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Lou Dobbs Tonight

Created or Creative?; Public Option Push; Lawmaker's Nightmare; White House Muscle; Gun Battle; High School Dropouts; California Jobs

Aired October 30, 2009 - 19:00   ET



Praising the stimulus plan -- the Obama administration says massive government spending has created or saved up to one million jobs but are those numbers accurate?

Pushing the public option -- the issue has divided the Democratic Party, but for one of the most powerful members of Congress delivering government-run health care has become a matter of political survival.

Also, alarming news on high school dropout rates -- in some cities, only half of the kids ever graduate and now new desperate measures are being tried to keep kids in school. But will they work?

ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and analysis for Friday, October 30th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening everybody.

Praising the stimulus program -- the Obama administration touted a new report today that said up to one million new jobs were created or saved as a result of the massive federal stimulus plan. Now despite some positive economic signs, the White House has been heavily criticized over record high unemployment now just under 10 percent. And there are questions tonight about how accurate the government's new figures are and whether the stimulus plan is working at all -- Louise Schiavone reports.


LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): From the Obama administration, a jobs creation message...

JARED BERNSTEIN, WHITE HOUSE ECON. ADVISER: We're going to learn today later from -- again, from the Independent Recovery Board direct information from recipients of Recovery Act funds that they have created or saved 650,000 jobs so far.

SCHIAVONE: From the government's own record keepers, the other side of the story -- 15.1 million unemployed. More than one million net new unemployment claims filed in the two weeks ending October 24th. One nonprofit with long experience studying federal spending has doubts about the record keeping. CRAIG JENNINGS, OMB WATCH: I think it's really too early to say, you know, based on the numbers today how many jobs were created or saved.

SCHIAVONE: The administration says half the jobs saved so far have been in education where state and local government used stimulus money to avoid layoffs. But at INPUT, a marketing research firm that advises clients on federal contracts, president and CEO Tim Dowd told us quote, "How can you tell the difference between a created or saved job? We don't think that number is knowable" -- end quote.

In fact, shortly after announcing the stimulus had saved or created 650,000 jobs, the administration changed the number to 640,000. Local financial strategist David Smick says it's all designed to lend some courage to a job-starved nation in the face of challenging realities.

DAVID SMICK, GLOBAL FINANCIAL STRATEGIST: Here's what's really going on. The unemployment rate is almost 10 percent. To bring it down to five percent over the next five years, not an unreasonable amount of time, we would need the creation of 250,000 jobs per month each year for the next five years. We would need to achieve a massive growth rate.

SCHIAVONE: The 650,000 jobs claim is based on $150 billion in stimulus spending and the White House says the number is closer to a million when tax cuts and other measures are included. But each job costs $230,000 to create and Vice President Biden conceded...

JOSEPH BIDEN, (D-DE) VICE PRESIDENT OF THE UNITED STATES: It's not good enough. Less bad is not good enough.


SCHIAVONE: And Kitty that appeared to be Wall Street's impression, closing down 250 points today. More than giving up Thursday's gain on word of a 3.5 percent third quarter gross domestic growth, which on second look said financial strategist David Smick appeared much less impressive -- Kitty.

PILGRIM: Thanks very much -- Louise Schiavone.

We have some disappointing news tonight about paychecks for the middle class. Wages and benefits increased only 1.5 percent in the year ending in September. That's the smallest amount in 27 years. Economists are blaming high unemployment rates and workers with jobs are less likely to demand more money from employers.

Well the push for a government-run health care plan in Congress has divided lawmakers and that could prevent the bill from passing, but for one of the most powerful Democrats in Congress, Senate Majority Leader Harry Reid, getting a public option passed is becoming a matter of personal political life or death -- Dana Bash reports.


SEN. HARRY REID (D-NV), MAJORITY LEADER: It's a very important week for our country...

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A call to action posted on YouTube.

REID: Make sure you contact your representatives back here in Washington and push hard. We want a health care bill that has a public option.

BASH: A blast of political e-mails all week pushing the public option and sending a not so-subtle reminder it's Harry Reid who put it in the Senate health care bill. Senator Reid's leadership was on full display said one e-mail. He took a courageous stand in fighting for and including the public option. Why the sudden sales job?

PENNY LEE, FORMER AIDE TO SEN. REID: The more liberal side of the party has you know questioned whether or not we could get this done, whether or not the leadership was behind it and I think...

UNIDENTIFIED REPORTER: And questioning Senator Reid.

LEE: Sure and questioning Senator Reid.

BASH: Penny Lee, a former Reid aide admits part of the motivation is to reassure an anxious Democratic base.

LEE: It wasn't just a one-time you know press conference that he had. Instead he said I am going to fight for this. I believe in it.

BASH: Lee and others say that's his goal as a national leader. But home in Nevada, where Reid is facing a tough reelection battle, he has different reasons for promoting his support for a public option.

UNIDENTIFIED MALE: Harry Reid is in a lot of trouble. It's what I like to call Reid's fatigue.

BASH: A recent poll showed 50 percent, half of Nevadans view Reid unfavorably, a stunningly high figure.

JON RALSTON, NEVADA POLITICAL ANALYST: He's not the most personable guy. He's not -- certainly doesn't have much charisma. And what he does have though is a survival instinct unlike any I've seen in politics.

BASH: Survival in Nevada now means appealing to Independent voters and they tend to support a government-run health care option.

RALSTON: His success is going to play -- or failure is going to play into his main campaign theme which is reelect me. I'm the guy Nevada and the nation needs in Washington. I can get things done.

BASH (on camera): A huge risk for Reid, of course, is, what if he doesn't get it done? What if he can't find the votes for a public option in the Senate health care bill? That is a very real possibility and one of the reasons we're told Reid's aides were split on whether this was the right move from the beginning. Right or not, now that Reid has made the decision, though, it's clear he knows he has to push the public option, he has to own it, whatever the outcome -- Kitty.


PILGRIM: Dana Bash, thank you.

Well a secret report leaked to "The Washington Post" has revealed that dozens of House lawmakers are under investigation for wrongdoing. The House Ethics Committee initially announced that two California Democrats were being looked at but then had to admit that a cyber hacking exposed the names of more than 30 politicians the committee had an interest in -- Brianna Keilar reports.


REP. ZOE LOFGREN (D), CALIFORNIA: I regret to report that there was a cyber hacking incident of a confidential document of the committee.

BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): The normally super-secretive operations of the Ethics Committee made public, splashed across the front page of "The Washington Post". Democratic leader Steny Hoyer said just because a lawmaker's name is on the list doesn't mean he or she has done anything wrong.

REP. STENY HOYER (D-MD), MAJORITY LEADER: Brianna, if I said your name to the Ethics Committee and say you've been acting unethically as a journalist that may have totally no substance. But if your name is on that computer list, then the public draws the inference almost immediately Brianna must have done something. That's not accurate."

KEILAR: Some of the named are on the defensive. Washington Democrat Norm Dicks said "I expect that when all the inquiries are concluded I will be completely exonerated. A spokesman for Ohio Democrat Marcy Kaptur insisted "Marcy has nothing to hide".

And Kansas Republican Todd Tiahrt said in a statement "we have no reason whatsoever to believe that we are subject to a House Ethics Committee investigation." All stress they are cooperating with investigators. But one watchdog group says the scope of the preliminary inquiry speaks to what's wrong with Washington.

RYAN ALEXANDER, TAXPAYERS FOR COMMON SENSE: They think this looks wrong. For lobbyists to come and say, hey, my client wants X, I'll give you some money, we'll you know help you raise some money for your reelection if you give that to my client.

KEILAR: And with a midterm election one year away, that perception could be a problem for Democrats who won a majority in 2006 campaigning on this promise.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: That you cannot advance the people's agenda unless you drain the swamp.

(END VIDEOTAPE) KEILAR: These preliminary inquiries that are detailed by this "Washington Post" story, they are not full-blown Ethics Committee investigations and honestly they don't always end up in one of these full-blown investigations. Sometimes these preliminary inquiries, the allegations that may have come forth in them are found to not have any basis, in fact, and so they're just summarily dismissed. And that quite frankly, Kitty, is why lawmakers are so irritated at this point that their names are out at this stage, really raising questions about their conduct.

PILGRIM: Brianna, it raises a lot of questions. When might we get some clarity on this -- any indication?


KEILAR: No indication. Right now what we're doing is listening to the reaction of lawmakers, but this is a ultra secretive committee and so it's kind one of those things where we find out what happens when we find out, barring any sort of cyber hacking, as this was a very, very rare instance.

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

Well the administration says we're on the road to economic recovery, but where are the jobs? That's the subject of our "Face Off" debate tonight.

Also, breaking news tonight, the runoff election in Afghanistan now in shambles -- what does that mean for our troops? How will it affect President Obama's war plans?

Also the White House is now heavily invested in the New Jersey race for governor. Why are Democrats saying the race is a must-win for President Obama?


PILGRIM: The White House has taken a serious interest in New Jersey Governor Jon Corzine's reelection campaign. The key adviser to President Obama was installed as Governor Corzine's chief strategist to help turn the campaign around for the Democratic candidate. But now some say the president's help more and more looks like a White House takeover in a race that is too important for Democrats to lose -- Ines Ferre reports.



INES FERRE, CNN CORRESPONDENT (voice-over): The Obama administration has thrown its full weight behind New Jersey Governor Corzine; Obama's chief 2008 pollster is now a central strategist for the incumbent's campaign. President Obama campaigned for Corzine and appears in television ads. In a complicated race with three candidates, Corzine was once trailing behind the Republican Chris Christie.

JP FREIRE, THE WASHINGTON EXAMINER: What's at stake is the reputation. What's at stake is their ability to move political boulders aside and accomplish things in their agenda.

FERRE: It's not the only high-profile campaign with which the administration has gotten involved. In September it reportedly pressed New York's Democratic Governor David Paterson to not run for reelection, showing low poll numbers Democrats were worried 2010 would go to the Republicans. And in Virginia, President Obama has said that state's gubernatorial race isn't over. But one Democratic strategist says the administration has clearly lowered its expectations for the Democratic candidate trailing his Republican opponent in the polls.

HANK SHEINKOPF, DEMOCRATIC POLITICAL CONSULTANT: When it looked like things weren't working out for the Virginia Democratic candidate for governor well they buried him and now they've decided that the guy in New York won't work, so they buried him. And Corzine they've put all their weight behind him. It's not that it's elective. It's protective. Don't give the Republicans a place they can raise money. Show you're in charge. Don't let them get out from under your foot.

FERRE: The White House has said it's common for administrations to get involved in state electoral races and it's not concerned that these elections might be seen as a referendum on the president.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't think it portends quite honestly -- whatever the results are I don't think they portend a lot in dealing with the future.

FERRE: But Obama's effectiveness on New Jersey's race could still say a lot.


FERRE: And strategists point to other reasons why the administration is helping Corzine. The governor has money and can raise money and that can be beneficial for 2010's midterm elections. Also, New Jersey is close to New York, the nation's media capital and the race is sure to receive large national attention and analysis, Kitty.

PILGRIM: You know, when you look at the poll numbers, Ines, it wasn't this tight in the summer so it's definitely having an impact.

FERRE: No. Corzine was pretty much trailing behind Christie and now they're really at a dead-heat even.

PILGRIM: All right. Thanks very much -- Ines Ferre.

Well a new ruling tonight by a New Jersey court could further restrict Second Amendment rights in the state. The court now ruled that people who live in New Jersey have no federally guaranteed right to own a handgun. Bill Tucker has our report.

(BEGIN VIDEOTAPE) BILL TUCKER, CNN CORRESPONDENT (voice-over): If a person wants to buy a gun in New Jersey they have to be fingerprinted and answer questions about whether they're a citizen, whether they're an alcoholic, drug dependent, ever confined to a mental institution, ever been treated by a psychiatrist, whether they are or have been a member of a group that advocates the forceful overthrow of the government, whether they've ever been convicted of a crime, been disorderly. And then local officials still have the power to decide that person may just be generally unfit to own a gun. Few, if any, states go as far as New Jersey say advocates of gun rights.

EVAN NAPPEN, AUTHOR, "NEW JERSEY GUN LAW GUIDE": The conditions are so far and they're so extreme, they are unreasonable and they are unreasonably applied.

TUCKER: But all those regulations were recently upheld in a case where a man wanted to buy a handgun and was told no. He sued, calling the laws unconstitutional. The state appeals court said no, stating explicitly that quote, "our gun laws have the purpose of keeping firearms out of the hands of all dangerously unfit persons, non- criminal as well as criminal."

In other words, neither he nor anyone in New Jersey has an explicitly guaranteed right to own a gun. It's up to the authorities to decide. The state court's ruling comes only months before the U.S. Supreme Court is expected to hear a case to decide if the Second Amendment in the U.S. Constitution applies to the states.

PROF. JONATHAN TURLEY, GEORGE WASHINGTON UNIV. LAW SCHOOL: The New Jersey case could not have more poignant timing. It was released basically on the day that the final briefs were due before the Supreme Court. It was in many ways a reminder of how important this question is over a fundamental right.

TUCKER: New Jersey is one of six states which has no guarantee in its state constitution of the right to keep and bear arms.


TUCKER: Now, the Supreme Court will hear the McDonnell versus Chicago case in late February, and you can bet that we will be watching of course with intense interest as will everyone in the gun community, Kitty.

PILGRIM: How important is this New Jersey case to gun advocates?


PILGRIM: I mean just in a sense.

TUCKER: The gun advocates say, look, New Jersey runs exactly counter to the Second Amendment. It is a state which allows that the government controls who gets the guns and the government controls the guns, not the people. And that's the point they would argue of the Second Amendment.

PILGRIM: All right. Thanks very much -- Bill Tucker.

Well the Pennsylvania Supreme Court has thrown out nearly 6,500 juvenile convictions by one of two county judges involved in a kickback scheme. The two judges were charged with taking millions of dollars in kickbacks to send the youths to a -- to private detention centers. The judges reached a plea agreement with prosecutors in February, but a federal judge rejected the deal as too lenient. Now the judges now face a racketeering trial. An attorney representing the youths told us she was thrilled with the ruling and that a civil suit against the judges is proceeding.

Coming up -- has the federal stimulus created anywhere near the number of jobs promised? That's the subject of our "Face Off" debate tonight -- also new desperate measures to keep high school students from dropping out.


PILGRIM: There's an alarming new study on the high school dropout rate in this country. One in five students leaves school without graduating. And now some school districts are considering raising the legal dropout age. Lisa Sylvester has our report.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Montgomery County, Maryland School Board voted unanimously to request the state change the law and keep students in school until the age of 18, currently students can drop out in Maryland at 16 years old. Nineteen states and the District of Columbia now have raised their legal dropout age to 18. The National Education Association, the country's largest teachers union, wants all states to adopt the policy.

SHEILA SIMMONS, NATL. EDUCATION ASSOCIATION: You cannot compete globally if you do not have the proper academic preparation and the credentials. And so we're moving more towards a credentialized (ph) society and one of the very first credentials that you need to have is a high school diploma.

SYLVESTER: The National Governors Association this month joined the ranks of those calling to raise the legal dropout age. Consider these numbers -- at least one in five students drops out of school. Nearly five million 18 to 24-year-olds don't have a high school diploma and the U.S. ranks 20th out of 28 among industrialized countries when it comes to high school graduation rates, that according to the Organization for Economic Cooperation and Development.

But not everyone thinks it's a good idea. There is the added cost, more teachers and classroom space. The Campaign for Liberty is a group that advocates for less government.

JESSE BENTON, CAMPAIGN FOR LIBERTY: If we're putting this federal mandate on -- on kids or a state mandate on -- on local school districts that they have to educate these kids until the age of 18 that don't want to be there, don't have the support system to be there, that's going to take away valuable resources from the kids that want to be there.

SYLVESTER: But there is also a cost associated with a high dropout rate. According to a 2005 study from a Princeton University researcher, an 18-year-old earns $260,000 less over his or her lifetime without a high school diploma and contributes roughly $60,000 less in taxes.

(on camera): A study done by the National Bureau of Economic Research concluded that as many as 25 percent of potential dropouts stay in school because of the compulsory school age laws.

Lisa Sylvester, CNN, Washington.


PILGRIM: A new report finds more states are lowering the standards for student achievement. The Department of Education says states' proficiency standards are lower than those set by federally funded assessment programs. Now the department is offering states millions of dollars in grants to bring up their math and reading proficiency standards. Every state but Texas and Alaska has committed to adopting the standards.

A reminder to join Lou 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 -- go to to find the local listings for "The Lou Dobbs Show" on the radio and to subscribe to the free daily Podcast. You can also follow Lou on Twitter at loudobbsnews on

Also coming up the federal stimulus now where are the jobs the Obama administration promised? That's the subject of tonight's "Face Off" debate and a high-profile Republican praises the president.


PILGRIM: Tonight -- more on our series "DOBBS & JOBS NOW!" California has received more federal stimulus to create jobs than any other state, and that has led the state's Republican governor, Arnold Schwarzenegger, to break with his party and actually praise the Obama stimulus plan. Casey Wian reports.


CASEY WIAN, CNN CORRESPONDENT (voice-over): The famed Sunset Strip in West Hollywood, California, is receiving $1 million in federal stimulus money to help give it a celebrity-style face-lift, including a smoother road and new landscaping. It's one of several taxpayer-funded bailout projects criticized by Senate Republicans this week. They're skeptical of the Obama administration's claims that the stimulus program has created or saved 640,000 jobs.

UNIDENTIFIED MALE: There is no factual way of determining how many jobs were saved or created as a result of the stimulus bill. All I know is that what is factual is that three million Americans have lost their job since the bill was signed into law. WIAN: But not every Republican is so critical.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I just want to say again, thank you very much to the vice president, Vice President Biden, and thank you very much to President Obama for helping the state of California.

WIAN: California Governor Arnold Schwarzenegger says federal stimulus money has saved or created more than 100,000 jobs in his state, including 62,000 teachers.

SCHWARZENEGGER: Just to date California has been awarded more than $12.5 billion of the stimulus money. And we have been promised $50 billion to be looking forward for the rest of the money (INAUDIBLE).

WIAN: The governor was clearly in a celebratory mood.

SCHWARZENEGGER: So that everyone knows there's lunch being served outside (INAUDIBLE).


WIAN: And outside the White House Schwarzenegger was asked about another controversy, the not so hidden message to a California Democratic lawmaker in the governor's recent veto statement.

SCHWARZENEGGER: That was a total coincidence. It was one of those wild coincidences.

WIAN: As is the case with the stimulus plan, it's all a matter of whose story you believe.


WIAN: And depending on what numbers you believe, California has lost between 730,000 and 900,000 jobs over the past year. So, even with those 100,000 jobs governor claims have been saved, the state's unemployment rate remains among the nation's highest at 12.2 percent -- Kitty.

PILGRIM: All right, thanks very, Casey Wian.

Well, as we reported earlier, the White House says the stimulus has created up to 650,000 jobs, but with up to 30 million Americans out of work, that seems hardly enough. And that is the subject of tonight's "Face-Off" debate. Where are the jobs needed to put Americans back to work?

And we are joined by Nicole Gelinas, a fellow at the Manhattan Institute and author of "After the Fall: Saving Capitalism from Wall Street and Washington." We're also joined by Ethan Pollack, fiscal policy expert at the Economic Policy Institute.

And thanks very much for join us, both. You know, this is a critical issue. I can see every American watching this program thinking, we really do need jobs. If you're not laid off, you know someone who has been and this is a very, very important thing. The stimulus package was supposed to create jobs.

Now, Ethan, you really help us sort out the numbers here -- 30,000 private sector jobs, is that all there is?

ETHAN POLLACK, ECONOMIC POLICY INSTITUTE: No, no. Actually, it's quite a bit more. You know, the estimates right now are about 650,000 jobs just the in the reported data, about half the money that's actually gone to work in the stimulus so far, which has been about $340 billion. So, it's definitely not all there is. Right now the estimates are a little over 1.1 million jobs or so that have been created, so far. And that's a huge amount. No, we've still got a huge job gap. We've lost over eight million jobs so far since the recession began, but the stimulus has done a great job of kind of turning that around.

PILGRIM: Well, I guess my point is, how many of those are private sector jobs? Because the majority of the jobs in that 650,000 are government jobs, correct?

POLLACK: I -- not -- I mean, you've got to remember what this is not including. What this is not including is indirect jobs. That's one of the big things. Basically, whenever anyone gets money they re- spend it in the economy and that boosts employment by 50 percent. Now, none of that's going to be, you know -- if I have a higher income and I then I go to the restaurant and I spend more money, that provides them with more business. They can either, you know, hire more people or does not lay off people. No one reports on that. So, there's a lot of private sector employment that's out there that's been created from the stimulus that we're not seeing in these reports.

PILGRIM: All right, Nicole, you say it's not about jobs at all, right?

NICOLE GELINAS, MANHATTAN INSTITUTE FOR POLICY RESEARCH: Well, it's about jobs to some extent, but the focus of the stimulus should not be on creating a job just for the sake of creating a job. Because we are not -- this is all borrowed money and we have to spend it as wisely as possible. And we are not spending the money creating the physical infrastructure that the private sector economy needs to grow healthily and to create private sector jobs. Roads, bridges, mass transit, these things have been decaying for decades, this stimulus was billed at first as a public works measure, but half of the jobs we've created are in education, a good deal -- $229 billion of this stimulus money went towards states, 70 percent of that for education and Medicaid spending. But, this is just exacerbating the economic imbalances that got us into this crisis in the first place -- too much social spending at the expensive infrastructure spending and also not fixing our financial regulatory infrastructure, as well.

PILGRIM: Let me bring up a couple of comments. And first is Joe Biden. He had this to say about the stimulus package. Let's listen for a moment.

(BEGIN VIDEO CLIP) JOE BIDEN (D), US VICE PRESIDENT: Without the economic recovery act, it's very unlikely this economy would have expanded at all this last quarter. It may have even contracted.


PILGRIM: Now, we have House minority leader John Boehner saying these are phony statistics out today that three million jobs were lost and unemployment stands just under 10 percent. When people listen to this, is the glass half full, half empty? Are we coming out of this? Are we not coming out of this at all? What's your view?

GELINAS: I think the focus on whether the numbers are made-up, this is just another distraction. Clearly, when you spend government money you do get jobs. It is true that without this spending going to the states the states would have had to lay off public sector workers. But, that may not have been such a bad thing. We have a problem where public sector pay and benefits have just gone up and up and up in the last decade. This has crowded out private sector investment.

There's an argument to be made that less money to education would have given the cities and states some leverage to try to get some concessions from the unions that fewer jobs in some areas in the public sector is not a bad thing for private sector recovery. We need to be building physical stuff to give the private sector a good base upon which to grow, and we are not doing that. We are instead continuing to crowd out the private sector.

PILGRIM: Ethan, that's on that?

POLLACK: Yeah. I mean, it -- she's basically saying that, you know, it's OK that they would otherwise be laying off teachers, firefighters, policemen. I mean, if -- I don't think the people would be very comfortable with, you know, hire, you know, larger classroom sizes, more crime. I mean, these are the types of things that, you know, after the recession they're going to need to hire these people back anyways. So, it makes sense we would keep them employed now.

Now, furthermore, as soon as a state lays off a bunch of people, what do they do? They stop espying money. There's a certain amount of economic insecurity there, so that depresses demand. Everyone else around them sees that their friend got laid off. They stop spending money, too. So it's this vicious cycle. So, if we can mitigate some of the layoffs and we're not mitigating all the layoff layoffs. Sixteen states last year laid off -- had layoffs, 17 states this year laid off employees.

Now, Nicole was saying that, you know, that, you know, states and local governments are, you know, boosting their spending. They're actually not. In this last quarter they actually decreased their spending. So, we're not actually doing enough to aid these states, they're still having to raise taxes and they're still having to cut budgets. Now, that's very harmful to the economy. And what we should be doing is preventing that from happening.

PILGRIM: All right, can you sum up very quickly where you would like to see the rest of the stimulus money going? Just very fast.

POLLACK: Well, what I think we need is we've got -- going forward, we've got nearly $500 billion in state and local budget gaps and that's huge, and they're going to be doing -- raising more taxes and they're going to be cutting budgets more. So, what we need to be doing is, yes, we need to be doing more borrowing, but for the sake of them not raising taxes on us and laying off more people, which will hurt the economy in the long run. Now, if we can get the economy back on track, what that will mean is that will mean, you know, a higher GDP, but that will also mean higher incomes and that will mean higher tax returns.

PILGRIM: Nicole, last thoughts on this.

GELINAS: We need to direct the rest of the spending toward lower education and medical spending, which has grown far too high. New York has a $50 billion Medicaid program. We can get better medical care for cheaper and we need more of that money to go toward physical infrastructure to rebuild the private sector economy.

PILGRIM: Nicole Gelinas, Ethan Pollack, thanks very much for joining us, tonight.

GELINAS: Thank you.

POLLACK: Thanks a lot.

PILGRIM: Still ahead, will Democrats unit behind House Speaker Pelosi's massive plan to overhaul health care?

Also, talks break down in the Afghan reelection. What does that mean for our troops? Three of the country's best political analysts join me next.


PILGRIM: Joining me now are three of the best political analysts in the country, they are all CNN contributors. We're joined by Ed Rollins, Republican strategist, former political director for the White House. Errol Louis, columnist for the "New York Daily News," And Robert Zimmerman. Democratic strategist.

Gentlemen, let's start with the House health care bill, 2000 pages. Will this actually save money? Ed, thoughts on this.

ED ROLLINS, CNN CONTRIBUTOR: I don't see how you can possibly save money. Whatever the numbers they're putting out today are not going to be the numbers 10 years from now. We don't know what the science is going to be. All I can say, you're going to add 30 million people to the process, many of whom are very ill. You can't save money long-term. It's going to be a big entitlement program.

PILGRIM: The criticizes is it sets up a new entitlement program because of the subsidies to purchase health insurance, also it expands Medicaid. Thoughts on this... ERROL LOUIS, CNN CONTRIBUTOR: To me, it exposes the sort of inherent craziness of it. The show last night that went through with the three doctors going through all the necessary, very logical ways to sort of deal with actual health care, as opposed to trying to make something work in sort of a financial setting and ensure profits for the right people and keep costs down for some other people, I think it's going to show that this a very unworkable, very complicated, very expensive system, and I think that so much of this debate is really a step down the path to single payer sometime in the future.

ROBERT ZIMMERMAN, CNN CONTRIBUTOR: You know, it may be complicated, but I wouldn't call it unworkable. We know the status quo is unworkable. The status quo is a fiscal calamity for working America. What's important here in terms of analyzing the bills is the House and Senate is the Congressional Budget Office, which is the arbiter of the fiscal impact, has indicated that both bills, the House bill in particular, reduces the deficit by $100 billion over 10 years. And so that's one standard to look at.

The other point to consider, too, is the public option according to the House bill, according to the CBO, the public option is only going to be eligible for six million Americans, yet the insurance companies are going to get 36 million new clients.

ROLLINS: Maybe. And one thing is very important, the CBO has said the numbers are not exact, they're quoting over a trillion dollars, the House Democrats are insisting it's not that. They're going to push Medicare cuts off somewhere else. The bottom line is it's going to be expensive, whether it's what the Democrats want or not, we'll wait and see. But, I think at the end of the day the lottery form that needed to take form in the insurance companies no one knows what's in this bill. There's five people on Capitol Hill who know what's in the 1900-page bill.

ZIMMERMAN: You know what, Ed, I've got to give the House credit. They were up front. If an individual makes over $500,000 a year, they're going to be surcharged. If a couple makes over $1 million, they're going to be surcharged. The Democrats in the Senate laid -- attacks on the Cadillac plans which the unions are protesting because they gave up salary increases in exchange for health benefits. Real debate around this.

ROLLINS: It's your old Robin Hood take from the rich and give to the poor.

ZIMMERMAN: It's about those who profited in the last eight years...

ROLLINS: Don't go there.

PILGRIM: Let's just go to another topic, because this is also important and that's the stimulus job creation debate. What's your view on what's going on here?

ROLLINS: My view is once again we're dealing in numbers. Any, any jobs that have been saved, any jobs that have been added is a benefit, when we're in this environment. So, I'm not going to sit and pick apart what a lot of my Republican colleagues are, if 600,000 people had job saved or they've been added, the bottom line is we have a long way to go and the stimulus bill may not have been geared to be a total jobs bill, but I think we still need to keep doing things to get people back to work.

LOUIS: It's anticipated really from the beginning by advocates of stimulus that there be a need for a much bigger one or a second one. The advocates for the second one, I think, have been sort of muted lately, because we're going into the 2010 political cycle. It's going to be very controversial, but the reality is this will be a jobless recovery until and unless there's a second stimulus.

ZIMMERMAN: The big question is going to be whether this stimulus package, which we all agree was needed, is just economic Viagra for the special interests or whether the impacts will be lasted longer than four hours, in political terms. And if it's shorter than four hours, call our Congress members, not just our doctors.

So, clearly we've created a process, as Ed points out correctly, where jobs are being created, the stimulus was needed, now the issue is the long-term ramifications.

PILGRIM: All right, let's go into the House Ethics Committee and the hack and the leak. What are your thoughts about the implications?

ROLLINS: It's outrageous. The House ethics committee has a sacred responsibility to keep confidential anything brought to them, that's part of the drill, that you can have a real investigation of members. When you have 30 names out there, many of whom people have never even known there were charges against, I think you've done a great injustice to the House. At the end of the day, they haven't fully investigated. Why this happened is beyond me. It's never happened in my long history. I think it's really outrageous.

PILGRIM: I'm sure the cyber security team is being called right now and being beefed up -- Errol.

LOUIS: Well, like every other journalist in America, I kind of wish I had gotten that scoop, myself. You know, but this is the way the game is played. If there is something going on, it is the duty of the press to try to find it out. I don't know if it threatens the health of the Republic, quite the opposite. I think it's better for there to be disclosure than not.

ZIMMERMAN: People should go to jail for this. It's an outrageous violation of privacy. It is an outrageous breach of ethical conduct. And whoever is responsible for it, really should be prosecuted and with all due respect to the media and I understand where you're coming from, this is really about a matter of justice and really a matter of ethical standards in the House.

ERROL: When do they get to be these protected princes and princess? I mean, if they're being looked at, why shouldn't the public know? They're using our taxpayer money to do the looking. ZIMMERMAN: Because the charges in many cases are proven to be false and we don't prosecute people in -- we don't investigate people in this type of public standard because it leads to false rumors, it leads to a lot of scandalous stories, and people are entitled to be innocent until proven guilty.

ROLLINS: I think there are members, both Democrat and Republican, who deserve to be looked at hard and sooner or later the ethics committee will come forth with some kind of report. I think what's happened now is you've created so much dust and controversy that they're going to go back into their hole and probably take a long period of time before they really do a thorough investigation. And that's where an injustice is done.

PILGRIM: All right, gentlemen, let's take a break. And we'll be back with the panel in a moment.

First, a few other stories in the news we'd like to tell you about. Two Massachusetts fishermen, tonight, are recovering after spending six hours in the frigid Atlantic Ocean after their boat sank. Wearing winter survival gear, the men drifted towards land and they were picked up by a Coast Guard helicopter.

If you're looking for a getaway with 6,300 of your closest friends, head to Florida, you can book passage on the new 1,200-foot- long Oasis of the Sea, it's the biggest cruise line in the world. It features what the cruise line is calling "neighborhoods," recreation, parks and squares and arenas. And you may also be able to catch a glimpse of the ocean.

And what do you do with all those leftover rubber bands? Well, if you're Joel Waul from Lauderhill, Florida, you roll them up into what becomes the world's largest rubber band ball. And Waul sold his 6-1/2-foot diameter, 9,000 pound creation to the Ripley's Believe It or Not Museum. The most amazing thing is that Wall's neighbors were actually sorry to see it go -- believe it or not. And we'll have much more with our panel, next. Stay with us.


PILGRIM: We're now back with our panel. You know, Afghanistan's runoff election tonight in trouble, talks between President Karzai and his opponent, Abdullah Abdullah, basically broken town.

ROLLINS: We basically have to go with the status quo. There is no challenger and I think that makes the decision tougher for the president.

PILGRIM: Yeah, and President Obama is standing here trying to make a decision. Errol, should he even worry about that?

LOUIS: Well, I don't think he wanted to make a decision and he's not going to have a chance to, at least not in the short term. They'll have to wait until the snows are over and the country comes back to life sometime in the early spring. And at that point, they're going to have to have a strategy and possibly an entirely new counterinsurgency doctrine that's appropriate for this country. What worked in Iraq is not going to work here.

PILGRIM: And yet the pressure is on him to make some sort of commitment or statement about increasing the troops.

ZIMMERMAN: I think he'll have to before he goes to Asia or right when he comes back. Of course, the terribly difficult decision has to be, how to engage in a military procedure in that region without a competent partner. The Afghanistan government under President Karzai has proven to not just be incompetent, but also corrupt. And either one is bad, both is a pretty potent combination. And it may be that we're going to have to look at fighting this war in terms of counterterrorism battle, through using the drones which have been very effective, taking out 13 of the top 20 al Qaeda leaders and also looking at using unarmed, unmanned vehicles, as well.

PILGRIM: All right, let's talk about elections that are going to happen and come off pretty well, I guess. New Jersey first. Ed, I would like to turn to you. We have Corzine at 39 percent, Christie, 36 percent, and Daggett at 20 percent.

ROLLINS: The bottom line is reelections are always about the incumbent. A majority of voters in New Jersey do not want Corzine, that's not evident by the polling. Now, whether the third party candidate is enough of the anti-Corzine vote to give him a squeaker, we won't know until late Tuesday night.

PILGRIM: Yeah, ht is really tight, isn't it Errol?

LOUIS: Sure it is and Daggett, the third candidate is making a lot of promises around taxes which are very important in New Jersey. He's also being an independent. Independents are the largest bloc of voters in New Jersey, they're larger than either the Democrats of the Republicans. He's the man to watch.

PILGRIM: Robert, put in the national picture for us. What does it mean nationally?

ZIMMERMAN: Well, let me say, the most important aspect of that race is we're grateful as Democrats that Ed Rollins is here with us tonight because he ran the last successful campaign in New Jersey for governor for Christine Whitman.

ROLLINS: Eighty years ago.

ZIMMERMAN: No, everyone is going to try to interpret the gubernatorial races in the context of national results. These races are about local elections. Clearly who wins and losses will impact the national party. What will have national consequences, though, is the northern New York congressional district.

PILGRIM: That's what I want to get to, the 23rd district and we have a lot of Republican support for a conservative candidate.

ZIMMERMAN: In fact, what you have emerging now, and let me give you my prediction. This is not a race between the Republican and the Democrat, as it started out. This is now a race between the Democrat and the conservative candidate. And from both sides in this battle, we're going to see this election go right down to the wire. And I believe it's going to be determined by absentee ballots and military ballots. And it will be an interesting test. Sarah Palin was the first Republican leader to endorse the conservative candidate followed by Dick Armey and Tim Pawlenty.

PILGRIM: And George Pataki, right?

ZIMMERMAN: And Joe Biden's coming in on Monday for Bill Owens, who's run a tremendous field operation in the face of the TEA baggers for the Get Out the Vote drive.

ROLLINS: That won't encourage me if I was a conservative candidate that Biden was coming in.


ZIMMERMAN: You wait and see.

LOUIS: Well, this fratricide within the Republican Party, this is a national fight that's really sort of a microcosm and it will be very interesting to see which side wins.

PILGRIM: Yeah, it's going to be great to watch the elections.

ROLLINS: What we didn't talk about was Virginia. The Republicans are way ahead there and should win, easy.

PILGRIM: All right. Gentlemen, we'll be watching. Ed Rollins, Errol Louis, Robert Zimmerman, thank you.

Coming up at the top of the hour is CAMPBELL BROWN -- Campbell.

CAMPBELL BROWN, CNN NEWS ANCHOR: Hey there, Kitty. Tonight we are going to get to the bottom of some of the week's top stories from some of CNN's smartest and toughest correspondents. We're getting into the alarming news today about the H1N1 flu. Also, the mounting pressure on President Obama as he consults the top brass on how to get a handle on Afghanistan. Plus, what's the real story when it comes to jobs saved by the president's economic rescue plan. Is the White House is using fuzzy math? All that coming up at the top of the hour.

PILGRIM: We look forward to it, Campbell. Thank you.

Up next, "Heroes," and that's our tribute to the country's men and women in uniform. And tonight we meet Gunnery Sergeant Marcus Wilson, a leader to his fellow Marines on and off the battlefield.


PILGRIM: And now "Heroes," it's our weekly tribute to the men and women who serve this country in uniform. Just six months after returning from deployment in Afghanistan, Gunnery Sergeant Marcus Wilson was sent to Iraq and there he led his platoon through multiple gun battles, even risking his life to save another Marine. Well now, Sergeant Wilson he is leading Marines again, and this time through a very different battle. Philippa Holland has his story.


GUNNERY SGT MARCUS WILSON, U.S. MARINE CORPS: Anytime anybody tells me I can't do anything, then I go out and prove them wrong and I do it.

PHILIPPA HOLLAND, CNN NEWS CORRESPONDENT (voice-over): Gunnery Sergeant Marcus Wilson is learning how to run again after more than 20 surgeries in three years. Wilson just finished his third marathon using a hand cycle.

MARCUS: I came in at three hours. Not really the time I wanted, you know, because did I L.A. and did I that in tow hours and seven minutes.

HOLLAND: In July 2006, Sergeant Wilson was deployed to Iraq as platoon commander for Company E, Second Battalion Third Marine, he led 48 marines through 80 combat patrols and 50 quick action force responses. In one firefight, Wilson used his body as a shield to save a fellow Marine.

MARCUS: I just heard the big explosion first, then I saw pieces of the vehicle flying in several different directions. I thought everybody had passed away.

HOLLAND: But then he saw movement.

MARCUS: That's my corpsman there, he was really messed up. I was applying first-aid to him. We started taking gunfire and there was nothing else I could do except for put my body on his.

HOLLAND: A Medivac was called and the wounded Marine was airlifted to safety. In November 2006, while securing a bridge near Haditha City, Wilson you was badly wound by an IED explosion.

MARCUS: President Bush, while I was in the hospital recovering, he came and give me both my Purple Hearts, which was a really, really big deal for me.

HOLLAND: Wilson you was also awarded the Navy Commendation Medal with Valor.

MARCUS: Once I got back, I would just go from room to room, maybe twice a week over Bethesda and Walter Reed and visit the injured Marines and Sailors and just letting them know that everything was going to be OK.

HOLLAND: It's his new mission, both at Walter Reed and at home.

MARCUS: If they see me doing it knowing all the injuries I had, then it gives them the confidence to do something like that themselves. I have three children and they look up to me and seeing those guys and the way they look at me, that keeps me going from day to day.

HOLLAND: Philippa Holland, CNN.


PILGRIM: A remarkable man. In 2007, Gunnery Sergeant Wilson you was awarded the General C. Thomas Award for inspirational leadership for motivating recovering marines. And Sergeant Wilson plans to stay in the Marine Corps for years to come and says, "I still have a lot to contribute, so that's what I'm going to do." We wish him the very best.

Thanks for being with us tonight. For all of us here, thanks for watching. Goodnight from New York. Campbell Brown is next.