Politics of Fear; Stimulus Showdown; Classic Public Works
LOU DOBBS, CNN ANCHOR: Wolf, tonight President Obama intensifies his rhetoric of fear, selling his huge borrowing and spending legislation. President Obama says delay will bring deepening disaster, as he put it, we'll have complete coverage tonight. Transportation Secretary Ray LaHood will be here to explain the Obama administration's position on the so-called economic stimulus bill. Ranking member of the Senate Banking Committee, Senator Richard Shelby joins us to tell us why he believes the legislation could lead to disaster. Also tonight in "Lou's Line-Item Veto" what critics say is another waste of taxpayer money, a new headquarters for the Department of Homeland Security. We'll have all of that, all the day's news and much more straight ahead right here.</s>ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and opinion for Monday, February 9th. Live from New York, Lou Dobbs.</s>DOBBS: Good evening everybody. Within the hour, President Obama will hold a primetime news conference to sell his so called stimulus legislation to the American people. Earlier President Obama used some of his most fearful language so far, abandoning the politics of hope for the rhetoric of fear. Speaking in Elkhart, Indiana today, President Obama declared that if Congress fails to take action the United States may face a crisis that may be impossible to reverse. Ed Henry has our report from the East Room of the White House where the president will hold his news conference within the hour -- Ed.</s>ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, good evening. We're told that the president will focus in an eight to 10-minute opening statement exclusively on the economy talking all about the financial crisis and that was the topic he addressed as well earlier today, as you mentioned, Elkhart, Indiana, his first town hall meeting since he took office. Aides say he picked that town because unemployment there has tripled from five percent to 15 percent in just the past year, and Robert Gibbs, the White House spokesman said the whole point was to get outside the beltway, show lawmakers how much people are hurting and give the president a backdrop to once again call for urgent action to deal with the economy.</s>BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: We can't afford to wait. We can't wait and see and hope for the best. We can't posture and bicker and resort to the same failed ideas that got us into this mess in the first place. I can say with complete confidence that endless delay or paralysis in Washington in the face of this crisis will only bring deepening disaster.</s>HENRY: Robert Gibbs insisted the president is not back in campaign mode, but I can tell you this morning very early today Gibbs sent myself and a lot of other reporters some polling data from the Gallup Organization showing that the president has about a two-thirds approval rating among the American people in terms of how he's been handling this stimulus issue. Now Republicans have been firing back with other polls suggesting that the actual substance of the stimulus bill itself is not as popular as the president. That gap between the popularity of the president and his plan is part of the reason why the White House is putting him out there as a salesman, not just with the town hall meeting today. He's going back to Florida for another town hall meeting tomorrow, and then of course he has his prime time news conference right here in the East Room in little less than an hour, Lou.</s>DOBBS: All right, I'm looking forward to it. Thank you very much, Ed -- Ed Henry. Well the so-called stimulus package as it now stands will likely cost somewhere around a billion -- $1 trillion. That would work out to about $1 billion a page for the legislation. Just how will it be paid for? Well, we'll have to borrow every dollar of it, much of it of course from communist China. Basically Beijing is now our principal banker. The interest alone on this legislation would amount to nearly $400 billion. Economists say the plan could at best save or create about three million jobs by the end of 2010. Based on the analysis of the House version of the legislation by Moody'sEconomy.com, the construction industry would see the largest gain in jobs, over six percent by the end of next year. Natural resources and mining, retail and leisure and hospitality would also see job gains. The overall employment impact of the stimulus would be felt most strongly in states that have been hurt the most -- principally, California. Arizona, Nevada and Florida could also be among the top beneficiaries. Economist Allan Sinai (ph) points out that the stimulus package is different than previous ones in our history. This one is fueled by government spending. Usually consumer spending leads the way out of recession. And as economist Peter Morrissey points out, once this money is spent and our deficit is even larger, there's absolutely no guarantee that our economy will not fall back into recession. The White House and Democrats tonight winning a key Senate victory on the so-called stimulus bill, senators voting 61 to 36 to end debate on the legislation and it moves to a final vote tomorrow. But even if the Senate were to approve the legislation tomorrow, there remains a huge fight ahead over how to convince House Democrats to support the spending cuts that have been proposed, if not put together rather obviously by the Senate. Dana Bash has our report from Capitol Hill.</s>DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): On its face, the Senate economic stimulus compromise, about $827 billion looks a lot like what passed the House, an $819 billion plan. But the reality is there are some major differences, setting up tough negotiations. Senate Democrats...</s>SEN. MAX BAUCUS (D), MONTANA: This is a compromise across the aisle and it's the finest vision of the Senate.</s>BASH: Versus House Democrats.</s>UNIDENTIFIED MALE: If it stays the way it is, then it's all a little bit more challenging for us.</s>BASH: In the Senate, the only way Democrats could lure Republican votes to pass the plan is by slashing some $100 billion in spending. But House Democrats are balking because a big chunk of the Senate's spending cuts are aimed at education. For example, the Senate sliced $40 billion in funding to the states, money for local officials to avoid cutbacks in education and other services. The Senate also eliminated $19 billion for school construction and cut Head Start early education funding in half from $2 billion to one billion. House Speaker Nancy Pelosi warned the cuts her fellow Democrats agreed to in the Senate do quote, "violence to their economic goals". Other House Democratic leaders agree.</s>REP. JOHN CLYBURN (D-SC), HOUSE MAJORITY WHIP: Sure, part of this compromise does violence. What's wrong with funding Head Start and so what's wrong with funding higher education?</s>BASH: But here is the big problem, and that is that House Democrats do force any changes in that spending that may jeopardize support in the Senate from the three Republicans, the only three Republicans who voted yes today and those Republicans are opposed that President Obama really, really needs to keep this going and actually get this legislation to his desk. But for example, one of those three Republicans, Susan Collins, Lou, she told us that if some of those excess spending measures, what she considers excess spending, if that goes back into this compromise, she said she just can't support it.</s>DOBBS: Well she may not be able to support it, but I can't find the cuts. It's $828 billion in the Senate version, 819 billion in the House version. Look, I'm -- Dana, I'm as used as you are to games being played on Capitol Hill, but when you cut 100 billion and I didn't perhaps do the best in my class in math, I know that the number should go down, not up by nine billion.</s>BASH: You're right they should. And the reason why is because before those cuts, this bill in the Senate was well over $900 billion, Lou, and the reason is because they added some tax provisions, a tax for the so-called AMT, a tax that really affects middle income people, or at least it affects them more than I think the tax was supposed to be in the first place. But other -- two other things. One is a tax credit for housing and the other is a tax credit for people who buy American cars. Those are three things that weren't factored bud did pass the original Senate bill, so that's why those particular tax provisions are in and that's why it doesn't look like there are tax -- that there are cuts in the overall number, but there actually are.</s>DOBBS: OK. I think we can leave it at OK. Dana, thank you very much -- Dana Bash. Well a new CNN/Opinion Research Corporation poll shows only a small majority of Americans now supporting the president's borrowing and spending stimulus legislation, but that very same poll gives the president himself a much higher approval rating than the most recent other polls. The CNN poll shows 76 percent of Americans approve of the way President Obama is handling his job. At the same time, only 54 percent of those surveyed approve of the president's economic stimulus package. Forty-five percent oppose that legislation. Well Americans' opposition to the so-called stimulus bill is being driven in part by considerable outrage over measures that would do little or absolutely nothing to stimulate the economy or to create jobs. One example of utter waste is a proposal that would spend almost $650 million on a new headquarters for the Department of Homeland Security. Lisa Sylvester has our special report in "Lou's Line-Item Veto".</s>LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Top officials at the Department of Homeland Security have been dreaming of a new headquarters for more than three years. The proposal, to consolidate DHS offices now spread out among 70 buildings to one campus located at the former St. Elizabeth's Hospital in Washington, D.C. The only snag, money. But the stimulus package solves that, $646 million earmarked for the project, while proponents including Representative Eleanor Holmes Norton call it a classic public works project that is shovel ready and will put people to work, opponents like the National Taxpayers Union say it's a prime example of what should not be in the stimulus bill.</s>PETE SEPP, NAT'L TAXPAYERS UNION: The DHS headquarters will be a definite waste of money and certainly it merits consideration on its own rather than being stuffed into a larger stimulus package. This is a lot of money being spent on a federal facility.</s>SYLVESTER: The Department of Homeland Security officials declined our interview request, but pointed us to a policy statement on the DHS Web site that says quote, "once completed, this project will further unify our components, enhance communication and increase our mission effectiveness ultimately improving our security." Fiscal conservative groups warn though that future taxpayers are on the hook for any money spent.</s>ROBERT BIXBY, CONCORD COALITION: It's important for people to remember that this money isn't free. We're going to be borrowing heavily.</s>SYLVESTER: Many Republicans complain that they haven't had much time to examine the stimulus package for items like the DHS headquarters because the legislation has been rushed to the floor.</s>SEN. JON KYL (R), ARIZONA: We're spending more money than we have ever spent in a piece of legislation in the history of the United States of America and we have only spent one week at it.</s>SYLVESTER: And part of that compromise worked on by Senators Susan Collins and Ben Nelson trimmed $50 million from the original price tag for the DHS headquarters, but adds $646 million. The National Taxpayers Union says that still is way too much money for a new headquarters at a time when the country is facing a fiscal crisis -- Lou.</s>DOBBS: And to hear Senator Jon Kyl talk about $1 trillion and a week's consideration, it would be one thing if indeed a full week had been spent, but hardly half of that time by most of the senators and their staffs . I mean it's -- and the administration demanding quick action because of again, just as George W. Bush said, Barack Obama is now claiming the sky will fall unless they vote on this legislation without further deliberation.</s>SYLVESTER: Yes.</s>DOBBS: The parallels are remarkable.</s>SYLVESTER: Yes, Lou, this is truly an amazing thing for people watching this Democratic process. I mean here you have a Congress that's basically being said here vote on this bill. Many of them, as most of them probably have not even had a chance to read it and we're talking about $1 trillion here, Lou.</s>DOBBS: Absolutely. Lisa, as always thank you very much -- Lisa Sylvester. The Obama administration has delayed an expected announcement today about the overhaul of the massive bank bailout plan. Treasury Secretary Timothy Geithner postponed that announcement from today until tomorrow. The Treasury Department says the Obama administration wants to focus on its economic recovery plan first. By one estimate the total cost of dealing with this financial crisis has now skyrocketed to almost $10 trillion, including all of the so-called stimulus spending, government lending and the trillions of dollars of loan guarantees. Bloomberg News estimating that that's enough to pay off just about 90 percent of the nation's home mortgages at full value as of two years ago. Of course it would be probably well over 100 percent of those mortgages given current market rates. Much more on the fight over the stimulus legislation ahead. A battle over whether to spend $2 billion on something called zero emission power plants. This is stimulus? This is possible? We'll have the answers for you in our special coverage "Lou's Line-Item Veto". And President Obama intensifying the rhetoric of fear on this legislation. Will the politics of fear work? Do those politics have any place in this discussion? The president's Secretary of Transportation Ray LaHood joins me here next. Stay with us. We're coming right back.