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Lou Dobbs Tonight
Leak Investigation Expands Beyond White House; No Weapons of Mass Destruction Found in Iraq
Aired October 02, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, October 2. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.
Tonight: The criminal investigation into the published disclosure of a CIA officer's identity is expanding far beyond the White House. A senior Justice Department official today said the State Department, the Pentagon and other government agencies will be told to preserve all documents relevant to the investigation.
The White House today continued to resist demands for the appointment of an independent prosecutor to investigate the leak.
White House correspondent Suzanne Malveaux reports -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, President Bush maintained his official schedule here at White House, celebrating Hispanic Heritage Month.
But, at the same time, the partisan bickering continued over this leak investigation, Democrats insisting that Attorney General John Ashcroft should appoint a special counsel to conduct this investigation, or, at the very least, because of his close ties to the White House, recuse himself from this investigation.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA), MINORITY LEADER: You can put lipstick on a pig and it's still a pig.
SEN. CHARLES SCHUMER (D), NEW YORK: The attorney general is so inextricably locked up with the people he's investigating, he can't do a fair job.
(END VIDEO CLIP)
MALVEAUX: Now, the White House press secretary, Scott McClellan, while not naming names, did charge Democrats, as well as former Ambassador Joe Wilson, whose wife was the subject of the leak, of playing politics.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Unfortunately, there are some that are looking through the lens of political opportunism. There are some that are seeking partisan political advantage.
(END VIDEO CLIP)
MALVEAUX: Now, the majority of Americans believe that there should be an independent investigation, this according to the latest "The Washington Post"/ABC News poll. They say that 29 percent believe that the Justice Department should handle it; 69 believe that a special counsel should, so still quite a bit of debate circling around this issue -- Lou.
DOBBS: Thank you very much, Suzanne -- Suzanne Malveaux.
Well, later, I'll be talking about the CIA leak with Senator Joseph Lieberman, Democratic candidate for the presidential nomination. Senator Lieberman is calling for a special investigator. And I'll also be talking, from the point of view of journalism, with Rem Rieder, the head of "The American Journalism Review," about the CIA leak and commentator Robert Novak.
Two very different views of Iraq from the two top men -- two of the top men in the Pentagon today -- the commander of U.S. forces in Iraq, General Ricardo Sanchez, today said the insurgents and terrorists in Iraq are becoming more sophisticated and deadly in their attacks. But his boss at the Pentagon, Defense Secretary Donald Rumsfeld, had a very different emphasis, preferring to highlight the good news from Iraq.
Senior Pentagon correspondent Jamie McIntyre reports.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT (voice-over): Nearly six month after the fall of Baghdad, an average of three to six U.S. troops die and 40 are wounded every week in Iraq at the hands of an enemy that has grown more lethal and tenacious, according to the commander of U.S. forces. But despite the daily casualties, Lieutenant General Ricardo Sanchez bristled when a reporter suggested Iraq is not safe.
LIEUTENANT GENERAL RICARDO SANCHEZ, U.S. COMMANDER IN IRAQ: No one feels safe? Give me a break. If you go out there into the countryside and talk to average Iraqis, there's a lot of Iraqis out there that feel safe in this country. They feel a lot safer than they did five or six months ago.
MCINTYRE: In Washington, Defense Secretary Donald Rumsfeld opened his Pentagon briefing with a salvo against the press.
DONALD RUMSFELD, SECRETARY OF DEFENSE: I guess good news is not news.
MCINTYRE: Rumsfeld complained bitterly that members of Congress who have recently returned from Iraq with enthusiastic progress reports have been virtually ignored by the news media.
RUMSFELD: I saw nothing in any of the four or five papers that I read or on any of the television shows which I occasionally have on.
MCINTYRE: But the Bush administration's credibility is suffering even among conservatives. In his syndicated column, George Will called on the administration to just admit the prewar intelligence about Iraq's weapons of mass destruction was wrong, that Americans understand, intelligence is imperfect, a suggestion Rumsfeld rejected as premature.
RUMSFELD: It's not clear that it was off by a little bit or a mile at this stage. That's yet to be seen. If it is off by a lot, that will be unfortunate.
(END VIDEOTAPE)
MCINTYRE: Unfortunate, Rumsfeld says, not for the administration's credibility, but for the people of Iraq, who Rumsfeld said would have needlessly suffered, because Saddam Hussein failed to come clean with U.N. inspectors -- Lou.
DOBBS: Well, Jamie, you should have the defense secretary watch this broadcast, because we have talked with returning congressmen, as well as journalists, from Iraq.
Jamie, is this turning into a real fissure of policy and viewpoint within the Pentagon itself?
MCINTYRE: Well, no, this really is a classic glass-half- empty/glass-half-full scenario.
If you look at the facts on the ground in Iraq, you can make a case for things are better than they look and you can also make a case for the undisputable facts, the indisputable facts that the level violence against U.S. troops is escalating. The U.S. commander there insisted, this is something that they're making progress on and they're just going to have to take some casualties in the short run, but he continues to express some confidence, in the long run, the U.S. is going to prevail.
DOBBS: Jamie, thank you -- Jamie McIntyre, our senior Pentagon correspondent.
Later in the show, "Grange On Point" will be focusing on the increased challenges now faced by military reservists and members of the National Guard.
Central Command today said 315 Americans have now been killed in Iraq, 196 killed in action, 119 in accidents. Another 1,710 troops have been wounded, nearly 1,400 of them in combat.
Turning now to tonight's poll question: Whom do you believe is most out of touch on the issue of Iraq, the media, U.S. commanders in Iraq, or Defense Secretary Donald Rumsfeld? Cast your vote at CNN.com/Lou. We'll have the results later in the show.
As the war goes on, so does the search for Saddam Hussein's weapons of mass destruction. David Kay, the CIA adviser leading that search, today said investigators have not found any biological or chemical weapons so far. But Kay said search teams have found evidence of Iraqi weapons programs.
National security correspondent David Ensor with the report -- David.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, as you say, Lou, the lead really has to be that they haven't found any weapons, they haven't found a smoking gun, though they have found a great deal that leads them to think there may have been a program under way.
Here's how David Kay put it.
(BEGIN VIDEO CLIP)
DAVID KAY, CHIEF U.S. WEAPONS INSPECTOR: We have not found yet -- and I'm you know sure this -- otherwise, you would know it earlier. We have not found, at this point, actual weapons. It does not mean we have concluded there are no actual weapons.
It means, at this point in time -- and it's a huge country with a lot to do -- we have not yet found weapons. If I can speak of what we have found, in addition to intent, we have found a large body of continuing activities and equipment that were not declared to the U.N. inspectors when they returned in November of last year.
(END VIDEO CLIP)
ENSOR: Now, a few minutes ago, the CIA put out an unclassified version of Mr. -- of Dr. Kay's testimony before the two committees. And there are some interesting new details about what they have found in the biological weapons area, in the missiles area, chemical weapons.
In biological weapons, for example, they have found in the home of a biologic scientist live strains of botulinum toxin in test tubes, in a package of test tubes, kept alive for use in a possible future weapon. They found research on brucella and Crimean-Congo hemorrhagic fever that shows that the Iraqis had an ongoing effort to turn those into weapons.
They found a prison laboratory complex, the report says, possibly to be used for human testing of biological weapons on prisoners there. And they found a clandestine network of laboratories and safe houses within the Iraqi intelligence service with lots of equipment suitable for chemical or biological weapons research.
Now, in the missile area, they have found plans and advance design work for new, long-range missiles. The Iraqis weren't supposed to have anything that could go more than 150 kilometers. They were planning to have missiles that could go 1,000 kilometers, the could reach Cairo and Abu Dhabi.
And in the area of chemical, now, it was always said in 1991 by the U.N. that they couldn't find all the chemical weapons that they knew Iraq had. David Kay says that there's 600,000 tons of artillery shells and bombs that have not yet been tested for chemical munitions.
And, Lou, Kay says that the chemical munitions were always mixed in among the other munitions in the Iraqi force. So there could yet well be chemical weapons among those munitions that may yet be tested and found. Now, they say they need six to nine more months of research and hundreds of millions of dollars to do it -- Lou.
DOBBS: The search goes on, but, to this point, no weapons of mass destruction.
David, Kay's boss, CIA Director George Tenet, today strongly rejected those congressional complaints about the woeful intelligence on Iraq before the war. Just what did the CIA director say?
ENSOR: Lou, he sent a rather strongly worded letter to the House Intelligence chairman, Porter Goss, and the ranking member, Jane Harman, rejecting some of the complaints that had been in a letter that they addressed.
"The suggestion by the committee," he said, "that we did not challenge long-standing judgments and assessments is simply wrong." He said he emphatically disagreed with the committee's view that intelligence reports on Iraq's ties to al Qaeda should have been screened out by a more rigorous vetting process because -- before they were provided to analysts. He said, "I can't see why one should give the analysts less information about the ties between al Qaeda and Iraq than we actually on hand."
So rather a blunt letter of reply to the two legislators from the nation's top intelligence officer. At the CIA, they were annoyed that Harman in particular went public with her complaints before talking to them -- Lou.
DOBBS: David, thank you very much -- David Ensor, national security correspondent.
Coming up next here: It is from bad to worse for Rush Limbaugh, charges of racism, quickly followed by new charges today of drug abuse.
And Democratic presidential candidate Senator Joe Lieberman tonight speaks out on the CIA leak, exporting America, outsourcing jobs, Iraq, and much more. Senator Lieberman is our guest.
And a mea culpa from Arnold Schwarzenegger. We'll tell you what he did and why. Bob Franken will report.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: This has been a very bad week for Rush Limbaugh. Last night, Limbaugh resigned his post at ESPN, just three days after making racially charged comments about an NFL player. This morning, he explained his decision.
(BEGIN VIDEO CLIP)
RUSH LIMBAUGH, RADIO TALK SHOW HOST: I offered an opinion. In my opinion, it was not a racial opinion. It was an opinion about the media. And I simply -- I don't want to cause any discomfort to the people on that program. So the path of least resistance became for me to resign.
(END VIDEO CLIP)
DOBBS: And just hours after resigning, Limbaugh was at the center of another controversy. His name has now surfaced in connection with an investigation of a drug ring in Palm Beach County, Florida, Limbaugh allegedly making illegal purchases of prescription painkillers, OxyContin.
In a statement Limbaugh said -- quote -- "I am unaware of any investigation by any authorities involving me. No governmental representative has contacted me directly or indirectly. If my assistance is required in the future, I will, of course, cooperate fully."
Turning to the California recall race, front-runner Arnold Schwarzenegger today apologized for having behaved badly in the past. That apology came in response to a "Los Angeles Times" story that alleged Schwarzenegger made unwelcomed advances to at least half-a- dozen women over the past three decades.
Bob Franken joins us now from Los Angeles with the report -- Bob.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, "The Los Angeles Times" report did certainly get everybody's attention today.
It alleged that six women it interviewed -- the women alleged that over a period of several decades, from the '70s until 2000, in separate incidents, Arnold Schwarzenegger groped them, unwelcomed sexual advances. That occurred on movie sets and off movie sets.
Now, Schwarzenegger, whose aides originally denied the reports, then they, in effect, implied that the Democrats are responsible, as Schwarzenegger began a statewide tour in San Diego, he had a different and somewhat convoluted take on it.
(BEGIN VIDEO CLIP)
ARNOLD SCHWARZENEGGER (R), CALIFORNIA GUBERNATORIAL CANDIDATE: I know that the people of California can see through this trash politics.
(CHEERING AND APPLAUSE)
SCHWARZENEGGER: Yes.
Let me tell you something, let me tell you something, a lot of those, what you see in the stories is not true. I have behaved badly sometimes. Yes, it is true that I was on rowdy movie sets and I have done things that were not right which I thought then was playful. But now I recognize that I have offended people. And to those people that I have offended, I want to say to them, I am deeply sorry about that and I apologize, because this is not what I'm trying to do.
(END VIDEO CLIP)
FRANKEN: Now what?
The Schwarzenegger opponents have to decide how they're going to react. Governor Davis, who is trying to avoid the recall Schwarzenegger is trying very much to get done, Governor Davis had kind of a noncommittal reaction, saying the voters will have to decide what this means. Cruz Bustamante, the lieutenant governor who directly running against Schwarzenegger on the recall alternative ballot, had a stronger one, suggesting that the California Penal Code says, any person who touches an intimate part of another person against the will of the person touched is guilty of a misdemeanor sexual battery.
Now, as for Maria Shriver, the candidate's wife, she is out campaigning separately from her husband. Other women in the name of CodePink -- that's a feminist group -- are trying to organize now. They're trying, Lou, to get a movement going in the state calling on Schwarzenegger to step down. And, of course, what Schwarzenegger is hoping that he has sort of dampened this down a little bit by having a reaction almost immediately -- Lou.
DOBBS: And the reaction there in California to the timing of "The Los Angeles Times" article, five days before the election, making allegations about events, some of which are 30 years old?
FRANKEN: Well, the Schwarzenegger camp is trying to suggest that this was somehow part of a Democratic effort to discredit Schwarzenegger.
But it should be pointed out that any number of news organizations have been investigating these charges. And some of them have appeared before, in an interview, for instance in 2001, in a different magazine. So, the two school office thought are that this was some sort of October surprise. But, on the other hand, others are just saying, it took that long to do the investigation.
DOBBS: All right. Thank you very much, Bob Franken, from Los Angeles.
Joining me now for more on the timing of this story is Rem Rieder. He is the editor of "The American Journalism Review." He joins us tonight from Washington,
Rem, good to have you with us.
REM RIEDER, EDITOR, "THE AMERICAN JOURNALISM REVIEW": It's nice to be here.
DOBBS: As Bob Franken just reported, some considerable suspicion, this story coming out five days before the election on events in Arnold Schwarzenegger's -- alleged events in Schwarzenegger's past that span 30 years. You, as the watchdog, does this strike you as normal, or is it something that should be looked at with some skepticism?
RIEDER: I'm not sure either one. Normal -- nothing has been very normal about this recall campaign.
DOBBS: That's entirely true.
RIEDER: But as far as skepticism, reading it closely, it seems like a very carefully reported story. Two of the people who say they were groped and harassed are on the record.
The other four have decent reasons why they don't want to be identified. And their accounts are corroborated by people they told them to at the time. It doesn't appear that it was leaked. According to "The Times," in looking at these long-standing rumors about Schwarzenegger, they found these out. In fact, I have been waiting for this -- expecting a story like this for quite a while.
DOBBS: Were you expecting it five days before the election? And would that be more an expectation based on journalism or politics?
RIEDER: Well, the expectation I was referring to was more on journalism, not necessarily at this time.
But I think the alternatives are to go with the story before it's ready and nailed down or to go when it's ready. And I think it's an important enough issue that, as long as it's a fair, well-documented story, I don't have a huge problem with the timing.
DOBBS: Of course, the allegations in this are not materially different from those, as Bob Franken pointed out, that occurred in the article published in "Premiere" magazine in 2001 or, previously to that, some 20 years ago in the interview with "Oui" magazine.
RIEDER: Right.
I think what we have here is a really carefully researched story by one of the top newspapers in the country, the top newspaper in the state, about some very serious allegations about somebody who, at least before the story came out, and perhaps at any rate, is about to become governor of the state. I think the voters need to know that.
DOBBS: Let's turn, Rem, to other serious allegations, far more serious allegations, in terms of the national interests. And that is Robert Novak's report in which he revealed the identity of a CIA officer. What is your reaction? Novak asked by the CIA not to reveal her name. What should he journalistically, in your judgment, have done?
RIEDER: Well, I think he should have done what the other journalists whom this information was leaked to did, and that's not run with it, not use it.
I thought his explanation that it was kind of a weak request not to use it rang very false. This was just a very bad call on his part. And it's kind of surprising that nobody editing the column raised a red flag about it.
DOBBS: Well, in fairness, we should point out "The New York Post" did, to our knowledge, is the only publication in the country carrying the Novak syndicated column that chose not to use those elements of the column identifying the wife of former Ambassador Joe Wilson. They deserve some credit for that, do they not?
RIEDER: Absolutely. Good for them. And that's, I think, what "The Washington Post" and other papers should have done as well.
DOBBS: Rem Rieder, the editor of "The American Journalism Review," we appreciate your time.
RIEDER: Thanks. Nice being here.
DOBBS: Coming up next, presidential candidate Joseph Lieberman lays out what he sees as the most critical issue facing this nation's economy today.
(BEGIN VIDEO CLIP)
SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: This is the largest challenge our economy is facing in the years ahead. And that is the movement of jobs overseas.
(END VIDEO CLIP)
DOBBS: Senator Joseph Lieberman is our guest next.
(COMMERCIAL BREAK)
DOBBS: Democratic presidential candidate Senator Joseph Lieberman is introducing a bill that would create a reform investigation of the White House independence counsel in order to investigation the leak of a CIA operative's identity. The independence counsel investigation during the Clinton administration drew wide criticism from Democrats.
And earlier, I asked the senator why, after the experience of the Clinton administration, we would want to reintroduce the independent counsel.
(BEGIN VIDEOTAPE)
LIEBERMAN: Well, first let me say on my behalf that I supported the independent counsel law and worked very hard with a bipartisan group of colleagues to keep it alive, even during the Clinton years. Because I thought that authority, that independence, had to be there.
And the fact that Ken Starr's investigation didn't provide anything -- didn't produce very much doesn't say that the idea of an independent counsel to investigate allegations against high officials of our government is not the right way to go. Of course, I think it is the right way to go.
DOBBS: Senator, let's move to another position that you took. What is your view now on Iraqi policy?
LIEBERMAN: Well, I regret very much that the Bush administration was unprepared, shockingly unprepared, for what to do the day after Saddam fell. I've never altered my opinion it was right to go into Iraq, that the world is safer with Saddam gone. But because of a lack of a plan by the Bush administration, we run the risk of losing, in peace in Iraq what we gained in the war.
And we ought to be doing a lot more than we're doing now at the United Nations to bring other countries in. I never felt that I was supporting the war so that the United States could control post-Saddam Iraq. I was supporting a war so we could get rid of Saddam and let the Iraqis control post-Saddam Iraq.
DOBBS: Senator, the economy continues to grow. The recovery is in place. But for almost two years now, jobs have not been created. They have been lost. Part of the reason for that is the outsourcing of jobs overseas. It has become a quick fix for much of corporate America.
How serious is the problem, in your judgment? What would you do about it?
LIEBERMAN: This is a real serious problem. We -- this is the largest challenge our economy is facing in the years ahead. And that is the movement of jobs overseas.
Some of that is happening because of foreign nations not playing by the rules, not -- stealing our patented, copyrighted goods, fixing their currency so they have a price advantage when they send in manufactured goods.
Some of it we can't change. We're in a global economy. And the way we're going to compete better and build jobs here in America is by having an economic growth plan. Having governments stand behind and with manufacturers and workers to create new jobs.
And how do you do that? You give them tax incentives to do it, to invest. The government invests in innovation and research and development that will create the new industries, that will create the hundreds of thousands of new jobs.
And then you provide the workers with lifetime opportunities for retraining so they can qualify for those new jobs.
You can't put a wall around America and grow the American economy. What we've got to do is to get better at what we're doing and knock down trade barriers abroad to sell American-made goods there. That's what worked in the '90s, and it will work again.
DOBBS: No walls around America, but our borders are not in any way stopping illegal aliens from entering this country. Now, estimates range between seven and 10 million illegal aliens in the country.
Where do you stand on the issue of illegal aliens in the country and immigration law?
LIEBERMAN: Yes. It's a crisis. I mean, the whole immigration system is not working. The fact is that most of the immigrants, overwhelming number of immigrants, are coming to America today for the same reason my grandparents did, for opportunity and freedom. And they're finding it. And the fact is if - somebody said to me, in one Southwestern state, if we were able to put a wall up between Mexico and our state, it happened to be Arizona, the Arizona economy would collapse.
We've got to acknowledge the reality here. And that's why I'm for temporary worker visas. There's been an agreement on Capitol Hill about a great agreement, about agricultural workers having a right to temporarily come in. And ones who have been here for a period of years, paid their taxes, not violated the law, let's give them legal status and try to recognize the contribution they're making to our economy and filling jobs that people who are here now won't fill.
DOBBS: Howard Dean admonishing all of the candidates for the Democratic presidential nomination, to look upon George Bush as the enemy and not to attack one another. Do you first look at George Bush was, quote, end quote, "the enemy"? And will you avoid any attacks against your Democratic colleagues?
LIEBERMAN: I'll give you two quick answers. George Bush is not the enemy. I always say to people, George Bush, as far as I can tell, is a good man. He's just been a very bad president. And I know that I and others can do better.
But we have to have an open debate within the Democratic Party among the candidates. We can't tie our tongues. This is about the future of the heart and soul of the Democratic Party and more to the point, will the Democratic Party nominate a candidate for president that the American people can trust, particularly now as they're losing their trust in George Bush, to govern this country in the public interest, to restore jobs, to protect our safety, to provide health insurance and education and retirement security.
And we have very different ideas about how to do that. A lot of my opponents in the Democratic primary, I think, want to go back to the days before Bill Clinton redefined the party. I want to build on that redefinition and continue us as a party of growth, fiscal responsibility. Strong on defense, pro-trade, and supportive of tax cuts, particularly for the middle class and for businesses that, after all, create the jobs that we all want.
DOBBS: Senator, I take it that you didn't just give Howard Dean a free pass?
LIEBERMAN: Well, no. Anybody in the race, including Wes Clark, who's just come in, been uncertain about what position he takes on the war. You know, we're asking the American people to trust us to be their commander-in-chief. We've got to be open to answering questions that will help the voters make a judgment about that.
DOBBS: And Senator, we thank you for taking the time to answer some of our questions.
LIEBERMAN: Thank you, Lou. Enjoyed it, as always.
DOBBS: Senator Joe Lieberman.
(END VIDEOTAPE)
DOBBS: And turning now to our series of special reports, "The Great American Giveaway." Tonight, we focus on education.
Somewhere between 7 million and 10 million illegal aliens live in this country. They are here in violation of the law. However, the courts have decided that their children have the right to a free education.
Bill Tucker joins us now with the story -- Bill.
BILL TUCKER, CNNfn CORRESPONDENT: Lou, the question is, are we educating for the future or simply giving the education away? It is a debate which raises the question of whether to punish the child for the sins of the parent.
(BEGIN VIDEOTAPE)
TUCKER (voice-over): More than a million kids in kindergarten through high school are illegal aliens according to an estimate by the Urban Institute. They are there because according to a Supreme Court ruling in 1982, they have the right to a free public school education. The court saying, in effect, that since the children were brought here by their parents and since it was clear that the government wasn't deporting the parents, U.S. citizens should be responsible for educating their children.
MELISSA LARAZIN, NATIONAL COUNCIL OF LA RAZA: It's not Americans who hold these students accountable for a decision that they did not make. These students are here to stay. They are part of our country. We might as well educate them while they're here. It benefits us all.
TUCKER: Seven states currently offer illegal aliens in-state tuition prices at state colleges. Fifteen more states are considering similar legislation.
And then there's the Dream Act, co-sponsored by senators Orrin Hatch and Richard Durbin. The act would grant residency status to illegal aliens of good moral character, between the ages of 12 and 21 who have lived in the United States for at least five years, and a high school graduates under the age of 25 who are enrolled in a college or university.
As compelling as the arguments may be, critics point out, there is a cost.
DAN STEIN, FED. FOR AMER. IMMIGRATION REFORM: Educating the children of illegal immigrants is costing U.S. taxpayers $7.5 billion a year -- $7.5 billion a year. We could be putting a computer on the desk of every junior high school kid in America if we had that money to educate our folks today.
(END VIDEOTAPE)
TUCKER: In California, for example, the Federation for Americans for Immigrants Reform statements that the state spends more than $2 billion each year educating illegal aliens. That's 20 percent of the state's budget deficit where, by the way, they are making budget cuts in education -- Lou.
DOBBS: Bill, thanks. Bill Tucker.
Tonight's thought is on education in this country. "In my days, schools taught two things, love of country and penmanship -- now they don't teach either." That from author Cleveland Amory.
Tomorrow on "The Great American Giveaway," exporting your confidential personal records. Some American companies are outsourcing work overseas and guess what? Your medical records, your financial records, your personal information are being exported right along with the jobs. That special report tomorrow night. Please join us.
An astonishing threat from Europe tonight over a Congressional proposal to force the Pentagon to buy essential weapons components in this country. The European Union is reportedly threatening legal action against the United States if the Buy America proposal becomes law. Foreign companies are heavily involved in U.S. military projects such as the joint strike fighter. But the House of Representatives says the Pentagon has become too dependent on foreign contractors and lawmakers are concerned those companies may cut off supplies if their governments disagree with U.S. policy.
The exporting of America also taking place on Wall Street. A number of brokerages are outsourcing their research to India. My guest tonight says this outsourcing will, in fact, lead to job creation here in this country.
Manu Bammi is the chief executive officer and co-founder of research firm SmartAnalyst. Good to have you with us.
MANU BAMMI, CEO, SMARTANALYST: Thanks, Lou.
Well, I think it's all about innovation and this is a very dynamic economy and what our innovation is to look at research and knowledge and how that's done and figure out how to do it more efficiently and in a more cost effective way. And I think companies can use this to do increased productivity and cut costs and create more jobs here.
DOBBS: In your own firm, for example you're creating research for Wall Street firms as some of this comes as a result of the settlement with Wall Street by New York Attorney General Eliot Spitzer and the divestment between investment banking and research.
You're sending actually research on equities in particular over to India, right? BAMMI: Well, we are not making any recommendation that we don't write the research reports. What we provide is what we call research support services, which means that, you know, these companies that have to figure out a new business model of how equity resent should be done, they can cover more stocks, do more in-depth research if they can use our services.
DOBBS: That's work that was at one time being done by Americans, certainly at higher salaries than are paid in India, correct?
BAMMI: Much higher salaries.
DOBBS: And that fact leads us to what conclusion? That that will create jobs in this country? I'm afraid I don't understand that.
BAMMI: The job -- the issue related to the job cuts had already happened before we came along.
DOBBS: Right.
BAMMI: And I think what people are looking at as the economy expands, you know, are they going back to the '90s model or is it going to be some new way to actually provide expanded coverage without taking on the overhead that they had before?
But I think that we can provide better services, cheaper costs, and more efficiently and they can cover more stocks than they were doing previously.
DOBBS: But the sum effect of what has transpired in this case, Manu Bammi -- bear with me on this -- is jobs that were once held in this country are now in India. They are paying the Wall Street firms -- ultimately paying for that research -- are paying far less for it in India than they are in the United States. And this is the metaphor, the paradigm we're seeing across vast numbers of industries, literally hundreds of thousands of jobs involved.
How do we rationalize that to Americans who don't have work, who are watching jobs being exported in all of these industries overseas? How do we explain that to those people?
BAMMI: I don't mean to plug McKinsey (ph)...
DOBBS: Plug them.
BAMMI: They have just done a study called "Offshoring: A Win/Win Solution" ...
DOBBS: Right.
BAMMI: ...where they have cranked the numbers and analyzed for every dollar spent -- spent outside, there's 1.5 dollars in value creation and most of that is actually coming back to America.
DOBBS: In what form? BAMMI: In -- in forms of, you know, reduced costs so there's more available and also in the form of redeployment of people to, in fact, even higher value jobs and wages.
DOBBS: Now that you've plugged McKinsey, perhaps I can be critical of McKinsey. In point of fact, it sounds like an absolute call to export jobs overseas. And it doesn't, to me, seem to require the intellectual firepower of one of the premier consulting firms to suggest to a CEO or CFO that he or she cut jobs in order to improve profitability or productivity in the first instance.
Does that seem to you to be a very complicated financial concept?
BAMMI: Well, I think it's an interesting argument that you're making. I would look at it in a different way. I mean, America's all about globalization. America is all about competitive advantage. America's all about innovation. And all of these three things play into what we are trying to do and what others are trying to do. And I think, you know, it has -- it has been beneficial over the last 10 years and it's going to be beneficial over the next 10 years, too.
DOBBS: Manu Bammi, we hope you're right. We also hope that there is a vigorous public dialogue in this country about what does make the best sense and what determines what this country really is about.
Manu Bammi, thank you very much.
BAMMI: Thank you very much.
DOBBS: Coming up next here, "The Great Unraveling." "New York Times" columnist Paul Krugman takes aim at -- guess who? -- the Bush administration. He's never done that before. Paul says the right wing is a revolutionary power, and he joins us next.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Paul Krugman has a new book. He calls it "The Great Unraveling: Losing Our Way in the New Century." "New York Times" columnist Paul Krugman in that book assembles a collect of columns over the past three years. A central theme, the Bush administration and what Krugman characterizes as a radical political movement. Paul, radical?
PAUL KRUGMAN, AUTHOR: Radical. Look, these guys have led us into a deficit, which is about 25 percent of government spending. About a third of non Social Security budget deficit. There's no way that gap can be closed without massive cuts in social programs or large increases in taxes.
And if you look at the people behind -- I don't know what Bush understands -- if look at the people behind they talk about wanting to roll back the great society, wanting to role back the new deal.
DOBBS: What part of the new deal has been rolled back?
KRUGMAN: Nothing has happened yet.
DOBBS: So, what would you have the government do? A war against terror, caring out operations in Iraq and Afghanistan with, whether you agree with them or not, the policy of the country, how is he going to pay for it?
KRUGMAN: Look, next year the tax cuts, the Bush tax cuts will subtract about $280 billion from government revenue. That dwarfs even the $87 billion that we were suddenly sprung on us for the Iraq war. So, the truth is, the budget crisis is much more the result of tax cuts than special demands is.
DOBBS: But, in that assumption, you as a Princeton economist extraordinaire, if I may say, know that that money will be in private hands and we could see with an uptick here more than that moving...
KRUGMAN: In fact...
DOBBS: I think that's wishful thinking.
KRUGMAN: That's enormously wishful thinking. The Congressional Budget Office has -- the White House's hand picked economist heading it and he doesn't think so. This is not -- this is wildly irresponsible policy unless the intent is to starve the government programs.
DOBBS; Starving government programs, this administration has expanded government farther than any administration.
KRUGMAN: Not really in new programs.
DOBBS: Budgets scale...
KRUGMAN: They're sloppy.
DOBBS: I've got to ask you this, because I am, as you know, a faithful reader of your column. Is there anything the administration's ever done that you like? Just one.
KRUGMAN: It's pretty rough. You know, my colleagues at Princeton said, say something nice about them. I said what. They said free trade. They're not free traders. I'm a better free trader than Bush is. Clinton was a better free trader than Bush is.
DOBBS; Well, we're trading away $503 billion in the last current account deficit. How free do you want this trade to get?
KRUGMAN: Oh, come on. The current account deficit is a reflection of budget deficit, of irresponsible policies at home.
DOBBS: The deficit at that point was only $200 billion. We're double that now. What's going to be next year?
KRUGMAN: Well, it's amazing. I wonder what if those numbers have been understated, too.
DOBBS: You and I both know the numbers are probably understated and totally -- I shouldn't say totally, but definitely not the absolute reading...
KRUGMAN: Well, a lot of what you why talking about outsourcing, I don't think that's showing in the commerce department numbers.
DOBBS: Not yet. In terms of the Bush administration's next step which is to move into solid recovery, job growth in 2004, preparing for a tremendous victory, is that the way you see it in 2004 presidential election?
KRUGMAN: You know, state of the economy right now technically, I would say it is weird. Different numbers pointing different directions, job numbers, output numbers, that's going to get reconciled. I don't know which direct.
DOBBS: Paul Krugman, thank you for joining with us. The book is "The Unraveling of America." I thought you'd find one nice thing to say about president George W. Bush.
KRUGMAN: I found it pretty hard.
DOBBS: Good to have you here with us, Paul.
KRUGMAN: Great.
DOBBS: A reminder to vote in our poll. The question, whom do you believe is most out of touch on the issue of Iraq, the media, U.S. consumers, Defense Secretary Donald Rumsfeld. Cast your vote at cnn.com/lou. We'll have the results coming up shortly.
Coming up next, "Grange On Point" tonight, the unfair burden being carried by thousands of our reservists and members of the National Guard. General David Grange is next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight in "Grange On Point," challenging times for this country's National Guard and our reserves. 200,000 national guardsmen and reservists are on active duty right now around the world. They make up of a third of all U.S. forces in the Persian Gulf and central Asia.
The National Guard and reserves have taken on a greater role and burden in the two years since September 11. Now here's General David Grange.
Dave, this seems like an unfair burden for men and women who are supposed to be citizen soldiers.
GEN. DAVID GRANGE, MILITARY ANALYST: Well, it just the expectations are different now, Lou. Before you had what's known as weekend warriors, you trained one weekend a month, you went for two- week annual training deployment somewhere in the United States and that was about it. If there was a war like Desert Storm, you had a quick mobilization of quite a few troops, but then nothing happened for a while. Now it's an every day occurrence
DOBBS: An every day occurrence. We have a Pentagon saying they don't need more troops meanwhile calling up more reserves, calling upon the guard. This does to the layman, if you will, this doesn't make a lot of sense to say you don't need more troops, but keep calling up reserves and your guard.
GRANGE: Well, some of the reserves and National Guard that are called up fill certain specialties that are not found or not found in large numbers in the active force and so they have to call up the guard and reserves. In other cases they're rotating out with active duty units because of the operational tempo the amount of deployments that are occurring, filling those units places overseas. And so the whole face of the reserve components has changed in today's environment.
DOBBS: It's changed. Has it changed for the better? And are we going to see as a result of this difficulty in recruiting for both the guard, for the reserves, and retaining those young men and women?
GRANGE: There's no retention problems right now, but in the future, I would predict there would be. The reason is because of maybe a burnout or just constant use of the reserves and guard units unless certain things happen, benefits are equaled out among reservists and active duty, as well as you have predictability in deployments and upfront training. So it's not a knee-jerk reaction to mobilize certain units and send them somewhere very quickly.
DOBBS: We have about 30 seconds, Dave. Do we have, in your judgment, the right mix of citizen soldiers and professional military?
GRANGE: No, I think there has to be a rebalance. You have to move some of the reservist skills back to the active side. You still want to keep certain skills in the reserves and the National Guard, there's homeland defense issues, there's big war issues, but there has to be some rebalance. Yes, you do.
DOBBS; Dave Grange, General Dave "Grange on Point," thank you very much.
GRANGE: My pleasure, Lou.
DOBBS: "Tonight's Quote" from Baghdad where the commander of U.S. forces there made comments on the ever-changing enemy that U.S. forces are fighting. We quote "The enemy has evolved. It is a little bit more lethal, little bit more complex, little bit more sophisticated and in some cases a little bet more tenacious." Lieutenant General Ricardo Sanchez.
A remarkable story of good fortune for one American soldier tonight. Army Sargent Steven Moore, he is now on a 30-day leave from South Korea is the sole winner of the $150 million Megamillions Jackpot. Sergeant Moore bought the winning ticket at a convenience store in Fitzgerald, Georgia. Moore who works as a chemical specialist chose the cash option. He was awarded $90 million before taxes. The sergeant plans to use his winnings to builds to a new home for his wife and two daughters.
Coming up next, hear "Your Thoughts" on our series of special reports "The Great American Giveaway."
We have had an overwhelming response from you. We'll share some of "Your Thoughts" next.
(COMMERCIAL BREAK)
DOBBS: Now the results of "Tonight's Poll." The question, whom do you believe is most out of touch on the issue in Iraq?
Nineteen percent of you for some reason said the media, 1 percent said U.S. Commanders in Iraq, 80 percent of you said Defense Secretary Donald Rumsfeld for some reason.
On Wall Street, the major stock averages held steady today. The Dow up 18, Nasdaq up almost 4, the S&P adding over two points.
Christine Romans joins us with the market, Christine.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: The market building on yesterday's gains. But it was a quiet day overall, a day before that job's report, Lou. Barely 1.3 billion shares changing hands.
Upstairs the New York Stock Exchange board met for the first time with its new leader, John Reed. On the table at the big board, big reforms. Everything from a smaller board to possibly splitting the chairman and CEO roles, board members want to keep the New York Stock Exchange regulatory power in-house and initial public offering of the stock exchange, not on the table at this point. And, Lou, we still don't know the paychecks of top New York Stock Exchange management.
I asked John Reed why should it take so long to give the public readily available information?
(BEGIN VIDEO CLIP)
JOHN REED, INTERIM NYSE CHAIRMAN: We could release it right away. If so, I'd like to talk to the management people involved, to make sure they're comfortable, their kids are going to be saying, gee daddy I didn't know you earned that much money. That's what kids used to say. I don't know why theirs would be any different.
(END VIDEO CLIP)
ROMANS: Of course, speculation they make millions of dollars. He said we would know maybe in a month.
DOBBS: Did the interim chairman the reason they're not divulging to the public what the five top executives of the what the New York Exchange make he's concerned about what their children would think?
ROMANS: I think he was trying to stall a bit. We asked a couple weeks ago, Lou, Carl McCall he said he would ask the board to find out what everybody made, and now we're still continuing to ask that question.
So John Reed said maybe it a month.
DOBBS: And reform at the big board but not to include being divested regulatory power, turning it over to the SEC.
ROMANS: Doesn't sound like they want to do that.
DOBBS: Sounds like tepid early turns at the big board, perhaps a bolder moves wait.
ROMANS: The final report has not been released but they're discussing 27 proposals.
DOBBS: Speaking of reform, the mutual fund industry, this just gets worse and worse.
ROMANS: Yes, we have been hearing about this all week and more on this today. Millennium Partners, a hedge fund in New York, a top trader has pleaded guilty to fraud. Citibank fired a Smith Barney broker for allegedly canceling trades after the market close. And earlier this week there was suspensions or job losses at Prudential and I Alliance Capital. On the Street, Lou, a lot of folks saying this is the just the beginning of all of this.
DOBBS: Well, after two years of corporate scandals and Wall Street reform, it doesn't feel like the beginning to me. Christine, thanks a lot, good work.
Take a look now at some of "your thoughts," from Russia, Ohio,"Thanks Lou for your Exporting America reports. I'm thankful that someone out there is speaking for all of us working stiffs in manufacturing. We used to be the backbone of America. Now were just the bottom line." That from Cindy Landsiedel.
From Hawaii, "Lou, how can someone who is illegal receive anything that is considered legal? I am so confused. It defeats our entire justice system. If they are considered illegal why are they still here?" Marion Basiliali.
And from Douglasville, Georgia, "Dear Lou, instead of a tax break why doesn't the government provide a tax incentive to companies to hire Americans and keep the jobs in the U.S." That from John Budahazy.
From Houghton, Michigan, "I believe most Americans would rather have greater job security than inexpensive imported furniture, clothes, and electronics. Buy American! The job you save may be your own!" Kevin McRae.
We appreciate "Your Thoughts." E-mail us at loudobbs@cnn.com. That's are show for tonight. For all of us here, good night from New York. "ANDERSON COOPER 360" is next.
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of Mass Destruction Found in Iraq>
Aired October 2, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, October 2. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.
Tonight: The criminal investigation into the published disclosure of a CIA officer's identity is expanding far beyond the White House. A senior Justice Department official today said the State Department, the Pentagon and other government agencies will be told to preserve all documents relevant to the investigation.
The White House today continued to resist demands for the appointment of an independent prosecutor to investigate the leak.
White House correspondent Suzanne Malveaux reports -- Suzanne.
SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Lou, President Bush maintained his official schedule here at White House, celebrating Hispanic Heritage Month.
But, at the same time, the partisan bickering continued over this leak investigation, Democrats insisting that Attorney General John Ashcroft should appoint a special counsel to conduct this investigation, or, at the very least, because of his close ties to the White House, recuse himself from this investigation.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA), MINORITY LEADER: You can put lipstick on a pig and it's still a pig.
SEN. CHARLES SCHUMER (D), NEW YORK: The attorney general is so inextricably locked up with the people he's investigating, he can't do a fair job.
(END VIDEO CLIP)
MALVEAUX: Now, the White House press secretary, Scott McClellan, while not naming names, did charge Democrats, as well as former Ambassador Joe Wilson, whose wife was the subject of the leak, of playing politics.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Unfortunately, there are some that are looking through the lens of political opportunism. There are some that are seeking partisan political advantage.
(END VIDEO CLIP)
MALVEAUX: Now, the majority of Americans believe that there should be an independent investigation, this according to the latest "The Washington Post"/ABC News poll. They say that 29 percent believe that the Justice Department should handle it; 69 believe that a special counsel should, so still quite a bit of debate circling around this issue -- Lou.
DOBBS: Thank you very much, Suzanne -- Suzanne Malveaux.
Well, later, I'll be talking about the CIA leak with Senator Joseph Lieberman, Democratic candidate for the presidential nomination. Senator Lieberman is calling for a special investigator. And I'll also be talking, from the point of view of journalism, with Rem Rieder, the head of "The American Journalism Review," about the CIA leak and commentator Robert Novak.
Two very different views of Iraq from the two top men -- two of the top men in the Pentagon today -- the commander of U.S. forces in Iraq, General Ricardo Sanchez, today said the insurgents and terrorists in Iraq are becoming more sophisticated and deadly in their attacks. But his boss at the Pentagon, Defense Secretary Donald Rumsfeld, had a very different emphasis, preferring to highlight the good news from Iraq.
Senior Pentagon correspondent Jamie McIntyre reports.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT (voice-over): Nearly six month after the fall of Baghdad, an average of three to six U.S. troops die and 40 are wounded every week in Iraq at the hands of an enemy that has grown more lethal and tenacious, according to the commander of U.S. forces. But despite the daily casualties, Lieutenant General Ricardo Sanchez bristled when a reporter suggested Iraq is not safe.
LIEUTENANT GENERAL RICARDO SANCHEZ, U.S. COMMANDER IN IRAQ: No one feels safe? Give me a break. If you go out there into the countryside and talk to average Iraqis, there's a lot of Iraqis out there that feel safe in this country. They feel a lot safer than they did five or six months ago.
MCINTYRE: In Washington, Defense Secretary Donald Rumsfeld opened his Pentagon briefing with a salvo against the press.
DONALD RUMSFELD, SECRETARY OF DEFENSE: I guess good news is not news.
MCINTYRE: Rumsfeld complained bitterly that members of Congress who have recently returned from Iraq with enthusiastic progress reports have been virtually ignored by the news media.
RUMSFELD: I saw nothing in any of the four or five papers that I read or on any of the television shows which I occasionally have on.
MCINTYRE: But the Bush administration's credibility is suffering even among conservatives. In his syndicated column, George Will called on the administration to just admit the prewar intelligence about Iraq's weapons of mass destruction was wrong, that Americans understand, intelligence is imperfect, a suggestion Rumsfeld rejected as premature.
RUMSFELD: It's not clear that it was off by a little bit or a mile at this stage. That's yet to be seen. If it is off by a lot, that will be unfortunate.
(END VIDEOTAPE)
MCINTYRE: Unfortunate, Rumsfeld says, not for the administration's credibility, but for the people of Iraq, who Rumsfeld said would have needlessly suffered, because Saddam Hussein failed to come clean with U.N. inspectors -- Lou.
DOBBS: Well, Jamie, you should have the defense secretary watch this broadcast, because we have talked with returning congressmen, as well as journalists, from Iraq.
Jamie, is this turning into a real fissure of policy and viewpoint within the Pentagon itself?
MCINTYRE: Well, no, this really is a classic glass-half- empty/glass-half-full scenario.
If you look at the facts on the ground in Iraq, you can make a case for things are better than they look and you can also make a case for the undisputable facts, the indisputable facts that the level violence against U.S. troops is escalating. The U.S. commander there insisted, this is something that they're making progress on and they're just going to have to take some casualties in the short run, but he continues to express some confidence, in the long run, the U.S. is going to prevail.
DOBBS: Jamie, thank you -- Jamie McIntyre, our senior Pentagon correspondent.
Later in the show, "Grange On Point" will be focusing on the increased challenges now faced by military reservists and members of the National Guard.
Central Command today said 315 Americans have now been killed in Iraq, 196 killed in action, 119 in accidents. Another 1,710 troops have been wounded, nearly 1,400 of them in combat.
Turning now to tonight's poll question: Whom do you believe is most out of touch on the issue of Iraq, the media, U.S. commanders in Iraq, or Defense Secretary Donald Rumsfeld? Cast your vote at CNN.com/Lou. We'll have the results later in the show.
As the war goes on, so does the search for Saddam Hussein's weapons of mass destruction. David Kay, the CIA adviser leading that search, today said investigators have not found any biological or chemical weapons so far. But Kay said search teams have found evidence of Iraqi weapons programs.
National security correspondent David Ensor with the report -- David.
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT: Well, as you say, Lou, the lead really has to be that they haven't found any weapons, they haven't found a smoking gun, though they have found a great deal that leads them to think there may have been a program under way.
Here's how David Kay put it.
(BEGIN VIDEO CLIP)
DAVID KAY, CHIEF U.S. WEAPONS INSPECTOR: We have not found yet -- and I'm you know sure this -- otherwise, you would know it earlier. We have not found, at this point, actual weapons. It does not mean we have concluded there are no actual weapons.
It means, at this point in time -- and it's a huge country with a lot to do -- we have not yet found weapons. If I can speak of what we have found, in addition to intent, we have found a large body of continuing activities and equipment that were not declared to the U.N. inspectors when they returned in November of last year.
(END VIDEO CLIP)
ENSOR: Now, a few minutes ago, the CIA put out an unclassified version of Mr. -- of Dr. Kay's testimony before the two committees. And there are some interesting new details about what they have found in the biological weapons area, in the missiles area, chemical weapons.
In biological weapons, for example, they have found in the home of a biologic scientist live strains of botulinum toxin in test tubes, in a package of test tubes, kept alive for use in a possible future weapon. They found research on brucella and Crimean-Congo hemorrhagic fever that shows that the Iraqis had an ongoing effort to turn those into weapons.
They found a prison laboratory complex, the report says, possibly to be used for human testing of biological weapons on prisoners there. And they found a clandestine network of laboratories and safe houses within the Iraqi intelligence service with lots of equipment suitable for chemical or biological weapons research.
Now, in the missile area, they have found plans and advance design work for new, long-range missiles. The Iraqis weren't supposed to have anything that could go more than 150 kilometers. They were planning to have missiles that could go 1,000 kilometers, the could reach Cairo and Abu Dhabi.
And in the area of chemical, now, it was always said in 1991 by the U.N. that they couldn't find all the chemical weapons that they knew Iraq had. David Kay says that there's 600,000 tons of artillery shells and bombs that have not yet been tested for chemical munitions.
And, Lou, Kay says that the chemical munitions were always mixed in among the other munitions in the Iraqi force. So there could yet well be chemical weapons among those munitions that may yet be tested and found. Now, they say they need six to nine more months of research and hundreds of millions of dollars to do it -- Lou.
DOBBS: The search goes on, but, to this point, no weapons of mass destruction.
David, Kay's boss, CIA Director George Tenet, today strongly rejected those congressional complaints about the woeful intelligence on Iraq before the war. Just what did the CIA director say?
ENSOR: Lou, he sent a rather strongly worded letter to the House Intelligence chairman, Porter Goss, and the ranking member, Jane Harman, rejecting some of the complaints that had been in a letter that they addressed.
"The suggestion by the committee," he said, "that we did not challenge long-standing judgments and assessments is simply wrong." He said he emphatically disagreed with the committee's view that intelligence reports on Iraq's ties to al Qaeda should have been screened out by a more rigorous vetting process because -- before they were provided to analysts. He said, "I can't see why one should give the analysts less information about the ties between al Qaeda and Iraq than we actually on hand."
So rather a blunt letter of reply to the two legislators from the nation's top intelligence officer. At the CIA, they were annoyed that Harman in particular went public with her complaints before talking to them -- Lou.
DOBBS: David, thank you very much -- David Ensor, national security correspondent.
Coming up next here: It is from bad to worse for Rush Limbaugh, charges of racism, quickly followed by new charges today of drug abuse.
And Democratic presidential candidate Senator Joe Lieberman tonight speaks out on the CIA leak, exporting America, outsourcing jobs, Iraq, and much more. Senator Lieberman is our guest.
And a mea culpa from Arnold Schwarzenegger. We'll tell you what he did and why. Bob Franken will report.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: This has been a very bad week for Rush Limbaugh. Last night, Limbaugh resigned his post at ESPN, just three days after making racially charged comments about an NFL player. This morning, he explained his decision.
(BEGIN VIDEO CLIP)
RUSH LIMBAUGH, RADIO TALK SHOW HOST: I offered an opinion. In my opinion, it was not a racial opinion. It was an opinion about the media. And I simply -- I don't want to cause any discomfort to the people on that program. So the path of least resistance became for me to resign.
(END VIDEO CLIP)
DOBBS: And just hours after resigning, Limbaugh was at the center of another controversy. His name has now surfaced in connection with an investigation of a drug ring in Palm Beach County, Florida, Limbaugh allegedly making illegal purchases of prescription painkillers, OxyContin.
In a statement Limbaugh said -- quote -- "I am unaware of any investigation by any authorities involving me. No governmental representative has contacted me directly or indirectly. If my assistance is required in the future, I will, of course, cooperate fully."
Turning to the California recall race, front-runner Arnold Schwarzenegger today apologized for having behaved badly in the past. That apology came in response to a "Los Angeles Times" story that alleged Schwarzenegger made unwelcomed advances to at least half-a- dozen women over the past three decades.
Bob Franken joins us now from Los Angeles with the report -- Bob.
BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, "The Los Angeles Times" report did certainly get everybody's attention today.
It alleged that six women it interviewed -- the women alleged that over a period of several decades, from the '70s until 2000, in separate incidents, Arnold Schwarzenegger groped them, unwelcomed sexual advances. That occurred on movie sets and off movie sets.
Now, Schwarzenegger, whose aides originally denied the reports, then they, in effect, implied that the Democrats are responsible, as Schwarzenegger began a statewide tour in San Diego, he had a different and somewhat convoluted take on it.
(BEGIN VIDEO CLIP)
ARNOLD SCHWARZENEGGER (R), CALIFORNIA GUBERNATORIAL CANDIDATE: I know that the people of California can see through this trash politics.
(CHEERING AND APPLAUSE)
SCHWARZENEGGER: Yes.
Let me tell you something, let me tell you something, a lot of those, what you see in the stories is not true. I have behaved badly sometimes. Yes, it is true that I was on rowdy movie sets and I have done things that were not right which I thought then was playful. But now I recognize that I have offended people. And to those people that I have offended, I want to say to them, I am deeply sorry about that and I apologize, because this is not what I'm trying to do.
(END VIDEO CLIP)
FRANKEN: Now what?
The Schwarzenegger opponents have to decide how they're going to react. Governor Davis, who is trying to avoid the recall Schwarzenegger is trying very much to get done, Governor Davis had kind of a noncommittal reaction, saying the voters will have to decide what this means. Cruz Bustamante, the lieutenant governor who directly running against Schwarzenegger on the recall alternative ballot, had a stronger one, suggesting that the California Penal Code says, any person who touches an intimate part of another person against the will of the person touched is guilty of a misdemeanor sexual battery.
Now, as for Maria Shriver, the candidate's wife, she is out campaigning separately from her husband. Other women in the name of CodePink -- that's a feminist group -- are trying to organize now. They're trying, Lou, to get a movement going in the state calling on Schwarzenegger to step down. And, of course, what Schwarzenegger is hoping that he has sort of dampened this down a little bit by having a reaction almost immediately -- Lou.
DOBBS: And the reaction there in California to the timing of "The Los Angeles Times" article, five days before the election, making allegations about events, some of which are 30 years old?
FRANKEN: Well, the Schwarzenegger camp is trying to suggest that this was somehow part of a Democratic effort to discredit Schwarzenegger.
But it should be pointed out that any number of news organizations have been investigating these charges. And some of them have appeared before, in an interview, for instance in 2001, in a different magazine. So, the two school office thought are that this was some sort of October surprise. But, on the other hand, others are just saying, it took that long to do the investigation.
DOBBS: All right. Thank you very much, Bob Franken, from Los Angeles.
Joining me now for more on the timing of this story is Rem Rieder. He is the editor of "The American Journalism Review." He joins us tonight from Washington,
Rem, good to have you with us.
REM RIEDER, EDITOR, "THE AMERICAN JOURNALISM REVIEW": It's nice to be here.
DOBBS: As Bob Franken just reported, some considerable suspicion, this story coming out five days before the election on events in Arnold Schwarzenegger's -- alleged events in Schwarzenegger's past that span 30 years. You, as the watchdog, does this strike you as normal, or is it something that should be looked at with some skepticism?
RIEDER: I'm not sure either one. Normal -- nothing has been very normal about this recall campaign.
DOBBS: That's entirely true.
RIEDER: But as far as skepticism, reading it closely, it seems like a very carefully reported story. Two of the people who say they were groped and harassed are on the record.
The other four have decent reasons why they don't want to be identified. And their accounts are corroborated by people they told them to at the time. It doesn't appear that it was leaked. According to "The Times," in looking at these long-standing rumors about Schwarzenegger, they found these out. In fact, I have been waiting for this -- expecting a story like this for quite a while.
DOBBS: Were you expecting it five days before the election? And would that be more an expectation based on journalism or politics?
RIEDER: Well, the expectation I was referring to was more on journalism, not necessarily at this time.
But I think the alternatives are to go with the story before it's ready and nailed down or to go when it's ready. And I think it's an important enough issue that, as long as it's a fair, well-documented story, I don't have a huge problem with the timing.
DOBBS: Of course, the allegations in this are not materially different from those, as Bob Franken pointed out, that occurred in the article published in "Premiere" magazine in 2001 or, previously to that, some 20 years ago in the interview with "Oui" magazine.
RIEDER: Right.
I think what we have here is a really carefully researched story by one of the top newspapers in the country, the top newspaper in the state, about some very serious allegations about somebody who, at least before the story came out, and perhaps at any rate, is about to become governor of the state. I think the voters need to know that.
DOBBS: Let's turn, Rem, to other serious allegations, far more serious allegations, in terms of the national interests. And that is Robert Novak's report in which he revealed the identity of a CIA officer. What is your reaction? Novak asked by the CIA not to reveal her name. What should he journalistically, in your judgment, have done?
RIEDER: Well, I think he should have done what the other journalists whom this information was leaked to did, and that's not run with it, not use it.
I thought his explanation that it was kind of a weak request not to use it rang very false. This was just a very bad call on his part. And it's kind of surprising that nobody editing the column raised a red flag about it.
DOBBS: Well, in fairness, we should point out "The New York Post" did, to our knowledge, is the only publication in the country carrying the Novak syndicated column that chose not to use those elements of the column identifying the wife of former Ambassador Joe Wilson. They deserve some credit for that, do they not?
RIEDER: Absolutely. Good for them. And that's, I think, what "The Washington Post" and other papers should have done as well.
DOBBS: Rem Rieder, the editor of "The American Journalism Review," we appreciate your time.
RIEDER: Thanks. Nice being here.
DOBBS: Coming up next, presidential candidate Joseph Lieberman lays out what he sees as the most critical issue facing this nation's economy today.
(BEGIN VIDEO CLIP)
SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: This is the largest challenge our economy is facing in the years ahead. And that is the movement of jobs overseas.
(END VIDEO CLIP)
DOBBS: Senator Joseph Lieberman is our guest next.
(COMMERCIAL BREAK)
DOBBS: Democratic presidential candidate Senator Joseph Lieberman is introducing a bill that would create a reform investigation of the White House independence counsel in order to investigation the leak of a CIA operative's identity. The independence counsel investigation during the Clinton administration drew wide criticism from Democrats.
And earlier, I asked the senator why, after the experience of the Clinton administration, we would want to reintroduce the independent counsel.
(BEGIN VIDEOTAPE)
LIEBERMAN: Well, first let me say on my behalf that I supported the independent counsel law and worked very hard with a bipartisan group of colleagues to keep it alive, even during the Clinton years. Because I thought that authority, that independence, had to be there.
And the fact that Ken Starr's investigation didn't provide anything -- didn't produce very much doesn't say that the idea of an independent counsel to investigate allegations against high officials of our government is not the right way to go. Of course, I think it is the right way to go.
DOBBS: Senator, let's move to another position that you took. What is your view now on Iraqi policy?
LIEBERMAN: Well, I regret very much that the Bush administration was unprepared, shockingly unprepared, for what to do the day after Saddam fell. I've never altered my opinion it was right to go into Iraq, that the world is safer with Saddam gone. But because of a lack of a plan by the Bush administration, we run the risk of losing, in peace in Iraq what we gained in the war.
And we ought to be doing a lot more than we're doing now at the United Nations to bring other countries in. I never felt that I was supporting the war so that the United States could control post-Saddam Iraq. I was supporting a war so we could get rid of Saddam and let the Iraqis control post-Saddam Iraq.
DOBBS: Senator, the economy continues to grow. The recovery is in place. But for almost two years now, jobs have not been created. They have been lost. Part of the reason for that is the outsourcing of jobs overseas. It has become a quick fix for much of corporate America.
How serious is the problem, in your judgment? What would you do about it?
LIEBERMAN: This is a real serious problem. We -- this is the largest challenge our economy is facing in the years ahead. And that is the movement of jobs overseas.
Some of that is happening because of foreign nations not playing by the rules, not -- stealing our patented, copyrighted goods, fixing their currency so they have a price advantage when they send in manufactured goods.
Some of it we can't change. We're in a global economy. And the way we're going to compete better and build jobs here in America is by having an economic growth plan. Having governments stand behind and with manufacturers and workers to create new jobs.
And how do you do that? You give them tax incentives to do it, to invest. The government invests in innovation and research and development that will create the new industries, that will create the hundreds of thousands of new jobs.
And then you provide the workers with lifetime opportunities for retraining so they can qualify for those new jobs.
You can't put a wall around America and grow the American economy. What we've got to do is to get better at what we're doing and knock down trade barriers abroad to sell American-made goods there. That's what worked in the '90s, and it will work again.
DOBBS: No walls around America, but our borders are not in any way stopping illegal aliens from entering this country. Now, estimates range between seven and 10 million illegal aliens in the country.
Where do you stand on the issue of illegal aliens in the country and immigration law?
LIEBERMAN: Yes. It's a crisis. I mean, the whole immigration system is not working. The fact is that most of the immigrants, overwhelming number of immigrants, are coming to America today for the same reason my grandparents did, for opportunity and freedom. And they're finding it. And the fact is if - somebody said to me, in one Southwestern state, if we were able to put a wall up between Mexico and our state, it happened to be Arizona, the Arizona economy would collapse.
We've got to acknowledge the reality here. And that's why I'm for temporary worker visas. There's been an agreement on Capitol Hill about a great agreement, about agricultural workers having a right to temporarily come in. And ones who have been here for a period of years, paid their taxes, not violated the law, let's give them legal status and try to recognize the contribution they're making to our economy and filling jobs that people who are here now won't fill.
DOBBS: Howard Dean admonishing all of the candidates for the Democratic presidential nomination, to look upon George Bush as the enemy and not to attack one another. Do you first look at George Bush was, quote, end quote, "the enemy"? And will you avoid any attacks against your Democratic colleagues?
LIEBERMAN: I'll give you two quick answers. George Bush is not the enemy. I always say to people, George Bush, as far as I can tell, is a good man. He's just been a very bad president. And I know that I and others can do better.
But we have to have an open debate within the Democratic Party among the candidates. We can't tie our tongues. This is about the future of the heart and soul of the Democratic Party and more to the point, will the Democratic Party nominate a candidate for president that the American people can trust, particularly now as they're losing their trust in George Bush, to govern this country in the public interest, to restore jobs, to protect our safety, to provide health insurance and education and retirement security.
And we have very different ideas about how to do that. A lot of my opponents in the Democratic primary, I think, want to go back to the days before Bill Clinton redefined the party. I want to build on that redefinition and continue us as a party of growth, fiscal responsibility. Strong on defense, pro-trade, and supportive of tax cuts, particularly for the middle class and for businesses that, after all, create the jobs that we all want.
DOBBS: Senator, I take it that you didn't just give Howard Dean a free pass?
LIEBERMAN: Well, no. Anybody in the race, including Wes Clark, who's just come in, been uncertain about what position he takes on the war. You know, we're asking the American people to trust us to be their commander-in-chief. We've got to be open to answering questions that will help the voters make a judgment about that.
DOBBS: And Senator, we thank you for taking the time to answer some of our questions.
LIEBERMAN: Thank you, Lou. Enjoyed it, as always.
DOBBS: Senator Joe Lieberman.
(END VIDEOTAPE)
DOBBS: And turning now to our series of special reports, "The Great American Giveaway." Tonight, we focus on education.
Somewhere between 7 million and 10 million illegal aliens live in this country. They are here in violation of the law. However, the courts have decided that their children have the right to a free education.
Bill Tucker joins us now with the story -- Bill.
BILL TUCKER, CNNfn CORRESPONDENT: Lou, the question is, are we educating for the future or simply giving the education away? It is a debate which raises the question of whether to punish the child for the sins of the parent.
(BEGIN VIDEOTAPE)
TUCKER (voice-over): More than a million kids in kindergarten through high school are illegal aliens according to an estimate by the Urban Institute. They are there because according to a Supreme Court ruling in 1982, they have the right to a free public school education. The court saying, in effect, that since the children were brought here by their parents and since it was clear that the government wasn't deporting the parents, U.S. citizens should be responsible for educating their children.
MELISSA LARAZIN, NATIONAL COUNCIL OF LA RAZA: It's not Americans who hold these students accountable for a decision that they did not make. These students are here to stay. They are part of our country. We might as well educate them while they're here. It benefits us all.
TUCKER: Seven states currently offer illegal aliens in-state tuition prices at state colleges. Fifteen more states are considering similar legislation.
And then there's the Dream Act, co-sponsored by senators Orrin Hatch and Richard Durbin. The act would grant residency status to illegal aliens of good moral character, between the ages of 12 and 21 who have lived in the United States for at least five years, and a high school graduates under the age of 25 who are enrolled in a college or university.
As compelling as the arguments may be, critics point out, there is a cost.
DAN STEIN, FED. FOR AMER. IMMIGRATION REFORM: Educating the children of illegal immigrants is costing U.S. taxpayers $7.5 billion a year -- $7.5 billion a year. We could be putting a computer on the desk of every junior high school kid in America if we had that money to educate our folks today.
(END VIDEOTAPE)
TUCKER: In California, for example, the Federation for Americans for Immigrants Reform statements that the state spends more than $2 billion each year educating illegal aliens. That's 20 percent of the state's budget deficit where, by the way, they are making budget cuts in education -- Lou.
DOBBS: Bill, thanks. Bill Tucker.
Tonight's thought is on education in this country. "In my days, schools taught two things, love of country and penmanship -- now they don't teach either." That from author Cleveland Amory.
Tomorrow on "The Great American Giveaway," exporting your confidential personal records. Some American companies are outsourcing work overseas and guess what? Your medical records, your financial records, your personal information are being exported right along with the jobs. That special report tomorrow night. Please join us.
An astonishing threat from Europe tonight over a Congressional proposal to force the Pentagon to buy essential weapons components in this country. The European Union is reportedly threatening legal action against the United States if the Buy America proposal becomes law. Foreign companies are heavily involved in U.S. military projects such as the joint strike fighter. But the House of Representatives says the Pentagon has become too dependent on foreign contractors and lawmakers are concerned those companies may cut off supplies if their governments disagree with U.S. policy.
The exporting of America also taking place on Wall Street. A number of brokerages are outsourcing their research to India. My guest tonight says this outsourcing will, in fact, lead to job creation here in this country.
Manu Bammi is the chief executive officer and co-founder of research firm SmartAnalyst. Good to have you with us.
MANU BAMMI, CEO, SMARTANALYST: Thanks, Lou.
Well, I think it's all about innovation and this is a very dynamic economy and what our innovation is to look at research and knowledge and how that's done and figure out how to do it more efficiently and in a more cost effective way. And I think companies can use this to do increased productivity and cut costs and create more jobs here.
DOBBS: In your own firm, for example you're creating research for Wall Street firms as some of this comes as a result of the settlement with Wall Street by New York Attorney General Eliot Spitzer and the divestment between investment banking and research.
You're sending actually research on equities in particular over to India, right? BAMMI: Well, we are not making any recommendation that we don't write the research reports. What we provide is what we call research support services, which means that, you know, these companies that have to figure out a new business model of how equity resent should be done, they can cover more stocks, do more in-depth research if they can use our services.
DOBBS: That's work that was at one time being done by Americans, certainly at higher salaries than are paid in India, correct?
BAMMI: Much higher salaries.
DOBBS: And that fact leads us to what conclusion? That that will create jobs in this country? I'm afraid I don't understand that.
BAMMI: The job -- the issue related to the job cuts had already happened before we came along.
DOBBS: Right.
BAMMI: And I think what people are looking at as the economy expands, you know, are they going back to the '90s model or is it going to be some new way to actually provide expanded coverage without taking on the overhead that they had before?
But I think that we can provide better services, cheaper costs, and more efficiently and they can cover more stocks than they were doing previously.
DOBBS: But the sum effect of what has transpired in this case, Manu Bammi -- bear with me on this -- is jobs that were once held in this country are now in India. They are paying the Wall Street firms -- ultimately paying for that research -- are paying far less for it in India than they are in the United States. And this is the metaphor, the paradigm we're seeing across vast numbers of industries, literally hundreds of thousands of jobs involved.
How do we rationalize that to Americans who don't have work, who are watching jobs being exported in all of these industries overseas? How do we explain that to those people?
BAMMI: I don't mean to plug McKinsey (ph)...
DOBBS: Plug them.
BAMMI: They have just done a study called "Offshoring: A Win/Win Solution" ...
DOBBS: Right.
BAMMI: ...where they have cranked the numbers and analyzed for every dollar spent -- spent outside, there's 1.5 dollars in value creation and most of that is actually coming back to America.
DOBBS: In what form? BAMMI: In -- in forms of, you know, reduced costs so there's more available and also in the form of redeployment of people to, in fact, even higher value jobs and wages.
DOBBS: Now that you've plugged McKinsey, perhaps I can be critical of McKinsey. In point of fact, it sounds like an absolute call to export jobs overseas. And it doesn't, to me, seem to require the intellectual firepower of one of the premier consulting firms to suggest to a CEO or CFO that he or she cut jobs in order to improve profitability or productivity in the first instance.
Does that seem to you to be a very complicated financial concept?
BAMMI: Well, I think it's an interesting argument that you're making. I would look at it in a different way. I mean, America's all about globalization. America is all about competitive advantage. America's all about innovation. And all of these three things play into what we are trying to do and what others are trying to do. And I think, you know, it has -- it has been beneficial over the last 10 years and it's going to be beneficial over the next 10 years, too.
DOBBS: Manu Bammi, we hope you're right. We also hope that there is a vigorous public dialogue in this country about what does make the best sense and what determines what this country really is about.
Manu Bammi, thank you very much.
BAMMI: Thank you very much.
DOBBS: Coming up next here, "The Great Unraveling." "New York Times" columnist Paul Krugman takes aim at -- guess who? -- the Bush administration. He's never done that before. Paul says the right wing is a revolutionary power, and he joins us next.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: Paul Krugman has a new book. He calls it "The Great Unraveling: Losing Our Way in the New Century." "New York Times" columnist Paul Krugman in that book assembles a collect of columns over the past three years. A central theme, the Bush administration and what Krugman characterizes as a radical political movement. Paul, radical?
PAUL KRUGMAN, AUTHOR: Radical. Look, these guys have led us into a deficit, which is about 25 percent of government spending. About a third of non Social Security budget deficit. There's no way that gap can be closed without massive cuts in social programs or large increases in taxes.
And if you look at the people behind -- I don't know what Bush understands -- if look at the people behind they talk about wanting to roll back the great society, wanting to role back the new deal.
DOBBS: What part of the new deal has been rolled back?
KRUGMAN: Nothing has happened yet.
DOBBS: So, what would you have the government do? A war against terror, caring out operations in Iraq and Afghanistan with, whether you agree with them or not, the policy of the country, how is he going to pay for it?
KRUGMAN: Look, next year the tax cuts, the Bush tax cuts will subtract about $280 billion from government revenue. That dwarfs even the $87 billion that we were suddenly sprung on us for the Iraq war. So, the truth is, the budget crisis is much more the result of tax cuts than special demands is.
DOBBS: But, in that assumption, you as a Princeton economist extraordinaire, if I may say, know that that money will be in private hands and we could see with an uptick here more than that moving...
KRUGMAN: In fact...
DOBBS: I think that's wishful thinking.
KRUGMAN: That's enormously wishful thinking. The Congressional Budget Office has -- the White House's hand picked economist heading it and he doesn't think so. This is not -- this is wildly irresponsible policy unless the intent is to starve the government programs.
DOBBS; Starving government programs, this administration has expanded government farther than any administration.
KRUGMAN: Not really in new programs.
DOBBS: Budgets scale...
KRUGMAN: They're sloppy.
DOBBS: I've got to ask you this, because I am, as you know, a faithful reader of your column. Is there anything the administration's ever done that you like? Just one.
KRUGMAN: It's pretty rough. You know, my colleagues at Princeton said, say something nice about them. I said what. They said free trade. They're not free traders. I'm a better free trader than Bush is. Clinton was a better free trader than Bush is.
DOBBS; Well, we're trading away $503 billion in the last current account deficit. How free do you want this trade to get?
KRUGMAN: Oh, come on. The current account deficit is a reflection of budget deficit, of irresponsible policies at home.
DOBBS: The deficit at that point was only $200 billion. We're double that now. What's going to be next year?
KRUGMAN: Well, it's amazing. I wonder what if those numbers have been understated, too.
DOBBS: You and I both know the numbers are probably understated and totally -- I shouldn't say totally, but definitely not the absolute reading...
KRUGMAN: Well, a lot of what you why talking about outsourcing, I don't think that's showing in the commerce department numbers.
DOBBS: Not yet. In terms of the Bush administration's next step which is to move into solid recovery, job growth in 2004, preparing for a tremendous victory, is that the way you see it in 2004 presidential election?
KRUGMAN: You know, state of the economy right now technically, I would say it is weird. Different numbers pointing different directions, job numbers, output numbers, that's going to get reconciled. I don't know which direct.
DOBBS: Paul Krugman, thank you for joining with us. The book is "The Unraveling of America." I thought you'd find one nice thing to say about president George W. Bush.
KRUGMAN: I found it pretty hard.
DOBBS: Good to have you here with us, Paul.
KRUGMAN: Great.
DOBBS: A reminder to vote in our poll. The question, whom do you believe is most out of touch on the issue of Iraq, the media, U.S. consumers, Defense Secretary Donald Rumsfeld. Cast your vote at cnn.com/lou. We'll have the results coming up shortly.
Coming up next, "Grange On Point" tonight, the unfair burden being carried by thousands of our reservists and members of the National Guard. General David Grange is next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight in "Grange On Point," challenging times for this country's National Guard and our reserves. 200,000 national guardsmen and reservists are on active duty right now around the world. They make up of a third of all U.S. forces in the Persian Gulf and central Asia.
The National Guard and reserves have taken on a greater role and burden in the two years since September 11. Now here's General David Grange.
Dave, this seems like an unfair burden for men and women who are supposed to be citizen soldiers.
GEN. DAVID GRANGE, MILITARY ANALYST: Well, it just the expectations are different now, Lou. Before you had what's known as weekend warriors, you trained one weekend a month, you went for two- week annual training deployment somewhere in the United States and that was about it. If there was a war like Desert Storm, you had a quick mobilization of quite a few troops, but then nothing happened for a while. Now it's an every day occurrence
DOBBS: An every day occurrence. We have a Pentagon saying they don't need more troops meanwhile calling up more reserves, calling upon the guard. This does to the layman, if you will, this doesn't make a lot of sense to say you don't need more troops, but keep calling up reserves and your guard.
GRANGE: Well, some of the reserves and National Guard that are called up fill certain specialties that are not found or not found in large numbers in the active force and so they have to call up the guard and reserves. In other cases they're rotating out with active duty units because of the operational tempo the amount of deployments that are occurring, filling those units places overseas. And so the whole face of the reserve components has changed in today's environment.
DOBBS: It's changed. Has it changed for the better? And are we going to see as a result of this difficulty in recruiting for both the guard, for the reserves, and retaining those young men and women?
GRANGE: There's no retention problems right now, but in the future, I would predict there would be. The reason is because of maybe a burnout or just constant use of the reserves and guard units unless certain things happen, benefits are equaled out among reservists and active duty, as well as you have predictability in deployments and upfront training. So it's not a knee-jerk reaction to mobilize certain units and send them somewhere very quickly.
DOBBS: We have about 30 seconds, Dave. Do we have, in your judgment, the right mix of citizen soldiers and professional military?
GRANGE: No, I think there has to be a rebalance. You have to move some of the reservist skills back to the active side. You still want to keep certain skills in the reserves and the National Guard, there's homeland defense issues, there's big war issues, but there has to be some rebalance. Yes, you do.
DOBBS; Dave Grange, General Dave "Grange on Point," thank you very much.
GRANGE: My pleasure, Lou.
DOBBS: "Tonight's Quote" from Baghdad where the commander of U.S. forces there made comments on the ever-changing enemy that U.S. forces are fighting. We quote "The enemy has evolved. It is a little bit more lethal, little bit more complex, little bit more sophisticated and in some cases a little bet more tenacious." Lieutenant General Ricardo Sanchez.
A remarkable story of good fortune for one American soldier tonight. Army Sargent Steven Moore, he is now on a 30-day leave from South Korea is the sole winner of the $150 million Megamillions Jackpot. Sergeant Moore bought the winning ticket at a convenience store in Fitzgerald, Georgia. Moore who works as a chemical specialist chose the cash option. He was awarded $90 million before taxes. The sergeant plans to use his winnings to builds to a new home for his wife and two daughters.
Coming up next, hear "Your Thoughts" on our series of special reports "The Great American Giveaway."
We have had an overwhelming response from you. We'll share some of "Your Thoughts" next.
(COMMERCIAL BREAK)
DOBBS: Now the results of "Tonight's Poll." The question, whom do you believe is most out of touch on the issue in Iraq?
Nineteen percent of you for some reason said the media, 1 percent said U.S. Commanders in Iraq, 80 percent of you said Defense Secretary Donald Rumsfeld for some reason.
On Wall Street, the major stock averages held steady today. The Dow up 18, Nasdaq up almost 4, the S&P adding over two points.
Christine Romans joins us with the market, Christine.
CHRISTINE ROMANS, CNNfn CORRESPONDENT: The market building on yesterday's gains. But it was a quiet day overall, a day before that job's report, Lou. Barely 1.3 billion shares changing hands.
Upstairs the New York Stock Exchange board met for the first time with its new leader, John Reed. On the table at the big board, big reforms. Everything from a smaller board to possibly splitting the chairman and CEO roles, board members want to keep the New York Stock Exchange regulatory power in-house and initial public offering of the stock exchange, not on the table at this point. And, Lou, we still don't know the paychecks of top New York Stock Exchange management.
I asked John Reed why should it take so long to give the public readily available information?
(BEGIN VIDEO CLIP)
JOHN REED, INTERIM NYSE CHAIRMAN: We could release it right away. If so, I'd like to talk to the management people involved, to make sure they're comfortable, their kids are going to be saying, gee daddy I didn't know you earned that much money. That's what kids used to say. I don't know why theirs would be any different.
(END VIDEO CLIP)
ROMANS: Of course, speculation they make millions of dollars. He said we would know maybe in a month.
DOBBS: Did the interim chairman the reason they're not divulging to the public what the five top executives of the what the New York Exchange make he's concerned about what their children would think?
ROMANS: I think he was trying to stall a bit. We asked a couple weeks ago, Lou, Carl McCall he said he would ask the board to find out what everybody made, and now we're still continuing to ask that question.
So John Reed said maybe it a month.
DOBBS: And reform at the big board but not to include being divested regulatory power, turning it over to the SEC.
ROMANS: Doesn't sound like they want to do that.
DOBBS: Sounds like tepid early turns at the big board, perhaps a bolder moves wait.
ROMANS: The final report has not been released but they're discussing 27 proposals.
DOBBS: Speaking of reform, the mutual fund industry, this just gets worse and worse.
ROMANS: Yes, we have been hearing about this all week and more on this today. Millennium Partners, a hedge fund in New York, a top trader has pleaded guilty to fraud. Citibank fired a Smith Barney broker for allegedly canceling trades after the market close. And earlier this week there was suspensions or job losses at Prudential and I Alliance Capital. On the Street, Lou, a lot of folks saying this is the just the beginning of all of this.
DOBBS: Well, after two years of corporate scandals and Wall Street reform, it doesn't feel like the beginning to me. Christine, thanks a lot, good work.
Take a look now at some of "your thoughts," from Russia, Ohio,"Thanks Lou for your Exporting America reports. I'm thankful that someone out there is speaking for all of us working stiffs in manufacturing. We used to be the backbone of America. Now were just the bottom line." That from Cindy Landsiedel.
From Hawaii, "Lou, how can someone who is illegal receive anything that is considered legal? I am so confused. It defeats our entire justice system. If they are considered illegal why are they still here?" Marion Basiliali.
And from Douglasville, Georgia, "Dear Lou, instead of a tax break why doesn't the government provide a tax incentive to companies to hire Americans and keep the jobs in the U.S." That from John Budahazy.
From Houghton, Michigan, "I believe most Americans would rather have greater job security than inexpensive imported furniture, clothes, and electronics. Buy American! The job you save may be your own!" Kevin McRae.
We appreciate "Your Thoughts." E-mail us at loudobbs@cnn.com. That's are show for tonight. For all of us here, good night from New York. "ANDERSON COOPER 360" is next.
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