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Lou Dobbs Tonight

Obama's Defining Moment; Congress Leaves Town; Who Gets the Cash?

Aired July 31, 2009 - 19:00   ET


KITTY PILGRIM, GUEST HOST: Thanks, John. Good evening everybody.

President Obama and his cabinet tonight begin a two-day strategy session. Now this comes at a potentially defining moment for the Obama administration as the president's poll ratings sink.

Congressmen heading out of town for their August recess. Democrats are likely to face a barrage of protests from opponents of President Obama's health care plan.

And Congress rushes to bail out the "cash for clunkers" program before it runs out of money, but that program could be benefiting foreign carmakers more than American companies.

But first President Obama tonight is launching a sweeping review of his administration's performance. The president is holding a two- day strategy session with his cabinet to discuss the administration's priorities. Now, this review comes as the latest polls indicate the president's approval ratings have slumped to just over 50 percent. The president is facing rising opposition to his health care agenda and new skepticism about his economic policies -- Dan Lothian reports from the White House.


DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (voice-over): With the economy on life support when Mr. Obama came into office six months ago, the administration is taking credit for bringing it back from the brink of disaster.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We were in a position where we could have gone into a great depression. I think those fears have abated.

LOTHIAN: One reason, they say, a $787 billion stimulus plan.

OBAMA: This and other difficult, but important steps that we've taken over the last six months have helped us put the brakes on the recession.

LOTHIAN: But that stimulus plan which Republicans thought was wasting taxpayers' dollars is perhaps the biggest example of what hasn't happened so far -- wide scale bipartisanship. Mr. Obama vowed to change the way Washington works. OBAMA: Surely there's got to be some capacity for us to work together...

LOTHIAN: But has had to fall back on his own party to get things done.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: He was not under the illusion that change was going to come to this town easily.

LOTHIAN: The president has pulled back in Iraq, fulfilling a campaign promise, but troops are now fighting extremists in Afghanistan. He's announced the closing of the Guantanamo Bay detention facility, but making that happen has been sticky, as is Mr. Obama's push for health care reform, which some say if he fails it could undermine his presidency. Politico's Mike Allen says that's way overstated.

MIKE ALLEN, POLITICO: The chance that some health care bill is going to define his presidency is zero but at the moment he's way out on that limb and he needs a win.

LOTHIAN: If the White House is keeping track of wins and losses some say image would be in the "W" column.

UNIDENTIFIED MALE: He's made Americans feel better about themselves and he delivered on his campaign promise of giving America a different face overseas.


LOTHIAN: Now, this administration has always said that they don't care much for polls unless of course those poll numbers are positive but one would think that they're paying a lot of attention to what has happened since the president came into the office. As you pointed out just a short time ago, the president came in with a little bit more than 60 percent approval rating. The latest Poll of Polls by CNN has him about 54 percent -- Kitty?

PILGRIM: Thanks very much, Dan Lothian. Thanks, Dan.

Well we do have some good news on the economic. The pace of economic decline slowed sharply in the second quarter. The Growth Domestic Product declined by just one percent. That's after tumbling more than six percent in the first quarter. Now those GDP numbers helped lift the stock market. The Dow Jones industrial average today up 17 points. This month was the best in July for the Dow in two decades.

A big majority of Americans do not believe that the economy is improving whatever the president says. In fact, a new Gallup poll says 60 percent of Americans believe the economy is getting worse. Only 38 percent believe it's getting better.

Other polls say a rising number of Americans are refusing to support President Obama's health care plan. Now many believe the president is doing a bad job selling the plan. The latest CNN Poll of Polls says 45 percent of Americans disapprove of the way the president is handling health care; 43 percent approve.

Democratic Party leaders tonight claiming to have broken the deadlock in their own party over health care legislation, and that deal will supposedly allow the bill to go to the full House, but only after the lawmakers' summer vacation, which began today -- Dana Bash reports from Washington.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): After the last vote, the exodus, House members rushing home for the entire month of August. And if you're a vulnerable Democrat, prepare for the political tsunami on health care.

REP. TOM PERRIELLO (D), VIRGINIA: They're going to get the first shot in, the 30-second attack, but the more people know the more they like what we're doing and that's going to be good for us over the long term.

BASH: Tom Perriello is a freshman Democrat who only won his conservative Virginia district by two-tenths of one percentage point. He's undecided about his party's health care plan and will use August with his constituents to decide.

UNIDENTIFIED MALE: Eighteen counties, 18 (INAUDIBLE) towns and meetings with elected officials and doctors and others. Road testing this, I haven't committed on the bill.

BASH: Democratic leaders are hoping to defend Democrats like Perriello from withering Republican attacks by arming them with a media strategy from power points to simple message ideas, hold insurance companies accountable, remove them from between you and your doctor. To get their message out Democratic leaders suggest using town halls, Twitter, Facebook. Pennsylvania Democrat Jason Altmire rolls his eyes at those instructions.

REP. JASON ALTMIRE (D), PENNSYLVANIA: The House bill is in my opinion flawed.

BASH: He's a vulnerable Democrat who voted against his party's health care plan and committee and says Democratic leaders have put Democrats like him from conservative districts in a tough spot by including controversial proposals in their health care plan like a tax increase.

ALTMIRE: Go back to their district and explain to their constituents why they took the politically unpopular vote. It just was tone deaf to me.

BASH: He insists he's not worried about the onslaught of ads, calls and protests that await him at home.

UNIDENTIFIED MALE: At least it's encouraging debate. We took the August recess to allow the country's voice to be heard.

(END VIDEOTAPE) BASH: Republicans and Democrats are both gearing up for this month-long congressional recess as if it were a political campaign, especially when it comes to the TV ads they're planning to run in swing districts. In fact, one House Democratic leader said they're trying to make sure their health care proposal doesn't get, quote, "swift voted", during the month of August -- Kitty.

PILGRIM: Thanks very much, Dana Bash. Thanks, Dana.

BASH: Thank you.

PILGRIM: Turning overseas -- three American tourists are reportedly in Iranian custody tonight. Now a Kurdish official told CNN the three may have strayed across the Iraq/Iran border while on a hiking trip in the Kurdish region of northern Iraq. The U.S. embassy in Baghdad said it was checking to reports. It could not confirm them.

In Afghanistan two more of our troops have been killed. Forty- four of our troops have been killed in Afghanistan this month. It has been the deadliest month of the entire war for our servicemen and women. Meanwhile, the U.S. commander in Afghanistan, General Stanley McChrystal is expected to ask for more troops.

The United States already has more than 60,000 troops in Afghanistan. That is double the number of troops who were there when President Obama took office. One hundred and thirty thousand of our troops still in Iraq -- the violence continues. Today at least 29 Iraqis were killed in a wave of bomb attacks against Shiite mosques in Baghdad. Now these bombings appear to target worshippers leaving the mosques.

U.S. combat troops withdrew from Iraqi cities at the end of last month. The U.S. Navy has conducted what the Defense Department says is a successful missile test, missile defense test. Now, the USS Hopper fired an interceptor missile at a dummy warhead 100 miles above the Pacific Ocean. The Pentagon says 19 out of 23 tests of the Aegis missile defense system have succeeded.

And still to come, a "Face Off" over health care and President Obama's sinking poll numbers. Also the House of Representatives votes to restrict the skyrocketing pay of Wall Street executives. And lawmakers bail out "cash for clunkers" program.


UNIDENTIFIED MALE: It's a success that there's concern that too many people are buying cars. That's a good thing.


PILGRIM: We'll tell you why this program may not be such a good thing after all.

(COMMERCIAL BREAK) PILGRIM: Well some of this country's top corporate executives are discovering there's no such thing as a free lunch especially at the White House. It appears White House staffers are collecting credit card numbers from CEOs who dine with President Obama. Now this practice apparently began last month when the CEOs of Xerox, Coca- Cola, AT&T and Honeywell International had lunch with the president. The White House says it's all about trying to prevent any possible conflicts of interest.

There is no embarrassment on Wall Street though about being on the receiving side of government largesse. New York Attorney General Andrew Cuomo says that Wall Street employees are paid well even when the banks do poorly and they receive huge government bailouts.

Citigroup, for example, had a loss of $27 billion last year, received $45 billion in bailout money but it still paid out more than $5 billion in bonuses. And meanwhile, Goldman Sachs made a profit of just over $2 billion last year. Goldman paid out even more in bonuses to its employees, almost $5 billion. JPMorgan Chase, Morgan Stanley also handed out generous bonuses that exceeded their annual profits.

Many in Congress have had enough of Wall Street's massive pay packages and congressmen today voted to restrict pay deals that in their opinion encourage excessive risk. Financial Services Chairman Congressman Barney Frank explained why he believes pay curbs are necessary.


REP. BARNEY FRANK (D), FINANCIAL SERVICES CHAIRMAN: What's excessive risk? Excessive risk is when the people who take the risk pay no penalty when it goes wrong. When they have a heads they win- tails they break even situation when the company loses money and the economy may suffer but the decision-makers do not.


PILGRIM: So far the White House and Senate Democrats have not declared their support for this bill.

The House is refusing to expand an investigation into whether more members of Congress received preferential mortgage deals, House Democrats deciding not to subpoena records of Countrywide Financial. That's one of the companies at the center of the mortgage crisis.

Critics say that Democratic Senators Chris Dodd and Kent Conrad received so-called sweetheart deals from Countrywide. Both deny seeking special treatment. The senators were friends of Angelo -- that is Angelo Mozilo, the former CEO of Countrywide.

The House today agreed to spend an additional $2 billion on the "cash for clunkers" program. The program went through the original $1 billion in funding in less than a week. But there are new questions tonight about who really benefits from the program. Bill Tucker reports.


UNIDENTIFIED MALE: ... the bill is passed without objection...

BILL TUCKER, CNN CORRESPONDENT (voice-over): It took the House just a few hours to pump an additional $2 billion into the "cash for clunkers" program and send the bill to the Senate. And the president praised their quick action.

OBAMA: Thanks to quick bipartisan responses we're doing everything possible to continue this program and to continue helping consumers and the auto industry contribute to our recovery.

TUCKER: Washington is in love with the "cash for clunkers" program.

GIBBS: It's a success that there's concern that too many people are buying cars. That's a good thing.

TUCKER: Dealers are enthusiastic.

UNIDENTIFIED MALE: It's going to be a huge success. You know, I can't wait to do another 100 of them.

TUCKER: But what is all this enthusiasm based on? A survey by the National Automobile Dealers Association of 2,000 dealers reporting an average of 13 deals ready to be approved under the program. (INAUDIBLE) extrapolated that data out to the more than 23,000 dealers participating in the program and declared the program's $1 billion budget to be spent.

REBECCA LINDLAND, GLOBAL INSIGHT: There's definitely reason to just take a deep breath for a moment. If you know Congress goes ahead next week and we get final approval from the Senate on this two billion more dollars, that's great, but it -- everything just seems a little bit rushed.

TUCKER: On the Senate side, there appears to be some who would like to slow it down. Senators Dianne Feinstein and Susan Collins are asking the Department of Transportation for a report on exactly what vehicles are being traded in and bought. The CEO of Auto Nation told "CNN MONEY" that demand is tilting in favor of foreign carmakers, yet "cash for clunkers" was designed to put more fuel-efficient vehicles on the road and boost the U.S. auto industry.


TUCKER: Now the Senate will have a key piece of data to digest before its votes on whether to increase funding for the "cash for clunkers" program on Monday. That's when auto sales for July are released, which will measure whether the "cash for clunkers" program has truly helped to contribute to an economic recovery.

We need to underline one simple point that seems to get lost in all of this enthusiasm today. Kitty, nobody has any idea of how much that initial $1 billion has been spent or committed. This is all based on extrapolated data and they're running to spend another $2 billion.

PILGRIM: A billion in a week -- $2 billion in what...

TUCKER: (INAUDIBLE) three weeks and a lot of stimulus, I don't know.

PILGRIM: Unbelievable numbers and all these deals aren't approved yet, right?

TUCKER: No, all of these deals -- that's why we don't know how much money has really truly been spent. They haven't been approved. They're not -- there's no restrictions by the way on who the money goes to, so it seems to be benefiting foreign automakers more than U.S. automakers, which is legal under this deal because there are no restrictions and it seems to go counter against at least the spirit of the program initially.

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

Honda today expanded a recall of some Accord and Civic and Acura models. Now this recall covers 440,000 vehicles for a potential air bag defect. Some 2001 Honda Civics and Accords are affected. Acura TL model sold between 2002 and 2003 are also affected. Honda tells CNN the potential defect has resulted in one known death and six known injuries.

Now, to hear Lou's thoughts on all of these issues join him on the radio Monday through Friday for "The Lou Dobbs Show" 2:00 to 4:00 p.m. each afternoon on WOR 710 Radio in New York and go to to find the local listings for "The Lou Dobbs Show" on the radio. You can also follow Lou at loudobbsnews on

Coming up, federal stimulus dollars, your money funding erotic theater, also the health care debate down President Obama's standing with the American people? That's the topic of tonight's "Face Off" and Senate lawmakers taking desperate steps to close the widening budget gaps. They're literally selling the kitchen sink.


PILGRIM: A new debate has erupted over how some of the $800 billion in federal stimulus money is being spent. The National Endowment for the Arts was given $50 million in stimulus funds to dole out to needy artists and organizations but some of the more than 600 grants have gone to groups that feature sexually explicit and violent content. For example, a theater in San Francisco that features a weekly sexually explicit review received $25,000 from the NEA. And a San Francisco movie house featuring, for example, what it describes as underground art porno film received $50,000 in taxpayer money.

And many states tonight are facing massive budget deficits. They're considering desperate measures to raise money. State lawmakers are resorting to all sorts of plans and accounting measures trying to close their budget gaps. Casey Wian reports.

(BEGIN VIDEOTAPE) CASEY WIAN, CNN CORRESPONDENT (voice-over): Lawmakers in Arizona are struggling to close a $3.4 billion budget deficit. To avoid even greater spending cuts and tax increases they're proposing to sell the Capitol building where they work. Along with the sale and leaseback of other state property Arizona lawmakers estimate they can raise more than $700 million.

KIRK ADAMS (R), ARIZONA ASSEMBLY SPEAKER: It is a technique that is being used all across the country by many, many states to help balance their budgets. It is also a mechanism that we had no disagreement with on the Democratic side of the aisle.

WIAN: Washington State Governor Chris Gregoire signed a budget that closed part of its deficit by calculating the savings in pension payouts based on state employees working longer while not recognizing that they're also likely to live longer. Alabama eliminated funding for school supplies but the costs will be shifted to already cash- strapped local school districts.

California which just reached a deal to close a record $24 billion deficit took budget smoke and mirrors to a new level. The state will save more than a billion dollars on paper by delaying the paychecks of state workers by one day, from June 30th to July 1st pushing the costs over to the next fiscal year.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: If you have to make quick adjustments and you have to go and quickly make the necessary cuts and you know live within your means.

WIAN: California is also collecting taxes sooner to inflate this year's revenue and it's banking on selling part of the state-funded workers' compensation insurance business for a billion dollars, a deal the legislature's own independent analyst concludes is risky and not likely to happen in time.

PROF. RICHARD BRIFFAULT, COLUMBIA UNIVERSITY: What's worse, the kind of manipulation and deception and sort of really, you know, shady budgetary tactics that these things represent or, you know, tax increases or further spending cuts during the middle of recession.

WIAN: Briffault says the maneuvers are legal but risky especially if the recession persists and state revenues don't rebound quickly.


WIAN: The National Conference of State Legislature says states faced budget short falls totaling $142 billion this year. Using gimmicks to close those gaps is especially risky for states like California which face structural budget deficits that are likely to continue for the foreseeable future -- Kitty.

PILGRIM: Thanks very much Casey Wian. Thanks, Casey.

We have a safe landing today for the shuttle "Endeavour". Now the shuttle with seven astronauts onboard touched down at the Kennedy Space Center after a 16-day mission. The astronauts delivered critical spare parts and among other things to the international space station. The crew also brought back a Japanese astronaut who had been in orbit since March. Well, seven more shuttle flights remain before the fleet is retired next year.

Coming up, congressmen go on vacation, leaving much of the people's business unfinished, also new pressure to force employers to use E-Verify and stop hiring illegal workers. And in our "Face Off" debate we'll examine President Obama's health care plan and his plunging poll numbers.


PILGRIM: One town in rural Pennsylvania has seen its health care costs fall sharply. It's Danville, Pennsylvania. It is home to the Geisinger Medical Center. The Obama administration points to Geisinger as the proof that the nation's health care system can be made more effective and efficient, but can this model work for the nation as a whole. Jessica Yellin reports.


UNIDENTIFIED MALE: Do you feel me pushing?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Cardiologist Peter Berger (ph) is looking inside a patient's heart and getting graded on his work.

UNIDENTIFIED MALE: We're in the heart and we're taking some pictures.

YELLIN: The grade is based not just on the success of this procedure but on the overall care his patient receives, sometimes up to months later.

DR. GLENN STEELE, GEISINGER HEALTH SYSTEM CEO: Everybody that's involved in the care is focused on the outcome, not their piece of the action.

YELLIN: It's part of a radical new approach to medicine that's made Geisinger Health System an Obama administration poster child for reform. Geisinger has cut costs and improved quality by standardizing how procedures are done, developing a team approach and emphasizing preventive and follow-up care.

STEELE: All of those things are thought or have been proven to be related to the probability of you having a perfect outcome.

YELLIN: Some of their innovations -- checklist. The medical team follows steps to ensure there are no mistakes like making sure the right patient is on the table.

UNIDENTIFIED MALE: Can you tell me when your birthday is?

YELLIN: Another innovation -- a warranty -- instead of charging for each test or procedure, patients can pay a flat fee for treating their heart condition. If there are any complications, the patient gets follow-up care for free.

DR. PETER BERGER, CARDIOLOGIST: This warranty system just provides additional incentive for us to do the right thing.

YELLIN: A third innovation -- patient partnering -- a nurse is assigned a patient with a chronic condition and checks in regularly. Nurses can even get a readout of a patient's weight every day, if he gains weight...

JAMES CONNELLY, PATIENT: Dan's going to be on the phone the next morning looking for an explanation.

YELLIN: According to Geisinger, partnering has led to a huge decrease in hospitalizations. Dr. Berger says these innovations have helped make his patients healthier and Geisinger says in some instances they've saved up to seven percent a year.


YELLIN: Now, the question, Kitty, is can this team approach be duplicated nationally. Geisinger's doctors say well some parts of their system will be duplicated more easily than others. For example, it might be easier to get doctors around the nation to adopt electronic medical records but probably harder to get primary care physicians, nurses, and specialists all coordinating their care together and really changing the way they practice medicine -- Kitty.

PILGRIM: Very impressive, nevertheless. Thanks very much, Jessica Yellin.

Well, as we have reported, public support for the president's health care plan is dwindling. His approval ratings are also declining. And so is the health care responsible for Obama's sliding poll numbers. And that is the subject in tonight's face-off.

Joining me now, Matt Lewis from, and Karen Finney, a former director of communications at the Democratic National Committee.

And thanks for being with us.

You know, I would like to actually just cite the poll numbers we're talking about just to start. And this is the latest Rasmussen presidential tracking poll. And it really does show a clear -- clear shift in the nation's affection towards President Obama.

And it's a sample of likely voters. You have 39 percent strongly disapprove of the job that the president is doing. Twenty-eight percent strongly approve. You can see these two lines actually crisscross. It's been an absolute flip-flop.

Matt, what -- what's your thought on this?

MATT LEWIS, POLITICSDAILY.COM: Well, I think it's a variety of reasons. I think, first of all, the policy, if you look at it, and the possibility of rationing, which some people mock, but I have to tell you, it's a very real possibility if we get a national health care system.

I think a lot of Americans are also looking at the economy. We have lost something like 2.6 million jobs since President Obama was sworn in. And here he is trying this big health care effort, which the Congressional Budget Office and their scoring says it will actually increase the deficit.

And, lastly, I think, looking at his style and his leadership, where -- that's been lacking. The -- the press conference, he gave that big prime-time press conference last week. It fell flat. He failed to inspire. He failed to connect at an emotional level.

And, so, I think, when you combine those things, it's not surprising that -- that he hasn't had a good week.

PILGRIM: Karen...


PILGRIM: ... Matt is clearly saying it's his fault.

What do you think?



Well, obviously, there's not going be rationing of care. We have rationing of care now, because, if you're poor, and you don't have health insurance, you frankly don't get access to care.

Look, I think that if we take a look at these numbers, considering where the president was, you know, in the high 70s, you have to expect that things were going to stable out a little bit.

But let's also be honest. Whether you agree with what -- the way the president has done what he's done, he has had to take some pretty hard steps to stabilize the economy, to deal with our banking system, to get a handle on the housing crisis.

We had some moderately good economic news today. We're only in the first, you know, six months or so of the economic turnaround. Those are tough decisions that the president's had to make. And he's been willing to put his political capital out there to, you know, make those decisions, doing what's good for the country, and not so much worried about the poll numbers.

And then the other thing I find interesting in these -- these numbers when we talk about health care is that, when -- actually, when you start to ask people questions specific to some of the policy ideas, they do like those ideas. We know that 70 percent of Americans actually want a public health insurance option, and that includes about 50 percent of Republicans.

So, when you dig down to that sort of next layer, people are supportive of the individual proposals. There's obviously a lot of misinformation out there. And part of what we will see in August is a conversation with people to try and, you know, correct some of the misinformation and also talk -- and also hear from the American people.

PILGRIM: Karen -- Karen, well, you bring up health care. And this is, of course, very politically difficult. It didn't really help when President Clinton had some trouble with it, failed to push through health care reform.


PILGRIM: We have how the public is looking at the numbers when it comes to the president's handling of health care. And we have 43 percent approve, and 45 percent disapprove.

Matt, health care and your thoughts on -- on just tackling such a large issue so early in the presidency.

LEWIS: Right.

Well, I mean, there have been all sorts of problem, strategic problems, tactical problems. And, I mean, part of the problem here is that he said, we're going to get it done by August, we're going to pass a bill in the House and Senate.

He failed. The voters, I think, have punished him for that lack of leadership there and failing to deliver. I think he learned the wrong lesson from the Clinton years. Bill Clinton had very -- a lot of details. He tried to -- to sort of take his time. And Barack Obama's done the opposite. He's essentially outsourced it to Congress.

So, he's lost control over his message. He's lost control over it. And we have these committee chairmen who have been in Congress or the Senate for 30 or 40 years, and they're not so keen on this whippersnapper sort of telling them what to do.

So, I really think he's found himself in a defensive position. And I think that Harry Reid and Nancy Pelosi are calling the shots, not Barack Obama.


FINNEY: Well, obviously, I disagree with that.

I mean, let's -- but let's be clear. We have said from the beginning, the president said from the beginning we need to pass health care reform by the end of this year. And I think, if -- if we fail to do that, frankly, I think that the consequences will bear out in 2010. And it won't be just about the president. It will be about members of Congress.

I mean, this has been a problem for a long time. It's not like this kind of just came up out of thin air. And, so, I think the American people and the voters are going to hold members of Congress accountable for actually getting this done.

And to the point about dealing with health care, from -- he had to deal with health care reform. We know that the health care system in this country is intimately linked to many of the economic problems that we're facing. It's crippling small businesses. It's crippling our large businesses.

We know that, you know, a large percentage of the people who went bankrupt and lost their homes, why did they go bankrupt? Because of their health care costs. So, we know that that is just as intimately linked to parts of our economy as the banking system was and the housing system was.

So, he really didn't have a choice. Unfortunately, it was left undone, so this president stepped up to the plate and said, let's get this done.

PILGRIM: How do you think -- I would like to ask both of you, how do you think he's selling it? And let's, for a moment, listen to his prime-time news conference last week. There's a clip of this. And give me your assessment of -- of what you think.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I get letters every day from families that are being clobbered by health care costs. And they ask me, "Can you help?"

So I have got a middle-aged couple that will write me and they say, "Our daughter just found out she's got leukemia and, if I don't do something soon, we just either are going to go bankrupt or we're not going to be able to provide our daughter with the care that she needs."

And in a country like ours, that's not right.


PILGRIM: We have seen him give speeches like this, give examples. We have seen him in -- in sort of forum settings with real citizens.

Matt, your thoughts on -- on how he's selling his plan.

LEWIS: Well, I mean, stylistically, it was horrible.

I have to tell you, when that press conference started, I was fully convinced that, when he was done, that health care would be a done deal. That was his opportunity. It was a prime-time press conference.

Ronald Reagan would have hit that out of the park. Bill Clinton would have knocked that out of the ballpark. Barack Obama, during the campaign, was often praised for being very logical, no-drama Obama. And there's a lot of good things about that. But he could not connect emotionally. You could see he was attempting to tell this story about this average person who was asking for health care. Ronald Reagan would have told that story. Bill Clinton would have had you tearing up. There were no tears when Barack Obama said that.

PILGRIM: All right.


FINNEY: Well, I mean, I -- look, I will agree and concede the point that I think Democrats need to get back on offense in talking about health care reform. And I don't think it needs to be just emotional points being made.

Again, I think there are economic points to be made here about why this is now an imperative. So, I do think we need -- and we need to get out there and combat some of the misinformation. There's not going to be rationing of care. They're not going to take away your Medicare. They're not..

LEWIS: That's not what...


LEWIS: ... bioethicists said in "The New York Times" magazine.

FINNEY: It's -- but that's ridiculous. You know, as the president has said from the beginning, if you like what you have, you can keep it.

LEWIS: Right. Right.


FINNEY: If you want something different, there will be a public option.

LEWIS: He said a lot of things about the bailout, too.

FINNEY: The Republicans basically -- Republicans are basically saying that they're against competition in the marketplace. That's a new stance for the Republican Party that I have not heard before, afraid of a little competition.


LEWIS: Competition with the government paid for by my tax dollars. That's not competition.


FINNEY: Look, we have three public health care systems...


LEWIS: Barack Obama voted against allowing...


FINNEY: Are you going to let me finish, or did you want to just keep interrupting?

We have three public health care systems already in this country. It's the VA system, the Medicare system, and the system that members of Congress participate in.

So, I think, in terms of -- and, actually, the VA system has the highest customer satisfaction of any program, whether it's in -- whether it's private or public.

I think that that's -- if that's good enough for our men and women in uniform -- obviously, they deserve the best -- it ought to be good enough for our -- the American people. Each one of us deserves access to that kind of care.

PILGRIM: Matt, last word for you.

LEWIS: Well, I think that, you know, President Obama voted against allowing Americans to negotiate from state to state.

Right now, if you want to buy health insurance, you have to buy it within your state. You can't cross state lines. That would be real competition. It would be something very easy that we could do that would bring down the cost of health care.

FINNEY: Actually, that's not true.


LEWIS: Are you going to interrupt me now?

FINNEY: Yes, I am, actually, because you're just -- because now what you're saying is -- it's not even true.


LEWIS: It wouldn't require socializing one-sixth of the U.S. economy.

FINNEY: Well, again, I think the idea of having a public health insurance option available to people is that it would -- you would have portability, and you would have a larger bargaining power to leverage low-cost -- the lowest costs available, both for small businesses and individual.

And, look, it costs us now that people are out there who don't have insurance. Your premiums and my premiums are actually thousands of dollars higher than they would be if those people accessed health care.

LEWIS: There are a lot of good plans that will fix this without nationalizing one-sixth of the U.S. economy. FINNEY: So, what's good enough for the U.S. Congress isn't good enough for the rest of the American people? They deserve something the rest of the American people don't?

PILGRIM: Matt, we have got to give you the last word. And this is truly the last word.


PILGRIM: Go ahead.

LEWIS: I believe in -- I believe in freedom and competition. And it's not competition when the government owns the program and it's subsidized by my tax dollars.

We need to have real competition. And I want real health care reform. Don't get me wrong. I'm not against health care reform. I'm against a national plan to essentially run health care, like the -- when you go to the -- the driver's -- to get your driver's license or go to the post office. It's not they're effective.


LEWIS: The DMV, that's the word.


PILGRIM: All right.

Matt Lewis...

LEWIS: Thank you.

PILGRIM: ... and Karen Finney, very nice, spirited debate.


PILGRIM: Thank you very much.

FINNEY: Thanks, Kitty.

Coming up: President Obama meets with his Cabinet to grade their performance after six months. Now our political panel will weigh in also next.

And 97 illegal immigrants found crammed into a refrigerated trailer in Arizona, we will have that story and much more -- next.


PILGRIM: Arizona authorities have discovered nearly 100 illegal immigrants crammed inside a refrigerated truck. Now, police stopped the truck for an equipment violation on Wednesday night near the border city of Nogales.

And, during a search, police found 97 illegal immigrants, including children as young as 9. And they were sitting among pallets of mangoes. And the temperature in the drunk was just about freezing, 34 degrees. No one was injured. Police arrested the driver. The illegal immigrants are in custody.

Well, there is a new bipartisan push in Congress to make the E- Verify program mandatory for all U.S. employers. E-Verify is the federal database used by employers to make sure potential employees are legally eligible to work. E-Verify is the federal government's single most successful program against illegal immigration, its accuracy rate, 99.6 percent.

Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The Internet- based system is called E-Verify. Employers input the names and personal information of prospective employee, and, within seconds, the system will tell if the person is authorized to work in the United States.

E-Verify is now a voluntary program, but a bipartisan group of lawmakers has proposed legislation that would make it mandatory for all U.S. employers, as a way to reduce the hiring of illegal workers.

REP. HEATH SHULER (D), NORTH CAROLINA: With high unemployment, half-a-million people losing their jobs every day, we have to ensure that American -- Americans and legal immigrants get those jobs, not those who are -- who are breaking the law.

SYLVESTER: Currently, Arizona, Mississippi, and South Carolina have passed laws that require all employers in the state use the E- Verify system. The U.S. Chamber of Commerce has asked the U.S. Supreme Court to review the Arizona law's constitutionality.

Other critics say E-Verify is not foolproof, that it can lead to an increase in identity theft.

MIKE AITKEN, DIRECTOR OF GOVERNMENT AFFAIRS, SOCIETY FOR HUMAN RESOURCE MANAGEMENT: E-Verify, in some instances, has been beaten by simply using a stolen identity. Some -- some employers -- and there's the Swift meat-packing case of a few years ago -- when it's as many as 15 percent of their work force beat E-Verify using stolen identity.

SYLVESTER: Still, the system is gaining in popularity with companies, growing at a rate of 1,200 new employers every week.

JANICE KEPHART, NATIONAL SECURITY DIRECTOR, CENTER FOR IMMIGRATION STUDIES: They're no longer paper-based, it's free to use, and, most importantly for them, it's credible deniability if the federal government comes to them and they have work site enforcement issues. If they have been using E-Verify, then it shows good faith on their part.

SYLVESTER: Currently, more than 133,000 employers are using E- Verify. (END VIDEOTAPE)

SYLVESTER: And add to that list soon federal contractors and subcontractors.

The Obama administration twice delayed implementation of a rule that would have required E-Verify be used by companies that do business with the federal government. But the Department of Homeland Security this month reversed course. And that rule will now take effect September 8 -- Kitty.

PILGRIM: Thanks very much, Lisa Sylvester.

Well, joining me now are three of the country's best political minds, Joe Conason, columnist with We Miguel Perez, syndicated columnist and CNN contributor, and Tara Wall, deputy editor for "The Washington Times."

And thanks for being with us.

You know, I think we should start with the beer summit. To me, that was one of the more intriguing aspects of the week of news.

Miguel, your -- your thoughts on that.

MIGUEL PEREZ, CNN CONTRIBUTOR: I was a little bit disappointed. I expected more to come out of that summit, if you -- that's what you want to call it.

You know, I really wanted these two guys, the sergeant and the professor, to come out and say, listen, we were both a little wrong here, and let's mend things, but let's have the whole country mend things. Let's, both of us, work on racial profiling, with the president's support.

I needed a plan or something to...

PILGRIM: You needed closure, did you?

PEREZ: I wanted something constructive to come out of that, and it didn't.

PILGRIM: All right.

Tara, you -- you actually in your column called it a sideshow.

Elaborate on that a bit for us.

TARA WALL, DEPUTY EDITORIAL PAGE EDITOR, "THE WASHINGTON TIMES": Well, it was a sideshow to sidestep the, you know, verbal gaffe that the president admittedly made, which, you know, some say amounted to apology; other didn't.

But I also said, you know, I wouldn't express disappointment, because I was a little bit cynical early on. I probably -- I was hopeful, but still cynical, in that nothing probably would really come out of it, in that it was obvious these men had -- both had -- the two men involved had very strong positions on both -- both sides, and that this was more of what the president had talked about we shouldn't be doing, is simply just talking about race, as opposed to doing anything about it.

It was obvious that was not going to take place, which begs the question of why. And then we were focusing, as a media -- the media was focusing on all the wrong things, focusing on what kinds of beers these guys were going to drink and what kind of picnic table they were going to have, as opposed to -- I think, if they had been challenged a bit more on what the substantive issues were going to be, or at least the substantive conversation that was going to come about, or anything forthcoming that was going to come about, I think we would have -- we could have and should have expected more.

But, you know, short of that, no one was really questioning what they should have been questioning and how this was going to raise the discussion of race relations in general, not just racial profiling. And I think we all recognize that that's not what happened here. But if you're going to raise the level of discussion about race, then let's -- let's start with a conversation.

PILGRIM: But, Tara, Tara...

WALL: But that also starts with an apology. That also starts with an apology.


PILGRIM: You seem to be blaming the -- the press' coverage of it, as much as the substance of the event.

Joe, thoughts on this?

JOE CONASON, COLUMNIST, SALON.COM: Well, I thought, from the president's point of view, it worked out as well as it possibly could, because he didn't want the subject changed to racial profiling. That was an accident and a mistake, a trap that he fell into. He wanted to cool things out.

And I think Professor Gates and Sergeant Crowley helped him do that with their statements afterwards. I think, you know, Professor Gates even showed a sense of humor about it. He said, you know, Sergeant Crowley is not bad guy -- or a likable guy when he's not arresting you.

And that kind of put a friendly coda on the whole thing that was I think the best the president could have hoped for at this point.


PEREZ: But imagine how much more the country could have gained if these two guys got together now and said, listen, now we are going work together to work on these problems.

CONASON: Well, but, you know, Miguel, they did say that. I mean, basically, they -- Professor Gates...


CONASON: Professor Gates said, it's incumbent on us to try to continue this discussion afterwards, not necessarily in the White House, because that's not what the president wants.

I think in Cambridge, perhaps, they will talk about this. And maybe they will meet again. But, from the -- from President Obama's point of view, this isn't the subject that he wants at the top of the agenda right now. And -- and I think he's right.


PILGRIM: Tara, go ahead.

WALL: And I think that -- and, Sergeant Crowley also pointed out, you know, we will simply agree to disagree.

So, to that extent, there's not going to be any movement in that regard as far as who is going to agree with whom and who is going to apologize to whom, and, frankly, who is teaching whom.

And, so, what -- what the president did, though, was I -- he recognized -- and the polls bear it out -- is that he really put his foot in it, if you will, and wanted to doing do something to resolve this quickly, so it wouldn't hurt him, essentially, politically.

It already has somewhat. And I think he realized that. And I think it had more to do with that. I don't -- I don't question his motivation for wanting to put race out there. But I do question his real lack of acknowledgement that there is real -- any real ability to actually do anything, beyond making this a photo-op.


PILGRIM: All right, Tara, we are going to take a break, and we will come back with some other subjects. And we will more with our panel in just a moment.


PILGRIM: We're back with our political panel.

I would like to move on to the subject of health care, gentlemen and Tara. And one of the things that intrigues me is President Obama's former physician, Dr. David Scheiner, says he doesn't like the president's proposal. He feels like it is a succession of compromises.

And that really sort of strikes me, that his own physician is worried about this, especially in the cost structure of it.

Miguel, your thoughts on this?

PEREZ: You know, because it is a succession of compromises, I don't think the doctor knows what we are talking about. I don't think President Obama knows what we are talking about.

There are so many things going around regarding this plan, this health care reform, that we -- nobody knows exactly what is being proposed. The American public certainly don't know. And that is causing all the problem and the confusion.

If the president had a definitive plan, and he was proposing, this is exactly what I want -- instead, what he is saying is, let's see what comes about, and then maybe I will go along with it, and I will like it, and I will take credit for it.

And the American people can see right through that.

PILGRIM: It's an extremely difficult issue. I think you will give him that.

Tara, quickly, what -- your thoughts on the president's approach to health care.

WALL: It's true. And I think he should have done more on the front end to listen to what constituents and taxpayers and Americans were saying. They were saying that this plan is not palatable. The polls have borne that out. They say they don't like -- 56 percent don't want an overhaul.

They -- 80 percent like their insurance. They want to keep it. So, I think having that having in consideration and recognizing now that the Blue Dogs...

CONASON: Seventy-two percent say they want the public option.


CONASON: You can find a poll that says anything about this, because people don't know...

WALL: Sure, but the public didn't like it. And he has to acknowledge that.

CONASON: Well, you know, the...


WALL: The Blue Dogs had to be responsible to their constituents.

And, at the end of the day, I think it will be like health care insurance, not health care reform.

CONASON: All of them -- all the members of Congress are responsive to their constituents, Tara, not just the Blue Dogs.

The president came in with an aim to do something about health care. It has been a festering problem for 60 years. It is not true that he didn't say anything about what he wanted. He laid out principles for what he wanted to change in the health care system as it stands now. And he said... (CROSSTALK)

PEREZ: Very vague, though.

CONASON: No. They were very specific. And the president said, please, in Congress, come up with the bills that will meet these proposals, and I will consider signing them.



WALL: He left it up to Congress.

CONASON: He didn't.

WALL: And lord knows they know how to spend all our money.

CONASON: He didn't just leave it up to Congress. He has to sign the bill. And that's how the system works.

WALL: Sure. Sure.

PILGRIM: OK. We have -- we have to -- we have to hold it there. Thanks very much. We will be debating this for a while, though, I think.

Joe Conason, Miguel Perez, and Tara Wall, thank you very much.

CONASON: Thank you.

PILGRIM: Coming up at the top of the hour, John Roberts, in for Campbell Brown -- John.

JOHN ROBERTS, CNN ANCHOR: Hey, Kitty. Great discussion tonight, by the way.

Tonight, coming up at 8:00: What really happened the day that Michael Jackson died? His personal chef was there. She is going to join me live this evening.

Also, has celebrity stalking gone too far? Now two police chiefs are charged with breaking into the home of the surrogate mother for actress Sarah Jessica Parker.

Plus, our newsmaker tonight -- a small-business owner who went toe to toe with President Obama on his health care plan -- all of that, plus our "Mash-Up" of the day's other big news. It's all coming up at the top of the hour -- Kitty.

PILGRIM: We look forward to it, John.

Still ahead, we have "Heroes."

Stay with us.


PILGRIM: Time now for "Heroes."

And, tonight, we honor 1st Lieutenant Joshua Rodriguez.

Bill Tucker has more.


BILL TUCKER, CNN CORRESPONDENT (voice-over): For Lieutenant 1st Class Joshua Rodriguez, the Army is a family tradition.

1ST LIEUTENANT JOSHUA RODRIGUEZ, U.S. ARMY: Growing up in a military family with my grandfather, my cousins and my uncles -- all started out in the military -- it just seemed like that's -- that's what my path was going to be. So, I decided to continue that.

TUCKER: Two days after graduating from West Point, he married his high school sweetheart. As a member of the Army's 3rd Brigade, 1st Infantry Division, Rodriguez knew he would be deployed.

RODRIGUEZ: I told my wife, I'm doing it because I -- I love you that much. I'm going to go out and do something to make sure that you are safe here. And she doesn't believe that line, but it -- it actually is true.

TUCKER: Extensive training prepared him for his mission in Afghanistan. On May 3, 2009, Rodriguez's platoon was fortifying an observation point along a critical supply route through an Afghan valley prone to enemy ambush. They set up trip flares close to their location.

RODRIGUEZ: After we had done our defensive operations, we were sitting around eating some MREs. All of a sudden, the trip flare goes off. I looked at it. Sergeant Wynn (ph) looked at it. We knew something was about to happen real quick.

TUCKER: The enemy was within 10 meters, or 30 feet away, hand grenade range. Rodriguez's platoon had 43 hand grenades.

RODRIGUEZ: We threw 40 of the 43 that we had. And I don't know anybody that didn't throw one, to be honest.

TUCKER: His team of 20 solders fought some 80 insurgents for 35 minutes before air support came in to help. For his leadership and bravery under fire, Rodriguez was awarded a Bronze Star with valor.

RODRIGUEZ: The reason I joined the Army was because I wanted to make sure that my family was safe. I want to make sure that there's -- there is no conflict here in the United States.

And there is a quote that I actually go by personally. It is by Thomas Paine. And he said, "If there be trouble let it come in my day, that my child may have peace."


PILGRIM: A real hero.

Thanks to all our troops.

And now John Roberts.