best political team, go to cnn.com/situation room. i'm suzanne malveaux "the situation room." up next, "lou dobbs tonight." lou? >> thank you, and good evening, everybody. the white house is trying to spin its way out of a controversy over a possible middle class tax increase, a controversy driven, in part, by two of the administration's top officials. we will have a special report on whether the president is planning to break a key campaign promise. also, rising outrage across the country over the president's health care plan. congressmen returning home for their august recess, they're hearing from their constituents. and the president's plan facing protests similar to the anti-tax t.e.a. parties earlier in the year. president obama, as well, facing strong opposition to that health care overhaul from his own form doctor. dr. david shiner stays doesn't go far enough. dr. shiner among my guests here tonight. first, the rising uproar over the possibility of a broken

campaign promise and middle-class tax hike. the white house today trying to play down that controversy over remarks by two of the leading administration economic officials who refused to rule out such a tax increase. senior white house economic adviser, lawrence summers, and treasury secretary, timothy geithner, both declaring that it would be wrong to pass judgment on any tax increase now. today, white house press secretary robert gibbs says summers and geithner were speaking hypothetically. dan lothian reports from the white house. >> reporter: the president's two top money men may have a good grip on all the numbers, but their words may have gone offscript. >> i think they allowed themselves to get into a little bit of a hypothetical back and forth. >> reporter: that's the clarification of comes made by treasury secretary timothy geithner and economic adviser, larry summers, on the sunday morning talk shows. the two seemingly leaving the door open to a middle had-class

tax hike in order to pay down the deficit and afford health care reform. >> it is never a good idea to absolutely rule things, rule things out, no matter. what. >> we are going to have to do what it takes. we are going to do what's necessary. were. >> reporter: spokesman robert gibbs again stressed the president's commitment to not raise taxes on americans making less than $250,000 a year. >> though there's no -- there's no real scenario there as the administration sees it where middle-class taxpayers might be hit with a hike? will is no scenario now? >> the president has been very clear. >> if someone says -- >> the president made a commitment in the campaign. he is clear about that commitment and he is going to keep t i don't know how much clearer about the commitment i can be. >> reporter: on the campaign trail, mr. obama drew a line in the sand. >> you will not see your taxes increase by a single dollar, not your income tax, not your payroll tax, not your capital gains tax, no tax. >> reporter: when asked if geithner and summers were test the temperature by leaving the

door open, gibbs said, "i don't know" he did say during a meeting with his top economic advisers, the president reiterated his position on middle class taxes so there would be no confusion. now, gibbs says geithner and summer were not taken to the woodshed in that meeting but up on capitol hill on the senate floor, republican senator lamar alexander says that he thinks that they were reprimanded and he believes that it is irresponsible for this administration to say that they can do all those things that they currently have on their plate, like health care reform, without touching middle class americans. lou? >> well, dan, there is also the comment by the president, as you know, on july 22nd, and that press conference where he said that he would be opposed to anything in which the tax increases for health care came down disproportionately on the middle class, seemingly accepting the idea that the middle class would receive part of any tax increase.

>> reporter: right, but any time you do address a question to the president or this administration, specifically robert gibbs, they will come back time and time again and say, listen, the president has said that he is not going to hit middle-class taxpayers and he is talking -- the number three threw out there is those making less than $250,000 with additional taxes. now, i guess, the big question could be with a do you classify as middle-class taxpayers? perhaps that number could be shifted and then you can move it all around but that is the number that they are using right now. we heard what summers and geithner said over the weekend. the white house saying nothing has changed. >> nothing has changed? it sounds like something is changing. we just don't know what. >> reporter: exactly, something is going on behind the scenes. perhaps we don't have all the answers. >> i know one thing, you will get them. >> reporter: i will try. >> thanks. dan lothian from the white house. as dan just reported, the president has repeatedly declare he has in no plans to raise taxes on middle-class americans. here's one example of his rhetoric from a campaign event

in do every, new hampshire, last september. >> and i can make a firm pledge u , under my plan, no family making less than $250,000 a year will see any form of tax increase, not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. >> now, that was candidate obama. now, let's listen to what president obama was saying at a news conference just last month on july 22nd. president obama clearly recal bragt his language on the issue. >> if i see a proposal that is primarily funded through taxing middle-class families, i'm going to be opposed to it, because i think there are better ideas to do it it. >> in his statement, the president opposed middle-class taxes that pay for the predominant cost of his health care plan. over the weekend, as we

reported, two of the president's top economic advisers, lawrence summers and timothy geithner, faced tough new questions about the possibility of that middle-class tax hike. they both flatly refused to rule it out, a tax increase to pay for health care and to tackle our exploding federal budget deficit. treasury secretary geithner first. >> i think that what the country needs to do is understand we are going to have to do what it takes, we are going to do what's necessary. >> there's a lot that could happen over time, but the priority right now, never a good idea to absolutely rule things, rule things out, no matter what. >> although that apparently is exactly what white house press secretary robert gibbs did today, dismissing those comments as "a little bit of hypothetical back and forth." the obama administration also breaking a promise to limit the power of lobbyists after intense lobbying from lobbyists. the white house has reversed its

course and is now allowing lobbyists to meet and to have telephone conversations with government officials on economic stimulus projects. lisa sylvester with our report. >> reporter: $787 billion in stimulus money at stake, states, private companies and industries, lots of groups want a piece of it. the obama administration has limited lobbyists to making appeals in writing to government i officials instead of having face-to-face meetings over how the money should be spent. but a memo just released by the obama administration lifts that communications ban. a variety of groups, including the aclu and the american league of lobbyists, have threatened to sue the government. >> any time you decide to limit or discriminate against a class of people, whether it be lobbyists, policemen, firefighters, whoever, and restrict them from petitioning the government is not right, and is unconstitutional. >> reporter: with the rule change, lobbyists, lawyers and

others advocating for special interests will still be banned from talking to government officials about the substance of the application as they await a decision on a stimulus grant. john wonderlick with the sunlight foundation sways so much taxpayer money on the line it is important that the public knows who is exerting influence. >> lobbyists wield a disproportionate amount of influence that can distort the policy process. well, we should at least know who is paying to you make an argument and understand who you are immediating with and why. >> reporter: under the rule change, government officials must now document certain lobbying and advocacy discussions. he said if elected, lobbyists would not find a job in the white house. after the election, that rule was modified to say that lobbyists would not dominate the white house. and here we are today, according to the national journal, they did a survey and found that 11% of 267 of president obama's political appoint test and nominees were, in fact, rebel

gisted to lobby at some point in the last five years. lou? >> from zero to 11%? also, the white house declining, just as did the bush administration, and actually before that the clinton administration, to reveal who the visitors were, the advisers to the president, on the issue of health care. >> reporter: yeah, this is one of those ongoing things that is sort of the back and forth, how much transparency that there should be in the white house. and when president -- was then-candidate obama, said there would be lots of transparency, now there is a push for him to keep his word and for them to release the logs of all the visitors and detailed logs, at that. >> all right. transparency and openness, not quite at the level that it appeared that it would be in the campaign. lisa, first of all, thank you very much. appreciate it. president obama has now broke an number of other high-profile campaign promises in just the first six months in office. among those promises, a promise to allow five days of public

comment before president obama signed bills into law. one example of the recent credit card bill of rights, it was signed two days after congress completed work on the legislation. the president also breaking a promise to negotiate changes to health care in public sessions, televised on c-span. all of the negotiating sessions at the white house and in congress have been in private, behind firmly closed doors. up next here, president obama's former doctor joins us. he will tell us why he opposes the president's health care plan. also, rising protests across the country against the democratic party's health care agenda. [ chanting ] >> we will report on this increasingly bitter and vocal fight and we will tell you about one country where the health care system appear it is to work. and most of its people satisfied with their medical treatments. we will be telling you about

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with congress heading home to talk health care with their constituents and to listen. congressmen from both parties facing tough questions on the extent of government involvement and the cost of any new health care policy. and some of those lawmakers aren't exactly receiving a warm welcome back home. candy crowley with our report. >> reporter: democratic congressman lloyd dogget was in his texas district over the

weekend, talking health care. trying to listen up to youtube. >> just say no. just say no. >> reporter: also courtesy youtube, pennsylvania senator arlen specter with hhs secretary, kathleen sebelius in philadelphia, trying to talk health care reform. >> the bill very fast. [ crowd booing ] >> why? why? why? >> reporter: suddenly, the august recess seems pretty long. it was more sedate but doing rounds at a denver hospital, senator michael bennett did not sound like a man in a huge hurry to pass health care reform. >> the more one gets into this, the more you see how complex a system it is, very important that we don't create a bunch of unintended consequences that compound problems and struggles that people already have. >> reporter: august recess has begun for most capitol hill lawmakers who are headed home, with one thing on their mind, health care. actually, two things.

>> members are always thinking about running again, so, 2010, top of their mind. >> reporter: even those not up for re-election next year feel the heat of an august recess when a hot topic like health care is in limbo on capitol hill. senator kent conrad will do listening sessions across north dakota. but bet your last dollar that august recess this time will have a lot more to do with talking than listening. >> i think it's also very important that people across the country hear that the course we're on is not sustainable. >> reporter: on the house side, speaker nancy pelosi and republican leader john boehner spent talking points to their members, basically boiling down to two themes. >> big evil insurance companies versus socialized medicine. >> reporter: time is not on the side of democrats, many whom wanted health care done before recess. the longer the issue becomes out there the more it becomes a pinata. advantage, the critics. >> i think it's safe to say that

over the august recess, as more americans learn more about their plan, they are likely to have a very, very hot summer. >> reporter: democrats say it is not that americans are learning more about reform, it's that they are learning erroneous things about reform. august on defense. >> we are going to make sure that health care reform does not get swift-voted during the month of august. >> reporter: the problem is there is no one single health care bill, no plan that has jelled on capitol hill. in some ways, it allows both sides to claim they're right. now, about those angry voters, there are some when republicans go out to talk about health care, but it looks as though democrats are getting the brunt of it and they accuse republican operatives of sending pro-toaster these town hall meetings. but even if there is truth to that, the reality is that poll after poll shows americans are divided about obama-style health care reform. lou? >> and these constituents are making themselves heard. is there any reason to believe

that these are some sort of political operatives working for either -- well, the republican party? >> reporter: well, we do have e-mails that go around and certainly republicans of various interest groups are looking at this and understanding, of course, as you know it shows up on capitol hill. but you know what, these are constituents, too, and they get to show up in protest. >> all right, candy, thanks a lot, candy crowley. the latest opinion polls supporting what candy just reported, that president obama is losing support for his health care proposals and he is losing that support very quickly. the most recent cnn poll-to-poll shows 45% of americans disapprove of the way the president is handling health care, while 43% approve. meanwhile, the latest "new york times"/cbs news poll shows the number of americans who are very concerned their health care will worsen has soared from 28% just in june to now 41%. perhaps one reason for the growing skepticism is there are

a number of questions that haven't even been asked, let alone answered, about health care in this country like what is the ratio of doctors to patients? think about it, have you heard that discussion? well, in the united states it is 1:416. on average in other developed nations, it's 1:323. what is the biggest driver of health care costs? is it medical technology? is it pharmaceuticals? what is it? we haven't been hearing that discussion. it's medical technology, replacing older medical equipment with the newer options that are far more expensive but not necessarily more efficient or effective. and what is a reasonable percentage of our gdp to spend on health care? we spend fully 16% of our gdp on health care. to other developed nations spend far less. france spends 11%. germany spends 10%. canada also 10%. why are other countries spending

less and what can we learn from their health care plans? these are questions that our "representatives in washington" should be asking but are not and open toly discussing with the american people and are not before any discussion of a health care overhaul can be rushed through congress and then signed by this president. we will be doing just that on this broadcast. we will be having a discussion about the key questions that should be answered and the answers that will affect your family. some of those answers to these questions may come from other countries' health care plans. one such country with a high level of satisfaction with its health care system is denmark. most danish health care is provided by regional governments at federal taxpayer expense. it is a lot cheaper than health care in this country, both as a percentage of the economy and per citizen. kitty pilgrim with our report on denmark. >> reporter: denmark's health

care is funded by the government, and it's responsible for collecting an 8% tax on income to pay for the service. each of the five regions is responsible for running their own health care budgets, running their own hospitals, paying for doctor visits, treatments, nursing homes and all other health services. health care costs in denmark are half of those in the united states. according to the organization for economic cooperation and development, denmark spends $3,362 per person, and that is 9.8% of gdp. the u.s. spends $7,290 per person, 16% of gdp. richard saltman, who has written extensively on health care in europe, says the danish health care system is less expensive and less inclined to litigation. >> all their physicians are in hospitals, are public employees. they don't need malpractice insurance. nobody ever talks about defensive medicine. that's not a term that would be

used in denmark in any form. >> reporter: personal service is key. in 1998, 90% of danes said they were satisfied with their health care, according to a survey by the european commission. that was the highest satisfaction in europe. there are more doctors per parent in denmark than in the united states can, almost four doctors for every 1,000 people, versus almost three in the united states. doctors in danish hospitals are paid a fixed salary by contract. primary care physicians are paid an annual amount for each patient and are paid additional amounts for more extensive treatment of severe conditions such as coronary care. denmark is also trying to reform its system. now, some danes are also buying private health insurance to cover extra costs, such as drug co-payments, fees and a better room in the hospital, but even so, the world health organization says that in denmark, private spending on health care is only 16%, while in the united states, private spending is more than half of all spending on health care. lou? >> and i think it would surprise a lot of people to know that

denmark, with its universal care system, still, i think it is about 70% of the co-pays on dental and that sort of care, is up to the patient. it is not a place where -- it's a safeguard against extraordinary and extreme and imprudent spending. >> that's right. that's exactly right. >> this is fascinating you and we haven't heard anybody else talking about these issues. we haven't heard this president who is demanding health care be signed, we haven't heard this congress, either republican or democrat, talking about these comparisons intelligently with other nations from which people can learn. and for one thing, the issue that you bring up, malpractice. >> yep. >> the discussion they want -- they want, i don't know what they will see, but they want a public on option, ie, government health care, but haven't, so far, gained the courage to say, does that mean there would be no malpractice lawsuit brought by lawyers against doctors if it's a federal system? you know, these are not small

issues and this discussion is not taking place in public. it is almost as if the public be damned. it have he enlightening to look at the different systems, especially on -- >> i'm glad you said that enlightening is what we are going to do here, kitty and we are going to do much of it we are going to be bringing you the comparisons over the august recess here on the "lou dobbs tonight" broadcast. we are going to show what you other countries are doing, those -- those elements of those other nations' health care systems from which we can learn and which, one hopes, will benefit all of us here. kitty, thank you very much. outstanding. kitty pilgrim. up next, president obama's former physician believes the president's approach to health care is just plain wrong. he is opposed. dr. david shiner joins me here. and the president's approval ratings, as we said, dropping sharply. who's to blame? what's to blame? that's the subject of tonight's faceoff debate. and the future of that cash for clunkers program, now in the hands of the united states senate. don't be afraid.

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now this is one of thoserare nights. are you ready? we have good news for you from detroit. ford motors reporting sales up

compared to the same time a year ago. ford reporting its sales rose 2% on the year. ford also reporting a 6% increase in sales from june. chrysler, one of several carmakers reporting declines in sales, however, from a year ago, chrysler sales down 9%. i feel like i should say down only 9%. chrysler says sales were up 30% from june. toyota sales down 11%, but its sales soaring 32% from june. general motors had a 19% decline in sales, year on year, but its sales were up 8% from june. well, the government's clunkers for cash program luring more car buyers into show rooms. that program will end friday, if the senate doesn't approve another $2 billion more for the program. two key senators, democrat dianne feinstein and republican susan collins, are both opposed -- well, they did oppose passing more money to pay for the program. now, they have changed their position and will support that

extension. but the program is still facing stiff opposition. brianna keilar has our report. >> reporter: christopher sherrisome and mary lafleur were going to wait until next year to get rid of their 1998 nissan pathfinder, which gets 15 miles per gallon. then they qualified for as 3500 rebate toward a new car under the government's cash for clunkers program. >> we just don't want to miss that, to miss this program. >> reporter: that sentiment is fuelling a boom at neil cooperman's toyota dealership outside new york city. >> the sales have picked up at least 50 to 75%. >> reporter: but the buying frenzy could be short lived. >> the bill is passed without objection to motion, reconsidered later on the table much. >> reporter: the house of representatives passed a $2 billion extension of the program before adjourning for august recess last friday but it's uncertain if the senate can do the same before it leaves at the end of this week. many republicans oppose cash for clunkers. >> the government should not be in the used car business and

this is just a great example of how badly the government manages things. >> reporter: some democrats have major reservations about extending the current program as is. senator claire mccaskill said on twitter, "the idea was to prime the pump, not subsidize auto purchases forever." but two key senators who opposed extending the program, democrat dianne feinstein and republican susan collins, changed their minds after an analysis by the obama administration showed consumers were buying higher fuel economy vehicles than the law requires. >> fuel efficiency has to be a major component of this program, not just clear inventories off of car lots. >> reporter: for now, prospective buyers continue to be enticed by hefty rebates. >> i will be leaving here with a car today. >> reporter: but will other potential buyers get the same opportunities? it is still unclear if democratic leaders will be able

to get those 60 votes they need to pass an ex-steps of cash for clunkers and the clock is ticking in the senate, which leaves for recess at the end of this week with. and also, lou, a very busy week ahead of the senate here, since they are going to debate and vote on sonia sotomayor's nomination to the supreme court. >> well, cash for clunkers, it will be interesting to see how that unwinds. and basically, this is a scrap program as well? these cars that are being traded in are going out to scrap. some of the differentials in gas mileage only am to one to a few miles per gallon, right? >> reporter: well, for instance, when we, our producers up in new york went to that dealership today, they were trading in a car that got 15 miles per gallon and they were trading it in for a car that got 21 miles per gallon. and it this is a program that the secondary part of the industry opposes because a lot -- for instance, the engine certainly does not go to scrap, lou, doesn't go to be recycled, does go to scrap, it's crushed.

and there, that's the end of it. >> amazing. all right, well, a lot for the senate to sort out. brianna, thank you very much. brianna cooler from washington. harvard professor henry louis gates speaking out for the first time since last week's beer summit at the white house. at that summit, you recall, the professor met with and shared a beer with police sergeant james crowley and the president, who invited them to the white house after that national controversy over the arrest of professor gates. but sergeant crowley and the president's subsequent remark about the cambridge police acting stupidly. over the weekend, professor gates talked about what it was like to meet crowley at the white house. >> you know what, i liked crowley and i thought that we would like each other. and you know, i don't know what we will talk about but i asked him if he would have lunch with me one-on-one. i asked him maybe to go to a red sox game together, maybe go to a celtic game together. you know, maybe have dinner with

our families, you know? why not? >> these guys are gonna be spending a lot of time together. and professor gates also joked about helping crowley's children with their college admission. >> you know, i offered to get his kids into harvard. [ laughter ] if he doesn't arrest me every day. >> a reasonable trade. and i think the professor is going to hear from the sergeant on that admission's process. when asked by reporters, gates refused to say whether he thought race played a role in that arrest. a judge in california today awarded michael jackson's mother custody of the singer's children in the jackson case today. 79-year-old katherine jackson given permanent custody of jackson's three children. an agreement between katherine jackson and debbie rowe, the mother of jackson's two oldest

children cleared wait for that ruling. katherine jackson also want at least partial control over her son's estate. i will have a few thoughts about all of these issues. join me on the radio monday through friday for "the lou dobbs show" 2 to 4 p.m. on wor 710 radio in new york city. go to lou dobbs.com to get the local listings for the lou dobs show on the radio and please follow me on lou dobbs news on twitter.com. up next, more good news to tell you about on the economy, but the unemployment rate still rising. we will have a special report on this recession and recovery. concerns tonight about the economy helping drive the president's poll rating even lower. we will examine the president's sinking approval ratings in our faceoff debate here tonight, next. (music plays)

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president obama's approval rating is falling sharply. two major national polls showing a 6% decline in the president's approval rating last month. health care, the economy, just what's behind the president's declining popularity, the subject of our faceoff debate tonight. joining me now, jeffrey guerin, democratic pollster, president of peter hart research associates. great to have you with us, jeff.

a and president and ceo of a polling company, kelly ann conway. >> thank you. >> let's look at the most recent polls here, start with the abc "washington post" poll which has declined from 65 to 59%, the cbs "new york times" poll from 63 to 57%. nbc/wall street journal 56 to 53%. jeff, should the white house be worried? >> well, nobody likes to see their numbers going down, but the reality is that president obama is serving a at very difficult time and he is trying to do very difficult things. what i would be paying attention to if i were the white house were the fundamental sounds in terms of his reputation and how people see him. what we also know from the polls is people still think he is a very smart president and -- who has been dealt a very difficult hand and that at a very fundamental level, they like him and they are rooting for him. >> you are talking about a lot

of empathy there. >> when people stop rooting for him that is when they really are worried. look, these are tough times things aren't changing as quickly as people would like, but the fundamental basic things that are important to barack obama's long-term success, both as president and politically they are in good shape. >> kelly ann, luke at those numbers, significant decline no question. down to 59%, 57%, 53%. many a president would have paid a lot of money for those numbers? >> yes, but that's generic approval, as geoffrey points out, man the is likable. about 71% of americans say he is "likable" they like him, they want him to suck seemed he is the president, not the prom king. they want him to be voted most likely to succeed, not most popular. you look at the real devastation, mr. dobbs, in his disapproval, on key issues on

taxes on the def of, on the economy and now according to cnn polls we poll officers call it negative on issues. >> look at the come polls that kelly ann referred to cnn poll of polls, how obama is handling health care, approval, 43%, disapproval, 45%. your sense of how significant this is? >> whatth is what he is talk about putting all his political capital different than personal appeal on the line. different than town hall meetings. he has his economic team out there fundamentally, americans are looking at health care reform as an economic issue. that is where he is not faring well. they should also be worried because he ran on hope, change, opportunity and specifics are not his friend. every time he unveils specifics about a particular plan, like the stimulus, like the national energy tax and now like health care, you see a nexus in the dip in his approval ratings on this specific issue. >> the rasmussen reports, geoff,

how would you rate the health care you receive right now, excellent to good, comes up to about -- and fair, talking about 74, 91%. i mean, these are pretty strong numbers. if we could take a look at that, please that rasmussen report on the health care we receive, excellent, good, fair, down to 17%. those are pretty strong -- that is a pretty strong support of what -- of the status quo, is it not? >> it is. it is why change is hard in health care. real schizophrenia, people on the one hand are satisfied with their own health care but the other hand they know that the health care system is not working well for others. the real question is i thought you did a real service earlier in the show you talk about these deeper issues, is the current system sustainable and that there is a lot of evidence it is not and people have a right to be concerned about whether they

are going to be able to keep what they've got. frankly, you said nobody is talking about that i think president obama does it is a complex message to try to communicate. >> too complex for me to always correctly proceed. >> on the health care poll ratings, loo thank is obviously a work in progress, his ratings are what his ratings are but this will come to a conclusion hopefully and that is really when the ratings will matter. >> i think that is an interesting take, jeff, if i may say, and kelly, the republican pollster. i will tell you, i think that the idea personally of rushing through health care at this point, talking about a sixth of the economy, talking about health care for really 300 million americans, the rush to judgment seems, i will put it in the kindest terms possible, unseemly and perhaps imprudent but it also seems unfair to

judge a president who has been in office for six months on this issue s is there some sort of great penalty here for this president and the republican party, the democratic leadership in congress to say, wait a minute, we are really sincere and serious about this let's all take a deep breath, let's look and compare as we are going to on this broadcast, all the principal health care systems, let's look at the cost what is sustainable what is not what is an appropriate way to go forward? why not do that with an honest, open, public debate in this country? >> that would be terrific and i think that begs question, what was the rush? why should we put 16% of the nation's gdp on an egg timer, trying to ram this through -- >> what about the role of the republican party, they should be something other than naysayers? >> a bipartisan plan came out last week driven by a few republican senators and i think

what is important here, the difference between change and revolution, obama is a smart man on change. he is an even-headed slow-go guy, meaning he likes to look at best practices. he ran that way and i think he is governing way too rapidly for the kind of change and revolution that americans will follow. >> geoff, the last word and do it quickly. >> the one thing i would say -- >> get the last word either way. >> but i will try to be quick there are these bipartisan negotiations going on and the fact is the republican leader mitch mcconal is doing everything toke kill them and in fairness to america, he ought to encourage them not try to suffocate them and there is probably a bipartisan solution if the republicans will let it happen. >> i'm glad the two of you came together, kelly ann offered up revolution, you offered up killing. i think we have built a very important bridge here tonight. we will continue to try it. geoff, thank you very much. kelly ann, thank you. still ahead, president obama's health care plan faces sharp criticism from his own former doctor, dr. david shiner

joins me. he will tell me why he thinks his president's plan doesn't work. and more encouraging signs that our economy may be recovering. do you hear? recovering. we will have that special report. stay with us. anyone can prove they're strong once. the real question is can they prove it again and again. ♪ at northwestern mutual, we've answered that question compellingly... for over 150 years. northwestern mutual. consistency counts. put our strength to work for you. learn how at northwesternmutual.com.

encouraging positive signs on our economy to tell you b new home sales up 11% in the month of june. sales of existing homes also rose last month. economists some, of them at least, say this could be one indicate they're our economy is

beginning to stabilize and perhaps recover. casey wian has the good news. >> reporter: a surprising increase in spending on new home construction and other building projects in june is the latest evidence that the worst of the u.s. recession has passed. that is the view of former federal veer of chairman, alan greenspan. >> i'm pretty sure we have seen the bottom. in fact, if you look at the weekly production figures of various industries, is clear we have turned. >> the collapse of the housing market launched this recession. now in distressed places like california, arizona and florida home foreclosures have stabilize, according to the associate press' economic stress index it measures unemployment, home foreclosures and bankruptcy in more than 3,000 u.s. companies. wide disparities exist, as this map illustrated. whiter-colored countries in america's heartland show relatively healthy economic conditions but high levels of economic stress persist in

california and the michigan anden of the so-called rust belt and parts of the south. >> i think a little bit premature to be confident about recovery and i think it's very premature to be confident about a robust recovery by early next year. >> reporter: that hasn't stopped the president from taking some credit. >> in the last few months, the economy has done measurably better than we had thought, better than expected. and as many economists will tell you, that part of the progress is directly attributable to the recovery act. >> reporter: but his opponents are raising red flags. >> it is a short-term improvement in the economy and i'll be glad to give him credit for that, but the question that i think we should be asking are the long-term consequences of this unprecedented debts and

deficits. are they beneficial to the country? and i think the answer is no. >> reporter: many economists and even the white house say that for now, unemployment is likely to keep rising, even as the economy turns around. until job growth recovers, most americans are not likely to feel that the economy is recovering at all, which means consumer spending will probably remain slow and that, in turn, could slow the recovery. lou? >> yeah, but you know, i -- i have to be honest. it get as a little irritating to hear these economists be so cautious since they really have had little in the way of prescription about when it started, how they will wrap up. we are seeing positive signs shall as you have just reported. why not, if you will, ex-haltwh exalt in the positives in the last year and a half? >> they say this recovery will be stronger than companies think, auto manufacturing, home

construction has been down for so long there is a lot of pent-up demand there. >> those are the economists we ought to be talking to, casey. casey, thanks a lot. i appreciate t. >> reporter: time we will. >> you did great. thank you, sir. up next, president obama's health care plan is under attack by his former doctor with whom i'll be speaking. there are multiple problems with the present health care reform proposals but allowing private insurance to continue to be involved is the most egregious. >> egregious. we'll be joined by dr. david shiner who says the plan doesn't do well enough.

the president's health care proposal has many critics. one is his personal physician, dr. david shiner. dr. shiner is a chicago doctor. he treated president obama for more than two decades. he says the president's health care plan will not work because it's too expensive and too compromised. doctor, it's great to have you with us here. you know -- >> thank you very much. >> i think a lot of people have to be surprised that you spend two decades with your patient and now you're a little disappointed to say the least, with his health care plan. why so? >> well, i have tremendous respect for him. he's incredible, maybe the best president i've been living through and i go back to franklin roosevelt. but on this issue -- >> and we're only six months in. >> i think on this particular -- >> i'm just kidding with you. >> he is extraordinarily bright. the man is incredible. his knowledge.

once i told him a joke the last time i saw him, and he remembered i told him the same joke, and he criticized me. if he can remember dumb jokes this man has a memory. >> he has a memory but what's his vision? that's the issue here. you say the plan is too expensive and doesn't go far enough in the sense that it isn't sufficiently universal, isn't sufficiently nationalized in what way? >> well, you know, there's a number of areas. for example, one area that really bothers me is medicaid. one of the things he wants to do is to increase medicaid. medicaid, the states can't afford it now. how is he going to afford it. medicaid is also not a good system. most doctors won't take them. many hospitals won't take medicaid patients, and the patients are treated often in a third-class fashion. that's not the american way of life when we're supposed to be more egalitarian. medicaid is bad.

the other thing is that the private insurance companies will still be driving the cart and private insurance companies, i've had 40 years of dealing with them. people keep saying, well, the government will get in the way between you and your patient. the government never gets in the w way. medicare, 40 years of medicare, they've never interfered with me giving care. private insurance is constantly. >> all right. >> constantly interfering. >> medicare -- i'm sorry, which is interfering? >> medicare never interferes. if anything, medicare is too permissive. there's too many things they allow they should not. they should tight en it up. private insurance tells me what hospital, what laboratory, what meditation, whether i can admit the patient, whether i can't admit the patient. it's incredible. >> but the argument is, as you know, doctor, that with government-run health care there would be great intrusion by the government and the government, you mentioned medicare, is 35% more expensive over the past

30-some-odd years than all of the other private programs combined per patient, so that's not a very likely model either. so what would be the two -- >> medicare is treating old people. medicare is treating old, sick people. great amounts of costs the last two years of one's life. it has to be more expensive. >> my question is what are the things you would like to see done, the top two requirements for successful health care reform? i know there are many more. just the top two because we're out of time. >> the first one would be universal medicare so everyone is covered and there is no difference between different patients. the second thing, i think, we have to address the issue of the pharmaceuticals. this is getting way out of balance. we have to negotiate the fees for the -- >> you're talking price controls for pharmaceuticals? >> not cost controls but it has to be -- part "d" was a disas r

disaster, it was so expensive. there has to be negotiation. >> all right. dr. david scheiner, good to have you with us. and maybe you should call up your former patient and talk about a beer at the white house to get this thing resolved. >> i wouldn't mind a glass of water. >> you've got it. dr. scheiner, thank you very much. campbell brown? >> lou, if your kids download music, you may want to make sure they are doing it legally. we'll talk with one college student being forced to pay $675,000 to the record industry for his illegal downloads. does the punishment fit the crime? we'll talk about that ahead. ryan o'neal's bizarre behavior at farrah fawcett's funeral. he says he actually hit on his own daughter. we're going to have the details plus all our -- plus, rather, our mashup of the other top stories of the day at the top of the hour. lou? >> thank you, campbell.