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Lou Dobbs This Week
Russia and China Stand Against U.S.; More on the Mortgage Crisis; Campaign Updates; Alien Sanctuary State
Aired February 16, 2008 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACQUI JERAS, CNN METEOROLOGIST: I'm CNN's meteorologist Jacqui Jeras in the severe weather center with the latest on the ongoing tornado threat across parts of Texas.
Now, you can see the tornado watch in place covering much of the eastern part of the state. We had a few warnings and right now that includes Walker, Trinity and Houston counties. Doppler radar indicating two different parts of the rotation here: these storms are moving up to the north and to the east and a tornado could touchdown at any time. You want to get away lowest of your home away from doors and windows.
Look at all the lightning too here on our radar picture. Lightning will remain a threat of some of these downpours; they're going to be very heavy. Here, a strong cold front pushing off to the east and look at the temperature drop behind that. It's 67 in Shreveport. In Dallas, you're looking at temperatures in the 40s.
Now, all this moisture is going to be moving north ward throughout the night and it's going to be hooking up with this cold air and we are going to start to see some heavy snow developing as this storm continues to strengthen. We're going to see those winds pick up as well. So, some blizzard conditions are expected in Iowa late tonight and into tomorrow in this red area where we have the winter storm warning. That's where we're expecting to see some very heavy snow developing. There you can see the forecast snow fall over the next 24 hours.
And keep in mind, Wisconsin, a big state to watch with the all candidates there for tomorrow. They're going to be dealing with some very heavy snow into the center part of the state. Just of the south there, the rain maybe heavy at times. In addition, we'll have snow melt on top of that. So, we are concern about flooding across parts of Northern Illinois and into the Ohio River valley. We'll have another update about half an hour from now.
Now: Back to LOU DOBBS THIS WEEK.
KITTY PILGRIM, HOST: Tonight: America's middle class continues to bear the brunt of the nation's foreclosure crisis. There is no end in sight. A new White House plan to stave off foreclosures may not help those who need it the most.
And: The administration sends its top economic official to Congress. The economic outlook has worsened, they say. But they don't believe the country is in a recession. We'll have a special report on that. All that and much more, straight ahead tonight.
ANNOUNCER: This is LOU DOBBS THIS WEEK: News, debate and opinion. Here now Kitty Pilgrim.
PILGRIM: Good evening. Senator John McCain has all but sewn up the Republican nomination and the senator continues to pick up key endorsements. Mitt Romney threw his support to McCain on Thursday and CNN has learned that former President George Herbert Walker Bush will endorse the senator during the upcoming week.
But while the GOP candidate may be a certainty, on the Democrat side, Senator Barack Obama and Senator Hillary Clinton are locked in a very tight, very competitive race for delegates. So, where is that campaign headed? Well, we turn to two members of the best political team on television, Candy Crowley joins us from Chicago and Bill Schneider joins from Washington. Welcome to the broadcast. Let's go ahead to Wisconsin. Let's look ahead. Candy, what kind of territory is Wisconsin? Is it Hillary Country or is it Obama country?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT - CHICAGO: Yes, it is. There's little something for both of them in this. First of all, the Wisconsin primary is open. That is -- you can go in and vote for whoever you want, independence, Democrats, Republicans. So, that certainly favors as least according to exit polls we've seen so far, that favors Barack Obama. Because he does draw some Republicans, he does draw a good number of independents. There are these schools, particularly in Madison, all those young kids that have fueled Obama's campaign, filled arenas to come see him. That favors him. However, you still have those working class kind of "lunch bucket Democrats" as we call them, the "Dunkin Donut Democrats", however you want to put it. These are traditional Democrats who have been a part of her base. So, there is something that could bring both of them to the state, but I have to tell you that the strongest play in Wisconsin is being made by Barack Obama. She was also campaigning a couple days here.
PILGRIM: All right. Bill, how do you see Wisconsin shaping up?
BILL SCHNEIDER, CNN SENIOR POLITICAL ANALYST - WASHINGTON: Yes. Well, certainly, it is a showdown, not as big as Texas and Ohio which is shaping up as "Super Tuesday II" in March. Well, Wisconsin is going to be an important race where I think Obama has the advantage in organization and in passion (ph). Hillary Clinton as Candy said came there rather late. You know, Hillary Clinton's, what Obama has is momentum. Momentum means you're winning because you're winning. It's sort of content-free. Hillary Clinton is fighting back saying, I'm a fighter, I've been tested, I'm tough. I can fight a tough partisan war. I can take whatever the Republicans can dish out. The problem is a -- and also they are trying to portray Obama as kind of a wisp, that he is not enough, that he's not enough of a fighter. The problem with that message is: They may not be the message most voters want to hear this year. They're tired of all the fighting and that's her problem.
PILGRIM: You know, Candy, they're picking special venues to highlight their strengths, aren't they? CROWLEY: They absolutely are. I mean, I think, probably, if you look at your TV over the past week, what you would've seen is exactly what Bill's talking about. An attempt visually by the Obama campaign to show the passion, to show that sort of we are moving, we are moving. You know, huge arenas, he came out of those Potomac primaries and plopped himself down in Madison, where they got about 20,000 people. Obviously, it's a university town. But there we're more than that, would be on that arena. Hillary Clinton is going for the, look, I'm about solutions, he's about promises effect. So, if you look at her is, they sort of take those smaller venues and they talk about, you know, here's what I do about energy costs. Someone will stand up and ask anything, and she knows about it. So, they're hoping that the depth of her knowledge in sort of speaking of those home and heart issues in quieter venues will go to her strengths.
PILGRIM: That's interesting stuff. Now, let's talk endorsements for a second. Obama has quite a few endorsements, Candy, and a lot of celebrities endorsing him. What are you seeing in terms of the tone of the campaign with the endorsements?
CROWLEY: You know, here again, the two campaigns are just so different and you see that when you're out here. And one of the things that I noticed when we're arenas, they play on the big picture at the top. And these are basketball arenas, hockey arenas. A video of Obama being endorsed by a number of Hollywood stars and at the end, it says, join the movement. And they have tried from the beginning to make this more of movement, kind of going into that subterranean part of the American electorate that is totally fed up, trying to bring in new voters, trying to bring in disaffected voters. So, they describe it as to movement. You know, it is sort of beyond the campaign, it sort of transcends it.
PILGRIM: Right. You know, we spend a lot of time talking about the Democrats, but let's move on the Republicans. And McCain has actually picked up some good endorsements and may pick even a bigger one. Bill, tell us a little about what you think.
SCHNEIDER: Well, he was endorsed by Mitt Romney, but Romney was in a way following his voters. We saw in Maryland last week, the conservatives are already tilting towards John McCain and that the Mitt Romney vote is the favoring McCain over Mike Huckabee, who's claiming to be the last remaining conservative, holding out against John McCain. Mitt Romney isn't leading them. He's following them. The question about Huckabee is, you know, he's really a regional candidate. He's not showing much strength outside the south but the endorsements are coming in. There is momentum also for John McCain. But he in his way is fighting the movement, he's fighting the conservative movement which doesn't really, isn't really convinced that he's one of them.
PILGRIM: Candy, some thoughts on the Republican campaigns?
CROWLEY: Absolutely. George H. W. Bush, the former president is going to endorse John McCain. He will do it in Texas where obviously there is a primary coming up in early March. This is aimed at those social conservatives in Texas who have often tangled with George H. W. Bush. It's an interesting endorsement first of all because it's from the party elder in the Republican Party. But I'm not sure this is going to totally convince those conservative Republicans that are fueling Huckabee. Because as you know, there's couple of phrases in the conservative lexicon, read my lips, no new taxes and then, George Bush went ahead and raised them. No more suitors (ph), a reference to a Supreme Court nominee that turned out to be a liberal on the court. So, I'm not sure this will actually attract conservatives. But it's a powerful endorsement and it says to Mike Huckabee, get with the program. It's going to be John McCain
PILGRIM: Well, one thing is very clear: that these campaigns are not going to be boring any time soon. This is a fascinating race. We are bit out of time. So, thank you very much for joining us. Candy Crowley and Bill Schneider: Thank you.
Coming up: A new relief plan for homeowners who at risk of foreclosure that may not help those who need it the most. We'll have a report.
Also: The administration's top economic minds go to Capitol Hill and tell Congress the economy is deteriorating. We'll have that story.
Also: The federal government may be putting expediency before security when it comes to issuing green cards. We'll have that report. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Bush administration officials recently took some action to help the deteriorating economy. President Bush signed the $170 billion stimulus package. President Bush says, he believes this package will help avoid a recession. Hundreds of thousands of Americans will receive rebate checks. Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson testify before the Senate Banking Committee. Bernanke indicated further interest rate cuts could be coming in an attempt to revive the economy. Now, critics say, the administration is not doing enough to help solve the crisis that is hitting American homeowners particularly hard. Well, the administration is also proposing a new plan to help struggling homeowners facing foreclosures. But critics of the new proposals say that plan may help only a fraction of the number of Americans who now face foreclosure.
(BEGIN VIDEOTAPE)
PILGRIM (voice over): President Bush took (ph) up Project Lifeline, the new housing foreclosure plan.
PRES. GEORGE W. BUSH, UNITED STATES: Many Americans are worried about meeting their mortgages. My administration is working to address this problem.
PILGRIM: Many major banks support Project Lifeline which calls for a 30-day freeze before any foreclosure. But the plan does not include homeowners in active foreclosure process, like Diane Swigonski, who we profiled recently on this broadcast. She was supposed to lose her home yesterday but at still in desperate negotiations with the bank.
DIANE SWIGONSKI, FACING FORECLOSURE: It's extremely frustrating. It's been a nightmare.
PILGRIM: And under the voluntary program: Banks are required to offer refinancing or any new terms on loans.
ERIC HALPRIN, CENTER FOR RESPONSIBLE LENDING: At the end of the day, a voluntary initiative just isn't going to ensure that lenders are providing loan modifications that allow homeowners to stay in their homes for the long term.
PILGRIM: Only owners who have missed more than three month's payments are eligible for Project Lifeline. Theoretically, that could amount to, at best, 400,000 homeowners. Most analysts expect a far fewer to be offered better terms.
JOHN TAYLOR, NAT'L. COMM. REINVESTMENT COALITION: It's going to be a significant minority of the loans. Even using the best estimates, it's not going to put a serious dent on the problem.
PILGRIM: It's a real crisis: 86 out of 100 metropolitan areas are reporting higher foreclosure rates in the last year.
(END VIDEOTAPE)
PILGRIM: Detroit has the highest number of foreclosures in the country, the highest number in 2007. According to a new study by a realty track, nearly five percent of all Detroit household where in some stage of foreclosure last year. That's almost five times the national average. Stockton, California in second. Cleveland, a city who's mortgage crisis we reported extensively here, has the sixth highest foreclosure rate in the nation.
The White House just released a report that projects our economy will avoid a recession this year. Professor Martin Feldstein disagrees that that conclusion should be the case, at least at this point. Professor Feldstein is the president of the National Bureau of Economic Research. The bureau official tracks and determines when the economy is in recession. And Professor Feldstein spoke with Lou Dobbs recently.
(BEGIN VIDEO CLIP)
LOU DOBBS, HOST: I know it's far too early to make a judgment but the pain that is already being felt in the economy feels like a recession of literally millions and millions of Americans. Is it -- give us your best judgment of the forces that are working in this economy, how severe they are and how much they can contribute to a recession, perhaps even worse.
MARTIN FELDSTEIN, PRES., NAT'L BUR. OF ECON. RESEARCH: Well, I think, we don't know yet whether the economy is actually turning down. But if you look at the data for the last month of December, it looks like an economy that is stalling out and could be the beginning of a downturn. We see consumer retail sales are flat. We see private sector employment down a little bit. We see personal incomes not growing. Of course, housing is in terrible shape. So, we've been on economy that is weak and may be heading down.
DOBBS: Well, the folks are now, after they're watching you and me and are saying, oh, my gosh, economics. I know what it feels like when I'm at a store, at a bank, or paying bills or trying to get a job or a raise. The reality here is that we have a serious economic - I think many people are describing it as a crisis, whether we're talking about housing, whether we're talking about the credit market, whether we're talking about the general economy. You call for a cut on interest rates. You federal reserve has responded positively and it's cut rates in terms of the Fed funds rate down to 3 percent. You call for an economic stimulus package. Congress and the president responded, approximately $150 billion, about 1 percent of GDP. Give us your sense, Martin Feldstein's sense of just how serious the problem is and whether more steps are necessary and soon to avoid the stall, the downturn that none of us wants to go through.
FELDSTEIN: We don't really know. I think the Feds has done the right thing in bringing rates down. They're now at stimulative level. I think the fiscal package was a good thing also. I think that also will reduce both the risk of a recession and for when (ph) it comes to severity. But it could get worse and I think the reason it could get worse is the credit markets. What's happening in credit markets seems to me without precedent, it's not just about banks, it's about the whole range of players in the credit markets not stepping up, not being able, not wanting to lend because they don't have confidence in the folks they would be lending to and they don't have confidence in the value of the assets that they're creating.
DOBBS: And the situation here you're describing is not simply domestically. It is now becoming international in which participants and parties in these transactions are unwilling to, in many cases, let's say some cases right now, and I hope it doesn't become many, are not willing to honor their obligations in the debt market.
FELDSTEIN: That's right. And it is primarily at this point, still a U.S. problem. But this markets, the hedge fund markets, the credit derivative markets, those are international markets and so, they're going to have similar effects elsewhere and we are seeing the European economy slowing down, month after month. So, the Japanese economy has never really taking off.
DOBBS: There was a time I think when people could comfortably say, that the dollar's decline was a good thing for this economy because we would be exporting more goods and services because of lower prices. But actually (ph) what we witness over the last eight months and which frankly, professor, I warned against on this broadcast now since this administration started suggesting, that's won be dealing with the dollar is because there is no elasticity in demand and price here for imports in China. We've seen prices go up eight consecutive months in imports from China.
FELDSTEIN: But look at the overall story of the dollar. The main move of the dollar has been against the European currency, it's been against Canada. It's been against Japan even. And that has made a big difference. Our exports are up 25 percent in the last two years. Our trade deficit is down a full percentage point of GDP. So, one of the few positive things out there is the fact that the dollars is getting more competitive.
DOBBS: Can I brush a little reality across the - about the surface of the current deficit, and that is that it's still of just about 6 percent of GDP, that our debts have continue to rise. We'll set again another record deficit against China in 2007.
FELDSTEIN: But overall, our deficit has actually come down. Current account deficit has come down about a percentage point of GDP. But it's enormous and the fact that it's enormous tells me that the dollar, the market pressures are going to push the dollar down more (ph) to make it more competitive. And we shouldn't think of the dollar coming down as somehow a bad thing about America. It's giving us a greater competitiveness in world markets.
DOBBS: I would accept competitiveness. I hope that you're right. You have a great track record. But I have to say, I'm enormously skeptical of the impact of what we're going to have, particularly this would (ph) be China. Professor, also, we thank you very much for being here. We can certainly weigh on the decision as to whether or not this is a recession. The pain is sufficient. We'll have to put here an official informatory on it, I think at this point for many Americans.
FELDSTEIN: Could be million (ph).
DOBBS: Professor, thank you.
(END VIDEO CLIP)
PILGRIM: Coming up: Pro-amnesty advocates aren't happy with just sanctuary cities for illegal aliens, they want a sanctuary state. And we'll tell you which state they have in mind.
Also: The Department of Homeland Security is waiving some background checks for those applying for green cards. Is this a case of speed over security? We'll have a report.
And: A new cold war maybe brewing as the Russian president makes a new threat at the west over the missile defense shield. We'll have that story. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: The battle over amnesty for illegal aliens is intensifying in California, the state with the largest illegal alien population. And now, one leading pro-amnesty group wants the entire state declared a sanctuary for those in the country illegally. Casey Wian reports.
(BEGIN VIDEOTAPE) CASEY WIAN, CNN CORRESPONDENT (voice over): The California chapter of LULAC, the League of United Latin American Citizens unanimously voted to declare what it called "California del Norte", a sanctuary for immigrants. The group, the largest and oldest Latino group in the U.S. demands an end to all state local police cooperation with federal immigration authorities, things like immigration and customs enforcement raids of businesses employing illegal aliens.
JAN TUCKER, CALF, LULAC: Most responsible law enforcement officials would agree with us to initially extent that when local police get involved to try to enforce (ph) immigration laws that it's just creates an environment that's hostile towards the police. No one cooperates with them whether they're here legally, illegally.
WIAN: California LULAC also wants the Mexican government to seek the assistance on the third nation to resolve disputes with the United States over American immigration laws and their enforcements. The group cites Article 21 of the 1848 treaty of Guadalupe Hidalgo which ended the Mexican-American war in transfer of part of Northern Mexico to the United States. LULAC sanctuary state declaration seemed ironic to this California lawmaker.
CHUCK DEVORE, CALIF. STATE ASSEMBLY: I guess one could argue that we are in effect already a sanctuary state. If you look at our $103 billion annual general fund budget, most estimates are that we spend in upwards of $11 billion of that money caring for, providing welfare, educating, housing for people who are here illegally.
WIAN: Devore has introduced a bill that would end the California's policy of subsidizing state college tuition for illegal aliens. Instead, he wants to provide free tuition to members of the California National Guard. Devore estimates the proposal would save the state well over $100 million a year.
(on camera): Because California legislature is dominated by Democrats who favor amnesty for illegal aliens, Devore's bill is not expected to pass. The LULAC declaration of course carries no legal authority. But both demonstrate the deep divide that remains in California over illegal immigration. Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
PILGRIM: The Department of Homeland Security this week came up with the solution to a massive backlog of green card applications. The Department of Homeland Security now says it will grant green cads without completing back ground checks. As Bill Tucker reports, this just the latest example of our government putting expediency ahead of national security.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice over): The Department of Homeland Security is reversing its long-standing policy and will begin granting green cards to tens of thousands of applicants whose background checks are incomplete. Eligible immigrants are those whose fingerprints have clear of FBI database of criminal convictions and arrest but whose names haven't. DHS defends the practice, noting that all applicants for agree cards are people who've been in the country for several years and who have already undergone one background check when they initially entered the country. It's a move though that has alarmed agency critics.
MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: The whole point to doing this security checks every time a foreigner changes status is to give us a second, third, fourth chance to find out if they're really supposed to be here.
TUCKER: The policy change has intended to clear up a backlog of 150,000 applicants. Some of whom have been waiting for more than three years. Critics say, the policy reversal smacks of expedience trumping security.
MICHAEL CUTTER, FORMER INS AGENT: If we can spend so much time, money and effort screening passengers getting onboard airplanes, wouldn't that only make sense that we similarly subject aliens seeking to enter the United States especially permanently through a similar process.
TUCKER: In 2006, the United States Citizenship and Immigration Services announce that it had lost the files of 111,000 people waiting to become naturalized citizens. The agency then admitted it had granted citizenship to 30,000 of those people any way.
(on camera): Our alliances (ph), say the critics, we're not taking responsibility for our immigration policies. Congress does not provide the funding, the resources or the staffing necessary to do the job right. And that, the critics say, leave us with two simple choices. Either Congress provides the resources or we reduce the number of illegal immigrants allowed to come in the country each year. Compromising security is not an option. Bill Tucker, CNN, New York.
PILGRIM: Coming up: China and Russia both taking a stand against the United States. We'll tell you what they have to say.
Also: Special interest groups lining up to receive billions of dollars from Congress. We'll have a special report.
Romney endorses John McCain: Will this help McCain win over conservatives?
We'll be right back.
(COMMERCIAL BREAK)
JACQUI JERAS, CNN, METEOROLOGIST: I'm meteorologist Jacqui Jeras in the CNN Severe Weather Center with the latest on the severe thunderstorms across eastern parts of Texas. Really getting walloped right now with some very heavy storms from the Gulf coast, extending all the way up towards the northern state line there. We have a couple of tornado warnings in effect right now. In Montgomery and Grimes Counties as well Walker, Trinity, Poke and the San Jacinto. Here you can see the two storms of concerns our there towards trinity. These storms are not moving very quickly up to the north and the east. They also have a history of producing some large hail in Houston county rather. Hail about the size of quarters was reported about an hour ago. So be aware of that on-going threat as well. The moisture is continuing to move northward down. It's moving into some cool air. And notice some of these pinks beginning to develop. We think we're going to see a real hodge podge of weather here from freezing rain over to rain and back into freezing rain and then into snow tonight, particularly in the northern part of Kansas and that includes you in Kansas City. And the winds are going to be whipping up very strong. Tomorrow, the blizzard watch had been issued across parts of Iowa, mostly to the west of i-35 and into the north of I-80, a big wintry mess across the upper Midwest. That's a look at the latest on weather. Tony Harris will be back in about an hour with the latest headlines. Now, back to Lou Dobbs this week.
KITTY PILGRIM, CNN, ANCHOR: China and Russia, both taking a stand against the United States. Communist China said the United States should "give up its cold war thinking," after the Justice Department announced charges in two different cases of Chinese espionage in this country. Meanwhile, Russian President Vladimir Putin threatened U.S. installations in Europe, calling the U.S. missile defense program, a threat to Russia's national security.
(BEGIN VIDEOTAPE)
PILGRIM (voice-over): Vladimir Putin threatening to target planned U.S. missile defense installation in Poland and the Czech republic.
In his last news conference before presidential elections on March 2nd, Putin told a hall packed with hundreds of journalist, he is not running for president again, but he has no problem sharing power with Dmitri Mendeleev. The man he called "the best person to succeed him." Putin's vision of Russia under his direction is to counter U.S. power in the region.
GLEN HOWARD, THE JAMESTOWN FOUNDATION: The rhetoric has a specific aim and the specific aim is to intimidate those countries bordering the Soviet Union and that are aspiring to become members of NATO and that's what the United States needs to be concerned about.
PILGRIM: Last year, the U.S. National Intelligence Director, Michael McConnell said Chinese and Russian spies are stalking the United States at levels last seen in the cold war. This week, four individuals were charged for selling sensitive technology to China. China is also in the middle of a massive military build up, refusing to explain its intentions to U.S. officials.
JOHN TKACIK, THE HERITAGE FOUNDATION: China certainly seeks regional predominance in east Asia and Russia's most recent behavior indicates that they that shall wants to return to a time that had overwhelming influence in Eastern Europe and central Eurasia.
PILGRIM: China told the United States to drop its cold war attitude. They called the charges of Chinese espionage complete fabrication.
(END VIDEOTAPE)
PILGRIM: Strategic experts say Russia's strength has increased with the revenues from their oil sales. China, of course, a global trade powerhouse, has the means to build up its military. Well, Gordon Chang, one of the country's foremost experts on China says two espionage cases revealed this week are evidence of a dangerous pattern by both China and Russia.
GORDON CHANG, AUTHOR, "COMING COLLAPSE OF CHINA": Well, the most important thing about is that China is following the Soviet pattern of putting their best agents not in Washington or New York but in California because that's where the high-technology is. They are trying to steal it, not only for their military but for their businesses as well. So, this is a very important thing for us to talk about. They talk about cold war thinking. That's because they think they're in a cold war. We don't know. You know, we're just ignoring some blatantly unfriendly behavior but they actually think that there is a global contest with us.
PILGRIM: The espionage coupled with a military buildup is an extraordinarily dangerous situation, isn't?
CHANGE: That would certainly is. And this comes at the same as these increased cyber attacks against, not only the United States, but Britain, France, Germany, Japan. This has been occurring especially since 2003 and the United States while we're trying to counter it is not saying anything in public. You know, German Chancellor Angela Merkel went to Beijing late last year and told off the Chinese. You know, it's high time us to do the same thing.
PILGRIM: We are very polite. In fact, we took no response from our inquiries about the satellite test last year. Let's talk about Russia, how much of this rhetoric from President Putin is posturing an advance for the presidential election?
CHANG: I think a little bit of it is but he is very confident about the outcome. They've eliminated almost all of the opposition.
PILGRIM: Confidence is a euphemism.
CHANG: Putin isn't actually trying to sort of reassemble the Soviet empire but he is trying to assert his will over what he calls the a nearer abroad and the problem is they're young democracy is there. You know, last year it was Georgia, this year he is threatening the Ukraine. This is a very bad development. And the United States needs to do something about it.
PILGRIM: We have the united nations talking about Kosovo, how much of - and Russia, of course, opposes the U.S. and the Europeans on this issue. Is there a little bit of anger about Kosovo in this rhetoric too?
CHANG: Well, Putin has been very concerned. This is something that goes back for a number of years and here is one place where he is trying to make a stand. So, it's not just the Ukraine but it's Kosovo and it's all sorts of things that the Russians are doing, including buzzing our carrier groups. This is not a good development because this is really a return to sort of the cold car tactics.
PILGRIM: Do you not find it disturbing though that so much aggressive action is being taken, the sort of games being played and these military maneuvers that are sort of quasi aggressive all over the globe and it was China with Russia and U.S. forces.
CHANG: Yes. And the one thing that the United States is not willing to acknowledge is the new found assertiveness of both Russia and China which in many cases are working together because they see their interest coincide. This is something which we see in Iran and North Korea. The two greatest threats to the United States and the international community, and China and Russia are backing both of their nuclear ambition.
PILGRIM: And how much do you worry about China and Russia teaming up? I mean, they have not been traditional allies in any sense of the term but in the last half decade, they had their treaty of friendship. They started calling each other strategic partners. Now, it's a generation of themselves working together because they sort of view themselves as rising powers and they view us as the adversary. And so, it's something of concern and I think the United States needs to start talking to both the Chinese and the Russians, not only in private but in public as well.
PILGRIM: That was Gordon Chang, author of "The Coming Collapse of China" on U.S., China and Russian relations.
Coming up. The best government money can buy. It's earmark season again and special interest groups are lining up with their hands out to collect your tax dollars from Congress. We have a special report.
And McCain on a roll. Major endorsements this week for the republican front runner. Can it carry him all the way to the White House? All that and much more, straight ahead.
(COMMERCIAL BREAK)
PILGRIM: The 2008 earmark season is under way. Congressman and senators from both parties are telling constituents and lobbyists to recommend pet projects that could be financed by the federal government. According to tax payers for common sense, Congressman Jack Murtha, the head of the House's Appropriation sub-committee, leads the list of congressmen obtaining earmarks. Louise Schiavone reports there may be a distinct correlation between earmarks given by Congressman Murtha and campaign contributions.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN, CORRESPONDENT: In the world of federal spending, it's that time of year again. Just two weeks to go to get your request for earmarks, specifically targeted spending awarded in the form of no big contracts. Submissions are to be entered on this handy house appropriations committee website. And if history is any guide, defense sub-committee chairman John Murtha of Pennsylvania promises to be a stand out. RYAN ALEXANDER, TAXPAYERS FOR COMMON SENSE: Representative Murtha in the house has always been a champion and he's at the top again. Every single earmark that he made was to someone who gave him a campaign contribution.
SCHIAVONE: Taxpayers for Common Sense, a non-partisan watch dog group, reports that last year, Murtha single handedly nailed down $160 million worth of earmarks. On the receiving end of these earmarks, businesses like Concurrent Technologies, DRS Technologies, Inc., The National Drug Intelligence Center, all of which have two things in common, according to Taxpayers for Common Sense, and addressing Murtha's district and contributions to his campaign chest. Congressman Murtha refused to comment but his critics aren't holding back.
REP. JEB HENSARLING (R), TEXAS: When I see reports like Congressman Murtha's that every single recipient of an earmark turns around and puts campaign cash into his campaign coffers, the system is broken and he's the number one earmarked on Capitol Hill. It's the triumph of politics over merit and the system is broken.
SCHIAVONE: At the end of this month, Congressman Murtha will host a campaign fund raiser at a posh hotel near the Pentagon. An annual event where defense contractors have been regular attendees.
(END VIDEOTAPE)
SCHIAVONE: President Bush has vowed to veto any spending bill that does not reflect a 50% or more reduction than last year's earmarks but it remains to be seen if members of both parties can stop bingeing on these earmarks. Kitty.
PILGRIM: I wouldn't bet on it. Thanks very much, Louise Schiavone.
Senator Hillary Clinton leads the presidential candidates in the use of earmarks. According to a new study by the group Taxpayers for Common Sense, the New York senator secured more than $340 million for home state projects and that places here among the top ten senate recipients. That's almost four times as much as Senator Barack Obama. The Illinois senator supported $91 million in earmarks. In sharp contrast, Senator John McCain rejects earmarks completely. McCain is only one of five senators to do so.
Coming up, the race for the democratic nomination is closer than ever. But will a handful of party leaders decide the democratic nominee instead of the voters. That and more ahead. Stay with us.
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PILGRIM: A big week for John McCain. Picking up Mitt Romney's endorsement and his delegates. On the democratic side, Senator Clinton picked up a win but it was not enough to regain the lead from Senator Obama. So, joining me now, CNN contributor Errol Louis, who is a columnist for the "New York Daily News," Hank Sheinkopf, democratic strategist, also a CNN contributor and from Washington, Diana West, columnist from the "Washington Times."
Thank you all for being here. You know, it's been a real interesting week in the campaigning. And what's particularly intriguing is the language. Now, Senator Clinton has a new sort of slogan. She says she is about programs, Obama is about promises. What do you think of this, Hank?
HANK SHEINKOPF, CNN, CONTRIBUTOR: Not a lot. The issue is not Obama. The issue is Hillary Clinton. They are thinking in traditional terms that is why the Clinton campaign has got some problems. This is not a traditional race. There is no phenomena before this name Barack Obama nor will it be afterwards. It's really got to be about her. It's got to be a personal relationship between her and the electorate and that is where disconnect is. Attacking Senator Obama is not going to help much.
PILGRIM: You know, we hear from Candy Crowley, our correspondent who has covered the Hillary Clinton campaign extensively that Senator Clinton is picking these small venues where she can talk specifics about policy which is really on the nuts and bolts. Let me draw something that she said in Ohio about her appeal to the middle class. Let's hear this.
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I am a candidate of, from and for the middle class of America. Because I believe with all my heart that the middle class is the guarantor of the American dream and it is the economic backbone of our country. It is time we had a president who is a fighter, a doer and the champion for the American middle class again.
(END VIDEO CLIP)
PILGRIM: Diana, Hank brings up this connection that has to be made between Clinton and the voters. She is in the small groups. She is talking about middle class issues. She's trying very, very hard to connect to their concerns. Do you think it's working?
DIANA WEST, "THE WASHINGTON TIMES": Well, it hasn't been working well enough because she hasn't been winning enough but I actually think that it is to her advantage to start, I don't know if attacking is the right word, but pointing out the emptiness of Senator Obama's rhetoric. I mean, that is really his great weakness. Some of the statements he's made about foreign policy would certainly strike even Senator Clinton as very naive in terms of him wanting to call a meeting with all the Islamic leaders and solve our differences that way. That kind of thing. I think that is what she has to do to show that she has more experience and understanding to get the job.
PILGRIM: You know, also brought up in an earlier discussion is Obama basically favoring these large venues, where he can make these sweeping speeches, sort of build the, sort of the momentum of his campaign. Errol, that seems to be working for him fairly well.
ERROL LOUIS, CNN, CONTRIBUTOR: Sure. PILGRIM: Does he have to go back to middle class issues?
LOUIS: I don't know that he does. Frankly, trust me, no matter what they say to the contrary, I think Senator Clinton's people would be thrilled if she can get 14 or 20,000 people, two and three times a week to fill up arenas and chant her name. I mean, one of the things that Obama is fond of doing at these big rallies by the way, especially when there are young people, is he asks them to take out their cellphones to call somebody on the spot. You know, if only a small percentage of people actually do it, he picked up hundreds of new contacts and absolutely at no cost.
You know, it's not just sort of a feel good kind of a situation despite what Senator Clinton says. On the contrary, I mean, it's understandable she would like to stay in small venues. She would like to stay with debates. She'd like to cut into his strong points because those rallies are inspiring and gets him lots of news coverage and they get them lots of new volunteers. But, you know, they're too smart I think on the Obama side to get suckered out of doing what has worked so well for them.
PILGRIM: You know, I'd like to bring out something that Obama said about the economy. He has to really focus on the economy. Also, let's listen to this.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We are not standing on the brink of recession because it forces out of our control. This was not an inevitable part of the business cycle. It was a failure of leadership in Washington, a Washington where George Bush hands out billions of tax cuts to the wealthiest few, year after year after year. A Washington where politicians thought NAFTA is a success when they're in the White House and then call it a mistake when they're on the campaign trail.
(END VIDEO CLIP)
PILGRIM: Now, we have middle class states -- Wisconsin, Ohio, Pennsylvania all coming up. They're basically middle class voters, strong bulk of that. Will he appeal to them with this kind of a message/
LOUIS: I think the NAFTA message is going to be right on target. I mean, Hillary Clinton is trying to use her husband's Bill Clinton's presidency as part of her experience except when it comes to something like NAFTA which is enormously unpopular with many union households and many union organizations. You know, some of that will bleed over into her record here in New York. As when she was running for senate, she promised 200,000 new jobs in the upstate, in the industrialized troubled part of the state economy. Nothing near like that has actually occurred. So, you know, she is asking for a fight on this turf. If she gets one, there is no guarantee that she's going to win it.
PILGRIM: We're going to have to take a quick break. This fascinating turf we're getting into. We'll take a quick break. We'll be back with our political round table in just a moment. Stay with us.
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PILGRIM: Joining me again, Errol Louis, Hank Sheinkopf and Dianne West. Hank, we were talking about the appeal of both democratic candidates to middle class values. Senator Obama was endorsed by the Service Employees International Union. What impact do you think that will have on his campaign? Will this be sort of the grassroots that he needs to support him or not?
SHEINKOPF: Certainly, the service employees have been very successful in campaigns, not only in the political world but in organizing they have a very important message and they work very well, in health care sector as well as even in the public sector workers. But here's the bottom line about the Clinton campaign and about Senator Clinton. It has to be made more personal. Barack Obama is what the kind of person they look for in times of crisis. A great orator, someone who is charismatic. They don't what too hear much about details. She is the detail person. The only way she's going to get that across is in smaller settings. The longer they wait to do it, the higher the probability they're going to lose.
PILGRIM: You know, Clinton and Obama are debating Monday in Austin, Texas. That's going to be covered here on CNN. Diana, what should we expect and will it be less cordial than the last time which really was quite cordial?
WEST: Yes, it was. Well, there's got to be a different kind of tension to this debate. I don't think it will have the feel of the last one. But I would say that in terms of appealing to middle class voters, I'm not sure that this something that Hillary Clinton can do but Barack Obama can be identified and labeled an extreme liberal. He was recently voted by the "National Journal" as the number one liberal senator. So is that really where the middle class is? That is the big question if he's ever defined that way. So far, he's avoided the label. The media has avoided labeling him and Mrs. Clinton who is not that different has also stayed away from that. But that, you know, the ideological quantity is something that we haven't gotten into yet.
PILGRIM: You know, it looks in all effect that it's going to very, very tight and then you have the outstanding question, what do with the delegates from Florida and Michigan. Julian Bond, the NAACP chairman, wrote the Democratic National Committee and called for the delegates to be seeded according to the primary results? Errol, do you think this is going to turn to a major fight here?
LOUIS: Well, you know, I think it's a trial balloon and I'm sure a lot of people across the nation as I was, were their heads and saying, is this the same Julian Bond who 40 years ago this year was nominated for vice president and you know, at the famous Chicago Democratic Convention and got up and said, I can't accept the nomination because the constitution says I have to be 35 and I am only 28 years old. You know, when he was part of this dynamic youth movement that was really trying to open up the party to now sort of be on the side of well let's change the rules to help our favorite candidate. I don't know if it's going, I don't know if it's going to fly. You know, Julian Bond is putting it out there. I don't know how many followers among the branches of the NAACO are going to come behind him with that.
PILGRIM: You know, the democratic race is so interesting that we always spend a lot of time on it. Let's switch to republicans, John McCain, possibly endorsed next week by all likelihood former President Bush. Mitt Romney this week. The endorsements, his numbers are holding up. He's the clear front runner. He probably has his own up. Is there anything surprising in this that we can see coming forward, Hank?
SHEINKOPF: Surprising that the pundits are wrong about John McCain from the beginning. Not surprising. Now, are republicans smarter than democrats? They want to win. The democrats want a fight. That's the difference.
PILGRIM: Diana?
WEST: Yes, well, I suppose they're trying to line up the republican party and make things look very neat and orderly to draw a contrast with the fighting that Hank's taking about going on with the democrats.
PILGRIM: I mean, you got Huckabee still hanging in there, Errol.
LOUIS: Yes, sure. I mean this is the problem. It's the same, you know, it's a little bit, it's playing out differently on the democratic side but this is about social movements trying to move into the center of power, and this is the evangelical movement, these social conservatives. On the republican side, this whole race has been about them, trying to find a home, trying to make some accommodations with a party establishment that doesn't seem to want them very much. And so there are going to ham on to Huckabee and he's going to be their chip and their leader and their negotiator and when that deal is cut, I think then he'll be standing beside John McCain.
PILGRIM: Very interesting stuff. We have to end it there. Thank you very much. Errol Louis, Hank Sheinkopf, Diana West. And thank you for joining us. Please join us tomorrow. For all of us here, thanks for watching. Good night from New York.
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