|
CNN LOU DOBBS MONEYLINE
Yale University Law School Rocked by Explosion
Aired May 21, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Wolf, thank you very much. Good evening everyone.
Tonight as Wolf has been reporting, an explosion has rocked the Yale University Law School building in Connecticut. The FBI said members of its terrorism task force have been dispatched to the university's campus in New Haven. No particular significance should be attached to that. That is a routine response to such an incident.
Smoke has been seen by witnesses rising into the sky. There have been no reports, again no reports of any injuries. The first reports say that the blast occurred in a mail room, the Associated Press reporting that part of a floor in that building may have collapsed.
The university, for its part, says some sort of device was likely placed in an empty classroom. The Mayor of New Haven said the building was empty at the time of the blast. The explosion happened as the United States is on heightened alert for a possible terrorist attack. And earlier in the day, President Bush visited the Coast Guard Academy in New London, Connecticut, some distance from New Haven.
This is an eyewitness now to the incident.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We heard a really very, very loud kind of shaking kind of sound and we didn't -- it sounded like it was outside the building somewhere but then everyone told us to leave and so we all kind of ran out. The building, the sirens went out. That's all but it was pretty loud.
UNIDENTIFIED FEMALE: A lot of people described it as an earthquake.
UNIDENTIFIED MALE: Well, I've never been in an earthquake but it sounded -- actually that was exactly my thought. I felt like this is probably what it feels like when the earth moves a little bit. But, we didn't know what was happening and so we left and then, you know, there was some kind of debris and stuff on the main floor (UNINTELLIGIBLE). Somebody saw a door go off.
UNIDENTIFIED FEMALE: What could you see when you were walking out? UNIDENTIFIED MALE: I just saw sort of like some sort of clouds of dust and stuff on the main floor of the law school, but we were really concerned with getting out of the building and not looking into what was going on. So, yes, I mean I didn't -- I just grabbed my computer and ran.
(END VIDEO CLIP)
DOBBS: You're looking at live pictures now. The police have cordoned off a city block there in the environs of the Yale University Law School. Again, there have been no reports of any injuries in this explosion. University officials now say that the explosion was the result of what is being termed by their spokesman a device.
That explosion tearing at least a part of one floor out, reports of extensive damage, and now again these are early reports, this explosion occurring just about an hour ago that the device exploded in a classroom near the mailroom, although the earlier reports suggested that the explosion had occurred in the mailroom itself.
Again no sign of any evidence of injuries, authorities as you see there in those live pictures canvassing the university and we will be returning to Yale University in New Haven, Connecticut as we learn more and we'll be bringing those developments to you.
Turning to other top stories tonight this country is on high alert for a possible terrorist attack. Justice Correspondent Kelli Arena will have the report.
And tonight, our guest the Crown Prince of Bahrain, we'll be talking about his assessment of the threat worldwide from radical Islamist terrorists.
And, the president's plan for big tax cuts is in jeopardy tonight. The House and the Senate can not agree on a compromise. Capitol Hill Correspondent Jonathan Karl will have the report.
And, our continuing series of special reports, "Exporting America," tonight a report on how international trade is cutting not only jobs in this country but also wages.
And, Senator Fritz Hollings of South Carolina joins us to tell us about his plan to keep jobs in this country.
Turning to our top story, FBI Director Robert Mueller is calling on Americans here and abroad to be on alert for the possibility of a terrorist attack by radical Islamists. Security has been increased at potential terrorist targets and antiaircraft missile batteries have been deployed in the Washington, D.C. area.
The heightened threat from al Qaeda prompted the Homeland Security Department to raise the terrorist alert to orange. Justice Correspondent Kelli Arena reports.
(BEGIN VIDEOTAPE) KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): In New York, more patrols at bridges and tunnels. In Los Angeles, air travelers are subject to random searches. The country is on high alert but officials say there are still no specifics about the threat.
ROBERT MUELLER, FBI DIRECTOR: I want to point out that we have no specificity as to targets. We have no specificity as to exact time.
ARENA: What officials do have is a high level of chatter or intercepted communications about possible attacks against the United States. Officials are hearing similar threat information from interrogations of people in custody.
But is an attack imminent? Officials say intelligence gathered since the bombings in Saudi Arabia suggest terrorists could strike in the "immediate future" but they quickly add the information points more toward the Gulf region than the United States.
ASA HUTCHINSON, HOMELAND SECURITY UNDERSECRETARY: There is concern worldwide as to the increased terrorist activity. We know that there is an interest in targeting the United States. Our security measures have been somewhat effective but we know that they continue to try to exploit any vulnerabilities.
ARENA: As a result, flight restrictions in the U.S. are in effect including the air space over large sports stadiums. There is more scrutiny at the nation's borders and an increased security presence in the nation's ports. A major concern remains soft targets like shopping malls or sports arenas, especially when there are a large number of people gathered.
JIM WALSH, HARVARD UNIVERSITY: There is an endless number of soft targets. You can't predict where they're going to strike and you can't harden every target. There isn't enough money in the treasury to do that. So what you try to do is your prioritize.
(END VIDEOTAPE)
ARENA: The FBI in a bulletin today warned its state and local partners to remain vigilant to "potential indicators of pre- operational planning" such as target surveillance and acquisition of explosive materials.
Now separately some officials say that they believe it is prudent to keep the level at orange at least through the Memorial Day festivities but that is a decision, Lou that is reconsidered daily -- back to you.
DOBBS: And, Kelli, no indication, any further indication of any more specificity in this terrorist alert?
ARENA: No, Lou, none at all, no target, no exact time, not even an exact location or vicinity, Lou, at least not that we've uncovered.
DOBBS: Kelli, thank you very much, Kelli Arena our Justice Correspondent.
The Arab Al-Jazeera Television Network aired an audiotape attributed to one of Osama bin Laden's top lieutenants Ayman al- Zawahiri. The State Department called Al-Jazeera irresponsible for playing what it called an inflammatory tape. The tape called upon Muslims to wage a holy war against Americans, against Jews, and western interests.
(BEGIN VIDEO CLIP)
AYMAN AL-ZAWAHIRI (through translator): You are not alone in this battle for your brethren, the Mujahedeen are chasing their enemies. The Mujahedeen in Palestine, Afghanistan, Chechnya, and in the heart of America and the west are punishing severely these crusaders.
(END VIDEO CLIP)
DOBBS: Norway was among the western countries mentioned in that tape, possibly because it sent troops to Afghanistan, possibly not. Tonight, the State Department said it has closed the U.S. embassy in the Norwegian capital of Oslo for security reasons.
The Defense Intelligence Agency has raised the military's terror alert level to high. That is the maximum possible. The move follows the elevation of the Homeland Security Department's alert status. Military commanders around the world will now review security at their bases and will consider taking additional measures to protect their troops and facilities.
Protecting the public has certainly become a costly endeavor. U.S. cities are spending roughly $70 million a week on heightened security measures and much of that going to overtime for police officers.
New York City, which has been on high alert since September 11, leads the list spending $5 million each week; second, San Francisco $2.6 million a week, rounding out that list Los Angeles and Atlanta spending more than $2 million each week.
The heightened state of alert is also cutting into the profits of many U.S. businesses, most notably of course the airline industry. Standard and Poor's estimates the top U.S. carriers will lost $6.5 billion this year. Two of the nation's largest carriers, U.S. Airways and United Airlines have both filed for bankruptcy in the past year.
Police departments across the country are responding of course to the heightened state in this period. Major landmarks and areas of heavy traffic, such as bridges and tunnels, are now under 24-hour watch. From Miami to Los Angeles, police chiefs say they are vigilant.
(BEGIN VIDEO CLIP)
CHIEF JOHN TIMONEY, MIAMI POLICE DEPARTMENT: Some locations that this time yesterday weren't being covered are now being covered 24 hours a day, seven days a week until we assess it usually about three or four days from now. And so, there are certain locations that will have full-time coverage. There are others that will get like an hourly visit from a patrol officer or a sergeant, and then there are others that just get the special attention.
CHIEF GIL KERLIKOWSKI, SEATTLE POLICE DEPARTMENT: Our officers go and check some critical infrastructure and power grids, gas lines. The bridges, we're quite dependent on the bridges over I-5 and others, those kinds of things, and also we have a very large port right in the heart of the city. So, those kinds of increases will occur.
CHIEF BILL BRATTON, LOS ANGELES POLICE DEPARTMENT: We have put in additional inspection spots at the airport. Down at our port, 40 percent of the goods that come in the United States come in through Long Beach and Los Angeles harbors, other than that, the increased patrols that we have around the 605 sites that we deem as sensitive sites.
(END VIDEO CLIP)
DOBBS: President Bush today said the United States will not permit terror networks or terrorist states to blackmail the world with weapons of mass destruction. President Bush told Coast Guard cadets at their graduation ceremony in Connecticut that terrorists will be denied their bases and sanctuaries they require.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We will hunt the terrorists in every dark corner of the earth and we're making good progress. Nearly one half of al Qaeda senior operatives have been captured or killed.
(END VIDEO CLIP)
DOBBS: U.S. officials today said President Bush may become more personally involved in the search for Middle East peace. The roadmap is facing obstacles in the Middle East, of course, and it also has plenty of critics in this country but a surprising number of supporters now in Congress; Kitty Pilgrim reports.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNNfn CORRESPONDENT (voice-over): In the Middle East this week, violence has flared again and again and again, that as Prime Minister Ariel Sharon and the Palestinian Prime Minister Mahmoud Abbas were holding the first high-level Israeli-Palestinian meeting since the latest round of violence began more than two years ago.
Despite the bloodshed in the region, President Bush said the roadmap plan for peace will go forward.
BUSH: We're still on the road to peace. It's just going to be a bumpy road.
PILGRIM: Many in Congress are determined to give him full support. A letter signed by 44 bipartisan members of Congress reads: "We applaud your recent release of the roadmap to peace. Along with changes on the Palestinian side, we share your belief that the roadmap must also be implemented by Israel, with the end goal, as you have stated many time, two states living side-by-side in peace and security."
REP. DARRELL ISSA (R), CALIFORNIA: It's more important than ever because the violence perpetrated primarily by Hamas shows that if you make all violence cease before you begin the process, then anyone who is an enemy of peace can stop that process from starting.
PILGRIM: But not everyone is so willing to give the roadmap a chance. Twenty-two organizations from the Christian right groups to Jewish groups are calling the roadmap a breach of a 4,000-year-old covenant between God and Israel. The groups include the Christian coalition, the Christian Broadcasting Network and the religious roundtable. Congressman David Price discounts detractors.
REP. DAVID PRICE (D), NORTH CAROLINA: I don't think anybody thinks the roadmap will work magic or that the roadmap will bring peace without political will on all sides, so we don't see it as a panacea. We do see it as an instrument though that with strong presidential leadership from the American side can move this process forward.
(END VIDEOTAPE)
PILGRIM: Now, Ariel Sharon had been scheduled to meet with President Bush this week but canceled because of the violence. Congressmen we spoke to today said that was not unanticipated but they said it's not enough to discourage their support -- Lou.
DOBBS: A breach of a covenant 4,000 years old? Could you amplify that a bit?
PILGRIM: It's a little bit difficult for me to make that stretch, Lou, but they say that God gave Israel the territory and that should be respected.
DOBBS: And these organizations' examples?
PILGRIM: Twenty-two organizations, Christian Coalition, Religious Roundtable, there are 22 organizations that held a meeting in Washington on Monday to basically rally support for this position.
DOBBS: And if anyone didn't think this was difficult enough without bringing in 4,000-year-old covenants, Kitty thank you very much, Kitty Pilgrim.
More now on the developing story at Yale University where a device has exploded, the university says the explosion was likely caused by a device placed in an empty classroom.
The FBI says members of its terrorism task force have been dispatched to the university's campus in New Haven, Connecticut. Again, there have been no reports of any injuries. The Associated Press is reporting part of a floor in that building has collapsed.
The mayor of New Haven said the building was empty at the time of the explosion. The mayor is expected to hold a news conference shortly. We will have that for you live just as soon as it begins. That explosion occurred as the United States of course is now on heightened alert for a possible terrorist attack. There are no indications at this juncture that this is in any way connected to terrorism.
Earlier today, President Bush was at the Coast Guard Academy, as we reported to you, in New London, Connecticut. That is a considerable distance from Yale University.
Still ahead here, our "Quote of the Day" on the state of the economy from a man who ought to know.
And, targeting U.S. allies, a top al Qaeda leader speaks out against Saudi Arabia and a number of other Gulf countries, one of them Bahrain.
I'll be talking with the Crown Prince of Bahrain.
And, our series of special reports continues, "Exporting America." Tonight Bill Tucker reports on American companies facing down overseas competition.
Senator Fritz Hollings is our special guest tonight. He joins us to talk about his efforts to keep jobs in this country. Stay with us.
(COMMERCIAL BREAK)
(AUDIO/VIDEO GAP)
DOBBS: "We at the Fed recognize that deflation is a possibility. We recognize this not as an imminent dangerous threat, but a threat that, even though minor, is sufficiently large that it does require very close scrutiny and maybe, maybe action on the part of the central bank," that of course from Federal Reserve Board Chairman Alan Greenspan who testified on Capitol Hill today before the Joint Economic Committee.
Chairman Greenspan more optimistic somewhat less ambiguous about the economy's prospects in the second half of this year. The comments helped lift blue chips today certainly. The Dow Jones Industrials up 25 points, the Nasdaq however down a point, the S&P up more than three on the day, almost four in fact if one wants to start rounding up and this is a good time it seems to do it.
Christine Romans is here with a full report of the day's activity on Wall Street -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, oil services, also metals and tobacco stocks led the broader market higher. Hewlett- Packard, Altria, accounted for all of the Dow's advance. Altria, Phillip Morris, soared ten percent after the (UNINTELLIGIBLE) verdict was overturned. American Express raised its dividend and rallied and Hewlett-Packard rallied on its earnings report.
It's the last Dow stock to close the first quarter, one of 21 Dow companies to report profit growth. Seven showed lower earnings and results were flat for two. Now, even though when this market was a little bit lower earlier this morning, more stocks rose than fell. In the end, 19 stocks were up today for every 13 down.
Meanwhile, short interest at the big board has fallen to the lowest level since February and bullish sentiment as measured by investors' intelligence rose to 56 percent.
Another gainer today, Intel, shareholders narrowly rejected a proposal to expense stock options. Intel has said such a move would cut first quarter results by a third.
And, Lou, word tonight that you and I if we're going to cover action on the floor of the New York Stock Exchange, we're going to have to get fingerprinted and turned over the FBI for a background check.
DOBBS: Did we in some way annoy Dick Grasso at the New York Exchange?
ROMANS: I think it's equal opportunity annoying because everyone there, staff, clients, and media, will be fingerprinted and turned over to the FBI for a background check.
DOBBS: Terrific; the market behaving peculiarly a bit today at least as measured by the major indexes.
ROMANS: It really was. This morning was quite paralyzed when Mr. Greenspan was speaking. It fell a bit and then at the end of the day, you know, the blue chips at least turned in a better performance but the Nasdaq really couldn't get off the mat.
DOBBS: All right, Christine, thank you very much.
It has now been 534 days since Enron filed for bankruptcy. At the outset of the corporate corruption scandal, 65 executives have been charged in all of corporate America, 15 of them at Enron. No one is in jail still.
When we continue, more on the explosion at Yale University in Connecticut a news conference due to start there shortly. We'll have that for you.
And, terror in the Middle East targets allies of the coalition. The Crown Prince of Bahrain joins us. We'll talk about how his country protects itself, what he expects in the coming months in the Middle East.
And later, new charges filed on the high school hazing incident in Illinois, adults are being held accountable. We'll have details on the story, a great deal more coming up, stay with us.
(COMMERCIAL BREAK) DOBBS: Again, authorities now investigating the explosion that rocked a building at the Yale University Law School. You're looking at live pictures brought to you from affiliate WTNH in New Haven.
We are also anticipating a news conference there. The mayor expected to be appearing here shortly. We'll be going to that and keeping you informed.
We also want to go to Washington, D.C. Our Justice Correspondent Kelli Arena has some new information for us at this point -- Kelli.
ARENA: Lou, government officials have confirmed with local law enforcement on the scene that it was indeed a bomb that exploded at Yale Law School. As we reported earlier, individuals from the Joint Terrorism Task Force were dispatched immediately upon learning that there was an explosion but that's not to suggest that there's any indication that this is at all terrorism related.
There's no warning. There is no one claiming responsibility. There was no prior intelligence or any known threat against the university that law enforcement officials were aware of. They're waiting to get more information from the scene and when we get that, Lou, we'll bring it to you.
DOBBS: I think this is probably appropriate here too, Kelli, to point out that even though neither Homeland Security or the Justice Department can say this is connected in any way to terrorism, I think it's safe to say that they can't say it isn't either, is that correct?
ARENA: Well, that's true, Lou, but as one official pointed out, he said we don't know what we're dealing with.
DOBBS: Right.
ARENA: This could be a disgruntled student. This could be something that has, you know -- it can run the gamut.
DOBBS: But at that point we move into speculation.
ARENA: Right.
DOBBS: And what I think we ought to do and I know you're as interested in it as I am, we just don't need to be moving. I understand why the Justice Department or Homeland Security would say these things and one of course hopes that they're right ultimately but at this point it's just speculation and we've got enough here to speculate on.
ARENA: Right.
DOBBS: Very gently, Kelli.
ARENA: We're just waiting for more facts, Lou.
DOBBS: Kelli, thank you very much, and if you will stand by as we are awaiting the arrival of the mayor, Mayor John DeStefano from New Haven, Connecticut.
Again, we want to point out that this explosion and, as Kelli Arena has just reported, the Justice Department is now confirming that it was a bomb that exploded in this classroom at about 5:00 Eastern time. No injuries reported, in fact the area around this explosion apparently very few students were nearby.
We've had a couple of eyewitnesses who say that while it was a loud explosion that none of them saw anything to suggest its origin or purpose. We just simply do not know and we're going to avoid speculation and wait for the authorities to appear. That news conference expected to begin shortly at Yale University Law School.
Turning now to Saudi Arabia, Saudi Arabian officials tell CNN that three men arrested this week were planning to hijack a plane and crash it into a building. Three Moroccans were captured at the airport in the port town of Jeddah. Officials say they were armed with knives.
Saudi officials say the men are linked to radical Islamists responsible for three bombings in the capital of Riyadh last weeks. However, Saudi Arabia's interior minister today said the men were wanted in a previous security case and he denied they were involved in any hijacking plot.
Well, my next guest is Saudi Arabia's -- lives in Saudi Arabia's neighboring Bahrain and our guest is the Crown Prince of Bahrain. Crown Prince Sheikh Salman bin Hamad al Khalifa today met with Secretary of State Colin Powell and Defense Secretary Donald Rumsfeld in Washington.
Secretary Rumsfeld praised Bahrain for its help in the war against Saddam Hussein and Crown Prince Sheikh Salman joins us now from our studios in Washington, D.C., good to have you with us.
SHEIKH SALMAN BIN HAMAD AL KHALIFA, CROWN PRINCE OF BAHRAIN: Hello, Lou.
DOBBS: You are now moving toward a free trade agreement with the United States.
AL KHALIFA: We're very excited.
DOBBS: And what do you expect to ensue as a result?
AL KHALIFA: Well, we think that there will be mutual benefits for both of our countries. We see food exports, services, and industries coming in from the United States and we see plastics, aluminum, and oil coming into the United States from Bahrain. So, it's a better future for both our countries.
DOBBS: In Bahrain, your country, obviously a steadfast ally, a participant in the coalition. How concerned are you about response on the part of al Qaeda?
AL KHALIFA: Well, I think we should all be concerned and, Lou, it's time to close ranks. I think your traditional friends in the region need all the support they can get. Ourselves, our Gulf neighbors, Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, and Oman are all participating in this war against terror and we need to work together closely, share information, and make sure these guys don't get away with the stuff they want to get away with.
DOBBS: Do you sense on the part of Saudi Arabia a change in approach? As you know, Saudi Arabia has been extraordinarily quiet about any aid that it does provide specifically the United States and often vocal in public in its support of radical Islamists. Do you sense a change?
AL KHALIFA: Well, I think I would disagree with that assessment. I think they have always been very closely associated with the effort in the war on terrorism. Now I think they're just talking about it so that the public is more aware of what actually it is they do and it's been my experience at least that they have no support for radical Islamic activities.
DOBBS: No support for it yet rather than quibble with the Crown Prince I'll just simply say the Wahhabi sect of the Islamic religion has been fundamental to the ideology of radical Islamist terrorists and there has been support, either direct or indirect from Saudi Arabia for terrorism for some time.
AL KHALIFA: Lou, you know, I take this issue very seriously because these guys are about 3,000 to 4,000 guys that are corrupting the image of 25 million in the Gulf region and making us all look bad. And, like I said, you can't paint millions of people with a brush of 1,000.
DOBBS: Nor would I want to.
AL KHALIFA: Thank you.
DOBBS: But in terms of the Wahhabis and the basis for the radical Islamist terrorism that's been conducted, Saudi Arabia and certainly other countries in the region have been supporting that terrorism, again either directly or indirectly and when I asked you if you saw any signs of a change on the part of the Saudi Arabian government that's what I was referring to.
AL KHALIFA: The change has been that they're talking about it publicly and I think it's good for the world to know exactly how onside they really are and we've seen people corrupt Christianity too. I remember the Branch Dividians down in Waco, Texas, and what they were doing, stockpiling arms and ammunition.
So, please, let's stick to the program. Let's stick together and let's fight these guys as the team we are.
DOBBS: I'm delighted to hear you say that. And, give us your counsel, your perspective on what -- first your assessment of how the United States is doing now in the region. Because obviously, the Bush administration has embarked on an entirely different approach diplomatically as well as militarily. Your views? AL KHALIFA: I think it's a very secure and stable approach. We cannot support the president enough on his mission to achieve peace in the Middle East and to create a free trade area in the region for those countries that are really moving forward on political and economic reforms. I think the investment that has been gained by the victory in Iraq should be put to good use and eliminating all of these radical elements from within all of our societies and making sure that our two peoples get along and live in a much better environment.
DOBBS: As we all -- we're going to -- if I may, Sheikh Salman, I'm going to ask you to forgive me for interrupting. We're going to go to Yale University where a bomb explosion has occurred, as you know.
AL KHALIFA: I understand.
DOBBS: And...
AL KHALIFA: Thank you very much, Lou.
DOBBS: If you wouldn't mind waiting just (UNINTELLIGIBLE) perhaps can continue this conversation. We're going now to Mayor John DeStefano at -- the mayor of New Haven at Yale University.
(INTERRUPTED BY LIVE EVENT)
DOBBS: Mayor John DeStefano, the mayor of New Haven, Connecticut. New Haven, of course, the home of Yale University where an explosion rocked a classroom and an adjacent classroom about 5:00 this afternoon. At this point, the mayor saying that he won't go beyond saying what it is what it is, but as one of the reporters there at that news conference asked, we're not entirely sure what it is. We do know it was an explosion. There have been no injuries. The joint terrorism task force has dispatched a team to Yale University.
But, at this point, very little information and of course, here at CNN, we'll be bringing to you any details as they are -- as we are made aware of them. Again, Mayor John DeStefano at New Haven, the mayor of New Haven on that explosion.
We were before breaking away for this press conference, talking with Crown Prince Sheikh Salman of Bahrain, and Sheikh Salman, we appreciate you being patient enough with us to stay with us here for a while.
AL KHALIFA: Oh, it's my pleasure, Lou.
DOBBS: All right. We were talking about a changing order and direction for U.S. policy in the Middle East and...
AL KHALIFA: Yes.
DOBBS: ... asking for your assessment. Is it your judgment that as the Bush administration has articulated it, I know your own country has made tremendous strides and liberalization. Is it your sense that the Middle East can move toward democracy and representation? AL KHALIFA: Well, we need it, Lou. Listen, we've had 50 years of Arabic thought in politics and epitomized in the abomination that was the Iraq regime, that got erased in 26 days. We need better answers for our people. And that is something we realize and that something we're acting to correct, and I think the rest of the Arab world will follow suit.
DOBBS: Better answer -- certainly the Palestinians need better answers for their lot. Mahmoud Abbas, Ariel Sharon, not exactly embracing a negotiation at this point, even with the road map before them. Do you have any counsel for either President Bush or Ariel Sharon or Mahmoud Abbas or the responsible neighbors of those two states?
AL KHALIFA: Well, I would support the president wholeheartedly in his effort to mediate the peace or work with the parties to achieve the peace. I think it's in both their interests. We need to put this conflict behind us and I'd rather not think of the leaders at the present time, but think about the ordinary people on the street who are suffering, and unless we can provide a better future for them, then there's no real hope for anybody in the region.
DOBBS: And, well, we hope that the free trade agreement that the United States and your country will be working under leads to great prosperity for Bahrain. It's perhaps a wonderful template for the future for the entire region.
AL KHALIFA: Thank you so much, Lou.
DOBBS: Sheikh Salman, thank you very much for being with us, the Crown Prince of Bahrain...
AL KHALIFA: It's been a pleasure, sir. It's been a pleasure.
DOBBS: Still ahead, our series of special reports continues on "Exporting America". Tonight, American companies faced with overwhelming wage and price competition from overseas. Senator Fritz Hollings joins us to talk about his efforts to keep American jobs here at home.
Also tonight, a possible deal to save that tax cut. Congressional correspondent Jonathan Karl will have the latest for us from Capitol Hill. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Three farms in Canada have been placed under quarantine. Investigators are rushing trying to trace the origin of the first case of mad cow disease in North America in a decade. The infected cow and the rest of the 150 head herd from northern Alberta were slaughtered. In the meantime, the United States and at least six other nations have banned Canadian beef exports. The USDA is examining its procedures to ensure the safety of American beef plants.
And our poll question tonight, "How worried are you about the spread of mad cow disease from Canada to this country?" A lot, somewhat or not at all? Cast your vote at cnn.com/moneyline.
The results of yesterday's poll question, "Should Congress launch an investigation of corporations that export U.S. jobs overseas? Eighty-seven percent say yes, 13 percent say no.
Late word tonight that the Senate and House Republicans have reached another compromise on tax cuts. And earlier compromise for a $383 billion cut was deemed too large by key moderate senators.
Congressional correspondent Jonathan Karl has the latest for us. Jonathan, the battle goes on, (UNINTELLIGIBLE)?
JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: This has been a seesaw battle, Lou. This deal now, which looks to be a final deal, Senator Bill Frist came out and told reporters just a few minutes ago that they have the agreement. They're just putting it on paper. It is a deal that was made possible with the personal intervention of Vice President Cheney, who has been a very commanding presence on Capitol Hill today meeting with all the key players here, including Bill Thomas, the chairman of the Ways and Means Committee, moderate George Voinovich, who objected to that larger tax cut, and Chuck Grassley, the finance chairman.
With Cheney's personal intervention, it looks like they have come to a deal. The rough outlines of this deal, Lou, are a $350 billion total tax cut. Not $383 billion that wouldn't sell, but $350 billion. And what they did here is they abandoned the idea of eliminating the tax on dividends and instead went with the House proposal to cut capital gains taxes. Under this plan, capital gains taxes will be lowered from 38.9 percent to 15 percent, and for low-income earners, actually five percent.
But, to keep it in this price limit that is only a temporary tax cut. They have sunsetted that after six years. It will expire in 2008 at which time capital gains taxes will go right back up and they're still working out the numbers. It's possible that it may actually sunset in 2007. They're also -- the same provisions we've been talking about in terms of accelerating rate cuts, having accelerating the child tax credit bringing that up higher, and eliminating the marriage penalty, but Lou, they're still working on the details and as you know, nothing is really truly final in the Senate until it is truly finalized and actually voted on, but they expect that this will be what it takes to get it done.
Lou, one thing I also want to add is that it looked like this was all dead just a few hours ago. Chairman Thomas of the Ways and Means Committee had come out and said that he had made a take it or leave it offer to the Senate at $380 billion. At that point, Vice President Cheney came in and got this done.
DOBBS: And, Senators Voinovich and Snowe are happy. They have the committee from the Senate Finance Committee Chairman, Charles Grassley, Chuck Grassley that they would stay at 350. It looks like they've done that and the powerful chairman of the Ways and Means Committee, Jonathan, Congressman Bill Thomas, it looks like he's had his way on this. KARL: On capital gains and one other thing, Lou, no offsets in this. They have done away with all of those offsets. So there are no tax increases including in this tax cut.
DOBBS: Jonathan, I don't know about you, but I think that's the way it ought to be. When we have tax cuts, we shouldn't have tax heights. Jonathan Karl, thank you very much.
KARL: Sure.
DOBBS: Our nightly look now at the national debt, which would -- one would think be significantly influenced here. Tonight it stands at more than $6,460,242,000. That's down slightly from the debt level we reported last night because the debt is fast approaching its legal limit and the Treasury Department doing everything it can to hold the line.
Those steps include divesting trust funds for federal employees and Treasury bills and other measures. The Treasury Department says those funds will be reinvested once Congress raises the debt ceiling and we can get back to some straightforward accounting.
We turn now to our continuing series, "Exporting America". Tonight, the cost of competing internationally. U.S. companies are many times forced to weigh the advantages and costs of international trade and often to the disadvantage of their employees.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNNfn CORRESPONDENT (voice-over): The international trade often looks like this, but it can also look like this. Small town in central Wisconsin -- here in Coloma is the company Especially For You. The company makes gifts and home furnishings, making furniture for catalogs like Land of Nod in a collectible line of cast resins. Especially For You is a company caught in the middle of the competitive struggle of international trade. It sends orders for its collectible line to a factory in China. In its shop in Coloma, it makes furniture. The company does find some relief from the lower dollar.
JACK ZELIENKA, CO-CEO, ESPECIALLY FOR YOU: I think the weaker dollar, you would definitely see buyers looking more at domestic manufacturers because now, all of a sudden, the big price difference between buying something offshore and buying domestic wouldn't be as big as what it is right now.
TUCKER: But a lower dollar is not enough. And try as Jack might, he can't really compete on an hourly wage basis. Compared with the hourly wages in the United States, workers in Canada are paid 77 cents on the dollar; workers in Mexico, 12 cents; Taiwan, 28 cents; and in Spain, 54 cents.
Unions argue that trade agreements depress wages in both the United States and in the country the jobs are exported to because of the priorities of trade agreements. Agreements, which put companies and investors first including workers only as an afterthought if they are included at all. So, labor unions rather than objecting to economic globalization are pushing lawmakers to impose improved working conditions and workers' rights similar to their American counterparts on foreign labor sources as a condition for trade agreements.
ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: A good trade agreement is going to be good for all of the members of society. It's going to make everyone better off. It's not going to work to simply enrich one particular class of societies.
TUCKER: Companies, meanwhile, are finding that to compete effectively, they can be successful playing to their strengths.
UNIDENTIFIED MALE: Oh, nice job.
TUCKER: Sometimes it's on a price basis and sometimes prices outweighed by other advantages.
UNIDENTIFIED MALE: There are some things that we can bring to the table that they can't. For instance, if I work with a national account, they can come right to central Wisconsin and my office is over here, we can sit down at my conference table and we can work on developments. We can bring shorter lead times. We can bring small or minimum orders. And, we feel that we're getting close to being on the same level playing field as our foreign competition simply from the fact that we can bring these things to the table.
(END VIDEOTAPE)
TUCKER: But Jack would like a little help from the government in leveling the playing field. He doesn't want much, Lou. He'd be satisfied if politicians just started paying attention to the situation and putting it in the national debate.
DOBBS: OK, well, it looks like that's certainly beginning. And next year is an election year. Bill, thank you very much -- Bill Tucker.
The issue of American jobs being exported has not gone unnoticed in Washington. Senator Fritz Hollings of South Carolina has long looked to give American companies incentives to hire within the United States instead of overseas. Senator Hollings is the ranking member of the Senate Commerce Committee and joins us tonight live from Washington, D.C. Senator, it is great to see you.
SEN. FRITZ HOLLINGS (D-SC), COMMERCE CMTE.: Good to see you, Lou.
DOBBS: We have, as you know, focusing this week on exporting U.S. jobs, exporting U.S. economic activity, plants. Is there anything that can be done in the short term to reverse what has become a threatening trend to this economy?
HOLLINGS: Well right to the point, instead of investigating manufacturing firms that are exporting the jobs, we got to sort of investigate the Congress, educate the Congress. We have just voted 10 minutes ago to do away with the buy America provision of the defense bill, so before long, we'll be buying the uniforms in China.
DOBBS: Well that's an extraordinary statement...
HOLLINGS: That's the truth...
DOBBS: ... for the Congress to make.
HOLLINGS: That's right. But I mean, we had a 50/50 vote and it went down on a party line and they could care less. They're just going along with the multinational corporations. You know, the business roundtable, the Chamber of Commerce, the Conference Board, all of those. They want to bring back manufacture overseas and bring it back here and make a bigger profit and that's their business.
And the only way we can get in on this game is to stop the dumping on the one hand and make the penalties for those who manufacture overseas and the benefits for those who manufacture in the United States. There's a bill in the House side both Charlie Rangel and Phil Crane have got it, a bipartisanship bill. I have a similar bill over there to keep the jobs in this country. It's going to be an uphill fight because we've got to really change the culture.
DOBBS: Change a culture. As we look at the trade deficit, the declining dollar, and in recovery, this economy is not creating jobs. In fact, going the other way. It is a jobless recovery as you well know.
HOLLINGS: Definitely.
DOBBS: The fact is that there are some sophisticates who would suggest that to be worried about American jobs just isn't really embracing of a more worldly globalizing trend. How do you respond to that?
HOLLINGS: Globalizing the trend, you know, that's the crowd that talks about protectionism. Look, we rebuilt the Pacific Rim in Europe with the Marshall Plan. Now with the fall of the world they've gone capitalistic throughout Europe. Even the communist China is, you know, competing in a capitalist fashion and it is a real viable trade war or conflict or competition and we've been AWOL.
We've got to get into it, use our richest market here as leverage to open up the other market. We're still not into Japan 50 years later. These are the kinds of things that we've got a deficit and a balance of trade not only in manufacture, now we have lost the high- tech. We've got a $15 billion deficit there. We've even got a deficit and a balance of cotton and farm products, and the Koreans now are really buying all their corn from China. So we're losing that market.
DOBBS: Senator, let me ask you, there was a time that a working man or woman in this country could count on the AFL-CIO, the Teamsters number of unions to represent their interests. Some would argue that the Democratic Party providing the same service...
(CROSSTALK)
HOLLINGS: Lou, they're afraid to open their mouths.
DOBBS: Where in the world...
HOLLINGS: If they open their mouths, they're gone. The job is gone overseas.
DOBBS: Where in the...
(CROSSTALK)
DOBBS: ... world is the working man and woman in this country, the middle class, going to find representation in this? It is not of much consolation to say, you know, in the long term trend, we'll see some efficiencies introduced in the economy when a man and woman loses a job like this.
HOLLINGS: That's exactly right and what happens is if you open up Dobbs Manufacturing tomorrow morning, you have to have clean air, clean water, social security, Medicare, Medicare plant closing notice, (UNINTELLIGIBLE) safe working place, safe machinery. You can go to China for less than 50 cents an hour and none of that. So, I lost 59,600 textile jobs in NAFTA down to Mexico.
Now the Mexicans are losing jobs to China, and we've got to sort of sober up and get into the competition, and do like the others, use barriers, use tariffs, enforce our dumping laws. Those are the kind of things when I say change the culture, we've got special trade representative goes to Doha. Bob Sellick (ph), he says we're going to do away with the dumping laws. Well, we're not enforcing them. but my solution is to enforce those dumping laws. Selling at less than cost. We can't compete with that.
DOBBS: Senator Fritz Hollings, as always, it's great to talk with you. We look forward to you coming back to talk about this very important issue.
HOLLINGS: Thank you very much.
DOBBS: Senator Hollings. Checking now on the trade deficit, which is growing by a $1.5 billion a year. It stands now at $194 billion. That's by our relatively rough estimate, but we think it's within say a couple of billion, and that's close enough for government work.
Turning now to our "Thought of the Day" on the importance of focus and trade and in all sorts of areas, "Concentration is the secret of strengths in politics, in war, in trade, in short, in all management of human affairs" from the American poet philosopher and (UNINTELLIGIBLE) Ralph Waldo Emerson.
The steep decline in interest rates is fueling a boom in refinancing of mortgages. Homeowners are rushing to lock in record- low interest rates. A 15-year mortgage now going for less than five percent.
Jan Hopkins reports.
(BEGIN VIDEOTAPE)
JAN HOPKINS, CNNfn CORRESPONDENT (voice-over): (UNINTELLIGIBLE) customers want to know about refinancing their mortgages. Homeowners across the country are rushing to get in on record low mortgage rates. The average rate for a 30-year fixed loan fell to 5.17 percent last week according to the Mortgage Bankers Association of America. We haven't seen mortgages this low in 45 years and that's reigniting a refinancing boom that's been going on for two and a half years.
DOUG DUNCAN, CHIEF ECON., MORTGAGE BANKERS ASSN.: It's a generationally great opportunity. In fact, a couple of generations are able to take advantage of it. Probably some parents and children are refinancing at the same time.
HOPKINS: Mortgage bankers are expecting $3 trillion of total mortgages in 2003. Even the fed chairman has taken note of the increase in activities.
UNIDENTIFIED MALE: Refinancings in the second quarter look to be very large.
HOPKINS: The low rates are getting the attention of homeowners always on the lookout for a way to cut costs. They want to lock in those record low rates now.
DAN GILBERT, CHMN., QUICKEN LOANS: One thing people should remember is that when rates go up, they go up way faster than they come down. They go up very, very fast in very short periods of time. That's been the history of it. So you can't ever look at an interest rate and say, you know, let me wait and I'm hoping they're going to go lower. Because you know what? If they do go lower, you can do it again.
(END VIDEOTAPE)
HOPKINS: Part of what is continuing to fuel the boom in refinancing is the homeowner who has refinanced a number of times. I confess, I am a serial refinance. In three years going from an eight percent mortgage on a 30-year low to a six and three-quarters on a 20- year and just this week, going to less than five on a 15 -- Lou.
DOBBS: You may be serial, but no one would question the rationality of it.
(CROSSTALK)
HOPKINS: Makes a lot of sense.
DOBBS: Good for you. Jan, thanks, Jan Hopkins.
When we continue, we'll have the results of tonight's poll and we'll share some of your thoughts on our series "Exporting America". Stay with us.
(COMMERCIAL BREAK)
DOBBS: The preliminary results of tonight's poll question, "How worried are you about the spread of mad cow disease from Canada to this country? Twenty percent said a lot; 33 percent say somewhat; and 47 percent say not at all.
Now a look at some of your thoughts. Overwhelming response to our series of special reports "Exporting America".
Connie from California is saying, "Exporting American jobs is about as unpatriotic as one can get. It's about greed and the total irreverence for one's country."
Beth Manders of Katy, Texas said, "Thank you for calling attention to the very serious problem of exported American jobs. Congress needs to get involved and now. Once again, the American worker gets mowed over by corporate greed."
Lee Anne of Anderson, Indiana asks, "As far as Congress investigating the export of jobs overseas, didn't they create the mess in the first place?" Good question.
Susan Stavern of Boca Raton, Florida offered one solution. "Instead of giving huge tax cuts to the rich, why not give tax incentives to corporations that don't export jobs and disadvantages to corporations that do."
Robert Lapka of Beaverton, Oregon. "Don't the supporters of President Bush's tax cut realize a lot of the money handed out will be used to export jobs outside our borders? When Mr. Bush said 1.4 million jobs will be created, I don't think a lot of people realize the jobs will be in Asia and Latin America."
We love hearing from you. E-mail us at loudobbs@CNN.com. Thanks for being with us tonight.
Our guests tomorrow include Congressman Pete DeFazio on why he's concerned about trade with China, actor, economist, author, Ben Stein joining us with a few tips on long-term investing.
For all of us here, thanks for being with us. Good night from New York.
"LIVE FROM THE HEADLINES" with Daryn Kagan coming right up.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
|
