but high-minded way about some of these things. Just because I think it's worth having the debate.

And on the famous wise Latino woman speech, there are things she said in that speech that were somewhat disconcerting, to the effect that, essentially, what she seemed to be saying was everyone has biases, and I think my biases make me a better judge.

Now, she said other things that were more reasonable. The speech was not a model of clarity or consistency and I just think it would be worth nailing down what she really thinks about these things.

GOFF: Look, Alito said he admired William F. Buckley in the "National Review." We know that all justices bring their own perspectives to the bench. That's just unrealistic to expect them not to. SHEINKOPF: Imagine what's going to happen if everybody is seen on television by the American public beating up a woman with a Latin surname who's a judge on the...

GOFF: And who's actually qualified.

SHEINKOPF: With a good record, by the way and qualified. Not so good for America.

TARANTO: Well, who said beating up? I said have a high-minded questioning.

GOFF: Debate.


PILGRIM: See, he was high-minded about it. Let's start another topic. A second stimulus package? And we basically haven't even seen the first one disbursed properly, yet. We have Joe Biden visiting Cincinnati, Ohio, to defend the current stimulus package. I think we have a clip of that. Let's listen.


JOE BIDEN (D), US VICE PRESIDENT: Our administration's financial stability plan and housing relief plan are attacking both the problems in the banking system in the financial industry, as well as housing. And there's solid evidence, solid evidence that both are taking hold.


PILGRIM: Now, we've done a lot of reporting on this on this broadcast over the last week and $57 billion of the $787 billion stimulus has been distributed so far, disbursed. That's not a lot, and yet they're talking about a second stimulus plan. Hank, thoughts on this.

SHEINKOPF: It hasn't all been distributes, in the first case. Why don't we see what happens. What they're really worried about, I think, is the midterm elections. Getting (INAUDIBLE) and circuses (ph) rolling, rather than accomplishment is always a good way to keep people happy. That's kind of what this may be about.

GOFF: I don't know how they can even be talking about this when Harry Reid has made it clear that he doesn't support it. So, I'm not exactly sure where they're planning to get the votes for this if the leader of the Senate said he's not going to support it.

TARANTO: A few months ago, Bob Herbert, a columnist for the "New York Times" wrote, "We appear to be doubling down on a policy that has failed." Now, he was writing about a completely different subject, but I was reminded of those words by the second stimulus debate.


SHEINKOPF: Excellent. GOFF: He has Buffett on his side, but I think that he needs his party on his side, not just Warren Buffett.

PILGRIM: OK, let's talk about President Obama. He's been on a week-long trip, huge agenda: climate change, global economy, international security, fighting world hunger, everything, kitchen sink kind of trip. And yet his poll numbers are not that good. Let's look -- a new poll shows Americans are losing confidence in President Obama, and if we put them up, does President Obama have a plan for solving the country's problems, domestic problems, after this global trip, 53 percent say yes, and that is down from 64 percent in February. Hank, what do you think about that?

SHEINKOPF: Not such great news, but frankly, it's early in the term and midterm elections are a year and change away. When the people see something happen in the economy that starts to move a little bit better, those numbers are going to go up. And it's really about the economy; nothing much has changed since then.

GOFF: Well, it's unfortunate because General Powell's comments on this subject kind of got overshadowed by Sarah Palin's surprise announcement, but he said that he was concerned, not worried, but concerned, that the president had too much plate at one time. And I actually am inclined to agree with him and I think...

PILGRIM: You're talking about Colin Powell?

GOFF: Yes, General Colin Powell's statement saying he's concerned the president had too much on his plate at one time. And I'm inclined to agree with him. I think these numbers are reflecting that lots of people are starting to agree with him on that.


TARANTO: Well, I agree that he has too much on his plate, mostly because he's been overambitious, wanting to remake the health care system and global warming and all this other stuff when there's an economic crisis to deal with. But, on the other hand, I wouldn't make too much of these polls. I mean, his numbers were very high when he came in. They were going to come down, simply the law of gravity. I think these numbers are probably pretty normal for a president at this point in his term.

PILGRIM: OK, Keli Goff, Hank Sheinkopf, James Taranto, thanks very much.

Coming up at the top of the hour, Campbell Brown - Campbell.

CAMPBELL BROWN, CNN NEWS ANCHOR: Hey, there, Kitty. Coming up, we're going to talk about the Michael Jackson investigation. The very latest, was foul play a factor in Jackson's death? You're going to hear his father's stunning allegations.

We also have new information about Jackson's long history of drug abuse. I'll talk with one of his close friends about what was really going on in the weeks just before the pop star died. All of that ahead, plus our "Mash-Up" the rest of the day's top stories -- Kitty.

PILGRIM: All right, thanks very much, Campbell Brown.

Still ahead, "Heroes." Tonight, the dramatic story of one young soldier who braved enemy fire to help save lives of his fellow comrades. Stay with us.


PILGRIM: A deadly week in Afghanistan for U.S. troops and Afghan civilians. A truck bomb, south of Kabul, yesterday, killed 25 civilians, two American soldiers were killed Wednesday by a roadside bomb and seven killed on Monday. Now, President Obama has ordered another 21,000 troops into Afghanistan and expects the total number in the region to hit 68,000 by the end of the year.

Tonight, in "Heroes," we honor some of our soldiers who have fought in Afghanistan. Army Reserve Specialist David Hutchinson was just a few days into his tour when his convoy was attacked.


(voice-over): On a cloudless Texas summer day, the 65th anniversary of D-Day, men and women in uniform gathered to honor a new generation of heroes. Among them, Army Reserve Specialist David Hutchinson.

Hutchinson was deployed to eastern Afghanistan in May 2008 as part of a security detail for bridge and road reconstruction. His first week on the ground, his first convoy out, he and his team came under attack from 20 Afghan insurgents.

SPC DAVID HUTCHINSON, U.S. ARMY RESERVE: They started shooting anything from AK-47s, machine guns, RPGs, there were, I counted, three or four RPGs that missed the truck, initially.

PILGRIM: From atop his Humvee, Hutchinson held his gunner and position. He took out the insurgent's own machine gun net and made himself the focus of enemy fire.

HUTCHINSON: And it was almost instantaneously after I stopped that the truck was struck with two RPGs. The blast initially knocked me down into the truck, it took my legs out from under me and I was laid flat inside the truck.

PILGRIM: Hutchinson ignored his own wounds to care for his first sergeant who was more seriously injured. With a medic's help, they made it to the MEDEVAC where Hutchinson began his long, painful recovery. Doctors in Afghanistan and at Brooke Army Hospital in San Antonio, removed shrapnel from his legs, repaired nerve and muscle damage and ultimately helped him learn to walk again.

REP CHET EDWARDS (D), TEXAS: Extraordinary courage, loyalty, and selfless service under fire.

PILGRIM: One year later, this 22-year-old from Humboldt, Texas, was awarded the Silver Star, an extremely rare honor for a reservist.

HUTCHINSON: You never know when it's your time. You couldn't help but think well, how -- what it could have ended up with. I mean, First sergeant could have died, I could have died, anybody in the convoy could have died. I mean, something bad did happen, but everybody came out alive and like I said, that's what it's about.


PILGRIM: The Army says Hutchinson's heroic actions on that day helped save the lives of all 17 soldiers in his convoy.

Well, join Lou on the radio, go to to find your local listings and follow Lou on Twitter @LouDobbsNews.

Thanks for being with us.

Now, Campbell Brown.