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Fox Business Network: Lou Dobbs Tonight
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LOU DOBBS, HOST: Good evening, everybody. Senate Democrats preparing to unveil their first budget proposal in almost four years. And tax hikes are at the center of their plans once again, Senate Budget Committee chair Patty Murray proposing a budget that calls for a trillion dollars in new taxes. And according to the Congressional Budget Office, it still won't balance the budget, even decades down the road.

Democrats argue that this budget cuts $1.85 trillion from deficits over a 10-year period, and they ask rich to pay their fair share, with the White House insisting to the press today that the American people have given them a mandate to take this approach.

(BEGIN VIDEO CLIP)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: We need to ask the wealthy to contribute to deficit reduction, and that's a position that, you know, the public widely supports.

I will wait for the budget to be put forward and Senator Murray to do that. We expected it to be balanced, to have the principle of balance inherent in its proposals. It's not -- and I don't expect it will be -- in agreement on every item of the president's proposal, but it will be consistent with the president's balanced approach.

(END VIDEO CLIP)

DOBBS: The latest Marist McClatchy poll, however, contradicts Jay Carney's claims of wide public support, the president's job approval rating sinking to 45 percent in the Marist poll, the president's lowest rating in the poll since November of 2011.

Meanwhile, Republicans blasting President Obama for not producing his own budget proposal before the Senate and the House present theirs, Senate Minority Leader Mitch McConnell seizing the opportunity to point out that this year will be the first time in 92 years that the president's budgets submission doesn't begin the process.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Given the fact that we're going into the budget week with both the Democrats and Republicans basically laying out their budget that will be on the floor of the House and Senate next week, it is noteworthy to point out this is the first time in 90 years that the president's budget will actually come up after both the House and Senate have voted. I hope that is not a reflection of a lack of seriousness, but it is beyond -- beyond tardy.

(END VIDEO CLIP)

DOBBS: House Budget Committee chairman Paul Ryan wrote a Wall Street Journal op-ed today laying out the Republican 2014 budget plan. The Ryan approach slices more than $4.5 half dollars in spending and balances the budget within a decade, and cuts tax rates while doing so. And it eliminates "Obama care," saving almost $1.8 trillion. Now, that's not a likely unlikely event, about as unlikely, in fact, as the Democrats' $1 trillion in new taxes. Republicans and Democrats obviously still as far apart as ever on the issues of spending and taxes.

The president's budget proposal is still a mystery, but his press secretary today giving us something of an idea of just when that well overdue budget might finally be delivered by the White House. Right now, the president is focusing on meeting with Democrats and Republicans on Capitol Hill. He has a lot to sell.

FOX News chief White House correspondent Ed Henry with our report.

(BEGIN VIDEO CLIP)

ED HENRY, FOX CORRESPONDENT (voice-over): On the day Republicans put their budget on the table, President Obama arrived on Capitol Hill for the start of three days of schmoozing, a charm offensive, but without a budget of his own to sell.

QUESTION: How can you attack the Ryan budget when you're standing here without an Obama budget?

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Well, I appreciate the question. The president will be putting forward a budget in the next several weeks, probably the week of April 8th, I would expect.

HENRY: That was news because the White House has repeatedly refused to say when the president will release his budget, which by law was due the first Monday in February. Then they promised March. Now it's next month.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: It appears the president is happy to drop the bomb on the congressional budget process instead by releasing his budget plan after -- after -- the House and Senate to have already acted. Now, presumably, this is so he can campaign against Republicans if the process fails, as he no doubt hopes.

HENRY: Jay Carney insists that in the one-page plan on the White House Web site, the president has more detail about changes to major programs like Medicare and Social Security.

CARNEY: Have you looked at the Ryan budget? Can you find a single item in tax reform, a single loophole closed (INAUDIBLE) $5 trillion -- $5 trillion, man! That's a lot of money! Not one.

HENRY: Except as the president went behind closed doors today with Senate Democrats, Senator Patty Murray released their budget plan and it leaves Medicare and Medicaid alone, raising questions about whether the president will be able to get his fellow Democrats to support the entitlement reform he has pledged, with House leader Nancy Pelosi suggesting to CNN she does not want to touch entitlements.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: If the point of it is to take trophies -- let's raise the age -- that doesn't save money. It's a trophy. It's a scalp. But it's not a solution.

HENRY: Tomorrow, the president meets with House Republicans amid questions about whether the outreach is for show after an unnamed White House official told National Journal, quote, "This is a joke. We are wasting the president's time and ours. I hope you all in the media are happy because we are doing it for you."

CARNEY: I have no idea who said that, but I can tell you that opinion has never been voiced in my presence, in the president's presence, in the West Wing.

(END VIDEOTAPE)

HENRY: Senator Tom Harkin said his Democratic colleagues told the president behind closed doors be careful about a grand bargain that, quote, "whacks away as Social Security and Medicare," though officials here insist that Democrats on the Hill are ready to make the tough choices on entitlements -- Lou.

DOBBS: Ed, thank you, Ed Henry, FOX News chief White House correspondent.

Another sign of potential progress in the Senate this time stopped in its tracks, the effort, the bipartisan $984 billion spending bill to get the government through this fiscal year negotiated by Appropriations chairwoman Senator Barbara Mikulski and ranking member Senator Richard Shelby, is now being blocked, and blocked by two Republican senators, Senators John McCain and Tom Coburn. Those senators insist they haven't had time to read the 500 pages.

Here to discuss what lies ahead in this -- what is shaping up to be a battle of the budget, John Lonski, chief economist for Moody's Capital Markets, and the executive editor of The Weekly Standard, FOX News contributor Fred Barnes.

Fred, first, if you will, your assessment as to two Republican senators blocking what looked like a piece of legislation that was well on its way to actually making it through.

FRED BARNES, WEEKLY STANDARD, FOX CONTRIBUTOR: Well, it'll make it through. I mean, we have until March 27th, until -- if that money is not approved and signed by the president, that the government would have to cease for a while. So it'll happen.

Look, they just -- they just were asking for 72 hours. They'll get 72 hours. So I think this is not really that much of a flap, even though Harry Reid got all whipped up about it and he just never heard anything like this before. This is a guy who hasn't presented a budget in the last four years until today, when they finally did it.

You know, you were saying something earlier that -- Lou, that -- remember, about the president coming in with his budget later. There used to be cliche about this! You know, the president proposes and Congress disposes. I guess that's not the case anymore. Now it's Congress that proposes and the president dawdles.

DOBBS: Well, the president is certainly dawdling and not setting a very good tone, John, for Wall Street, certainly, and for investors who are interested in what is happening to fiscal policy in this country. Why is he being, in your judgment -- well, let me ask it this way. What will be the effect if this process ends up much like the last one?

JOHN LONSKI, MOODY'S CAPITAL MARKETS CHIEF ECONOMIST: Well, obviously, it's something that the financial markets are not going to take kindly to. We could see some downward pressure put on equity prices. Perhaps that's tolerable. It's been a great year thus far.

You know, eventually, something has to be done on the budgetary front, and unfortunately, the president is discovering that there is a great deal of resistance to his emphasis on taxes and taxes alone as the primary means of balancing the budget.

DOBBS: Yes, this business, Fred, of Carney today inventing out of whole cloth the idea there's wide support for a trillion dollars in new taxes! My God, where do they keep coming up with the stuff? I mean, at what point does the national media say, You know, there is a reality here, and Mr. Carney, Mr. Obama, we would appreciate it if you would at least conform to it in some fashion in your statements!

BARNES: Well, I'd say don't hold your breath for the media to be jumping on President Obama about this, Lou. But it's not just this $1 trillion in new taxes. You know, we just got $600 billion in new taxes from the fiscal cliff. And then there's all those taxes in "Obama care" which are going to go into effect that Republicans anyway say, well, over 10 years, be (ph) another trillion dollars.

I don't know how a robust economy can be created out of this. I mean, if these tax increases -- which I agree, that $1 trillion Democrats are proposing won't happen. But if it were, that would be crushing to the economy!

DOBBS: Do you agree, John?

LONSKI: Yes. I don't know. With all these tax increases in the pipeline, how in the world do we realize a 3.5 percent average annual real GDP growth the CBO is predicting for the five years ending 2019? And we've got to get this growth if we're going to be on track to move towards a balanced budget!

DOBBS: And the Ryan budget does that in the course of 10 years, but it makes a huge assumption, as we pointed out. We're talking about $1.8 trillion that would be derived from the elimination of "Obama care"! That does not seem, as I said at the outset, likely.

LONSKI: It's not -- it's not politically feasible today, but once "Obama care" goes into effect, it could be that both the observable cost, as well as the possible rationing of health care, could create such an outcry that this program would be watered down substantially.

DOBBS: Fred, do you agree with John Lonski?

BARNES: Exactly. I think he's right. I don't think it's going to be overturned, "Obama care" is not. But even though it's going to be difficult to implement -- now we already know there's this 15-page thing that people have to fill out just to get started in registering for "Obama care." But it can be watered down. That's for sure. I mean, it better work, or it isn't going to -- it isn't going to be around totally, that's for sure. But $1.8 trillion -- you're not going to get quite that out of it.

DOBBS: You were about to say very quickly?

LONSKI: Well, I was going to say, you know, we don't want to overlook the fact the big problem facing the budget and the major uncertainty facing the U.S. economy is over the next 10 years, retirees are going to be growing by more than 3 percent annually. And we're going to be depending upon the working-age population that's going to be growing by only one half of 1 percent annually to fund this unprecedented retirement of huge numbers of Baby Boomers!

DOBBS: Well, we'll conclude this, gentlemen, with -- let me bring everybody up to date on the most recent comment by the president to ABC News, in which he said -- and I will paraphrase here -- that he's not interested in chasing a balanced budget.

Fred Barnes, John Lonski, thank you both for being here.

Much more on the budget battle on Capitol Hill -- it's shaping up quickly -- and where the president fits in this debate next.

The budget battle is on. I'll break it all down in the "Chalk Talk" tonight.

Do you think the president is being charming? We'll find out what Congressman Greg Walden thinks and whether charm is enough.

(COMMERCIAL BREAK)

DOBBS: And this breaking news. As I was just intimating to Fred Barnes and to John Lonski, the president today making this comment about a balanced budget and his budget proposal that the White House press secretary says is now going to be out the week of April 8th, well after the Democratic and Republican plans.

He said in response to a question, Are you going to come forward with a budget that reaches balance -- he says, "No. My goal is not to chase a balanced budget just for the sake of balance. My goal is how do we grow the economy and put people back to work -- " commenting to ABC News.

Well, President Obama is right now trying to smile a lot, shake a lot of hands. And tomorrow he meets with the House GOP leadership. The chairman of the National Republican Congressional Committee, Congressman Greg Walden, will be among those meeting with the president tomorrow. He'll join us here in just a moment.

But first let's take a look at what happened on Wall Street. The Dow Jones Industrials for an eighth day in a row gaining, up to a new all-time high for a sixth straight session. It's been 15 years since the Dow Jones Industrials put together a string of six record closing highs, last done back in February of 1998.

The Dow edging up today 2.75 points, but it still counts because it's a new high, 14,450.06. The S&P 500 fell 3.75, the index now within 13 points of its all-time high set back on October 9th, 2007. The NASDAQ down 10.5 points today, tech shares a drag on the overall market. Volume on the big board 3.2 billion.

Shares of Apple and Google holding the tech sector back. Apple the weakest, down 2 percent on the day. Merck up more than 3 percent, that on positive news about its cholesterol drug Vytorin. Goldman Sachs raising the commodity sector to overweight (ph) today, gold up $13.70, settling at $1,591.70. Crude oil up 48 cents a barrel. It settled at $92.54. And in the bond market, the 10-year Treasury slipping to 2.02 percent.

Overall, a slight pullback in the market today, the Wilshire 5,000 losing $50 billion in value. Since the beginning of this month, however, the market is up $425 billion. So a little sideways for a day. It's not anything to get too excited about, particularly with all the savants and gurus who are tripping over themselves, talking about corrections, sell- offs, and large percentage retracements (ph), as they put it, those gurus and savants. We'll see.

The former CEO of AIG more than doubling down in his lawsuit against the federal government, Hank Greenberg and the class action lawsuit that he's leading seeking now $55 billion from the government. That's up from the original $25 billion suit, the lawsuit contending the federal government's rescue of AIG was, first, unconstitutional -- "unlawful taking" is the term there -- and unnecessary in the parlance of Hank Greenberg.

A Treasury official tells FOX Business they still believe the lawsuit is without merit, and we will see.

And we'll see what happens when President Obama tomorrow meets with House Republicans. That will be their first meeting since June of 2011, when they were also talking budgets.

Joining is now to talk about tomorrow's meeting and what he expects, the budget battle that is now under way, joining us, Congressman Greg Walden, the Oregon Republican, chairman of the National Republican Congressional Committee, Energy and Commerce Committee, chairman of the Communications and Technology Subcommittee.

Congressman, great have you with us. Are you excited about tomorrow?

REP. GREG WALDEN (R), OREGON: You know, it's always interesting when the president comes to visit Washington, and certainly up to Capitol Hill, so we welcome him to hear what he has to say.

DOBBS: And what he has to say won't be in the form of a budget. We got to wait until, apparently...

WALDEN: No.

DOBBS: ... the week of April 8th.

WALDEN: Lou, this is nearly unprecedented in our lifetime. You have to go back to when Warren Harding was president. You know, he should have had this to us by February 4th. Now you're at least two months late. If he were a CEO of any major company, he wouldn't be a CEO by now with these lame uses.

DOBBS: And it'd be interesting to see how his shareholders would be behaving. I think somewhat...

WALDEN: I think...

DOBBS: Somewhat...

(CROSSTALK)

WALDEN: ... be a little upset. Yes! Well, actually, voters I think are catching on, if you look at his favorable and job approval numbers going down. You know, and to say that you're not even going to a chase a balanced budget -- we need a balanced budget so that we can grow the economy and jobs and stop having this drag with the deficit.

DOBBS: Tomorrow, in that meeting, the president is going to be talking, obviously, about -- well, I shouldn't say "obviously." I would presume that he would be talking about that trillion dollars in taxes for which he seems to feel he has widespread support, despite, well, for example, the poll you just cited, as we reported at the outset of the broadcast. What are you guys going to expect in that discussion?

WALDEN: Well, you know, we look forward to hearing what he has to say. We have no idea. Originally, the idea was he was coming to talk about his trip to the Middle East and Israel, but apparently, that has morphed and changed. And you know, so we're open to hear what he has to say.

But you know, if you're not going to put forward a budget that actually balances, which Paul Ryan and the Republican House budget balances in 10 years -- he now says his never balances, even with the trillion dollars in tax increases. That's not balance. That's irresponsible.

And so you know, we'll see what he has to say, but you know, this charm offensive Lou -- come on! You know, charm is something you put on a bracelet. You can't campaign nonstop.

(LAUGHTER)

WALDEN: Well, I'm just saying. You can't campaign nonstop since the election against Republicans, make the first phone call of the platform election night to Steve Israel to say, I want to wipe out Republicans in the House so I can govern unfettered in the last two years, and then come to Capitol Hill and say, Can't we all get along? And then that night, go to the Organizing for Action group, his former campaign team, and say, Hey, I'm with you to take out the House, the Republicans.

You know, it's, like, come on. We got big issues in this country we need to address.

DOBBS: Well, you know, as you say -- I love that expression, charm is what you put on a bracelet. But you know, you guys are -- you guys are sometimes pretty charming, I have to say, and you...

(LAUGHTER)

WALDEN: You're kind!

DOBBS: And I think you do that kind of consciously, much as he's doing right now. A little charm won't hurt here. But the fact is, as you're suggesting, there are some tough choices to be made. And one of the tough choices is where you come up with $1.8 trillion in the Ryan plan if for some reason you don't convince the president to just drop his signature law, the "Obama care" law.

WALDEN: Well, and that is in the Paul Ryan budget, to repeal "Obama care," because we feel very strongly that it is not going to work. It's going to be enormously expensive. It's going to cost jobs, delay access to health care, and with the IPAD (ph), that panel of 15 unelected bureaucrats who are going to decide what gets covered in Medicare after...

(CROSSTALK)

DOBBS: I stipulate. I stipulate. "Obama care" is a bad idea.

WALDEN: OK.

DOBBS: I just don't see how, as a practical political matter, you're going to get the Senate and the president to go along with you on that.

WALDEN: But we don't want to be Democrat lite and say, Well, we're just going to accept the fact "Obama care" is here for life.

DOBBS: Oh, no, I don't want you to be Democrat lite, even.

WALDEN: So we're putting in our budget...

DOBBS: But I do want you to be practical and realistic about what you can do. So you pull $1.8 trillion out of -- $1.8 trillion out of that Ryan plan.

WALDEN: And it's going to...

DOBBS: You still have $3.1 trillion, which is about twice as much as the president -- certainly, as the Senate, the Democratic plan, and likely the president's plan.

WALDEN: Remember, Lou, we as Republicans actually believe in a smaller federal government that balances its budget. We've put that forward in each of the last two Paul Ryan budgets. This is the third. As you've said, you know, this is the first time the Senate's put forward a budget, and we've never seen this circumstance, where the president waits until April. So we believe in this. And in fact...

(CROSSTALK)

DOBBS: You know what, Congressman? He -- the president may be in shock that the Senate's putting forward a budget and it's going to take him until April to kind of recover from it.

WALDEN: Well, you know, Rip Van Winkle woke up! I mean, it's been all these years. I'm -- they had to blow the dust off the manuals on how to put together a budget over in the Senate.

But remember, in the continuing resolution that you talked about earlier, we actually cut a billion dollars out of "Obama care" there. We denied the IRS the money to hire all these new agents to implement it from their perspective.

So we're chipping away at this every chance we get because we think there's a better way to reform health care and make sure Americans get that opportunity going forward.

But again, we balance the budget in 10 years. A serious alternative would be their version of a balanced budget in 10 years. We don't see that from the Senate Democrats, the House Democrats or the president.

Do you know the latest term they're using is that their -- their budget balances in principle.

(LAUGHTER)

WALDEN: Do you know what that means? No, wait! It gets better! Do you know what that means? It means that they don't count the interest payments! That's like saying to a family, My family budget balances, I just don't count my credit card interest payment, my home mortgage interest payments. Can you believe the double speak in -- well, of course, you can. You see it all the time.

DOBBS: I can...

(CROSSTALK)

DOBBS: ... every night, Congressman, every night.

WALDEN: These are the same guys that thought a trillion-dollar coin would solve the problem!

DOBBS: Yes.

WALDEN: I'm not making this stuff up!

DOBBS: Congressman, we are way over time and it's because...

WALDEN: Sorry!

DOBBS: ... you're making me laugh. And I appreciate it. Thanks so much, Congressman Walden. All the best.

WALDEN: You bet, Lou.

DOBBS: Have a great meeting tomorrow.

WALDEN: Thank you.

DOBBS: Up next, dueling budget proposals unveiled in the House and the Senate. In the "Chalk Talk" next, I'll show you just how far apart and interesting these two proposals are.

And the new fiscal year for the National Football League kicking -- kicking off, well, just hours ago, the salary cap casualties already mounting. You know, this is our way of pretending football is back in season here. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Well, if you've been with us throughout the broadcast, this is where it gets exciting. The budget battle -- it's under way in Washington. And believe it or not, it's been nearly four years since the Democrats last introduced a budget, that back on April 29th of 2009.

But this year, not only are the Democrats in the Senate producing a budget, but so is the president. He's a few months late. He's actually defying the law, but you know, who cares.

Tonight, we want to give you a sense of what they're proposing, these Democrats and these Republicans. We begin with the House Republicans. They like to name their budgets after a congressman, the Ryan budget. By the way, this is the third Ryan budget produced by the Republicans in the past three years.

Unlike the previous budget proposals, this Ryan budget balances the budget in 10 years -- 10 years. And I've got to commend the congressman and the Republicans for doing so. It also achieves $4.6 trillion -- $4.6 trillion -- in deficit reduction over the next decade.

There is one little hitch -- $1.8 trillion of that is "Obama care," the repeal of "Obama care" necessary to get to that number, but still a healthy, very healthy number.

Now we all know the House Republicans can't do that by themselves, so let's take a look at the Senate Democratic budget it doesn't even achieved half of that deficit reduction only $1.85 trillion in deficit reduction over the next decade. It's not even -- the President likes to use the expression "balanced". Taxes and spending cuts, higher taxes, now the Senate Democrats want -- they've got a little qualifier too, $1 trillion in new taxes.

So I can feel some excitement starting to wane here, but it's probably won't help. The Senate Democratic budget doesn't balance no matter what. So in terms of deficits, you know it never does get there -- zero. Absolutely zero deficit reduction perpetual infinite deficits.

Let's see what else they offer because there is entitlement reform. The Ryan budget starting in 2021, anyone born in 1959 or later is offered a choice between traditional Medicare and a private plan. That is 2024.

The Senate Democratic budget preserves Medicare and Medicaid programs in its current form. Absolutely no cutback, but that's more than just a problem because if nothing is done to make Medicare more affordable the program will explode. It will double its current size within a decade.

And look at this number -- I'm going to put it right here -- $592 billion paid out this year for Medicare. Within two years that goes to $1.1 trillion.

That is why these parties have no choice in the next few years. I would say at the outside, three years because this point, if the Democratic proposal, for example, were to be put forward, it's not -- it is not a budget proposal. In point of fact, if it were put together into law it would be fiscal suicide.

(BEGIN VIDEO CLIP)

DOBBS: You heard people say, America is becoming a third world nation. Peter Henry argues in his new book that we would do well to watch those third world countries.

The border patrol still tells us how many illegal immigrants they've captured. But two years ago they quit telling us how many got away. Why is that?

Sex, murder, alleged abuse, the man who successfully defended Casey Anthony joins Lis Wiehl. We'll have their take on the trial riveting much of America.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

DOBBS: A Colorado judge today scheduled an early August trial for James Holmes who's charged in the Aurora theater shooting. The judge also entered a not guilty plea on behalf of Holmes after his defense team said he was not ready to enter one.

Holmes can still change his plea to not guilty by reason of insanity. But prosecutors have asked the judge to keep the case moving forward and did so. If Holmes eventually does plead insanity, he could also be given a truth serum as part of his evaluation, although his defense attorneys have filed documents opposing the technique.

Now to a story that no one wants to talk about, what's happening in the murder capital of Chicago. Jonylah Watkins, a six-month old baby girl was killed, she died this morning after being shot five times yesterday while her father was changing her diaper beside his minivan. Officials say the gunman was apparently targeting her father, a known gang member who was also shot and remains in critical condition tonight.

Incredibly, this is the second shooting that the family has endured. The girl's mother was also shot several months ago while she was pregnant with Jonylah.

Jodi Arias will be back on the witness stand for an 18th day in the Phoenix, Arizona capital murder case. The 31 year-old is accused of murdering her ex-boyfriend, Travis Alexander, stabbing him 27 times, slitting his throat, shooting him in the head. And last week jurors asked more than 200 questions of Arias including one question which quote, "After all the lies you told why should we believe you now?" And now we are learning jurors have submitted even more questions.

Joining us, Lis Wiehl, Fox News legal analyst; Jose Baez, a criminal defense attorney who successfully defended Casey Anthony in a Florida death penalty case. Thank you both for being here.

I want to start with the idea that the -- that the defense has put her on the witness stand.

LIS WIEHL, FOX NEWS LEGAL ANALYST: Well they had to almost because there were only to people there in the room and they have the only one surviving. You had to put her on the stand why to keep her away from the death penalty.

She's already admitted to having done it, so now they have to put some theory forward, whether it's battered woman's theory or self-defense. I don't think any of these will fly and especially when you look at those juror questions. You know why should we believe you now she lied not once, not twice, but now a third time on the stand about all these different stories about what happened. I don't think she will prevail but they had to put her on.

DOBBS: Jose do you agree?

JOSE BAEZ, FORMER PROSECUTOR, CASEY ANTHONY: I do. I agree completely. I think that the way you have to look at this is this is first and foremost a death penalty case. So goal number one is to save her life. And I think what they did by putting her on the stand is -- is really an attempt to humanize her. And the fact that she spent so long on the stand, I think, will help the defense in that -- in that goal alone. As -- as it relates to the guilt phase, that remains to be seen.

DOBBS: Yes the -- this -- this defendant Jodi Arias she is saying that she had lapses of memory.

WIEHL: Lou I was just going to get to that. She is so unbelievable though, when she takes the stand because she said, well I remember all of these other things. You know our relationship. Apparently he beat her is what she's saying. You know he was a pedophile. But there was no evidence of that all in his computer.

All of these things she remembers everything up until the point where she slits his throat 27 times and then shoots him in the head. Then she is able to remember and be cognizant enough about getting rid of the gun, about making up a story.

So you know they've got experts lined up and defense experts lined up right after she's done. But that's going to be a tough one to get over.

DOBBS: And -- and where do you think Jose this case head? I mean, the jurors, this is -- this I peculiar to me at least. Jurors have that right to this much cross-examination. Where does it end?

BAEZ: Well, I think it's going to continue. Obviously this is being played out for the jury. The whole trial is specifically for the jury. So these are the people that really need the most attention. So I -- I believe it's going to continue until they are done. And I do think that the judge, after a few more days, will probably try and narrow this a bit.

DOBBS: Right.

BAEZ: But it's going to get very tricky because we might have some appellate issues that would come up as a result of that. But next I think we're going to see a whole slew of mental health experts after this.

DOBBS: Lis?

WIEHL: And there are only a few states that allow this, by the way. You know just three or four, so it's not that common where jurors are allowed to ask questions. But Jose is exactly right that if the judge cuts it off prematurely, then if she is convicted that's a big issue on appeal.

DOBBS: And I want to turn, if I may Jose to -- to the Colorado theater massacre and James Holmes. The judge ruling that the James Holmes could get truth serum if he does plead not guilty by reason of insanity for that examination. What is -- what is your reaction to that? Does that seem to comport to what you would expect?

BAEZ: Well, this has been going on for many, many years. This is nothing new. However, it's going to be put on by prosecution experts and they're not going to say anything positive for the defense anyway. So what it basically results in is, if you're going to plead not guilty by reason of insanity, then not only will the prosecution allow -- have the opportunity to have their experts interview him, but they're also going to be able to do this type of interview using the sodium pentothal and truth serum.

WIEHL: And -- and a polygraph, as you know Jose, as well. Because you know he's subject to a polygraph. That usually doesn't come in, in the courtroom, but it could in this case because you're talking about an insanity defense. All of those things are at the prosecution's disposal, but I guess my mantra here tonight though, is the prosecution has to be careful because if there is again an issue on appeal, is the truth serum, is that taking away some kind of constitutional right. Could there would be an argument about that down the road.

Now, it's true in Colorado that have this quote, unquote, "Truth serum" for a long time, but you never know when the case might lose on appeal.

BAEZ: Right.

DOBBS: I want to thank you both -- I'm sorry. Go ahead Jose.

BAEZ: No, I was going to say, right. But if he passes the polygraph and the truth serum test, you'll never hear from those witnesses because unless the defense decides to put them on.

DOBBS: Jose Baez thank you for being with us. We appreciate it. Lis Wiehl thank you I appreciate it as well.

WIEHL: Thanks.

BAEZ: Thank you for having me.

DOBBS: To join the discussion go to a LouDobbs.com and get the links to our Facebook page. E-mail me at Lou @LouDobbs.com or tweet me @LouDobbsNews.

Up next, a change in the way homeland security well gathers statistics. And by the way, one of the statistics they don't gather is how many -- how many border crossers get away. True story.

We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Defense Secretary Chuck Hagel reversing his position today on a controversial new medal for drone and cyber warfare. The distinguished Warfare Medal, as it is called, was approved last month. It would have ranked higher that the Purple Heart and Bronze Stars. Critics call that an insult to combat veterans. Hagel initially defended that award and the Pentagon today announce its halted production of the metal. Conducting a 30 day review.

Senate Minority Leader Mitch McConnell's office tweeting a shocking photo of a nearly 20,000 pages of Obamacare regulation -- I repeat, 20,000 pages. And if you stack every page of the regulations on top of one another, this is what it looks like compared to the original Obamacare law -- it rests comfortably on the chair.

Senator John Barrasso of -- Barrasso of Wyoming joined in on the fun in proving a stack is more than seven feet tall. But if you think that's a paper nightmare, try applying for benefits under Obamacare. According to the Associated Press, the process will be as difficult as doing your taxes.

The government's draft application, which is now on the Internet -- check it out -- is 15 pages long for a three person family. After you finish that, well, you still have to choose a plan. This is just where the fun begins.

Homeland Security Secretary Janet Napolitano testified to Congress last month that our border quote, "Has never been stronger". The President's secretary's prove -- border patrol apprehensions down 50 percent over the last five years. But it turns out Homeland Security is only telling part of the story and only measuring part of the problem.

Fox News William La Jeunesse reports border patrol agents are no longer counting the illegal immigrants who get away. Only the ones they catch. Critics say that without those figures there is no way to say that the border is safe or secure. I think they have a point, don't you?

Few people can say they have met with the President of the United States but we're guessing only one person can say that he piloted his own 747 jetliner to get to the meeting. And that person is the Sultan of Brunei. The 66-year-old did just that before sitting down for a talk with the President in the Oval Office today.

The Sultan is, of course, known for his vast wealth and that -- that includes a collection of some 7,000 high-performance automobiles valued at more than $5 billion. Among his collection 604 Rolls-Royces -- that's right 604; 574 Mercedes; 452 Ferraris; 382 Bentleys; 209 BMWs, 179 Jaguars, 21 Lamborghinis, 11 Aston Martins, and you get the picture.

Well it's payday in the NFL as free agency begins, although a flat salary cap has some team scrambling to restructure their contracts and to cut players ahead of next month's college draft. The NFL setting the 2013 cap at $123 million. That's where it was back in 2009 when the last collective bargaining agreement expired. That number represents only a $2 million increase from a year ago.

Wide receivers Anquan Bolden of the Super Bowl champion Baltimore Ravens, Percy Harvin of the Minnesota Vikings traded to San Francisco and Seattle respectively. Stars like Victor Cruz of the Giants and Darrelle Revis of the Jets could be on the move for the right price. And the list of high-price players already cut is growing by the minute.

Up next -- slow growth, high unemployment, the author of a new book argues we should look no further that the third world to turn around our first world economy. We'll find out what he means, next.

(COMMERCIAL BREAK)

DOBBS: My next guest says discipline is the key to economic success and the United States and Europe should be talking cues from those third world countries to -- to which they are often preaching. Joining us now is the Dean of New York University Stern School of Business, Peter Henry. He's also the author of this new book, "Turn Around: Third World Lessons for First World Growth". It's great to have you with us.

PETER HENRY, AUTHOR, "TURN AROUND": It's great to be with you.

DOBBS: Let's -- let's turn first to the idea, more and more we hear people say, the United States is becoming a third world country. You hear it. We've got high unemployment. We have very little growth. What should we be doing too, as you put it, turn this thing around?

HENRY: I think the key lesson often -- from these formerly third world countries and as you pointed out, these countries turn themselves around using discipline. So by using discipline it became known as emerging markets and go out of the situation where they are in high-debt, had slow-growth and a lack of direction. And I think the key --

DOBBS: Did you just describe the United States?

HENRY: In many ways that's exactly right. The United States and western Europe look a lot like these countries 30 years ago. As you said, we preach to them, taught them how to turn themselves around, the discipline. What we need to do now ironically is learn our own lesson.

DOBBS: When you say discipline, I think fiscal and I think my God, there is nothing approaching a fiscal discipline in this country except by the Republicans who are at a sufficient political power in this government to influence the have come. What are your thoughts?

HENRY: Here is the key thing. Discipline is not mean what people think it means. Discipline does not mean austerity. Discipline does not mean runaway stimulus either. So in the same way which binge eating is not good for you, neither are crash diets. Discipline needs a long-term focus.

And so my favorite example of what fiscal discipline really means is a simple story. Go back to the ant and the grasshopper. When times are flush, you save so that you have money when times a lean. That's why Chile is a great example of this.

Compare Chile to the United States. In 2000 with a record budget surplus, $236 billion in 2001. What did we do with that surplus? We actually gave that surplus back so that when we needed the money we did not have it.

Chile had a big surplus in 2008, and they faced great pressure from the population to spend that surplus but the finance minister said no. This is money for rainy day. And so when the crisis in 2009 they're able to cut taxes.

DOBBS: And Chile is the beneficiary of a great free trade relationship with its powerful North American country known as the United States as well. We don't have that advantage. But we do have the advantage of having intelligent people running a government.

What in the world are these fools doing? Because this is nothing more than abject madness what we are pursuing as fiscal policy in this country right now.

(CROSSTALK)

DOBBS: You have 30 seconds for you to give me the answer to all of our travails.

HENRY: Ok. We need less austerity, more reform. I think one disciplined piece of fiscal legislation, a combination of spending cuts and tax increases away from clarity which will --

DOBBS: Did you say tax increases?

HENRY: Spending cuts plus tax increases.

DOBBS: You were doing so well.

We are out of time. You had the chance to give us that magic but we will bring you back and give you more than 30 seconds to solve the nation's --

HENRY: I'll look forward to it.

DOBBS: Thanks so much.

HENRY: Thank you.

DOBBS: And the book is "Turn around". We appreciate that came.

That's it for us. Thanks for being with us.

Be here tomorrow, Congressman Trey Gowdy joins us. We're talking guns.

Good night from New York.

Additional coverage appeared on TheStreet.com