Massive Spending Plan; Red Storm Rising
LOU DOBBS, HOST: Wolf, tonight, President Obama on Capitol Hill trying to sell his $3.6 trillion budget to members of his own party. There's also some good news on the economy and the housing market tonight, so much for doom and gloom in Washington and on Wall Street. Also tonight, a troubling new report on communist China's rapid military build-up and the rising threat to this country, among my guests here tonight, Congressman Brad Sherman and Senator Judd Gregg will be talking about President Obama's budget and the future of this economy, all of that, all the day's news and much more, straight ahead here tonight.</s>ANNOUNCER: This is</s>LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, March 25th. Live from New York, Lou Dobbs.</s>DOBBS: Good evening, everybody. President Obama took his budget sales pitch to Capitol Hill. Today, he met with Democrats in the House and Senate, trying to persuade them to go along with his $3.6 trillion spending plan, already Democratic leaders are scaling back the president's domestic programs and his middle class tax cut. Republicans tonight are calling upon the American people to rise up against the president's spending plan. Dana Bash has our report from Capitol Hill.</s>DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A trip down Pennsylvania Avenue to rally support for his budget, going behind closed doors with fellow Democrats, wary of big spending and soaring deficits.</s>SEN. KENT CONRAD (D), BUDGET CHAIRMAN: He asked the caucus what he asked me; preserve my priorities, education, energy, health care. Reduce the deficit substantially.</s>BASH: But even as President Obama made his case, Democrat-led House and Senate committees were writing their own budgets and scaling back some of the president's plans. Most prominently, the signature tax cut he campaigned on, $400 for most individual, $800 for couples. The Senate budget would eliminate funding for that in two years, unless the White House finds a way to pay for it. Congressional Democrats are also slashing $250 billion the White House set aside for more Wall Street bailouts. The Democratic budget chairman called the changes critical to taming the exploding deficit.</s>CONRAD: In light of the new reality, those are the fundamental differences we have had to insist that things be paid for, and I make no apology for it.</s>BASH: CNN is told that some conservative Democrats used their private Obama meeting to question the wisdom of his plans for big spending on health care, education and energy in difficult economic times. Meanwhile, Republicans are trying to exploit differences among Democrats. Listen to this GOP appeal to conservative Democrats.</s>REP. PAUL RYAN (D), WISCONSIN: You hold the cards. You have the votes that can make the difference in this. You can stop this. I'm asking you join us to stop this fiscal train wreck.</s>BASH: Now, one of the major changes congressional Democrats are making is, Lou, they are taking out the $600 billion-plus that the president set aside to reform health care. That of course is one of his top priorities. Now, Democrats say that they still, of course, vow to tackle this issue. But now they're going to have to find a way to pay for it. And everybody agrees it is going to be a mind-blowing price tag.</s>DOBBS: Well, the mind-blowing price tag may be coming down if people like Congressman Paul Ryan, as you just reported, opposing directly, publicly and with some passion, the president's proposals. We know 16 Democrats in the Senate, doing the same thing. This president has a real battle on his hands on Capitol Hill with this budget, doesn't he?</s>BASH: He absolutely does. He's unlikely to get any of those House Republicans. He doesn't need them in the House, but with regard to those Senate Democrats, I talked to a lot of them going in and out of the meeting with President Obama today. Many of them did tell me that they feel a little bit more comfortable with the budget that's going through the Senate now because of those changes. They weren't major changes, but changes enough for some of them that they feel more comfortable with the fact that Congress is trying to tackle the deficit issue, at least better -- from their perspective -- better than the president has.</s>DOBBS: "Better" is as it implies, a relative term. I mean, these are huge deficits and additions to the national debt extraordinary. Thank you very much, we appreciate it. Dana Bash.</s>BASH: Thanks, Lou.</s>DOBBS: Well Republicans are also directly appealing to the American people to fight the Obama budget. Mike Pence, congressman from Indiana, today calling on Americans to, as he put it, rise up against the president's proposals.</s>REP. MIKE PENCE (R), INDIANA: I will always believe, as long as I serve here, that a minority in Congress plus the American people equals a majority. We intend to take our case for fiscal discipline, growth, and tax relief, to the American people from sea to shining sea and if the American people will rise up, anything's possible on Capitol Hill.</s>DOBBS: Congressman Pence accused President Obama of proposing the most fiscally irresponsibility budget in history. Two more Republican voices tonight saying loudly and clearly that President Obama's policies take this country in the wrong direction and they want those policies to fail -- senior political analyst Bill Schneider with that story.</s>UNIDENTIFIED MALE: It is not their right to remake this nation...</s>WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Last month, talk show host Rush Limbaugh created a stir when he said...</s>RUSH LIMBAUGH, RADIO TALK SHOW HOST: What is so strange about being honest and saying I want Barack Obama to fail, if his mission is to restructure and re-form this country so that capitalism and individual liberty are not its foundation? Why would I want that to succeed?</s>SCHNEIDER: Now, Louisiana Governor Bobby Jindal has joined the fray.</s>GOV. BOBBY JINDAL (R), LOUISIANA: Make no mistake, anything other than an immediate, a compliant well, no, sir, I don't want the president to fail, is treated as some act of treason, civil disobedience or political obstructionism. This is political correctness run amok.</s>SCHNEIDER: Former Senator and Republican presidential candidate Fred Thompson seems to agree.</s>FRED THOMPSON (R), FORMER U.S. SENATOR: I want his policies that I believe take us in the wrong direction to fail.</s>SCHNEIDER: Are these critics crossing the line between fair and unfair criticism? Where is the line anyway? It's fair for critics to oppose the president's policy. That's politics. It's harsh, but fair, to predict that those policies won't work.</s>JINDAL: And we believe that it is a dangerous path that could harm the very promise of America.</s>SCHNEIDER: But is it fair to say, unless the president does what I want, that I hope his policies fail?</s>JINDAL: Do you want the president to fail? It depends on what he it trying to do.</s>SCHNEIDER: These critics see the president's policies as failed by definition, bigger government, more debt.</s>THOMPSON: Well if he takes us down the road of tripling our national debt in 10 years, and making us vulnerable to higher interest rates and higher inflation and things of that nature, I want all those policies not to succeed.</s>SCHNEIDER: If you believe President Obama's policies are wrong, you might assume they have no chance to work. But not everyone shares that assumption.</s>SCHNEIDER: Ideologues believe that if a policy is wrong it can't probably work, even if it does work. Pragmatists believe that whatever works is right. Most Americans are pragmatists -- Lou.</s>DOBBS: And ideologues, to put it in the affirmative, also believe that what they believe will work, which creates the problem we're facing right now in the nation's capital.</s>SCHNEIDER: Exactly.</s>DOBBS: Bill Schneider, thank you very much. The current president of the European Union says the president's recovery plan is, as he put it, a road to hell. Czech Prime Minister Mirek Topolanek says huge government spending is a mistake and it's already causing panic in Europe. Under the plan announced by Treasury Secretary Geithner, the federal government would buy half a trillion dollars of toxic assets from commercial banks that are in danger of further default. Today, the dollar fell against the euro, another confusing statement from Treasury Secretary Geithner in which he contradicted his testimony before Congress. During an appearance at the Council on Foreign Relations in New York, the treasury secretary was asked about proposal from China's top central banker -- China's idea to replace the dollar as the world's reserve currency.</s>TIMOTHY GEITHNER, TREASURY SECRETARY: I haven't read the governor's proposal. We're actually quite open to that suggestion. But you should think of it as rather evolutionary, building on the current architecture, rather than moving us to global monetary union.</s>DOBBS: Well, you may remember that the treasury secretary had said just 24 hours earlier to Congresswoman Michele Bachmann something quite different.</s>UNIDENTIFIED FEMALE: I'm wondering would you categorically renounce the United States moving away from the dollar and going to a global currency as suggested this morning by China and also by Russia, Mr. Secretary.</s>GEITHNER: I would, yes.</s>UNIDENTIFIED FEMALE: You categorically and the Federal Reserve chair?</s>UNIDENTIFIED MALE: I would also.</s>DOBBS: Well, upon looking at the contradiction of his testimony, Congresswoman Bachmann says just a day later "Secretary Geithner has left the option on the table. I want to know which it is. The American people deserve to know" -- unquote. Secretary Geithner spent the rest of the day trying to double back on what he had said this morning, trying to reassure world currency markets. That was not successful, the dollar plunging in currency trading. British Prime Minister Gordon Brown taking searing criticism for following the lead of the United States on economic recovery. Listen to this statement from Daniel Hannan, a conservative British member of the European Parliament.</s>DANIEL HANNAN, EUROPEAN PARLIAMENT: Perhaps you would have more legitimacy in the councils of the world if the United Kingdom were not going into this recession in the worst condition of any G-20 country. The truth, Prime Minister, is that you have run out of our money. The country as a whole is now in negative equity. Every British child is born owing around 20,000 pounds. Servicing the interest on that debt is going to cost more than educating the child.</s>DOBBS: Well, we wondered how that particular comparison would work out with the president's projected debt in 2010 of 1.4 trillion deficit, rather. If those children in the United Kingdom were burdened with that, that would work out not to 20,000 pounds but 120,000 -- $127,000 each. Well, there's good news about the economy for a third time this week -- sales of new homes, up almost five percent in February. This is the first increase in those sales since last July. That's on top of Monday's report that existing home sales rose more than five percent, the biggest increase since 2003. On top of all of that, more good news, housing starts up 22 percent last month. That's the first increase since July. And more good news, another positive report on the economy. Durable goods orders up more than three percent last month and that is the biggest gain since 2007. Up later here a troubling new warning from the Pentagon about communist China's rapid military build-up. That's something, by the way, the Defense Department may have missed it, but we've been reporting on here now for more than two years. And next what Secretary of State Clinton is saying tonight about Mexican drug cartel violence and who is responsible. We'll tell you all about that next. You may not like the answer. We'll be right back.