updated 9/19/2005 11:39:40 AM ET 2005-09-19T15:39:40

Guests: Sheila Jackson Lee, Cleo Fields, Laurence Payne, Stephen Slivinski, Chuck Grassley

TUCKER CARLSON, HOST:  Good evening, and welcome to THE SITUATION.  It‘s been a dramatic week of news.  We‘ve got the latest for you tonight on a number of stories, including the contentious fallout over President Bush‘s speech in New Orleans last night. 

We‘ll talk to the chairman of the Senate Finance Committee about who‘s going to pay for all of the government‘s extraordinary promises. 

A Louisiana legislator will join us to attack the Red Cross pretty aggressively, if you can believe it. 

And we‘ll show you exclusive video of looters caught in the act. 

But first, President Bush spent the first part of today in church, observing the national day of prayer.  But the repentance actually began last night, when Mr. Bush implicitly apologized for what he described as legacy of racism in the Gulf region. 

Here‘s what he said.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  As all of us saw on television, there‘s also some deep, persistent poverty in this region as well.  That poverty has roots in a history of racial discrimination which cut off generations from the opportunity of America. 

We have a duty to confront this poverty with bold action.  So let us restore all that we have cherished from yesterday, and let us rise above the legacy of inequality.  When the streets are rebuilt, there should be many new businesses, including minority-owned businesses, along those streets. 

(END VIDEO CLIP)

CARLSON:  Well, the president‘s claim that racism causes poverty was a jarring departure from conservative doctrine.  Republican presidents typically don‘t believe things like that, much less say them out loud.  But did anyone even notice what he said?  Will the president‘s new position buy him any goodwill from black voters?

To answer these questions and many others, we welcome Congresswoman Sheila Jackson Lee, who represents the 18th District of Houston, Texas, which is now home to some 125,000 Katrina evacuees. 

Congresswoman, thanks for coming on. 

REP. SHEILA JACKSON LEE (D), TEXAS:  Thank you for having me. 

CARLSON:  Here‘s what I don‘t understand.  The president comes out, supports affirmative action, as he has for a number of years now, and comes out and says, “Look, poverty—or racism causes poverty.  People are poor because they‘re discriminated against.” 

This is a central tenant of American liberalism.  Why does he get so little black support?

LEE:  Well, the president had to speak last night to the obvious, Tucker, and might I say that his passion, his compassion was appreciated, and I believe welcomed, albeit that this is not a time to take polling numbers or to worry about how many votes he will get. 

But I think the question for many in the African-American community is that we know that there are a lot of words to be said.  The Good Samaritan is a story in words.  I think everyone is looking now for the deeds, and that‘s really the crux of the problem. 

We already have in the backdrop of the tragedy of Hurricane Katrina these visuals of seeing so many African-Americans left stranded and in desperate conditions.

But might I say, as a member of the homeland security committee, as someone who spent her afternoon visiting shelters and will continue to do so in the Houston area, I know that this is a multiple problem among many, many different groups, but the president has symbolically as a backdrop to the failure of Hurricane Katrina the thousands upon thousands of visual faces that happen to be African-American. 

Now we‘re looking for the announcements he made last night of the amount of dollars, the investment in housing, health care, to be in actual deeds.  That means he has to use the bully pulpit and get the United States Congress to work together. 

CARLSON:  Well, you know that $62 billion has already been appropriated.  We‘re going to go far above $100 billion.  We can say that for certain, I think.  Probably closer to $200 billion. 

But the point is, not only is the president disliked in the black community—I think that‘s fair to say.  He got 10 percent of the black vote in 2004.  But he‘s actually the subject of these pretty wild conspiracy theories, Louis Farrakhan saying the other day that he thinks the levees were blown up by the federal government, presumably, as part of an effort to kill black people in New Orleans, et cetera, et cetera, people saying that Bush hates black people, the wildest kind of claims about Bush and being a racist. 

Why do these continue in the face of the president standing up and saying that he supports affirmative action and that he wants to help black people specifically?  There‘s a huge disconnect, and I just don‘t get it. 

LEE:  Tucker, this—this obviously speaks to the disconnect that has continued from the 2000 election on to this date. 

I do go back to the point that deeds will speak louder than words.  You can‘t deny people the first right—First Amendment rights in their position.  But let me tell you how we can begin a pathway of healing. 

First of all, as you well know, numbers of organizations, including the Congressional Black Caucus and the Urban League and the NAACP, the National Medical Association, a number of others have joined together capturing, if you will, or taking the high road of recovery on Hurricane Katrina. 

We want to meet, and we will be seeking a meeting with the president of the United States so that the road map that he has now laid before the American people can be one laid out by people who are hearing and listening to those who have been harmed, amongst others. 

Frankly, as he speaks about affirmative action, legislation in the United States Congress, under the emergency supplemental or other bills this Congress has passed, has waived affirmative action on some of the billions of dollars that will be spent, and also question whether minority contractors, as he said last night, would even get the opportunity to do work. 

So the program...

CARLSON:  Hold on.  What do you mean?  Nobody is preventing anybody from getting work.  It‘s merely a question of ...

LEE:  Oh. 

CARLSON:  ... whether certain jobs should be set aside based on the color of the contractor‘s skin.  Everybody in this country, as you know, and let‘s not mislead our viewers, is free to compete for federal contracts. 

LEE:  I would respectfully and vigorously disagree with you.  I‘m in the government.  I understand the bars that small businesses and minority businesses and women owned businesses have to jump, the hurdles they have to overcome... 

CARLSON:  You‘ve got to be kidding. 

LEE:  ... in order to secure—oh, absolutely.

CARLSON:  I am sorry.  That is—that is simply...

LEE:  I disagree with you.  It would be important for the president, Tucker, to carry the message of last night...

CARLSON:  Congresswoman, please. 

LEE:  ... into the details of tomorrow.  And I think... 

CARLSON:  Congresswoman, I don‘t want to get off on a tangent here, but anybody who has ever competed for a federal contract knows the minority owned businesses have a distinctive advantage written in law.  You know that that‘s true.  So let‘s just admit it. 

LEE:  In the ordinary course of business, I‘m not going to deny that.  We have effectively, as Democrats and Republicans, placed an opportunity for minority businesses, women owned businesses. 

But what I‘m saying is that, in legislation recently passed because it was declared an emergency, some of those provisions have been waived. 

The president last night made it very clear that he believes that minority owned business should be engaged.  That means that he must use the bully pulpit and regulations that he will espouse to get Congress to make sure that those dollars are expended in that way, and his executive. 

But what I would say clearly is join us, Mr. President, and the African-American leadership, which, by the way, does not just speak for African-Americans.  We are patently concerned about the poor, as he mentioned.  And we think this is an excellent opportunity to bring people together of all races, eradicating poverty and laying out a road map for the Hurricane Katrina victims where they are invested in themselves and they will be stake holders and they will help to rebuild Mississippi, Alabama, and of course Louisiana.  I hope that will be the case. 

CARLSON:  I also hope, Congresswoman, that you will spread the word, that the president is now the standard barrier of the left wing agenda, and maybe get some support from that community. 

Thanks a lot for joining us.

LEE:  Well, we hope so.  We‘re looking forward to working together. 

CARLSON:  I bet. 

LEE:  Thank you.

CARLSON:  Joining me now to deconstruct the president‘s reconstruction plan for New Orleans, from MSNBC‘s “CONNECTED COAST TO COAST,” Monica Crowley joins us. 

Monica, thanks a lot for coming on. 

MONICA CROWLEY, HOST, “CONNECTED COAST TO COAST”: Hi, Tucker, you bet. 

CARLSON:  So last night, the president gives this now famous speech, in which he makes these various liberal claims.  Today at the national prayer breakfast earlier today, he promised to end inequality and improve the American character. 

So these are now aims of government?  Wouldn‘t it be just better to give people bottled water and a place to sleep?  Now we have to improve the American character?  He is acting like a liberal.  Explain this to me. 

CROWLEY:  You know, when I was listening to that speech, I had the same reaction last night, Tucker, which is, my goodness, it seemed like such a jarring thing when President Clinton said famously, “The era of big government is over.”  Coming from liberal Democrat, it sounded crazy. 

To hear a conservative Republican, a fiscal conservative like President Bush, who at least on paper has been a fiscal conservative, say, “Well, now I‘m going to launch this massive new spending program to reconstruct the Gulf Coast.  And then he veered off into war on poverty, racism, all of these bigger, broader things than just the particulars of dealing with getting the victims the help that they need in the Gulf Coast. 

Seemed to me to be blowing the original theme of helping these victims into something much broader, which I don‘t think that the president necessarily understands all of the ramifications. 

CARLSON:  Really, why does this sound so familiar to me?  You go into a country because you want to mitigate the threat it poses to you militarily.  Once you‘re there, you decide, “Wait a second.  Why don‘t we go ahead and create utopia here in the Middle East, Iraq.”  It‘s exactly the same, isn‘t it, these kind of grandiose plans? 

CROWLEY:  You have had—a lot of politicians don‘t understand that there are unintended consequences to their words and also to their actions. 

Last night, I saw this sort of strange brew of echoes of Lyndon Johnson, when he was talking about racism and really resurrecting this idea of a war on poverty, and then echoes of Ronald Reagan, where he‘s talking about creating a Gulf Opportunity Zone, which was a Jack Kemp idea, and offering tax incentives to bring the businesses back.  So it was sort of this odd mixture. 

But one thing I didn‘t hear last night, that I really was desperate to hear, is there was no challenge by the president to the Congress to cut spending or at least to reign in the growth of spending, for all of their pet projects. 

Republican Congressman Tom DeLay last week saying, “Well, there‘s not really a lot of pork we can cut.”  Excuse me, there is a ton of pork.  Now...

CARLSON:  He‘s—he‘s out of control, by the way. 

CROWLEY:  The president did correct that today when he said, “Look, we‘re going to have to cut spending in order to pay for, A, the war on terror, and also B...” 

CARLSON:  You know where people want to cut it?  New poll out today.  I believe it‘s an NBC poll: 45 percent of the people polled said they think that money ought to come from our effort in Iraq.  This is a view I think that‘s going to become more popular.  This spend, this reconstruction of the Gulf, will undermine support for the war in Iraq. 

These people are going to say, “Wait a second, why are we spending all this money to reconstruct Basra and Tikrit and Baghdad, when, you know, Mobile and New Orleans are broken.” 

CROWLEY:  I think you‘re right.  I think he‘s going to get a lot of pressure both from the right and from the left on the war in Iraq.  And he‘s got a lot of active military units, 82nd Airborne, Marine Expeditionary Force, that have been on the ground in Iraq, now on the ground in the Gulf states. 

CARLSON:  Oh, yes, we interviewed some. 

CROWLEY:  Doing a lot of the work down there.  And so I think he is going to have pressure, but the president has to do a couple of things. 

First and foremost, though, he‘s got to get out there as commander-in-chief.  And say, “look, we have faced this national catastrophe.  This was a natural disaster that was then followed frankly by a man-made disaster because of a sheer collapse of leadership at the local, state, and federal levels.  We have to deal with that.  We also, on the other hand, are fighting this war on terror, and we cannot take our eye off the ball in that regard.” 

President has to make a very persuasive case to the American people both need to be done, and frankly, both have to be done. 

CARLSON:  If there‘s one person in public life who is not capable of making a persuasive case, it‘s this president.  Even when his case is sound, even when he‘s saying the correct things, the honest things, he‘s not good at selling it.  He‘s a bad salesman.

CROWLEY:  He has been—Tucker, he has been...

CARLSON:  I fear he won‘t be able to pull that off. 

CROWLEY:  He has been good at it in the past.  When he‘s got the right message, when he believes in the power of the principles he is talking about, he can be extremely persuasive.  That is the power of the bully pulpit. 

His job is not just to execute policy.  His job is also to go out there and sell it.  And now he‘s got a double challenge.  First he had challenge before Katrina, selling the war in Iraq, reselling the war in Iraq.  Now he‘s got a huge massive spending addition. 

CARLSON:  But what a dismal—what a dismal failure that‘s been. 

CROWLEY:  To go out there and talk about both of them. 

CARLSON:  I wanted to support the war in Iraq, initially, I really did.  I‘m not anti-war.  He couldn‘t convince me why we were doing it.  I have no—there‘s no way. 

CROWLEY:  That‘s the argument that he has to make. 

CARLSON:  We‘re almost out of time.  So hit me.

CROWLEY:  OK.  He can make it if he says this.  “Look, none of this stuff is happening overnight.  Whether it‘s Katrina or whether it‘s Iraq.  I am asking the American people for patience.  Stay the course with me.”  He says stay the course, but he‘s got to—he‘s got to set this all in historical perspective, so the American people don‘t expect instant gratification, in either the Gulf Coast or in Iraq. 

CARLSON:  He ought to listen to you, Monica. 

CROWLEY:  Yes, he should. 

CARLSON:  We do.  Thanks. 

CROWLEY:  Thanks, Tucker. 

CARLSON:  Coming up, the feds aren‘t the only ones under fire in the aftermath of Hurricane Katrina.  At least one Louisiana senator is blaming, brace yourself, the Red Cross for the suffering.  We‘ll talk to him next. 

Plus, President Bush deals with two enormous expensive crises, so what‘s more important, reconstruction on the Gulf Coast or the reconstruction of Iraq?  How will they affect one another?  The question of our era when we come back.

(COMMERCIAL BREAK)

CARLSON:  Red Cross workers too cowardly to go into New Orleans in the days after Katrina struck.  My next guest says so, and blasts them for not moving faster. 

(COMMERCIAL BREAK)

CARLSON:  There‘s plenty of blame to go around in the aftermath of Hurricane Katrina.  Now some pointing the finger at aid organizations like the Red Cross.  Louisiana state senator Cleo Fields of Baton Rouge says the Red Cross was fatally slow to move into New Orleans after the storm.  Mr.  Fields joins us now.

Thanks a lot, Senator, for coming on. 

SEN. CLEO FIELDS ®, LOUISIANA:  My pleasure. 

CARLSON:  The Red Cross, of all the people you can blame, and many deserve it, for this disaster, the Red Cross, that‘s like blaming Santa.  What did the Red Cross do wrong?

FIELDS:  Well, first of all, the Red Cross, this was not a terrorist attack like 9/11.  This was a catastrophe that we knew was coming.  We knew the name of the catastrophe.  We even knew the face of it.  It was—the name was Katrina.  The face was a Category 5. 

The Red Cross failed to move into the Superdome when they knew that was the shelter in place for the people who were not leaving the city of New Orleans.

And even after the storm had hit, although they had vehicles and people in place to move into the Crescent City, they chose not to.  And then to see people actually begging for food and begging for water, and begging for medical care on roof tops and on bridges in a city in the United States of America, is absolutely unconscionable. 

CARLSON:  Wait a second, Senator Fields.  When you say we knew Katrina was coming, what about you?  You work for the state of Louisiana.  What about you and the other state officials?  It‘s your state.  Why weren‘t you bringing food and water and medical care to those people sitting on the roofs in New Orleans? 

FIELDS:  And you‘re absolutely right, and I did.  As a matter of fact, that‘s why I was so disappointed with the Red Cross, because not only I was bringing food and water into the city of New Orleans, I was also busing people out. 

CARLSON:  And let me just correct myself.  I don‘t mean specifically you.  I‘m sure you did a great job helping people, but you‘re just one man.  I‘m talking about the state and the apparatus that the state has to help its citizens.  Where was the state of Louisiana in the aftermath of Louisiana?

FIELDS:  There‘s no question, there‘s enough blame to go around, listen, in the Red Cross go to Somalia and take care of the people of Somalia and they can go to Iraq and take care of the people of Iraq, then they ought to be able to go and take care of people in America. 

It‘s just absolutely inexcusable for an organization who‘s clothed with the duty and a responsibility of feeding people, giving them water, and giving them medicine in a time of a crisis, when a crisis happened right here in the United States of America. 

CARLSON:  Wait. 

FIELD:  They are nowhere to be found. 

CARLSON:  Your governor, Kathleen Blanco, who I think everyone agrees was not equal to the task of responding to Katrina, apparently didn‘t ask immediately for the Red Cross to come into the city of New Orleans.  Why do you think that is?  And don‘t you think she deserves some of the blame here?

FIELDS:  Look, I think there‘s enough blame to go around to the local, state, and the federal government. 

CARLSON:  Let‘s start with the governor.  Don‘t you think—right.  Don‘t you think it would have been helpful had your governor asked the Red Cross immediately to move into the city of New Orleans?

FIELDS:  I don‘t know.  I don‘t know, quite frankly, I don‘t know the process as to whether or not you‘ve got to request the Red Cross to come in and take care of a natural disaster.  She declared it a natural disaster, I mean a state disaster, state of emergency. 

The president of the United States of America declared it a state of emergency.  And that was before the storm hit. 

And they had several Red Cross trucks and people located and staged in the city of Baton Rouge.  And then they give this lame excuse, we didn‘t have enough protection to go in and give people water and give people food is absolutely asinine to say the least. 

CARLSON:  Well, actually, I mean, as you know, having been to New Orleans recently, it sounds like, it‘s not totally asinine.  It was a dangerous city, because the officials were supposed to keep order in New Orleans, and in the state of Louisiana, didn‘t keep order.  And there were a bunch of lunatics running around with guns, shooting people and committing rapes and all sorts of other atrocities. 

Don‘t you understand why Red Cross volunteers, most of them are volunteers, would be a little wary of going into a situation like that?

FIELDS:  Absolutely not.  I do not understand it.  Because let me tell you, if we had the perfect situation, we wouldn‘t need a Red Cross.  Red Cross do not respond to perfect situations.  They respond to disasters. 

CARLSON:  But this is the man-made element is what I‘m talking about. 

The lawlessness. 

FIELDS:  No one can opine the thought that Iraq was safer than New Orleans.  It makes no sense whatsoever.  To see people begging for water and begging for food and begging for medicine, you will find that more people died as a result of neglect after the storm than the people actually died from the storm itself. 

CARLSON:  But wait a second.  When we were down there, we interviewed pilots who said, “We‘re afraid to fly over the city because people are shooting at us.”  Aren‘t you going to assign some blame to the people who were firing at rescue helicopters, and other people who were behaving like animals in that city and preventing aid from coming to the needy?

FIELDS:  Well, let me tell you, I was there from day one.  I was there Monday, Tuesday, Wednesday, Thursday, Friday, and Saturday, and I was on the ground.  Nobody shot at me. 

I mean, people were shouting to get out of the city of New Orleans, because they were in harm‘s way.  Not one Red Cross worker was shot at.  I asked the president of Red Cross, Miss Marsha Evans, I said, “Any of your workers been shot at?”

You know what?  They weren‘t shot at because they weren‘t there. 

Listen, Red Cross is not an organization that has the luxury when there‘s a disaster to say, “We‘re not going into certain areas in the United States of America because supposedly somebody has shot a weapon.” 

And all this shooting that took place.  Let me tell you, I was on the ground for six days, and I didn‘t witness not one person shooting a weapon.  And I didn‘t go there with security.  I went there with three buses, and we were picking people up and getting them out of harm‘s way.

And we cannot take the approach when—let‘s say it was dangerous. 

We take the approach that we don‘t give people medicine if it‘s dangerous?  We don‘t give them water?  We don‘t give them food?  In America, if it‘s danger, you take out the danger.  That‘s why we have...

CARLSON:  Actually, I have to say—I have to say, I tend to agree with you.  I just wish you would aim some of your criticism at the authorities who allowed that city to become dangerous.  Didn‘t have to be that way, and they let it become that way.  And all those cops who deserted, I hope every one of them is brought to justice for that. 

Anyway, Senator Fields, Cleo Fields from Baton Rouge, thanks for joining us. 

FIELDS:  Thank you, sir. 

CARLSON:  Up next, Habitat for Humanity is hammering away with plans to rebuild the Gulf region.  It will be the biggest project that organization has ever undertaken.  We‘ll hear about it next.  Stay tuned.

(COMMERCIAL BREAK)

CARLSON:  Other aid organizations are getting high marks for their response to Katrina.  Habitat for Humanity is taking a nuts and bolts, literally, approach to building new houses for evacuees who are suddenly homeless. 

Laurence Payne is the president and CEO of the Houston affiliate of Habitat for Humanity. 

Mr. Payne, thanks a lot for coming on. 

LAURENCE PAYNE, PRESIDENT/CEO, HOUSTON AFFILIATE, HABITAT FOR

HUMANITY:  Thank you, Tucker, and good evening.  Good to be with you and your audience this evening. 

CARLSON:  Thank.  So the obvious questions first.  You‘ve got hundreds of thousands of people without homes.  How do you choose who gets a Habitat for Humanity home?

PAYNE:  Well, we have a normal process, where there is a process for choosing family applications, they have to qualify, because remember, Habitat Homes is not a charity.  It‘s a mortgage.  You own it through 300 hours of sweat equity, a zero interest loan, and then they actually buy it through a mortgage, so you have to qualify. 

The main important thing is to have a job and be able to pay that mortgage.  It‘s usually around the same that one would pay for rent, so the beauty of it, it gets you in a home for the same thing you‘re paying for rent, and you become an instant homeowner.  All that goes with that, the security and the safety of being a homeowner. 

CARLSON:  I think it‘s tremendous.  I don‘t know anybody who doesn‘t like it, actually. 

I don‘t mean that.  I mean there are a lot of people who would want to have a Habitat for Humanity house.  They have nice houses.  Good stuff.  So how do you choose among the many worthy applicants?

PAYNE:  It‘s a process.  And all I can tell you, it‘s a long process. 

We work very hard with each individual family to help them qualify.

But we‘re doing two things now here in Houston.  We‘re taking care of our normal applications for processes for Houstonians for Habitat homes, and we‘ve operated a new program, the Operation Love—excuse me, Operation Love Thy Neighbor.

Because we have so many wonderful families here from Louisiana, Mississippi, and Alabama, who desire some Habitat homes.  We have junior started and doubled our effort, and with your wonderful listening audience‘s help—we need your help, America.  We need those donations to take care of those who desire to remain here in Houston as Houstonians.

We‘ve targeted the first 50 homes, immediately to jump start that process.  And with donations, we can build one home at a time, serve one family, get them back up and running to the road of recovery, with the safety and security of a home. 

CARLSON:  Now what about that, the staying in Houston part?  This is going to be a political issue, I can promise you.  A lot of these, according to polls, a lot of these evacuees who are now in Houston, and there are tens and tens of thousands of them, have no interest in returning to New Orleans.  They want to stay in Houston.

And that makes some people, particularly politicians, uncomfortable.  Are you getting any pressure at all from state and local authorities not to settle evacuees in Houston?

PAYNE:  Well, Tucker, I will let the electoral politics issues solve themselves and the number of people you need in these congressional district and all of those other things by elections.  What I‘m here to talk about this evening, and to your audience and America, is that we need your help to build homes for families who want to remain here in Houston. 

CARLSON:  Absolutely.  Let me...

PAYNE:  A recent “Washington Post” poll...

CARLSON:  Let me just give it—I want to restate my question.  Has anybody come to you from the city of Houston or the state of Texas to say, “Hold on.  Don‘t convince people to stay here”?

PAYNE:  To answer your question, no, and we‘re not trying to convince anyone to stay. 

What we‘re saying is we stepped up to the plate to put a program in place for those who want to remain in Houston.  A recent “Washington Post” poll showed that half—half of the current new Houstonians, as we refer to them in Houston, over 100,000 people, plan to remain here in Houston and in Texas. 

We have 250,000 people here in Texas.  We have at least 100,000 to 150,000 right here in Houston.  We have the largest group of people from the various other states who need our help today. 

And that‘s the beautiful thing about Habitat for Humanity.  We can get up and running quicker than any other organization to serve those needy people, to get them in a home and to start their life on the road to recovery. 

CARLSON:  All right.  Laurence Payne, president and CEO of the Houston affiliate of Habitat for Humanity.  Thanks for what you‘re doing and thanks for coming on. 

PAYNE:  Thank you very much, Tucker, for having me this evening. 

CARLSON:  Thanks.

Coming up, Congress has already approved more than $62 billion for recovery, and they‘re just getting started.  Can we do it all without going broke?  Are we broke already?  We‘ll talk to a Washington numbers man when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BILL CLINTON, FMR. PRESIDENT OF THE UNITED STATES:  And how are we covering this money?  We are borrowing the money from China, Japan, Korea, Saudi Arabia to pay for the suffering of our people in the gulf area, to pay for the Iraq War and to cover my tax cut and we are expecting our children to pay the bills. 

We‘ve made a decision to lower the living standards of our children and grandchildren and to soak other people around the world who don‘t have the money we do, by and large, to cover our self indulgence and I think it‘s crazy.

(END VIDEO CLIP)

CARLSON:  Maybe Bill Clinton could pitch in by returning his own tax cut.  Don‘t hold your breath.  That‘s not going to happen.

But it raises an interesting question could we trim the fat from the federal budget to pay the price tag for Katrina?  My next guest said yes we can.  He‘s Stephen Slivinski.  He‘s the budget director of budget studies at the Cato Institute in Washington, D.C.  Mr. Slivinski, thanks a lot for coming on.

STEPHEN SLIVINSKI, DIRECTOR OF BUDGET STUDIES, CATO INSTITUTE:  Thanks for having me on.

CARLSON:  So you are saying, and this is music to my ears anyway that we could actually come up with this money just by trimming waste, fraud and abuse from the federal budget is that right?

Not just waste, fraud and abuse, also programs that really shouldn‘t be a federal function in the first place.

CARLSON:  All right, hit me with some.

SLIVINSKI:  We‘re dealing with a $2.5 trillion federal budget and if you look back just over the past ten years, look back to 1994 with the Republican revolution, look at the list of programs they had on their to kill list.  Unfortunately, most of them are still around but you can think of things like Amtrak, farm subsidies.

In fact, if you remember, in 1996 they talked about the Freedom to Farm Act, which was actually going to phase out agriculture subsidies to zero over five, six or seven years.

CARLSON:  How did that work?

SLIVINSKI:  It didn‘t work out at all.  Starting in 1998, you started seeing these emergency appropriations start cropping into existence and then, of course, George Bush signed a huge, the biggest tax—or excuse me the biggest farm bill in history and so if you just kind of...

CARLSON:  Wait, just to clarify this money is going to hard scrabble family farmers in the mountains of Appalachia just kind of getting by is that where it goes?

SLIVINSKI:  I wish that were the case.  No, it‘s going to agri-businesses, like Archer Daniels Midland.  This is really a huge form of corporate welfare.

CARLSON:  How much?

SLIVINSKI:  Well, actually let‘s see if you actually cut it in half you get $10.6 billion, so basically...

CARLSON:  Twenty-one point two, huh?

SLIVINSKI:  Roughly, roughly, yes.  And just thinking about just the amount of waste that there is in the government, the amount of unnecessary programs there are in the government, again, it‘s really easy to cover these costs.  Now the question is, is there the political will to do that?  I don‘t think there is.

CARLSON:  Well, I think we know the answer to that.

SLIVINSKI:  Right.

CARLSON:  No, that‘s right.  Well, wait a second.  Tom DeLay himself, an old budget cutter, an old budget hawk, a small government Republican, said just the other day there‘s nothing to cut in the federal budget.  It‘s just been pared clean.  It‘s lean.  It‘s like buffalo meat.  Do you buy that?

SLIVINSKI:  No, not at all.

CARLSON:  Why would he say that?

SLIVINSKI:  He‘s been drinking the Kool-Aid I think.  I think Republicans have actually fallen prey to this idea that as long as they‘re in control of government, as long as they consider themselves to be I guess the permanent majority it‘s OK if government grows.  They‘re in control.  It‘s just going to be OK.

I think there‘s a—that‘s really what‘s happened to fiscal conservatism in D.C. today as long as self-proclaimed fiscal conservatives, you can say you‘re a fiscal conservative, as long as you say that and speak the talk you can at least pretend to get away with this stuff.  Unfortunately it just doesn‘t work that way.

CARLSON:  Well, yes, but the political angle here is at some point aren‘t voters going to say, “Wait a second.  If I‘ve got a choice between the Republicans, who act just like the Democrats and the Democrats who actually do what they say they‘re going to do, right, they behave the same but one seems a little more authentic, why am I voting Republican anyway?”

SLIVINSKI:  Yes, they just might not show up to vote at all.  I mean in some ways Republicans always complain about how, oh, it‘s just bad politics to cut spending.  I think it‘s even worse politics to spend more than they already are and it‘s just ridiculous to assume that we‘ve also got these trillions of dollars of unfunded liabilities and an upcoming Medicare drug benefit, which starts in January by the way, and then the Social Security, about $12 trillion in unfunded liabilities there.

And yet, we‘re talking about trying to spend billions upon billions on an expanded federal role to respond to a hurricane.  This is a federal role that‘s far more expansive than we‘ve had at any time in the past to respond to hurricanes or natural disasters.

CARLSON:  But wait, back up for just one second.

SLIVINSKI:  Sure.

CARLSON:  You said it‘s bad politics to over spend, so basically what you‘re saying is you know more about politics and the will of the voter than Karl Rove does who is, of course, in charge of this whole enterprise.  He must be looking at poll numbers that tell him people don‘t mind when you over spend as long as they get the goodies.

SLIVINSKI:  Well, that might be true.  I do think, though, in the aggregate that if you consider and talk to people directly and say to them, listen if it‘s the cost or rather if it‘s the tradeoff between doing something that you think is important and getting a government goody, most people will say just get rid of the goodies.

I‘ve seen poll results, for instance, that look at the goodies that happened or that came across in the highway bill.  People were willing to say, listen, this is really silly.  We don‘t need a bridge to nowhere in Alaska.  Even the people in Alaska don‘t think they need the bridge to nowhere incidentally.  Why don‘t we go ahead and try to offset, cut somewhere else perhaps in these highway programs to pay for things that we think are more vital or necessary?

CARLSON:  Well, then if that‘s true and I want to believe it‘s true but if it is true, then why doesn‘t it happen?  Why do we still have farm subsidies years after they were supposed to have gone away?

SLIVINSKI:  I think a lot of it has to do with the fact that—well, two things.  First is incumbency, reelection rates in America are over 90 percent.  Congress can do whatever they want and oftentimes they‘ll just get reelected.

Another problem is the budget system is broken.  We‘re dealing with a system that was built in the mid-‘70s by big spending Democrats and Republicans and it‘s put into place a series of auto pilot controls.  Basically, government is going to grow whether we do anything about it or not.

And so, getting those rules, those systems under control, is really going to do a lot I think to scale back spending in the future.  The problem is the Republican Party in Congress has had the chance to do this on numerous occasions.

CARLSON:  That‘s for sure.

SLIVINSKI:  And they just haven‘t.

CARLSON:  Really because it‘s only been eleven years, maybe give them another eleven.  Maybe they‘ll do better. 

SLIVINSKI:  There you go.

CARLSON:  Stephen Slivinski of Cato in Washington, D.C., a great guest, thanks for coming on.

SLIVINSKI:  Thanks for having me on.

CARLSON:  Still to come, confessions from an actual looter, a tourist in New Orleans tells the harrowing tale of a holdup at gunpoint during a looting spree at Wal-Mart.  Be right back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES:  I, as president, am responsible for the problem and for the solution.

UNIDENTIFIED MALE:  If he follows through.  I haven‘t seen a whole lot of follow through yet.

UNIDENTIFIED FEMALE:  It‘s been three weeks of hell.

MAYOR RAY NAGIN, NEW ORLEANS:  We‘re bringing New Orleans back.  We‘re bringing its culture back.  We‘re bringing its music back.

BUSH:  There is no way to imagine America without New Orleans and this great city will rise again.

(END VIDEO CLIP)

CARLSON:  One thing we know for certain the reconstruction of the gulf coast is going to be expensive, up to $200 billion, possibly more.  How are we going to pay for it? 

Our next guest should have some idea because he is the chairman of the Senate Finance Committee.  Joining us from Waterloo, Iowa tonight, Senator Chuck Grassley, Mr. Grassley, thanks a lot for coming on.

SEN. CHUCK GRASSLEY ®, IOWA:  Oh, I‘m glad to be with you, Tucker.

CARLSON:  So, Senator, I‘m looking at an AP story that has you quoted saying this.  You said in the case of a terrorist attack or in this instance a hurricane recovery, “You don‘t worry about the debt you incur in the cleanup.”  Do you still feel that way after the president‘s speech last night?

GRASSLEY:  Well, of course, I do because in the case of a terrorist attack we‘re at war and in World War II if we had worried about the deficit or would have been in New York City, an act of God comes along.  You can‘t insure for it ahead of time, so you do what you do to help the people that are hurting.

Now, you have to make adjustments accordingly to it and I would expect future budgets of this president and even under my leadership to show some restraint in other areas so that we‘re taking from other areas to help pay for this but it‘s going to be a long haul.

I would suggest, for instance, we could have an across the board budget freeze.  People that are going to get by on X number of dollars in 2006.  Then for our next budget, 2007, could get along with the same amount of money during that period of time.

Families have to live maybe the next year on what they made the year before without a raise and we in government can do the same thing.  And I know it doesn‘t give a lot of money into the pot that I‘m talking about but to members of Congress can start this process going by saying that we won‘t have a pay raise.

GRASSLEY:  But, Senator, one of the key promises of the Republican revolution eleven years ago was rollback, the idea that I was sold on anyway when all these Republicans took over was they were going to get rid of things.  They were going to chop federal spending not just halt it but cut it, pare it back.  What about that?

GRASSLEY:  OK, well let‘s look at where we have been under this president.  We inherited a 16 percent increase in annual spending from President Clinton the first year of the president‘s budget, Bush‘s budget, it was six percent and then five percent and three percent.

For the year we‘re in right now it‘s a one percent increase and the budget we‘re working on for next year for the programs that you can plan on, not acts of nature like New Orleans we‘re going to have a budget freeze except for defense.

So, we‘re picking out those things that are essential.  You‘ve got to support your troops in Iraq.

CARLSON:  Yes.

GRASSLEY:  Well wherever they are fighting the war on terror because it‘s our enemy.  And when you have an act of God, you‘ve got to help the people that have need but it‘s got to be paid for.  It‘s not something you can write off like you can by going into bankruptcy.  You‘ve got to keep your commitments and we‘ll do that by adjusting expenditures and paying for this over the long haul.

CARLSON:  Now, we just had a man from Cato on who I, of course, understand isn‘t in the position to make laws.  He‘s not under the same pressures you are obviously.  However, he suggested well what about cutting farm subsidies in half or the NASA budget in half?  I don‘t know.

GRASSLEY:  Yes.

CARLSON:  That would, I don‘t know, save $17 billion, $18 billion. 

What do you think of that?

GRASSLEY:  OK, well we‘re not cutting them in half but when we get this budget adopted for this year, the reconciliation process that was put off a month, it should have been done this week but because of Katrina we put it off until October 25th, we would be cutting farm programs by $3 billion over the next five years as one example.  And, throughout the entire budget, the reconciliation process would have saved about $40 billion.

CARLSON:  Now, this new poll out indicates that 45 percent of people asked anyway said the money to pay for Katrina and the reconstruction ought to come from Iraq, the money we‘re spending to rebuild that country.  What do you think of that?  Is that—will there be...

GRASSLEY:  Well, of course...

CARLSON:  I‘m sure you‘re against it.

GRASSLEY:  Go ahead.

CARLSON:  But is there going to be pressure, is there going to be more pressure do you think on the White House to do that to scale back in Iraq because of Katrina?

GRASSLEY:  Well, if you scale back in Iraq you‘re just going to put our men and women in more trouble there or you‘re going to give terrorists an opportunity to train there.  What we‘re doing is we‘re already in a draw down in the sense that a year ago on June the 30th we turned the government over to their country.  We‘re helping them through their elections, to write a constitution, to enhance their military.

Our intention is to get out of there just as soon as we can but we intend to make sure that it‘s a nation that won‘t train terrorists.  As you can see, the insurgency now is a bunch of terrorists that would just as soon attack America as they would their own people.

CARLSON:  Finally, Senator, what do you think of this plan that FEMA is going to spend billions, not exactly clear at this point, but more than $5 billion anyway on mobile homes to house tens of thousands of evacuees from the gulf coast and then when they‘re done with those mobile homes bulldoze them?  It seems kind of wasteful or maybe I‘m missing something.  What do you think of that?

GRASSLEY:  Well, I don‘t—it doesn‘t sound very reasonable to me when we have people that have a lot of hurt.  It would seem to me that as the mayor of New Orleans has seemed to indicate there‘s going to be people getting back into their own homes that we need to be a little cautious and maybe we‘re buying homes sooner than we need to and maybe spending some money we don‘t need to. 

That‘s why I‘m sponsoring this legislation that Senator Coburn came up with yesterday to have a chief financial officer survey all this money and see that it‘s spent wisely ahead of time instead of having the government accountability office come in afterwards like they did in Iraq on our capital expenditures there...

CARLSON:  Yes.

GRASSLEY: ...and say a lot of it was wasted.  You can‘t do anything once a horse is out of the barn.

CARLSON:  No, you can‘t.

GRASSLEY:  (INAUDIBLE) to lock the barn door then.

CARLSON:  I hope you get that legislation through.  That sounds like a great idea.  Senator Chuck Grassley of Iowa joining us from Waterloo, thanks a lot.

GRASSLEY:  Thank you.

CARLSON:  Coming up the voice mail box is packed with three weeks worth of your outrage about the war, Hurricane Katrina and the government in general.  My favorite audience in all of television, you, blows off some steam when we come back.

(COMMERCIAL BREAK)

CARLSON:  Welcome back.

Time now for our voice mail segment where we encourage you to share your thoughts about a story in the news, the show itself, or to take cheap shots, which you do anyway—first up.

(BEGIN VIDEO CLIP)

LISA, CHARLOTTE, NORTH CAROLINA:  Hey, this is Lisa from Charlotte, North Carolina.  The reason I‘m calling is because I think it‘s very sad for Bush to be focusing in on Iraq versus New Orleans, Mississippi and all the rest of the United States that is really suffering.  All those dollars that he‘s spending over there he needs to pull them back out and put them back over here where it needs to be.

(END VIDEO CLIP)

CARLSON:  You‘d probably want to pull the troops out first, probably a bad idea to de-fund the troops while they‘re still in a war zone but I do think we could probably cut farm subsidies and NASA while we‘re at it.  That would be nice.  I do think we ought to pay for this aid and not just chalk it up to deficit spending—next.

(BEGIN VIDEO CLIP)

JENNIFER, BOSTON, MASSACHUSETTS:  My name is Jennifer Bashay (ph), Boston, Massachusetts.  I feel the way that you treated Congressman William Jefferson tonight on your show was despicable.  A few days earlier you were, you know, only too eager to self-righteously condemn all the violence that was going on there and now you incredulously suggest that an eight-term Congressman should go unescorted into his city.

(END VIDEO CLIP)

CARLSON:  Huh?  No.  I was nice to the guy.  I like Congressman Jefferson, nice guy, and I don‘t think he should go into the city without an escort, though we did and we lived. 

But I just don‘t think he should use the National Guard to move his belongings into their Jeep when people are dying of exposure on their roofs.  I made that point and he agreed with it.  He said he wouldn‘t have done it if he could do it over again.  So, I wasn‘t mean to him.  I hope he comes back on and I assume he will—next up.

(BEGIN VIDEO CLIP)

MIKE, WISCONSIN:  Hi, Tucker.  My name is Mike Thomas, (INAUDIBLE), Wisconsin and I can‘t believe you just put a guy on national television so he could criticize the Sierra Club and it didn‘t have anything to do whatsoever with the levees breaking, as you pointed out.  I just can‘t believe it.  The message that they‘re trying to send to the American people is just unbelievable.  I‘m flabbergasted.  I‘m stunned silly over these people.  Thank you.  Goodbye.

(END VIDEO CLIP)

CARLSON:  Well, I think the key phrase there is, as I pointed out.  Yes, I did point out that the Sierra Club probably was not responsible for Hurricane Katrina unfortunately.  We have a lot of people on with views I don‘t agree with, with wrong views.  We had someone on yesterday who claimed that the government blew up the levees to kill black people. 

We have a lot of divergent views on this program.  I will say, though, the Sierra Club, while it didn‘t cause Hurricane Katrina, has blocked nuclear power plants from being built which is itself a sin worthy of outrage but that‘s another show.

(BEGIN VIDEO CLIP)

RICHARD, SAN DIEGO, CA:  Tucker, attorney, San Diego, Richard Gund (ph).  If you had done your homework you would have known long ago that the Landrieu family has ruled Louisiana since Christ was in short pants an Moon Landrieu ran one of the most corrupt administrations that would have put Tammany Hall to shame.  So, do some checking before you have some of these knuckleheads on your show.

(END VIDEO CLIP)

CARLSON:  Again, huh?  I mean I‘m sure it was corrupt.  There are a lot of corrupt people in Louisiana.  I mean it‘s Louisiana.  But that‘s not his boy‘s fault.  It‘s not his son‘s fault. 

Actually, I kind of liked Mitch Landrieu, a lot more impressive than his sister I can tell you that, the current Senator from Louisiana, much more impressive and I actually thought a pretty moderate, sensible person and, in fact, a lot more impressive than the current governor, the governor who screwed up the response to the hurricane. No, I liked Mitch Landrieu a lot despite whatever his father did or didn‘t do.

(BEGIN VIDEO CLIP)

VERONICA, NORTH CAROLINA:  Hi, Tucker.  It‘s Veronica from King, North Carolina.  I‘m an atheist, part of your one percent and I don‘t think that the gentleman guest spoke clear enough about why “under God” should not be in our schools because it‘s neutral, not because it advocates one side or another and that‘s where our government is supposed to be, neutral.

(END VIDEO CLIP)

CARLSON:  Did I say atheists were one percent?  I mean one-half of one-half of one percent.  But look government isn‘t neutral about anything.  Government takes a stand on behalf of kindness against meanness, peace over war, right, good over bad and I think we can—government can plausibly take a stand with God over no God. 

That‘s not establishing a religion.  It‘s just, I don‘t know, it‘s taking a perfectly understandable position as far as I‘m concerned.  Anyway saying “under God” in class if it‘s not mandatory hurts nobody, so lighten up Michael Newdow and all you atheists out there.

Let me know what you‘re thinking.  You can call 1-877-TCARLSON, that‘s 1-877-822-7576.

Still ahead on THE SITUATION, the looting that followed Hurricane Katrina was in some ways, in many ways uglier and sadder than the storm itself.  We‘ll introduce you to a confessed looter when we come back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE:  I‘m Ms. Mary Mack (ph).  I‘m looking for (INAUDIBLE) because I have a son and a daughter, Sheena Maxon, and little Edward Mack and Michael Mack and McArthur Mack (ph) and they are, if they see this they could contact me by Green Acres.

(END VIDEO CLIP)

CARLSON:  Within hours of Hurricane Katrina, looting broke out in New Orleans.  It continued unstopped for days blossoming into chaos that spawned rape, murder and arson.  You‘ve seen that tragic story but until now the looters themselves have been mostly silent and unfortunately unpunished.

Well, NBC Producer Rob Harris found a man who participated in the looting.  Here‘s his story.

(BEGIN VIDEOTAPE)

JONATHAN HUGGINS, LOOTER:  I‘m not going to pull any punches.  I was a looter and—and they shoot looters some places.

ROB HARRIS, NBC PRODUCER (voice-over):  Meet 45-year-old Jonathan Huggins, a third generation San Francisco paramedic, who was one of the hundreds of tourists stranded in New Orleans by Hurricane Katrina.

HUGGINS:  Do I look like a looter you heard on the press?  I love serving my community and my community is now being served by a looter.

HARRIS:  Along with his girlfriend, Huggins rode out the storm in an 11th floor hotel room.  Three days later with food running low, they and other guests headed for the local Wal-Mart.  The looting was well underway.

HUGGINS:  This looting is so unlike the looting and the riots after the King verdict or anything else.  This is not a looting of destruction and frustration.  You have generational looting.  I had 60-year-olds in there with me and I had 6-year-olds.

HARRIS:  Huggins said he did see a few people taking electronics and jewelry but given the situation he believes his fellow looters were also doing it to survive.

HUGGINS:  I have a gold ring.  I have something to hock.  I don‘t know if the person who took the VCR might not be able to.  I‘m not going to work for four months.  I may hock this VCR.  I may trade it out for, you know, a tank of gas for somebody else who‘s in this situation.

HARRIS:  Huggins said the police officers on the scene seemed unsure about what to do.  Some directed the looting.

HUGGINS:  No alcohol or we‘re going to take your card.

HARRIS:  Another officer threatened his girlfriend, Katherine Hawley‘s life as she tried to leave the store.

KATHERINE HAWLEY:  This officer is maybe four feet away from me and turns his—his shotgun, black, big, pump action shotgun at my face and starts screaming at me saying, you know, just F-ing looter, thief, put down your stuff.

HARRIS:  Huggins and Hawley survived that harrowing encounter and made it out to Baton Rouge by paying a man to drive them.  Looking back they are unapologetic.

HUGGINS:  I‘m a strong believer that the lawlessness and the looting, et cetera is because there‘s no relief.  I definitely think I was a looter.  I have the shopping list.  If Wal-Mart comes a knocking I have a good friend who is a defense attorney and I‘ll write the check.  Hopefully they‘ll accept it to a donation to the American Red Cross.

(END VIDEOTAPE)

CARLSON:  You have got to be kidding.  New Orleans littered with shoe boxes.  Are you telling me that people in need need brand new sneakers to survive?  Tell me another. 

That‘s going to do it for THE SITUATION this week.  Thanks for watching.  I‘ll see you here on Monday night.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

END   

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