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Lou Dobbs Tonight

California Fight to the Finish; White House Scrambles to Meet Investigation Deadline

Aired October 06, 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 Monday, October 6. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

It is the last chance for California campaigners. Some of the polls are narrowing. Many of the tempers are rising. And charges of dirty trash politics are flying.

Tonight, we'll bring you the very latest on the California recall election.

Bob Franken is covering Arnold Schwarzenegger's campaign from Los Angeles. Dan Lothian is reporting on Governor Gray Davis' campaign from Sacramento.

We begin our coverage tonight with Bob Franken in Los Angeles -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And, Lou, you use the polite term, trash politics. Out here, the proper term is puke campaigning. Remember that in case you want to be a Californian.

In any case, Californians will have their chance to finally decide how all this is going to go and how it's going to play out. And from the beginning, this has been about Arnold Schwarzenegger. The moment he announced on the "Jay Leno" show, it became really the story about, would he would be able to assume the governor's office in Sacramento, even though, of course, the fundamental story is whether Gray Davis will be recalled.

And as the polls are continuing to tighten, both candidates are saying that this could come down to the efforts to get out the vote favorable to them. So Schwarzenegger, every chance he gets, exhorted the crowd.

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GUBERNATORIAL CANDIDATE: We need everyone's vote. Each and every one, go out. Doesn't matter if you're a Democrat or a Republican. I need your help.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP) FRANKEN: And the polls, of course, as you pointed out, have tightened. Both the public polls and the ones that are private, the ones that are done for the campaigns, the fact of the matter, Lou, is, Arnold Schwarzenegger, nobody really knows how this is going to turn out, nor do they know how reliable the polls are, because there has never been an election like this -- Lou.

DOBBS: Bob, thank you very much -- Bob Franken from Los Angeles.

Governor Gray Davis today predicted he will win the recall vote, even though most polls suggest he is far behind Schwarzenegger. Davis is also attending to last-minute business. Yesterday, he signed a bill giving unions their most cherished wish, medical coverage for one million uninsured workers at the expense of employers.

Dan Lothian is following the Davis campaign and joins us now from Sacramento -- Dan.

DAN LOTHIAN, CNN CORRESPONDENT: Hello, Lou.

Well, it certainly has been a busy day for Governor Gray Davis and also for those who are fighting the recall and also pushing for the recall. Earlier today, here in Sacramento, there was a caravan of moving vans and large 18-wheeler trucks circling the capital. Of course, the statement there is that we need to help move Gray Davis out of the state capital, remove him from his job as governor.

Of course, on the sidewalks, as those trucks were going by, there were those who do support Governor Gray Davis. Davis, of course, as you mentioned, fighting to keep his job, is quite confident that he can do so. But does he need voters to come his way. He's taking part in a couple of get-out-the-vote rallies, one in San Francisco, another one later this evening in Los Angeles.

Now, earlier today, here in Sacramento, he met with young students. These were part of the Young Voter Forum. Of course, many of them are too young to vote. But he was urging them to go home and talk to their brothers and sisters and encourage their parents to vote against the recall. There was no mention when he was speaking to those young people about the controversy with Arnold Schwarzenegger. But he did, in response to one question, give his feelings about the recall.

(BEGIN VIDEO CLIP)

QUESTION: And being the governor and also a citizen of California, what do you think of this recall?

(LAUGHTER)

GOV. GRAY DAVIS (D), CALIFORNIA: What do I think of this recall? It is not my favorite subject.

(LAUGHTER)

DAVIS: And I am not for it. (END VIDEO CLIP)

LOTHIAN: Of course, that is an understatement.

Governor Gray Davis, of course, needs to rely on Democrats, and 27 percent of Democrats who have said in polls in the past that they do support the recall. He's hopeful that he can change their minds in this last full day before the vote -- Lou.

DOBBS: Dan, talking about the prediction from Gray Davis that he's going to win the recall election, if he believes that, why this last-minute flurry of appointments to judgeships and commissioners?

LOTHIAN: Perhaps it is somewhat of a hedge, just like Cruz Bustamante was a hedge, in case a Republican was going to get in.

But the Gray Davis campaign says, this is nothing unusual. He was out signing, as you mentioned earlier, that million-dollar health care plan for low or poor workers here in the state of California, surrounded by many high-profile Democrats. He has also been filling a number of key appointments. But the campaign, while it might have that appearance that he thinks he might have that possibility of not staying in his job, just going ahead and filling the positions with his friends and taking care of stuff that he wanted to do all along, they say this is just routine, nothing unusual here -- Lou.

DOBBS: Just routine in the final hours of the campaign before the election.

LOTHIAN: Nothing is routine.

DOBBS: Exactly, Dan. Dan Lothian from Sacramento, thank you.

Well, if you think California only has problems with its punch card voting machines, we can all think again. Tonight, new concerns about the latest election technology, computerized voting machines. Scientists say 10 percent of the machines in California do not produce paper printouts. That means it would be impossible to carry out a proper recount, should it be called for.

There are also concerns that hackers could break into those voting machines and vote more than once. But election officials in California say there have never been any known miscounts or fraud involving the machines.

There was a flurry of sometimes conflicting poll information tossed around by the candidates today. "A San Jose Mercury News"/Knight Ridder poll shows the number of people now saying they would definitely vote for the recall falling over the weekend.

I'm joined now by two of CNN's sharpest political analysts and reporters, senior political analyst Bill Schneider and colleague Judy Woodruff, anchor of "INSIDE POLITICS."

Let me start, if I may, with you, Judy.

These polls, conflicting information coming from them. Which, in your esteemed judgment, is the most reliable now?

JUDY WOODRUFF, CNN ANCHOR: Well, at this point, Lou, I think we have to take it all with a grain of salt.

Weekend polling, which is what these new numbers are, is notoriously unreliable. All we can really do at this point is look at the numbers over a trend. It was pretty clear going into the end of last week that Arnold Schwarzenegger had taken off, at least before those allegations about -- involving women came out on Thursday, he was a number of points ahead of Cruz Bustamante, the lieutenant governor, the lieutenant governor who was in second place.

The percentage of people voting for the recall was well beyond those who were opposing the recall. It was looking like Gray Davis was likely to lose his job. Then, along, on Thursday, came those allegations. Since then, the numbers have clearly slowed. The momentum toward Schwarzenegger has slowed. There has been some drop- off among women. The Schwarzenegger people say it's not very much. The Davis people say it's more than that. We're just going to have to wait and see.

DOBBS: Bill Schneider, what's your take?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: My take is that the race is probably getting closer on both votes, namely, whether to recall Davis and whether to elect Schwarzenegger, but probably not close enough to turn it around.

And there is an important reason why. Almost two million Californians voted by absentee ballot early, before any of these accusations against Schwarzenegger became public. Their votes were cast. And unlike, say, "The Oakland Tribune" newspaper which endorsed Schwarzenegger and then, a couple of days ago, reversed it and took back its endorsement, those early voters can't take back their votes. So the way they voted is going to stand. And they were not affected by these late revelations.

DOBBS: I should say that we're now looking at pictures of Arnold Schwarzenegger and his wife, Maria Shriver, campaigning in Huntington Beach, California, as we are talking here, Judy and Bill.

Judy, let's turn to these reports. You said, Thursday, the allegations coming from the women, as reported by "The Los Angeles Times." Of course, there had been allegations from the outset. How big a deal is "The Los Angeles Times" reporting of this story so close? Is it causing a significant ripple, not only with the Schwarzenegger camp, but throughout the state?

WOODRUFF: Lou, it is having an effect. There is no doubt about it.

The newspaper says that it spent seven weeks investigating these allegations. The newspaper went out on its own. It says none of this information came from other candidates. As you know, the Schwarzenegger camp is pointing a finger at the Gray Davis camp, saying that they originated it. But "The L.A. Times"' editor and everyone up and down the line at the newspaper says: No, we did this on their own.

It is having an effect among women voters in the state. Certainly, among Davis polling, at least the numbers that I've seen that they've shared with us, indicate that there is some drop-off in Schwarzenegger's support among women. So it is having an effect.

Schwarzenegger himself, Lou, said in an interview last night that he didn't want to get into the specifics before the election. He said: I want to focus on the campaign. He said: I will deal with them after the election.

DOBBS: Bill?

SCHNEIDER: Well, this is giving Schwarzenegger an interesting issue, because he's always campaigned as the outsider. Even though he has surrounded himself by a lot of Sacramento political insiders, he is an actor, not a politician, never served in elected office.

And so people see him as the outsider. And he claims, this is the kind of politics that Gray Davis and the Democrats have practiced in the past to get Davis elected. He calls it puke politics, as Bob Franken said. And he's running against the press and he's running against the political insiders. And he's running against the political process and saying: If you're fed up with this kind of politics, vote for me.

Because the question raised by the stories was that they came out so late, a lot of voters say, it must be dirty tricks. Why did these women wait decades, years, decades, to come forward? Well, there probably were good reasons why they were frightened to come forward. Nevertheless, the fact that it came out at the last minute makes a lot of voters very suspicious.

DOBBS: Well, doesn't it make you suspicious? "The Los Angeles Times" -- I want to direct this question to both of you -- you are veteran political observers, as well as journalists. Five days before an election, from a paper that endorsed Gray Davis. That's straining credulity, isn't it?

WOODRUFF: Well, Lou, what you say is right. It does strain credulity on the surface.

Except, please consider that Arnold Schwarzenegger didn't get into this race until the 6th of August. The newspaper says it started these investigations based on a number of just allegations that were out there in the air. The newspaper decided to go on its own, spent seven weeks looking at these allegations, interviewing women. It left out a lot of information that it says was out there, because either it couldn't get women to talk or it didn't have the detail.

So, if you read through these stories, which I have done, the series of three stories, there is a considerable amount of detail here. I think it is very hard to just dismiss it out of hand.

DOBBS: No, I wasn't dismissing anything. What I was questioning is -- and as are a lot of people -- the commonsense approach to this, if I may. Five days before an election, the paper has endorsed Gray Davis, and to be coming out with this, and really with nothing new -- and four of their sources are anonymous still.

Bill, your take?

SCHNEIDER: Well, I'm not making any accusations, but most readers do not really see the difference between the editorial department of a newspaper and the news department.

Those who read "The Wall Street Journal" are perfectly aware that it has a very conservative editorial page. And that is separate from its news reporting. "The L.A. Times" and most papers that I know of have the same thing. The editorial page is separate from the news coverage. But that is lost on most readers, who think, if they endorsed Gray Davis, then everything in the news coverage must favor Gray Davis. That is a big problem.

Also, the late reporting of these findings is a very big problem. And the paper was very aware of a man named Bob Packwood. "The Washington Post" did an investigation of his past behavior. They came out with the results a month after he was reelected. And people were very angry that it took them that long.

DOBBS: There are a host of examples as well, Bill, of papers who have come with stories just before an election that would serve to suggest an opposite approach.

Let me ask you this. Did "The Los Angeles Times" assign attack teams to cover Gray Davis as well at the same time as Arnold Schwarzenegger?

Judy, do you know?

WOODRUFF: I can't answer that.

I do know that there were...

DOBBS: Bill?

WOODRUFF: There was investigative work being done. The difference is that, for Davis, he's been in office now for almost five years. So they've been reporting on him throughout that time.

DOBBS: Bill, do you know?

SCHNEIDER: Yes, I think that's true. They claim that they've been covering him very closely for many, many years now and they've done a lot of very critical pieces about Davis.

DOBBS: All right.

Bill Schneider, Judy Woodruff, we're looking forward to your coverage tomorrow from California. Thanks, guys.

WOODRUFF: Thanks, Lou, very much. DOBBS: Still ahead here: Wherever he finishes, one candidate has managed to stay above the fray in the California recall race. That is state Senator Tom McClintock. He's our guest tonight.

White House staff scrambling to meet a deadline to hand over documents about the leak of a CIA officer's name. Senior White House correspondent John King reports.

And a potential crisis in this country's health care system: Hospitals simply cannot recruit enough nurses, even though nearly 10 million people in this country are out of work.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Arnold Schwarzenegger's chief Republican rival is state Senator Tom McClintock. He says "The Los Angeles Times" stories and other reports about Schwarzenegger should be treated with a certain degree of skepticism, as he puts it, because they were brought up so late in the campaign. At the same time, Senator McClintock says those charges are very serious.

Tom McClintock joins us now.

Good to have you with us.

TOM MCCLINTOCK (R), CALIFORNIA GUBERNATORIAL CANDIDATE: Well, hi, Lou.

DOBBS: We have been talking about the number of polls and the conflicting information. Let's start with your judgment on these polls, what your polls are showing you.

MCCLINTOCK: Well, the frustrating thing is, in all the polls, Gallup, "L.A. Times," Field, the public, by a very large margin, rates me as the best qualified by a very large margin. They say I would do the best job as governor, but we're not able to translate that into votes. I'm still running in third place.

So my message to everybody in this final day of the campaign is, it is all right to vote your conscience. That's what you're supposed to do. And if everybody who thinks I would do the best job as governor actually votes for me, we have the makings of an upset.

DOBBS: High favorable ratings so far not translating into active support among likely voters. Is that when you're saying?

MCCLINTOCK: Yes, I think people are afraid, if they vote for me, they might get somebody they don't like. And, again, my response is, according to the same polls that have me in third place, if the folks who believe I would do the best job actually were voting for me, we would win it. So don't vote somebody's political calculations. Vote your own personal convictions.

This is the most important election we have had in this state in perhaps 100 years. And if there was ever a time to vote your conscience, it is now.

DOBBS: Well, have you talked about Schwarzenegger about possibly pulling out and supporting you?

MCCLINTOCK: Well, no, I've not had that opportunity, Lou.

DOBBS: Has he asked you to do the same for him here in the last 48, 72 hours?

MCCLINTOCK: Well, through surrogates, we keep getting that. But, again, I made a pledge at the very outset of this campaign I would see it through to the finish line.

In the last few days, we have gotten a flood of e-mails from people saying, thank God you stayed in the race. We need somebody that we can count, that we can believe in, to vote for.

DOBBS: Your polls, what do they show you about the impact of any of these late charges against Schwarzenegger?

MCCLINTOCK: Well, we only have tracking polls that run through Friday/Saturday. And that was starting to show a significant shift from Schwarzenegger to undecided.

DOBBS: So you think this is going to be a close election?

MCCLINTOCK: I don't know. This is an election unlike any I've ever seen. I've got no way to make predictions at this point.

DOBBS: Well, you're in awfully good company. None of us has ever seen anything like this ourselves.

Let me ask you this way. The issues have been explored. The budget, says Governor Davis, is now rectified. Certainly, there are issues about the cost of services and taxation. If it is not to be you, between Gray Davis and Arnold Schwarzenegger, whom would you prefer to see in Sacramento?

MCCLINTOCK: Well, I don't endorse opponents in an election I'm running. That's the reason I'm here.

I do have to take issue with one point. And that is, this budget is not in good condition. It is a rotting porch waiting to collapse. It is based upon, among other things, $4 billion of illegally raised car taxes. There was $2 billion borrowed for the pension fund that the courts have already ruled is unconstitutional. And on that very basis, another $11 billion in borrowing, I suspect, is about to be ruled unconstitutional.

The Performance Institute and the Reason Foundation just released a report today indicating that they're estimating at least $16.5 billion of budget deficit already and probably building to $30 billion by the end of the fiscal year. And the end of the fiscal year is still a long ways off.

DOBBS: Senator McClintock, I just want to point out, I was quoting Gray Davis in saying that was rectified.

MCCLINTOCK: I understand.

DOBBS: And I do, as we conclude here, Senator, want to say to you, best of luck tomorrow. And our compliments here for staying above the fray in what has been a well-frayed contest. Thank you very much.

MCCLINTOCK: Lou, thank you very much. Thank you.

DOBBS: Tonight's quote is on the impact of "The L.A. Times" article on Arnold Schwarzenegger's bad behavior toward women -- quote -- "It is too late for 'The Los Angeles Times'' charges to have much impact. People have made up their minds. This attack, coming as late it does from a newspaper that has been acting more like a cheerleader for Gray Davis than an objective source of information will be dismissed by most people as more Davis-like dirty politics. Is this the worst they could come up with? Ho-hum. After what we've been through? To his credit, Schwarzenegger apologized for behaving badly, So should 'The Los Angeles Times'" -- that from law professor and author, Democrat Susan Estrich.

And that brings us to the subject of our poll tonight. The question: Does "The Los Angeles Times"' support of Gray Davis influence your opinion on the paper's coverage of sexual harassment charges against Arnold Schwarzenegger, yes or no? You can vote on our Web site, CNN.com/Lou. We'll have the results for you later in the show.

Coming up: a major policy shift at the White House on the continuing missions in Iraq and Afghanistan; the White House under investigation for that CIA leak. Senior White House correspondent John King will have the story for us next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Central Command today said 318 American troops have now been killed in Iraq since the start of the war against Saddam Hussein; 199 Americans have been killed in action, 119 in accidents. And the number of wounded or injured troops has risen to 1,743, more than 1,400 of them wounded of them in action.

President Bush today said his administration is now reorganizing the efforts to rebuild Iraq. The announcement comes as President Bush faces strong criticism over the rising cost in American lives and taxpayer dollars. The White House insists, the Pentagon's role in the reconstruction effort will not be reduced.

Senior White House correspondent John King has the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, there is no question the president is announcing this shakeup at a time he is still trying to get the vote from Congress for that $87 billion in new wartime spending.

We have seen the president's poll ratings dip as well in recent weeks, as Americans are increasingly skeptical of the overseas mission in Iraq, the White House saying today that Condoleezza Rice, the president's national security adviser, will take a more high-profile role coordinating postwar policy in both Afghanistan and Iraq.

She will have more day-to-day decision-making in how that $87 billion is spent, as to how U.S. strategy is implemented on the ground. They are calling this rather matter-of-factly here at the White House a commonsense move, not a shakeup, the White House press secretary, Scott McClellan, saying, this in no way is a vote in displeasure, any sanctioning of either Ambassador Paul Bremer, the president's point man on the ground in Iraq, or the man Ambassador Bremer reports to, the defense secretary, Donald Rumsfeld.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Nothing changes in terms of the Coalition Provisional Authority and the Department of Defense. This is still being led by the Pentagon. And the Coalition Provisional Authority is carrying out their exact same duties they have been to help transfer responsibility to the Iraqi people as quickly as possible. That's -- they're often interagency groups that are formed for different matters like this.

(END VIDEO CLIP)

KING: But, in private conversations, senior officials here at the White House concede this point. They say the president wants one of his most trusted advisers, Dr. Rice, to take a more hands-on, a more assertive day-to-day role. And analysts outside the White House compound say, you simply do not do this in the middle of a policy unless you think something is wrong.

(BEGIN VIDEO CLIP)

MICHAEL O'HANLON, THE BROOKINGS INSTITUTION: You don't change things in midstream of this scale unless you really think you need a major overhaul. The White House is saying exactly what I would expect them to say, but it is not quite right.

This is obviously a major change of focus, recognizing the mission's not going that well and we need a broader interagency participation, not just direction, from the Pentagon and the office of Mr. Rumsfeld.

(END VIDEO CLIP)

KING: So, Lou, the president elevating the authority of one of his top aides when it comes to the policy in both Afghanistan and Iraq. Some say that is a good thing; it consolidates power here at the White House. Others say it also will make it much more difficult for this White House to avoid direct blame if things don't improve soon -- Lou. DOBBS: John, this administration seems to be getting sufficient blame currently, without considering even more later. But this looks clearly, with Condoleezza Rice, the national security adviser, effectively taking over, this is certainly diminishing of Secretary Rumsfeld. And it really doesn't elevate Secretary of State Colin Powell, does it?

KING: Well, that all depends how Dr. Rice, I guess, takes this new role.

What people here at the White House say is that she is the best person to listen to Colin Powell, to listen to Don Rumsfeld, to listen to other voices as this $87 billion is spent. Some of those resources, some of the expertise would be from departments outside of State and the Pentagon. So they're trying to characterize this as a coordinating role, although do some say privately, Lou, that the president wants more voices involved and that he wants somebody who is not afraid to seek more input and to come to him with the bad news. And they say he trust Dr. Rice most of all.

DOBBS: Let's turn to another area where the White House is talking as well as listening. The deadline for the White House staff to hand over those documents about the leak of a CIA officer's name is now one day away, 5:00 tomorrow. How many of those documents have been handed over so far?

KING: As to how many documents, Lou, we do not have the answer to that question. But the deadline is now fewer than 23 hours away. As of about one hour ago, 500 of the 2,000 White House staffers who are covered by this Justice Department order had either turned over documents or had signed a certification saying they had no documents relevant to this investigation.

White House aides tell us, many of them will be here late tonight going through their e-mail, through their phone logs, through other records to see if they have documents. Most of the people so far have simply signed a one-page certification saying they have no relevant documents. But we are told a number of aides have turned over some e- mails, no knowledge as yet that we have as to how relevant they are or whether there is any damaging information in that.

The president himself, Lou, said he expected all aides to comply in a timely manner. He called it a criminal matter today. And he once again voiced confidence in the Justice Department. The president said he very much wants to know who the leaker is.

DOBBS: John, thank you very much -- John King, our senior White House correspondent.

President Bush today also repeated that Israel has the right to defend itself. Mr. Bush's comments came one day after Israeli aircraft bombed a suspected training camp for terrorists in Syria. That attack followed a suicide bombing in Israel Saturday in which 19 people were killed. It is the first time that Israel has raided a target deep inside Syria in the past three decades. Israel said the facility was a training camp for the Islamic Jihad. But villagers said the camp was abandoned more than a decade ago. The United States say terrorist groups based in Syria continue to issue orders for attacks against Israel.

A shocking report tonight on your government at work and how easy it is for potential terrorists to buy U.S. government equipment to make biological weapons. A draft report from the General Accounting Office says government surplus items were sold on the Internet at rock-bottom prices. That equipment included such items as an evaporator, an incubator and a centrifuge, as well as protective suits.

The Defense Department agency responsible for the disposal of the equipment says all further sales to the public have been halted, pending a review.

Turning to another issue on the political economy, this week, we continue our series of special reports, "The great American Giveaway."

Tonight, we focus on what this country gives away to the rest of the world. No other country can match the United States in the amount of money it gives to humanitarian causes and Third World development.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): When the world needs money, the United States writes a check, the largest financial contributor to the U.N. since it began in 1945.

Last year, the United States still was giving more to the U.N. in money and food than any other country, half the World Food Program and 22 percent of World Health. But it is not just U.N. programs. It's also the World Trade Organization and others.

STEVEN RADELET, CENTER FOR GLOBAL DEVELOPMENT: The United States is the largest shareholder in the World Bank and in the IMF. And that -- so we provide more money. That also gives us a larger say in board meetings.

PILGRIM: The two largest increases in foreign aid came during the Marshall Plan, after World War II, and during the Kennedy era. But now President Bush has proposed the largest increases in foreign aid in 40 years -- two programs, one on AIDS, and another, the Millennium Challenge Account, would boost aid by 50 percent over current levels.

Protesters in the recent World Bank meeting in Cancun charged the United States with being insensitive to poor countries. But this huge proposed increase in funding is designed to help -- quote -- "responsible governments in developing countries."

Aid can be used as so-called soft power.

DAVID DOLLAR, WORLD BANK: If you look at recent years, you see some U.S. aid was clearly strategic, like aid for Pakistan.

PILGRIM: The United States cut aid in 1998 when Pakistan exploded an atomic bomb. But now, as the U.S. ally in the fight against al Qaeda, it ranks high on the list of aid recipients.

Yet much is for humanitarian reasons and to reduce poverty.

ANDREW NITSIOS, U.S. AGENCY FOR INTL. DEVELOPMENT: Does it have a lasting effect? Yes. If you go to the Highlands in Ethiopia and you ask people who save them, they'll say the American people did.

(END VIDEOTAPE)

PILGRIM: Now what do we get for all this? Stability in some countries, influence in others. But it's really hard to get credit for all that giving with the international community. It seems the United States gets more credit in places like the Highlands of Ethiopia than it does in the government offices of -- say, Paris, France -- Lou.

DOBBS: Kitty, thanks very much. Kitty Pilgrim.

Tomorrow on "The Great American Giveaway," healing the world. We take a look at the United States' many contributions to health care all around the world and what the United States receives in return. That's tomorrow night here. Please join us.

Coming up next, "Exporting America." Texas has a 1,200 mile border with Mexico. It has the second largest population of illegal aliens. I'll be talking about trade, border and immigration issues with the governor of Texas, Governor Rick Perry.

And hundreds of thousands of American jobs have been exported to China and elsewhere. Congressman Bernie Sanders tells us what he thinks the White House and Congress should do to fix the problem.

All of that and more ahead. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Now, "Exporting America."

DOBBS: While the United States gives away billions of dollars in aid to the rest of the world, we continue to export hundreds of thousands of jobs overseas. As we have been reporting here for months, this is a result of a disastrous national trade policy, or lack thereof.

Congressman Bernie Sanders of Vermont has introduced a bill to deal with part of the problem, a bill that would revoke permanent normalized trade relations with China.

He joins us now from Burlington, Vermont.

Congressman, good to have you with us. REP. BERNIE SANDERS (I), VERMONT: Thank you for -- nice to be with you, Lou.

DOBBS: Congressman, the -- the issue of China certainly is part of a -- a big part of it. Why are you focusing on China itself?

SANDERS: Well, I think our -- fundamentally, our trade policy is an absolute disaster. We have a $435 billion trade deficit. We have $120 billion trade deficit with China, which is costing us approximately 1 million jobs. And in the last three years, we have lost almost 3 million decent-paying manufacturing jobs.

And I think we have finally got to come to grips with the fact that American workers cannot and should not be asked to compete against desperate people in China who work for 30 or 40 or 50 cents an hour. It's unfair. That's not working and we are losing our manufacturing base as a result.

DOBBS: The permanent naturalized trade relations was enacted with China three years ago. At the time, we were told U.S. exports would blossom, the trade would build significantly. It just -- it just hasn't worked at all, even incrementally in that area.

SANDERS: No, in fact we're moving, Lou, precisely in the opposite direction. Today, our trade deficit is $120 billion. The National Association of Manufacturers' estimates that we're going to go over $300 billion in the next five years if current trends continue. In other words, it's getting worse.

I think clearly what happened is that corporate America has sold us a bill of goods. And that's part of the bill of goods they sold Reagan, they sold Bush the first, the sold Bill Clinton and they're selling this president as well.

What the fact is is that our current trade policy, especially with China, is working. If you are a large corporation, a big corporation who is prepared to throw American workers out on the street and move to China, where people work for terribly low wages -- they go to jail if they form a union, -- I guess for those people our trade policy is working. But it is not working for the middle class and working people of this country.

DOBBS: Well, the middle class and the working people of this country right now are finding it very difficult to find representation in Congress or any other part of this country right now in what has been the traditional mechanism for that representation.

Where in the world are working people in this country? The middle class, which is under assault by so many policies -- trade policies, immigration politics -- where are they going to find the representation, Congressman?

SANDERS: Well, Lou, that takes us to a whole other area. That is, the role big money plays in our political process. I mean, so long as large corporations and wealthy people are able to buy and sell politicians, I think you're quite right. The middle class and working families are not going to have a voice to represent them.

I am happy to tell you we just introduced this legislation last week to repeal our trade relationship with China. We already have 36 co-sponsors on the bill, including nine Republicans. So we're moving forward in a tripartisan way. And I think what you're beginning to see, despite all of the newspaper editorials telling us how great unfettered free trade is, despite Bush and Clinton and the big money interests telling us how great it is -- when members of Congress go back to their districts, whether it's the Midwest, whether it's the Northeast, whether it's the South or California -- do you know what they're seeing? They're seeing decimation. They're seeing decent- paying jobs being destroyed and workers now working for a fraction of the wages that they used to.

DOBBS: Congressman, we thank you very much for being here. Congressman Bernie Sanders, appreciate it.

SANDERS: Thank you very much, Lou.

DOBBS: Turning now to tonight's thought on the ways in which to govern prosperous state, whether it be California, whether it be Texas or this country, the thought tonight is centuries old. It does, however, I think, resonate today. "The budget should be balanced. Public debt should be reduced. The arrogance of officialdom should be tempered. And assistance to foreign lands should be curtailed, lest Rome become bankrupt." That from statesman -- Roman statesman Marcus Tullius Cicero.

Coming up next here, where the jobs are. Millions of people are out of work in this country. But some employers are begging for help, and they're offering big perks, big incentives and still no takers. Lisa Sylvester has the story for us next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: For months the show has been focusing on "Exporting America," the exportation of American jobs overseas, the influx of illegal aliens into the can country and the absence of a national immigration policy. The influx is also influencing every aspect of this country. We have focused extensively on the trade deficit as well.

My guest tonight at the forefront of all of those issues is the governor of the great state of Texas, Rick Perry.

Good to have you with us.

GOV. RICK PERRY (R), TEXAS: Good to be with you. Thank you.

DOBBS: Let's start with the issue of trade. 1200 mile border with Mexico. All of these issues, facing you scarcely, yet your economy is moving robustly.

How are you continuing with all of these issues? Is there an overarching policy that you're following?

PERRY: We have a different relationship with Mexico than a lot of other states do. You know, being a Texan, so many of Texas families, Texas businesses have ties with Mexico. They're our number one trading partner. So, the idea that Mexico somehow or another is less important or that we have different trading interests is just not correct for us. We do indeed have very important ties with Mexico. There is, as I shared with you, Canada, number two, and it falls off quickly after that. The idea that we somehow want to limit our trade with Mexico is out of the question. It is very important to have good working relationships with Mexico.

DOBBS: Of course trade, immigration, all of these issues are national issues that have to be contended with.

Is there -- in terms of illegal aliens, lets begin there, you have the second largest population in the country of any state in illegal aliens, how significant a burden burden?

Is it a burden to the state of Texas on your resources and your governments, your quality of life?

PERRY: It is a two-edged sword. There is a cost when you have that type of immigration, whether it's health care, whether it's education. But on the other side of it, particularly the service industries, there is no doubt about whether it is agriculture service industry, construction industry, those all benefiting from those workers that are in the state of Texas. So, we look at it as a balance. It is a difficult issue. It is a federal issue. You bet, we wish the federal government would do a better job of taking care of our borders. But by and large we have had this close, very complex relationship with Mexico always.

DOBBS: The relationship with the three border states, Arizona, Texas and California, are quite unique one to the other. They have begun, as a matter of fact in Arizona moving illegal aliens they are deporting to the state of Texas.

How big a problem is that for you?

PERRY: It is actually has worked well. From the standpoint of being able to move individuals through the communities, the initial work here has worked well. Again, these are difficult issues that are federal and state in nature. We try to work well with our neighboring states, but again wish we could get the federal government to do a better job of patrolling our borders.

DOBBS: The taxpayer is ultimately paying for the problem of illegal aliens. It is paying also for ultimately the dislocations created by exportations and trade deficits, nationally. Is it time for this Congress, this president, this administration to start rationalizing trade policy to start rationalizing immigration policy so that we are not dealing with a bleak matter in which you said it is a balance, a trade-off, but effectively the tax payer is paying for low income workers who are illegal who are influencing the direction of our society, our culture and economy.

PERRY: No doubt that I think you continue to work on this issue. Prior to September 11, we had some great hope that President Fox, President Bush, together could come up with workable immigration policies to address these issues. We obviously have great burden on many aspects, health care, again education, in the state of Texas. But it is not lost on me and not lost on Texans.

DOBBS: Obviously, it's not lost on you. You put forward an initiative to provide the children of illegal aliens who have graduated from high school a community college education. You're dealing with it as sensibly as any governor in the state certainly.

But the issue becomes with 7 million illegal aliens is a national policy this country has not decided, made a decision through it's elected representatives what to do with the children nationwide?

What to do in terms of identification, as to whom will be allowed to leave here and who will not?

How secure are our borders?

PERRY: Those are big issues. Some that quite frankly in the state of Texas we can't deal with. For instance, the identification issue. Having a national identity registry in Mexico is a must. Until Mexico comes to the table and, again...

DOBBS: But in Texas you don't recognize the (UNINTELLIGIBLE) for...

PERRY: No. I vetoed a drivers license bill, because I could not tell my citizens that I knew for a fact who these individuals would be. Until Mexico comes to the table and in good faith puts in place a registry system which is recognized by the United States and by Texas, I might add, we're not going to be making any progress. Certainly I want to make progress but this is a two-way street so to speak.

DOBBS: Maybe talk to the predecessor of your current job to get that fixed.

Governor Rick Perry, thank you for being here.

PERRY: You're welcome, Lou.

DOBBS: Appreciate it.

PERRY: Pleasure to be with you.

DOBBS: Well, we're not the only ones who noticed that illegal aliens are enjoying benefits usually reserved for American citizens.

Bruce Tinsly is a cartoonist who draws a comic strip called Mallard Fillmore and took recently took aim at illegal aliens who buy homes in the United States and receiving driver's licenses. Let's look at that cartoon.

I must be getting old Mallard says, as he reads the latest headline.

I can remember when Illegal meant illegal.

Well, we're all getting a little older.

In another example of exporting America, Carrier is cutting 1,200 jobs from its container refrigeration plant in Syracuse, New York. The division of United Technology say 80 percent of its container refrigeration business is now centered in Asia. The company says it is important to move its facilities close to its markets. Carrier maintains 1,600 jobs in Syracuse.

Factory jobs are increasingly hard to come by in this country. But there is another part of the country that is begging for workers. Not only can you find a job very easily, but you may be able to swing a cash bonus, even a new car or an education as part of the deal.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Mark Nicholson is an operating room nurse at Johns Hopkins Hospital. He enjoys the work and the benefits are too good to pass up. His employer is paying for half of his daughter's college tuition.

MARK NICHOLSON, NURSE: It is a nice incentive to stay here and to continue here until I have a couple more children to go to college. So, I have no urge to leave at this time.

SYLVESTER: Queen of Angels Hospital in Los Angeles offers nurses a choice of a signing bonus up $7,000, a new car lease, or trips. This is on top of an average starting salary as high as $65,000 a year.

ALBERT GREENE, CEO, QUEEN OF ANGELS HOSPITAL: Basically we are seeing a battle of the bonuses. Who can offer a higher cash bonus. Who can offer the most unique incentive. And basicly what's going on is we're stealing from each other.

SYLVESTER: In the last decade, there has been an exodus of nurses, fueled by burnout and more career choices being offered to women. In 1996, 438,000 licensed nurses were no longer working in the profession. By the year 2000 that number jumped 12 percent with 494,000 outside the field. The American Nurses Association says its existing nurses were taking advantage of the bonuses, hopping from hospital to hospital. But the overall pool has not increased.

ANNA GILMORE-HALL, AMERICAN NURSES ASSOCIATION: Unfortunately, what we have seen in some instances, are some Band-Aid approaches, offering incentive sign-on bonuses, offering SUVs to nurses, to come to a hospital. That's not going to address the nursing shortage.

SYLVESTER: That means retaining and recruiting more people to the field including men. Only 5 percent of nurses are male. Mark Nicholson was studying for his MBA a few years ago, but figured starting a business career would mean a cut in pay.

(END VIDEOTAPE)

SYLVESTER: This shortage is expected to worsen with an aging nurse population, aging Baby Boomers and advances in medicine that require specialized nursing skills. So unless more people enter the profession, this could have a huge impact on patient care -- Lou.

DOBBS: How about just raising those wages in a hurry?

SYLVESTER: Indeed, that's happening as well.

DOBBS: Lisa, thanks. Lisa Sylvester reporting from Washington.

And a reminder now to vote in our poll tonight. The question: "Does 'The Los Angles Times' support of Governor Gray Davis influence your opinion on the paper's coverage of sexual harassment charges against Arnold Schwarzenegger? Yes or no?" Vote on our Web site, cnn.com/lou. We'll have the results for you later here in the show.

When we continue, Wall Street built on last week's gains. Christine Romans will have the market for us and we'll share your thoughts about our continuing coverage of "Exporting America."

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Results of our poll tonight. The question -- "Does 'The Los Angles Times' support of Governor Gray Davis influence your opinion on the paper's coverage of sexual harassment charges against Arnold Schwarzenegger?" Thirty-seven percent of you said yes; 63 percent said no.

On Wall Street, the major averages rose for a fourth straight day. The Dow up almost 23, the Nasdaq gained almost 13, the S&P up 4.5 points.

Christine Romans now with the market -- Christine.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: And Lou, now the Dow is up about 3.5 percent so far for October.

DOBBS: (UNINTELLIGIBLE)

ROMANS: Yes. Tech stocks leading the advance today, but not even a billion shares traded hands at the Big Board. Oil prices and treasuries both rose.

Meanwhile, the monthlong mutual fund scandal claims more victims. At least nine firms now involved in a probe of market timing and illegal trading after hours. Mutual fund investors worry that this is just the beginning of the fallout from Eliot Spitzer's probe. The body count has now surpassed 20. Merrill fired three employees Friday, a day after a former head trader for hedge funds Millenium Partners pleaded guilty to securities fraud. Twelve Prudential brokers have lost their jobs. Two have been suspended at Alliance Capital. Three suspended at Fred Alger and one fired at Smith Barney just in about a week.

Criminal charges were brought earlier this month against a former Bank of America broker and Fidelity confirming that it has been subpoenaed in all this as is probably every mutual fund company out there. Eliot Spitzer is really going after this one.

Meanwhile, at the New York Stock Exchange, regulators will interview the traders of AIG shares. The specialist there is Spear, Leeds & Kellogg. This as the New York Stock Exchange responds to a claim that former chairman Dick Grasso may have influenced the trading of AIG shares. Its CEO, the AIG CEO, of course, was on the compensation committee for Mr. Grasso. So some questions raised there about conflicts, potential conflicts of interest there.

DOBBS: In other words, there's a conflict of the people that are being regulated or deciding the pay of the regulator?

ROMANS: That's what the critics say, yes.

DOBBS: All right. Christine, thanks. Christine Romans.

John Reed wants to change that right? No, he doesn't. We do.

Let's take a quick look at your thoughts.

From New Jersey, on "The Great American Giveaway," our series of special reports, "We now have the software that is the backbone of our major U.S. financial companies being written by foreign nationals in foreign countries. Someone should be regarding this as a possible avenue for a terrorist attack on our economy." Cheryl Michaels.

And from California, on "Exporting America," "Finding a job in the Bay Area is like finding WMDs in Iraq." That from Alex B. in San Jose.

From California on Schwarzenegger, "Why all the uproar about boorish behavior within the context of an industry in which the best known piece of furniture is a casting couch? After all, it's not as if Arnold had sex with an intern in the White House and then repeatedly lied about it to the American people." Ralph Barker.

And from Illinois on the CIA leak, "If this CIA debacle had happened on Clinton's watch, the Republicans would have screamed treason, Ken Starr would have spent another $62 million. " Nick Lewis.

And in response to my interview with the Rocket Friday, Lisa Barton of Massachusetts, "I just wanted to thank you for that piece on Roger Clemens. My husband and I have always been huge fans of Roger Clemens. Go Roger! Go Yankees!" You bet.

We love hearing from you. E-mail us at loudobbs@cnn.com.

That's our show for tonight. Thanks for being with us. Tomorrow, our special report, "The Great American Giveaway." And we'll have complete coverage, of course, of the California recall election.

For all of us here, good night from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





Meet Investigation Deadline>


Aired October 6, 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 Monday, October 6. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

It is the last chance for California campaigners. Some of the polls are narrowing. Many of the tempers are rising. And charges of dirty trash politics are flying.

Tonight, we'll bring you the very latest on the California recall election.

Bob Franken is covering Arnold Schwarzenegger's campaign from Los Angeles. Dan Lothian is reporting on Governor Gray Davis' campaign from Sacramento.

We begin our coverage tonight with Bob Franken in Los Angeles -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: And, Lou, you use the polite term, trash politics. Out here, the proper term is puke campaigning. Remember that in case you want to be a Californian.

In any case, Californians will have their chance to finally decide how all this is going to go and how it's going to play out. And from the beginning, this has been about Arnold Schwarzenegger. The moment he announced on the "Jay Leno" show, it became really the story about, would he would be able to assume the governor's office in Sacramento, even though, of course, the fundamental story is whether Gray Davis will be recalled.

And as the polls are continuing to tighten, both candidates are saying that this could come down to the efforts to get out the vote favorable to them. So Schwarzenegger, every chance he gets, exhorted the crowd.

(BEGIN VIDEO CLIP)

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GUBERNATORIAL CANDIDATE: We need everyone's vote. Each and every one, go out. Doesn't matter if you're a Democrat or a Republican. I need your help.

(CHEERING AND APPLAUSE)

(END VIDEO CLIP) FRANKEN: And the polls, of course, as you pointed out, have tightened. Both the public polls and the ones that are private, the ones that are done for the campaigns, the fact of the matter, Lou, is, Arnold Schwarzenegger, nobody really knows how this is going to turn out, nor do they know how reliable the polls are, because there has never been an election like this -- Lou.

DOBBS: Bob, thank you very much -- Bob Franken from Los Angeles.

Governor Gray Davis today predicted he will win the recall vote, even though most polls suggest he is far behind Schwarzenegger. Davis is also attending to last-minute business. Yesterday, he signed a bill giving unions their most cherished wish, medical coverage for one million uninsured workers at the expense of employers.

Dan Lothian is following the Davis campaign and joins us now from Sacramento -- Dan.

DAN LOTHIAN, CNN CORRESPONDENT: Hello, Lou.

Well, it certainly has been a busy day for Governor Gray Davis and also for those who are fighting the recall and also pushing for the recall. Earlier today, here in Sacramento, there was a caravan of moving vans and large 18-wheeler trucks circling the capital. Of course, the statement there is that we need to help move Gray Davis out of the state capital, remove him from his job as governor.

Of course, on the sidewalks, as those trucks were going by, there were those who do support Governor Gray Davis. Davis, of course, as you mentioned, fighting to keep his job, is quite confident that he can do so. But does he need voters to come his way. He's taking part in a couple of get-out-the-vote rallies, one in San Francisco, another one later this evening in Los Angeles.

Now, earlier today, here in Sacramento, he met with young students. These were part of the Young Voter Forum. Of course, many of them are too young to vote. But he was urging them to go home and talk to their brothers and sisters and encourage their parents to vote against the recall. There was no mention when he was speaking to those young people about the controversy with Arnold Schwarzenegger. But he did, in response to one question, give his feelings about the recall.

(BEGIN VIDEO CLIP)

QUESTION: And being the governor and also a citizen of California, what do you think of this recall?

(LAUGHTER)

GOV. GRAY DAVIS (D), CALIFORNIA: What do I think of this recall? It is not my favorite subject.

(LAUGHTER)

DAVIS: And I am not for it. (END VIDEO CLIP)

LOTHIAN: Of course, that is an understatement.

Governor Gray Davis, of course, needs to rely on Democrats, and 27 percent of Democrats who have said in polls in the past that they do support the recall. He's hopeful that he can change their minds in this last full day before the vote -- Lou.

DOBBS: Dan, talking about the prediction from Gray Davis that he's going to win the recall election, if he believes that, why this last-minute flurry of appointments to judgeships and commissioners?

LOTHIAN: Perhaps it is somewhat of a hedge, just like Cruz Bustamante was a hedge, in case a Republican was going to get in.

But the Gray Davis campaign says, this is nothing unusual. He was out signing, as you mentioned earlier, that million-dollar health care plan for low or poor workers here in the state of California, surrounded by many high-profile Democrats. He has also been filling a number of key appointments. But the campaign, while it might have that appearance that he thinks he might have that possibility of not staying in his job, just going ahead and filling the positions with his friends and taking care of stuff that he wanted to do all along, they say this is just routine, nothing unusual here -- Lou.

DOBBS: Just routine in the final hours of the campaign before the election.

LOTHIAN: Nothing is routine.

DOBBS: Exactly, Dan. Dan Lothian from Sacramento, thank you.

Well, if you think California only has problems with its punch card voting machines, we can all think again. Tonight, new concerns about the latest election technology, computerized voting machines. Scientists say 10 percent of the machines in California do not produce paper printouts. That means it would be impossible to carry out a proper recount, should it be called for.

There are also concerns that hackers could break into those voting machines and vote more than once. But election officials in California say there have never been any known miscounts or fraud involving the machines.

There was a flurry of sometimes conflicting poll information tossed around by the candidates today. "A San Jose Mercury News"/Knight Ridder poll shows the number of people now saying they would definitely vote for the recall falling over the weekend.

I'm joined now by two of CNN's sharpest political analysts and reporters, senior political analyst Bill Schneider and colleague Judy Woodruff, anchor of "INSIDE POLITICS."

Let me start, if I may, with you, Judy.

These polls, conflicting information coming from them. Which, in your esteemed judgment, is the most reliable now?

JUDY WOODRUFF, CNN ANCHOR: Well, at this point, Lou, I think we have to take it all with a grain of salt.

Weekend polling, which is what these new numbers are, is notoriously unreliable. All we can really do at this point is look at the numbers over a trend. It was pretty clear going into the end of last week that Arnold Schwarzenegger had taken off, at least before those allegations about -- involving women came out on Thursday, he was a number of points ahead of Cruz Bustamante, the lieutenant governor, the lieutenant governor who was in second place.

The percentage of people voting for the recall was well beyond those who were opposing the recall. It was looking like Gray Davis was likely to lose his job. Then, along, on Thursday, came those allegations. Since then, the numbers have clearly slowed. The momentum toward Schwarzenegger has slowed. There has been some drop- off among women. The Schwarzenegger people say it's not very much. The Davis people say it's more than that. We're just going to have to wait and see.

DOBBS: Bill Schneider, what's your take?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: My take is that the race is probably getting closer on both votes, namely, whether to recall Davis and whether to elect Schwarzenegger, but probably not close enough to turn it around.

And there is an important reason why. Almost two million Californians voted by absentee ballot early, before any of these accusations against Schwarzenegger became public. Their votes were cast. And unlike, say, "The Oakland Tribune" newspaper which endorsed Schwarzenegger and then, a couple of days ago, reversed it and took back its endorsement, those early voters can't take back their votes. So the way they voted is going to stand. And they were not affected by these late revelations.

DOBBS: I should say that we're now looking at pictures of Arnold Schwarzenegger and his wife, Maria Shriver, campaigning in Huntington Beach, California, as we are talking here, Judy and Bill.

Judy, let's turn to these reports. You said, Thursday, the allegations coming from the women, as reported by "The Los Angeles Times." Of course, there had been allegations from the outset. How big a deal is "The Los Angeles Times" reporting of this story so close? Is it causing a significant ripple, not only with the Schwarzenegger camp, but throughout the state?

WOODRUFF: Lou, it is having an effect. There is no doubt about it.

The newspaper says that it spent seven weeks investigating these allegations. The newspaper went out on its own. It says none of this information came from other candidates. As you know, the Schwarzenegger camp is pointing a finger at the Gray Davis camp, saying that they originated it. But "The L.A. Times"' editor and everyone up and down the line at the newspaper says: No, we did this on their own.

It is having an effect among women voters in the state. Certainly, among Davis polling, at least the numbers that I've seen that they've shared with us, indicate that there is some drop-off in Schwarzenegger's support among women. So it is having an effect.

Schwarzenegger himself, Lou, said in an interview last night that he didn't want to get into the specifics before the election. He said: I want to focus on the campaign. He said: I will deal with them after the election.

DOBBS: Bill?

SCHNEIDER: Well, this is giving Schwarzenegger an interesting issue, because he's always campaigned as the outsider. Even though he has surrounded himself by a lot of Sacramento political insiders, he is an actor, not a politician, never served in elected office.

And so people see him as the outsider. And he claims, this is the kind of politics that Gray Davis and the Democrats have practiced in the past to get Davis elected. He calls it puke politics, as Bob Franken said. And he's running against the press and he's running against the political insiders. And he's running against the political process and saying: If you're fed up with this kind of politics, vote for me.

Because the question raised by the stories was that they came out so late, a lot of voters say, it must be dirty tricks. Why did these women wait decades, years, decades, to come forward? Well, there probably were good reasons why they were frightened to come forward. Nevertheless, the fact that it came out at the last minute makes a lot of voters very suspicious.

DOBBS: Well, doesn't it make you suspicious? "The Los Angeles Times" -- I want to direct this question to both of you -- you are veteran political observers, as well as journalists. Five days before an election, from a paper that endorsed Gray Davis. That's straining credulity, isn't it?

WOODRUFF: Well, Lou, what you say is right. It does strain credulity on the surface.

Except, please consider that Arnold Schwarzenegger didn't get into this race until the 6th of August. The newspaper says it started these investigations based on a number of just allegations that were out there in the air. The newspaper decided to go on its own, spent seven weeks looking at these allegations, interviewing women. It left out a lot of information that it says was out there, because either it couldn't get women to talk or it didn't have the detail.

So, if you read through these stories, which I have done, the series of three stories, there is a considerable amount of detail here. I think it is very hard to just dismiss it out of hand.

DOBBS: No, I wasn't dismissing anything. What I was questioning is -- and as are a lot of people -- the commonsense approach to this, if I may. Five days before an election, the paper has endorsed Gray Davis, and to be coming out with this, and really with nothing new -- and four of their sources are anonymous still.

Bill, your take?

SCHNEIDER: Well, I'm not making any accusations, but most readers do not really see the difference between the editorial department of a newspaper and the news department.

Those who read "The Wall Street Journal" are perfectly aware that it has a very conservative editorial page. And that is separate from its news reporting. "The L.A. Times" and most papers that I know of have the same thing. The editorial page is separate from the news coverage. But that is lost on most readers, who think, if they endorsed Gray Davis, then everything in the news coverage must favor Gray Davis. That is a big problem.

Also, the late reporting of these findings is a very big problem. And the paper was very aware of a man named Bob Packwood. "The Washington Post" did an investigation of his past behavior. They came out with the results a month after he was reelected. And people were very angry that it took them that long.

DOBBS: There are a host of examples as well, Bill, of papers who have come with stories just before an election that would serve to suggest an opposite approach.

Let me ask you this. Did "The Los Angeles Times" assign attack teams to cover Gray Davis as well at the same time as Arnold Schwarzenegger?

Judy, do you know?

WOODRUFF: I can't answer that.

I do know that there were...

DOBBS: Bill?

WOODRUFF: There was investigative work being done. The difference is that, for Davis, he's been in office now for almost five years. So they've been reporting on him throughout that time.

DOBBS: Bill, do you know?

SCHNEIDER: Yes, I think that's true. They claim that they've been covering him very closely for many, many years now and they've done a lot of very critical pieces about Davis.

DOBBS: All right.

Bill Schneider, Judy Woodruff, we're looking forward to your coverage tomorrow from California. Thanks, guys.

WOODRUFF: Thanks, Lou, very much. DOBBS: Still ahead here: Wherever he finishes, one candidate has managed to stay above the fray in the California recall race. That is state Senator Tom McClintock. He's our guest tonight.

White House staff scrambling to meet a deadline to hand over documents about the leak of a CIA officer's name. Senior White House correspondent John King reports.

And a potential crisis in this country's health care system: Hospitals simply cannot recruit enough nurses, even though nearly 10 million people in this country are out of work.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Arnold Schwarzenegger's chief Republican rival is state Senator Tom McClintock. He says "The Los Angeles Times" stories and other reports about Schwarzenegger should be treated with a certain degree of skepticism, as he puts it, because they were brought up so late in the campaign. At the same time, Senator McClintock says those charges are very serious.

Tom McClintock joins us now.

Good to have you with us.

TOM MCCLINTOCK (R), CALIFORNIA GUBERNATORIAL CANDIDATE: Well, hi, Lou.

DOBBS: We have been talking about the number of polls and the conflicting information. Let's start with your judgment on these polls, what your polls are showing you.

MCCLINTOCK: Well, the frustrating thing is, in all the polls, Gallup, "L.A. Times," Field, the public, by a very large margin, rates me as the best qualified by a very large margin. They say I would do the best job as governor, but we're not able to translate that into votes. I'm still running in third place.

So my message to everybody in this final day of the campaign is, it is all right to vote your conscience. That's what you're supposed to do. And if everybody who thinks I would do the best job as governor actually votes for me, we have the makings of an upset.

DOBBS: High favorable ratings so far not translating into active support among likely voters. Is that when you're saying?

MCCLINTOCK: Yes, I think people are afraid, if they vote for me, they might get somebody they don't like. And, again, my response is, according to the same polls that have me in third place, if the folks who believe I would do the best job actually were voting for me, we would win it. So don't vote somebody's political calculations. Vote your own personal convictions.

This is the most important election we have had in this state in perhaps 100 years. And if there was ever a time to vote your conscience, it is now.

DOBBS: Well, have you talked about Schwarzenegger about possibly pulling out and supporting you?

MCCLINTOCK: Well, no, I've not had that opportunity, Lou.

DOBBS: Has he asked you to do the same for him here in the last 48, 72 hours?

MCCLINTOCK: Well, through surrogates, we keep getting that. But, again, I made a pledge at the very outset of this campaign I would see it through to the finish line.

In the last few days, we have gotten a flood of e-mails from people saying, thank God you stayed in the race. We need somebody that we can count, that we can believe in, to vote for.

DOBBS: Your polls, what do they show you about the impact of any of these late charges against Schwarzenegger?

MCCLINTOCK: Well, we only have tracking polls that run through Friday/Saturday. And that was starting to show a significant shift from Schwarzenegger to undecided.

DOBBS: So you think this is going to be a close election?

MCCLINTOCK: I don't know. This is an election unlike any I've ever seen. I've got no way to make predictions at this point.

DOBBS: Well, you're in awfully good company. None of us has ever seen anything like this ourselves.

Let me ask you this way. The issues have been explored. The budget, says Governor Davis, is now rectified. Certainly, there are issues about the cost of services and taxation. If it is not to be you, between Gray Davis and Arnold Schwarzenegger, whom would you prefer to see in Sacramento?

MCCLINTOCK: Well, I don't endorse opponents in an election I'm running. That's the reason I'm here.

I do have to take issue with one point. And that is, this budget is not in good condition. It is a rotting porch waiting to collapse. It is based upon, among other things, $4 billion of illegally raised car taxes. There was $2 billion borrowed for the pension fund that the courts have already ruled is unconstitutional. And on that very basis, another $11 billion in borrowing, I suspect, is about to be ruled unconstitutional.

The Performance Institute and the Reason Foundation just released a report today indicating that they're estimating at least $16.5 billion of budget deficit already and probably building to $30 billion by the end of the fiscal year. And the end of the fiscal year is still a long ways off.

DOBBS: Senator McClintock, I just want to point out, I was quoting Gray Davis in saying that was rectified.

MCCLINTOCK: I understand.

DOBBS: And I do, as we conclude here, Senator, want to say to you, best of luck tomorrow. And our compliments here for staying above the fray in what has been a well-frayed contest. Thank you very much.

MCCLINTOCK: Lou, thank you very much. Thank you.

DOBBS: Tonight's quote is on the impact of "The L.A. Times" article on Arnold Schwarzenegger's bad behavior toward women -- quote -- "It is too late for 'The Los Angeles Times'' charges to have much impact. People have made up their minds. This attack, coming as late it does from a newspaper that has been acting more like a cheerleader for Gray Davis than an objective source of information will be dismissed by most people as more Davis-like dirty politics. Is this the worst they could come up with? Ho-hum. After what we've been through? To his credit, Schwarzenegger apologized for behaving badly, So should 'The Los Angeles Times'" -- that from law professor and author, Democrat Susan Estrich.

And that brings us to the subject of our poll tonight. The question: Does "The Los Angeles Times"' support of Gray Davis influence your opinion on the paper's coverage of sexual harassment charges against Arnold Schwarzenegger, yes or no? You can vote on our Web site, CNN.com/Lou. We'll have the results for you later in the show.

Coming up: a major policy shift at the White House on the continuing missions in Iraq and Afghanistan; the White House under investigation for that CIA leak. Senior White House correspondent John King will have the story for us next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Central Command today said 318 American troops have now been killed in Iraq since the start of the war against Saddam Hussein; 199 Americans have been killed in action, 119 in accidents. And the number of wounded or injured troops has risen to 1,743, more than 1,400 of them wounded of them in action.

President Bush today said his administration is now reorganizing the efforts to rebuild Iraq. The announcement comes as President Bush faces strong criticism over the rising cost in American lives and taxpayer dollars. The White House insists, the Pentagon's role in the reconstruction effort will not be reduced.

Senior White House correspondent John King has the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, there is no question the president is announcing this shakeup at a time he is still trying to get the vote from Congress for that $87 billion in new wartime spending.

We have seen the president's poll ratings dip as well in recent weeks, as Americans are increasingly skeptical of the overseas mission in Iraq, the White House saying today that Condoleezza Rice, the president's national security adviser, will take a more high-profile role coordinating postwar policy in both Afghanistan and Iraq.

She will have more day-to-day decision-making in how that $87 billion is spent, as to how U.S. strategy is implemented on the ground. They are calling this rather matter-of-factly here at the White House a commonsense move, not a shakeup, the White House press secretary, Scott McClellan, saying, this in no way is a vote in displeasure, any sanctioning of either Ambassador Paul Bremer, the president's point man on the ground in Iraq, or the man Ambassador Bremer reports to, the defense secretary, Donald Rumsfeld.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Nothing changes in terms of the Coalition Provisional Authority and the Department of Defense. This is still being led by the Pentagon. And the Coalition Provisional Authority is carrying out their exact same duties they have been to help transfer responsibility to the Iraqi people as quickly as possible. That's -- they're often interagency groups that are formed for different matters like this.

(END VIDEO CLIP)

KING: But, in private conversations, senior officials here at the White House concede this point. They say the president wants one of his most trusted advisers, Dr. Rice, to take a more hands-on, a more assertive day-to-day role. And analysts outside the White House compound say, you simply do not do this in the middle of a policy unless you think something is wrong.

(BEGIN VIDEO CLIP)

MICHAEL O'HANLON, THE BROOKINGS INSTITUTION: You don't change things in midstream of this scale unless you really think you need a major overhaul. The White House is saying exactly what I would expect them to say, but it is not quite right.

This is obviously a major change of focus, recognizing the mission's not going that well and we need a broader interagency participation, not just direction, from the Pentagon and the office of Mr. Rumsfeld.

(END VIDEO CLIP)

KING: So, Lou, the president elevating the authority of one of his top aides when it comes to the policy in both Afghanistan and Iraq. Some say that is a good thing; it consolidates power here at the White House. Others say it also will make it much more difficult for this White House to avoid direct blame if things don't improve soon -- Lou. DOBBS: John, this administration seems to be getting sufficient blame currently, without considering even more later. But this looks clearly, with Condoleezza Rice, the national security adviser, effectively taking over, this is certainly diminishing of Secretary Rumsfeld. And it really doesn't elevate Secretary of State Colin Powell, does it?

KING: Well, that all depends how Dr. Rice, I guess, takes this new role.

What people here at the White House say is that she is the best person to listen to Colin Powell, to listen to Don Rumsfeld, to listen to other voices as this $87 billion is spent. Some of those resources, some of the expertise would be from departments outside of State and the Pentagon. So they're trying to characterize this as a coordinating role, although do some say privately, Lou, that the president wants more voices involved and that he wants somebody who is not afraid to seek more input and to come to him with the bad news. And they say he trust Dr. Rice most of all.

DOBBS: Let's turn to another area where the White House is talking as well as listening. The deadline for the White House staff to hand over those documents about the leak of a CIA officer's name is now one day away, 5:00 tomorrow. How many of those documents have been handed over so far?

KING: As to how many documents, Lou, we do not have the answer to that question. But the deadline is now fewer than 23 hours away. As of about one hour ago, 500 of the 2,000 White House staffers who are covered by this Justice Department order had either turned over documents or had signed a certification saying they had no documents relevant to this investigation.

White House aides tell us, many of them will be here late tonight going through their e-mail, through their phone logs, through other records to see if they have documents. Most of the people so far have simply signed a one-page certification saying they have no relevant documents. But we are told a number of aides have turned over some e- mails, no knowledge as yet that we have as to how relevant they are or whether there is any damaging information in that.

The president himself, Lou, said he expected all aides to comply in a timely manner. He called it a criminal matter today. And he once again voiced confidence in the Justice Department. The president said he very much wants to know who the leaker is.

DOBBS: John, thank you very much -- John King, our senior White House correspondent.

President Bush today also repeated that Israel has the right to defend itself. Mr. Bush's comments came one day after Israeli aircraft bombed a suspected training camp for terrorists in Syria. That attack followed a suicide bombing in Israel Saturday in which 19 people were killed. It is the first time that Israel has raided a target deep inside Syria in the past three decades. Israel said the facility was a training camp for the Islamic Jihad. But villagers said the camp was abandoned more than a decade ago. The United States say terrorist groups based in Syria continue to issue orders for attacks against Israel.

A shocking report tonight on your government at work and how easy it is for potential terrorists to buy U.S. government equipment to make biological weapons. A draft report from the General Accounting Office says government surplus items were sold on the Internet at rock-bottom prices. That equipment included such items as an evaporator, an incubator and a centrifuge, as well as protective suits.

The Defense Department agency responsible for the disposal of the equipment says all further sales to the public have been halted, pending a review.

Turning to another issue on the political economy, this week, we continue our series of special reports, "The great American Giveaway."

Tonight, we focus on what this country gives away to the rest of the world. No other country can match the United States in the amount of money it gives to humanitarian causes and Third World development.

Kitty Pilgrim has the story.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): When the world needs money, the United States writes a check, the largest financial contributor to the U.N. since it began in 1945.

Last year, the United States still was giving more to the U.N. in money and food than any other country, half the World Food Program and 22 percent of World Health. But it is not just U.N. programs. It's also the World Trade Organization and others.

STEVEN RADELET, CENTER FOR GLOBAL DEVELOPMENT: The United States is the largest shareholder in the World Bank and in the IMF. And that -- so we provide more money. That also gives us a larger say in board meetings.

PILGRIM: The two largest increases in foreign aid came during the Marshall Plan, after World War II, and during the Kennedy era. But now President Bush has proposed the largest increases in foreign aid in 40 years -- two programs, one on AIDS, and another, the Millennium Challenge Account, would boost aid by 50 percent over current levels.

Protesters in the recent World Bank meeting in Cancun charged the United States with being insensitive to poor countries. But this huge proposed increase in funding is designed to help -- quote -- "responsible governments in developing countries."

Aid can be used as so-called soft power.

DAVID DOLLAR, WORLD BANK: If you look at recent years, you see some U.S. aid was clearly strategic, like aid for Pakistan.

PILGRIM: The United States cut aid in 1998 when Pakistan exploded an atomic bomb. But now, as the U.S. ally in the fight against al Qaeda, it ranks high on the list of aid recipients.

Yet much is for humanitarian reasons and to reduce poverty.

ANDREW NITSIOS, U.S. AGENCY FOR INTL. DEVELOPMENT: Does it have a lasting effect? Yes. If you go to the Highlands in Ethiopia and you ask people who save them, they'll say the American people did.

(END VIDEOTAPE)

PILGRIM: Now what do we get for all this? Stability in some countries, influence in others. But it's really hard to get credit for all that giving with the international community. It seems the United States gets more credit in places like the Highlands of Ethiopia than it does in the government offices of -- say, Paris, France -- Lou.

DOBBS: Kitty, thanks very much. Kitty Pilgrim.

Tomorrow on "The Great American Giveaway," healing the world. We take a look at the United States' many contributions to health care all around the world and what the United States receives in return. That's tomorrow night here. Please join us.

Coming up next, "Exporting America." Texas has a 1,200 mile border with Mexico. It has the second largest population of illegal aliens. I'll be talking about trade, border and immigration issues with the governor of Texas, Governor Rick Perry.

And hundreds of thousands of American jobs have been exported to China and elsewhere. Congressman Bernie Sanders tells us what he thinks the White House and Congress should do to fix the problem.

All of that and more ahead. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Now, "Exporting America."

DOBBS: While the United States gives away billions of dollars in aid to the rest of the world, we continue to export hundreds of thousands of jobs overseas. As we have been reporting here for months, this is a result of a disastrous national trade policy, or lack thereof.

Congressman Bernie Sanders of Vermont has introduced a bill to deal with part of the problem, a bill that would revoke permanent normalized trade relations with China.

He joins us now from Burlington, Vermont.

Congressman, good to have you with us. REP. BERNIE SANDERS (I), VERMONT: Thank you for -- nice to be with you, Lou.

DOBBS: Congressman, the -- the issue of China certainly is part of a -- a big part of it. Why are you focusing on China itself?

SANDERS: Well, I think our -- fundamentally, our trade policy is an absolute disaster. We have a $435 billion trade deficit. We have $120 billion trade deficit with China, which is costing us approximately 1 million jobs. And in the last three years, we have lost almost 3 million decent-paying manufacturing jobs.

And I think we have finally got to come to grips with the fact that American workers cannot and should not be asked to compete against desperate people in China who work for 30 or 40 or 50 cents an hour. It's unfair. That's not working and we are losing our manufacturing base as a result.

DOBBS: The permanent naturalized trade relations was enacted with China three years ago. At the time, we were told U.S. exports would blossom, the trade would build significantly. It just -- it just hasn't worked at all, even incrementally in that area.

SANDERS: No, in fact we're moving, Lou, precisely in the opposite direction. Today, our trade deficit is $120 billion. The National Association of Manufacturers' estimates that we're going to go over $300 billion in the next five years if current trends continue. In other words, it's getting worse.

I think clearly what happened is that corporate America has sold us a bill of goods. And that's part of the bill of goods they sold Reagan, they sold Bush the first, the sold Bill Clinton and they're selling this president as well.

What the fact is is that our current trade policy, especially with China, is working. If you are a large corporation, a big corporation who is prepared to throw American workers out on the street and move to China, where people work for terribly low wages -- they go to jail if they form a union, -- I guess for those people our trade policy is working. But it is not working for the middle class and working people of this country.

DOBBS: Well, the middle class and the working people of this country right now are finding it very difficult to find representation in Congress or any other part of this country right now in what has been the traditional mechanism for that representation.

Where in the world are working people in this country? The middle class, which is under assault by so many policies -- trade policies, immigration politics -- where are they going to find the representation, Congressman?

SANDERS: Well, Lou, that takes us to a whole other area. That is, the role big money plays in our political process. I mean, so long as large corporations and wealthy people are able to buy and sell politicians, I think you're quite right. The middle class and working families are not going to have a voice to represent them.

I am happy to tell you we just introduced this legislation last week to repeal our trade relationship with China. We already have 36 co-sponsors on the bill, including nine Republicans. So we're moving forward in a tripartisan way. And I think what you're beginning to see, despite all of the newspaper editorials telling us how great unfettered free trade is, despite Bush and Clinton and the big money interests telling us how great it is -- when members of Congress go back to their districts, whether it's the Midwest, whether it's the Northeast, whether it's the South or California -- do you know what they're seeing? They're seeing decimation. They're seeing decent- paying jobs being destroyed and workers now working for a fraction of the wages that they used to.

DOBBS: Congressman, we thank you very much for being here. Congressman Bernie Sanders, appreciate it.

SANDERS: Thank you very much, Lou.

DOBBS: Turning now to tonight's thought on the ways in which to govern prosperous state, whether it be California, whether it be Texas or this country, the thought tonight is centuries old. It does, however, I think, resonate today. "The budget should be balanced. Public debt should be reduced. The arrogance of officialdom should be tempered. And assistance to foreign lands should be curtailed, lest Rome become bankrupt." That from statesman -- Roman statesman Marcus Tullius Cicero.

Coming up next here, where the jobs are. Millions of people are out of work in this country. But some employers are begging for help, and they're offering big perks, big incentives and still no takers. Lisa Sylvester has the story for us next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: For months the show has been focusing on "Exporting America," the exportation of American jobs overseas, the influx of illegal aliens into the can country and the absence of a national immigration policy. The influx is also influencing every aspect of this country. We have focused extensively on the trade deficit as well.

My guest tonight at the forefront of all of those issues is the governor of the great state of Texas, Rick Perry.

Good to have you with us.

GOV. RICK PERRY (R), TEXAS: Good to be with you. Thank you.

DOBBS: Let's start with the issue of trade. 1200 mile border with Mexico. All of these issues, facing you scarcely, yet your economy is moving robustly.

How are you continuing with all of these issues? Is there an overarching policy that you're following?

PERRY: We have a different relationship with Mexico than a lot of other states do. You know, being a Texan, so many of Texas families, Texas businesses have ties with Mexico. They're our number one trading partner. So, the idea that Mexico somehow or another is less important or that we have different trading interests is just not correct for us. We do indeed have very important ties with Mexico. There is, as I shared with you, Canada, number two, and it falls off quickly after that. The idea that we somehow want to limit our trade with Mexico is out of the question. It is very important to have good working relationships with Mexico.

DOBBS: Of course trade, immigration, all of these issues are national issues that have to be contended with.

Is there -- in terms of illegal aliens, lets begin there, you have the second largest population in the country of any state in illegal aliens, how significant a burden burden?

Is it a burden to the state of Texas on your resources and your governments, your quality of life?

PERRY: It is a two-edged sword. There is a cost when you have that type of immigration, whether it's health care, whether it's education. But on the other side of it, particularly the service industries, there is no doubt about whether it is agriculture service industry, construction industry, those all benefiting from those workers that are in the state of Texas. So, we look at it as a balance. It is a difficult issue. It is a federal issue. You bet, we wish the federal government would do a better job of taking care of our borders. But by and large we have had this close, very complex relationship with Mexico always.

DOBBS: The relationship with the three border states, Arizona, Texas and California, are quite unique one to the other. They have begun, as a matter of fact in Arizona moving illegal aliens they are deporting to the state of Texas.

How big a problem is that for you?

PERRY: It is actually has worked well. From the standpoint of being able to move individuals through the communities, the initial work here has worked well. Again, these are difficult issues that are federal and state in nature. We try to work well with our neighboring states, but again wish we could get the federal government to do a better job of patrolling our borders.

DOBBS: The taxpayer is ultimately paying for the problem of illegal aliens. It is paying also for ultimately the dislocations created by exportations and trade deficits, nationally. Is it time for this Congress, this president, this administration to start rationalizing trade policy to start rationalizing immigration policy so that we are not dealing with a bleak matter in which you said it is a balance, a trade-off, but effectively the tax payer is paying for low income workers who are illegal who are influencing the direction of our society, our culture and economy.

PERRY: No doubt that I think you continue to work on this issue. Prior to September 11, we had some great hope that President Fox, President Bush, together could come up with workable immigration policies to address these issues. We obviously have great burden on many aspects, health care, again education, in the state of Texas. But it is not lost on me and not lost on Texans.

DOBBS: Obviously, it's not lost on you. You put forward an initiative to provide the children of illegal aliens who have graduated from high school a community college education. You're dealing with it as sensibly as any governor in the state certainly.

But the issue becomes with 7 million illegal aliens is a national policy this country has not decided, made a decision through it's elected representatives what to do with the children nationwide?

What to do in terms of identification, as to whom will be allowed to leave here and who will not?

How secure are our borders?

PERRY: Those are big issues. Some that quite frankly in the state of Texas we can't deal with. For instance, the identification issue. Having a national identity registry in Mexico is a must. Until Mexico comes to the table and, again...

DOBBS: But in Texas you don't recognize the (UNINTELLIGIBLE) for...

PERRY: No. I vetoed a drivers license bill, because I could not tell my citizens that I knew for a fact who these individuals would be. Until Mexico comes to the table and in good faith puts in place a registry system which is recognized by the United States and by Texas, I might add, we're not going to be making any progress. Certainly I want to make progress but this is a two-way street so to speak.

DOBBS: Maybe talk to the predecessor of your current job to get that fixed.

Governor Rick Perry, thank you for being here.

PERRY: You're welcome, Lou.

DOBBS: Appreciate it.

PERRY: Pleasure to be with you.

DOBBS: Well, we're not the only ones who noticed that illegal aliens are enjoying benefits usually reserved for American citizens.

Bruce Tinsly is a cartoonist who draws a comic strip called Mallard Fillmore and took recently took aim at illegal aliens who buy homes in the United States and receiving driver's licenses. Let's look at that cartoon.

I must be getting old Mallard says, as he reads the latest headline.

I can remember when Illegal meant illegal.

Well, we're all getting a little older.

In another example of exporting America, Carrier is cutting 1,200 jobs from its container refrigeration plant in Syracuse, New York. The division of United Technology say 80 percent of its container refrigeration business is now centered in Asia. The company says it is important to move its facilities close to its markets. Carrier maintains 1,600 jobs in Syracuse.

Factory jobs are increasingly hard to come by in this country. But there is another part of the country that is begging for workers. Not only can you find a job very easily, but you may be able to swing a cash bonus, even a new car or an education as part of the deal.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Mark Nicholson is an operating room nurse at Johns Hopkins Hospital. He enjoys the work and the benefits are too good to pass up. His employer is paying for half of his daughter's college tuition.

MARK NICHOLSON, NURSE: It is a nice incentive to stay here and to continue here until I have a couple more children to go to college. So, I have no urge to leave at this time.

SYLVESTER: Queen of Angels Hospital in Los Angeles offers nurses a choice of a signing bonus up $7,000, a new car lease, or trips. This is on top of an average starting salary as high as $65,000 a year.

ALBERT GREENE, CEO, QUEEN OF ANGELS HOSPITAL: Basically we are seeing a battle of the bonuses. Who can offer a higher cash bonus. Who can offer the most unique incentive. And basicly what's going on is we're stealing from each other.

SYLVESTER: In the last decade, there has been an exodus of nurses, fueled by burnout and more career choices being offered to women. In 1996, 438,000 licensed nurses were no longer working in the profession. By the year 2000 that number jumped 12 percent with 494,000 outside the field. The American Nurses Association says its existing nurses were taking advantage of the bonuses, hopping from hospital to hospital. But the overall pool has not increased.

ANNA GILMORE-HALL, AMERICAN NURSES ASSOCIATION: Unfortunately, what we have seen in some instances, are some Band-Aid approaches, offering incentive sign-on bonuses, offering SUVs to nurses, to come to a hospital. That's not going to address the nursing shortage.

SYLVESTER: That means retaining and recruiting more people to the field including men. Only 5 percent of nurses are male. Mark Nicholson was studying for his MBA a few years ago, but figured starting a business career would mean a cut in pay.

(END VIDEOTAPE)

SYLVESTER: This shortage is expected to worsen with an aging nurse population, aging Baby Boomers and advances in medicine that require specialized nursing skills. So unless more people enter the profession, this could have a huge impact on patient care -- Lou.

DOBBS: How about just raising those wages in a hurry?

SYLVESTER: Indeed, that's happening as well.

DOBBS: Lisa, thanks. Lisa Sylvester reporting from Washington.

And a reminder now to vote in our poll tonight. The question: "Does 'The Los Angles Times' support of Governor Gray Davis influence your opinion on the paper's coverage of sexual harassment charges against Arnold Schwarzenegger? Yes or no?" Vote on our Web site, cnn.com/lou. We'll have the results for you later here in the show.

When we continue, Wall Street built on last week's gains. Christine Romans will have the market for us and we'll share your thoughts about our continuing coverage of "Exporting America."

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Results of our poll tonight. The question -- "Does 'The Los Angles Times' support of Governor Gray Davis influence your opinion on the paper's coverage of sexual harassment charges against Arnold Schwarzenegger?" Thirty-seven percent of you said yes; 63 percent said no.

On Wall Street, the major averages rose for a fourth straight day. The Dow up almost 23, the Nasdaq gained almost 13, the S&P up 4.5 points.

Christine Romans now with the market -- Christine.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: And Lou, now the Dow is up about 3.5 percent so far for October.

DOBBS: (UNINTELLIGIBLE)

ROMANS: Yes. Tech stocks leading the advance today, but not even a billion shares traded hands at the Big Board. Oil prices and treasuries both rose.

Meanwhile, the monthlong mutual fund scandal claims more victims. At least nine firms now involved in a probe of market timing and illegal trading after hours. Mutual fund investors worry that this is just the beginning of the fallout from Eliot Spitzer's probe. The body count has now surpassed 20. Merrill fired three employees Friday, a day after a former head trader for hedge funds Millenium Partners pleaded guilty to securities fraud. Twelve Prudential brokers have lost their jobs. Two have been suspended at Alliance Capital. Three suspended at Fred Alger and one fired at Smith Barney just in about a week.

Criminal charges were brought earlier this month against a former Bank of America broker and Fidelity confirming that it has been subpoenaed in all this as is probably every mutual fund company out there. Eliot Spitzer is really going after this one.

Meanwhile, at the New York Stock Exchange, regulators will interview the traders of AIG shares. The specialist there is Spear, Leeds & Kellogg. This as the New York Stock Exchange responds to a claim that former chairman Dick Grasso may have influenced the trading of AIG shares. Its CEO, the AIG CEO, of course, was on the compensation committee for Mr. Grasso. So some questions raised there about conflicts, potential conflicts of interest there.

DOBBS: In other words, there's a conflict of the people that are being regulated or deciding the pay of the regulator?

ROMANS: That's what the critics say, yes.

DOBBS: All right. Christine, thanks. Christine Romans.

John Reed wants to change that right? No, he doesn't. We do.

Let's take a quick look at your thoughts.

From New Jersey, on "The Great American Giveaway," our series of special reports, "We now have the software that is the backbone of our major U.S. financial companies being written by foreign nationals in foreign countries. Someone should be regarding this as a possible avenue for a terrorist attack on our economy." Cheryl Michaels.

And from California, on "Exporting America," "Finding a job in the Bay Area is like finding WMDs in Iraq." That from Alex B. in San Jose.

From California on Schwarzenegger, "Why all the uproar about boorish behavior within the context of an industry in which the best known piece of furniture is a casting couch? After all, it's not as if Arnold had sex with an intern in the White House and then repeatedly lied about it to the American people." Ralph Barker.

And from Illinois on the CIA leak, "If this CIA debacle had happened on Clinton's watch, the Republicans would have screamed treason, Ken Starr would have spent another $62 million. " Nick Lewis.

And in response to my interview with the Rocket Friday, Lisa Barton of Massachusetts, "I just wanted to thank you for that piece on Roger Clemens. My husband and I have always been huge fans of Roger Clemens. Go Roger! Go Yankees!" You bet.

We love hearing from you. E-mail us at loudobbs@cnn.com.

That's our show for tonight. Thanks for being with us. Tomorrow, our special report, "The Great American Giveaway." And we'll have complete coverage, of course, of the California recall election.

For all of us here, good night from New York.

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