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Lou Dobbs Tonight

Wal-Mart Faces Federal Crackdown on Illegal Workers; Congress Battles Bush Over Medicare Reform

Aired October 23, 2003 - 18:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, October 23. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

Federal agents today raided dozens of Wal-Mart stores in 21 states in a massive crackdown on workers who are illegal aliens. The agents arrested about 250 illegal aliens employed by cleaning contractors hired by Wal-Mart. Law enforcement sources say some Wal- Mart executives and store managers knew that members of the cleaning crews were illegal aliens. Federal agents also searched the headquarters of Wal-Mart in Arkansas.

These raids go to the heart of a problem that we've been reporting on here for months, the huge influx of illegal aliens into this country, which now number some 10 million.

Bill Tucker is here tonight and has the report.

BILL TUCKER, CNN CORRESPONDENT: Lou, low-cost goods made in overseas shops on the shelves and illegal aliens working inside the stores -- Wal-Mart says it didn't know. The feds say otherwise.

(BEGIN VIDEOTAPE)

TUCKER (voice-over): Federal grand jury indictments could be in Wal-Mart's future, government sources confirming, search warrants were issued and executed on Wal-Mart's Bentonville, Arkansas, headquarters. But the feds won't say what they were seeking, nor what was found.

However, one federal source says executives for the world's largest retailer knew of the illegal workers and that they had been recorded during surveillance, indicating that they knew their cleaning contractors used illegal alien workers.

The company responded quickly.

TOM WILLIAMS, WAL-MART SPOKESMAN: We're trying to understand the investigation. We're trying to understand what the INS is looking for. We're cooperating fully with them.

TUCKER: Wal-Mart's saying that it used more than 100 cleaning contractors to service more than 700 stores across the country and that it requires contractors to use legal workers, in other words, obey the law. But the law also creates a loophole for employers. Employers are only required to ask if workers' papers are in order. They are not required to verify the paperwork.

SCOTT FELDMAN, LABOR ATTORNEY: Once the employee completes the I-9 form, the law doesn't require any further investigation on the employee's part. The employer, in essence, can take whatever the employee puts down on that form at face value.

TUCKER: And in the case of Wal-Mart, the company could simply blame it on the contractor, which defies the point for many who are critical of current immigration policy. They note, there are an estimated 10 million illegal aliens in this country working in all sorts of industry, from construction, to meat packing, to retailing. And until the government gets serious about the law, they say little is going to change.

IRA MEHLMAN, FAIR: Until companies are made to understand that this is going to cost them significantly and that there is a good chance that they're going to get caught, why should they obey the law? Why should they hire Americans and pay them a decent living wage?

(END VIDEOTAPE)

TUCKER: The Wal-Mart case is reminisce end of the Tyson Foods, case where Tyson was charged with conspiring to smuggle in illegal aliens to work in its plants. The company and its executives were acquitted of all of those charges in March of this year -- Lou.

DOBBS: Bill, thank you very much -- Bill Tucker.

We have reported extensively on this show about the benefits that illegal aliens enjoy in this country. There are now, as we said, an estimated 10 million illegal aliens in the United States. And their presence obviously affects government policy, our society and culture. They are also altering political power in this country, influencing congressional districts in which they live by gaining representation in Congress.

Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Every 10 years, a new census means some states will gain congressional seats and others will lose them. One factor influencing the number is the presence of illegal aliens. They can't vote, but they are counted. That means states with a high number of illegal get more congressional seats.

STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: The political influence of a state in Washington is partly dependent on the size of that state's delegation. Thus, illegal immigration is not just redistributing, in the abstract, seats. It's actually redistributing political power. SYLVESTER: California is a major winner, picking up six seats because of the presence of illegal aliens and other noncitizens, including people on student or work visas. Other states that gained: Texas, Florida and New York, each gaining an additional seat.

Seats were siphoned away from Montana, Utah, Oklahoma, Wisconsin, Michigan, Indiana, Kentucky, Mississippi and Pennsylvania. How can this happen? Well, this is the system laid out by the Constitution, which requires counting every person.

DEMETRIOS PAPADEMETRIOU, MIGRATION POLICY INSTITUTE: Essentially, they are members of the community. Whether we like it or not, they contribute to the labor market. They contribute through their social activities. And, at the same time, they use the services that every community and state and city provide.

SYLVESTER: But votes count more in certain congressional districts, those with heavy immigrant populations that have fewer eligible voters relative to the total population. In two California districts, it takes fewer than 35,000 votes to win, vs. 100,000 votes needed to win in a state like Pennsylvania.

DAN STEIN, FEDERATION FOR AMERICAN IMMIGRATION REFORM: Political subdivisions, political districts are shifted to states to give representation to illegal aliens, at the expense of U.S. citizens, five-, six-, seven-generation American citizens losing congressional representation to people who have crashed our borders. That's not fair.

(END VIDEOTAPE)

SYLVESTER: Only two things can be done fix this, a constitutional amendment -- not an easy thing to do -- or a change in the immigration policy -- Lou.

DOBBS: Lou, obviously a change in immigration policy is not easy either. Is this trend, then, likely to continue?

SYLVESTER: It is, indeed. You have a million and a half immigrants and illegal aliens entering into the country every year, so you can project out into the future that, as we go on, this will have an even greater impact on congressional district seats -- Lou.

DOBBS: Lisa, thank you very much -- Lisa Sylvester reporting from Washington.

On Capitol Hill tonight, a Medicare prescription drug benefit that could save money for millions of Americans is now in jeopardy; 40 Democratic senators and one Republican have sent a letter to President Bush. They are threatening to block the bill unless changes are made.

Congressional correspondent Jonathan Karl is live on Capitol Hill and has the latest for us -- Jonathan.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, those 41 senators are objecting to an emerging compromise that still isn't done yet between House and Senate negotiators on a final prescription drug bill for Medicare.

Those 41 senators, in their letter, wrote to the conference committee, as well as to President Bush -- quote -- "A partisan conference report that jeopardizes Medicare and does not provide meaningful assistance to the elderly and disabled should not and will not pass." Their main objection is not to the drug benefit itself, but to changes the bill would make into Medicare itself, changes that would make Medicare compete with private insurance companies.

Now, 41's a significant number. That is enough to block the bill here in the Senate. One of those today on that letter today was Senator Ted Kennedy, who issued the letter with a challenge to President Bush.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We're reaching the final hours. We call on the president to intervene and to exercise judgment in this conference.

(END VIDEO CLIP)

KARL: Now, the response -- he has a challenge for the president to get involved this, and the president needs to show leadership. The response comes just a short while ago from the White House from spokesman Trent Duffy, who says that the president is engaged, is working with Democrats and Republicans on this.

And Duffy says -- quote -- "It would be a disservice to seniors to miss this historic opportunity to get prescription drug coverage." Now, this is not done yet. Certainly, it's way too early to say that this will kill the bill. As a matter of fact, one of the Democrats who is working with the Republicans on this, Senator John Breaux of Louisiana, told CNN a short while ago that he believes that progress is being made.

(BEGIN VIDEO CLIP)

SEN. JOHN BREAUX (D), LOUISIANA: I think we're making real progress. This is a monumental effort. We're talking about not only adding prescription drugs to the Medicare program. We're talking about bringing about some major reform in the program to make sure that it's financially viable in the future and that it does what the challenge is for seniors and gives them adequate medical care. This is not easy. It's a monumental task. We're making real progress. There's still a lot left to be done.

(END VIDEO CLIP)

KARL: But Breaux acknowledges that there is a limited amount of time here. He says that this needs to be done within the next few weeks. He believes, though, that possibly as early as next week, that there could be a deal that would have substantial support from Republicans and Democrats here in the United States Senate and enough to pass both houses of Congress -- Lou.

DOBBS: Jonathan, thank you.

Last night here on the show, Majority Leader Frist said he expected this to get done within the next couple of weeks. This is -- and we should point this out -- this is a hugely expensive proposition. We're talking $40 billion. Is it your sense there on Capitol Hill that there is a real stomach for the kind of fight that would end up killing this legislation for seniors?

KARL: Well, in over 10 years, it's $400 billion. It's something that the president has said is his No. 1 domestic priority right now after education.

So there is great political risk to watching this die, some would say especially for the Republicans. Democrats are at risk, too. If they block this in the Senate, Republicans will certainly charge, here was something that was going to spend $400 billion on seniors to help them get drug coverage that was killed in the Senate. So both sides have enormous political stakes here. And although there are major obstacles here, major obstacles, there is still a significant chance that it will work. John Breaux puts it at 60/40 that it will ultimately passed and be signed into law.

DOBBS: Jonathan, I'm not sure I quite understand. If 40 Democratic senators would block this, it seems that the political liability would be theirs, would it not?

KARL: Well, certainly. But what they're going to say is that what was offered here was something that was simply not acceptable, that it was going to destroy Medicare. So you'll have a political back-and-forth.

Republicans would certainly argue it was the Democrats' fall. Democrats will say that the president simply didn't work with them to get something done that would be satisfactory.

DOBBS: Jonathan Karl, thank you very much, reporting from Capitol Hill.

Defense Secretary Donald Rumsfeld today made a surprise appearance at the Pentagon's news briefing to dispute the meaning of the word "slog." That word appeared in a leaked memo saying the United States faces what the defense secretary termed a long, hard slog in Iraq and Afghanistan. According to Secretary Rumsfeld, slog does not mean a slow, heavy pace.

And someone who took on the issue of the rather disputatious meanings is our senior Pentagon correspondent, Jamie McIntyre. And he has the report for us tonight -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, the Pentagon briefing was proceeding routinely with a spokesman and a military briefer when, suddenly, a surprise appearance by Defense Secretary Donald Rumsfeld, who bounded to the podium and issued a short statement about the anniversary of the bombing of the Marine barracks in Beirut, and then challenged the press corps about the definition of the word slog. He said he found a definition he likes in the Oxford English Dictionary.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Slog, to hit or strike hard, to drive with blows, to assail violently. And that's precisely what the U.S. has been doing and intends to continue to do.

QUESTION: Is that what you thought it meant when you wrote it?

RUMSFELD: It's close enough for government work.

(LAUGHTER)

(CROSSTALK)

MCINTYRE: ... to be disputatious. The American Heritage Dictionary

(CROSSTALK)

RUMSFELD: There are a lot of different definitions. I know that.

MCINTYRE: Well, this is its preferred definition, to walk or progress with a slow, heavy pace, plod, as in slog across the swamp.

RUMSFELD: Right. I've seen that one.

(LAUGHTER)

RUMSFELD: I read the one I liked.

(END VIDEO CLIP)

MCINTYRE: Well, the Pentagon say it's not going to investigate this leak, but it has acknowledged its chagrin that a memo appeared on the front page of "USA Today" so quickly after Rumsfeld wrote it.

He says now, after rereading it in the newspaper, he thinks it's a pretty good memo for discussion. And he's not apologizing for it at all. His theory was that it was leaked by one of the staff members who is -- because it only went to four of his trusted advisers, his theory is that they copied it for distribution to draw up discussion points and then somebody leaked it, in his words, thought it was a press release.

That's really interesting Pentagon spin here today. Now the spin is that leaking this memo was really a good thing, that it portrays Rumsfeld as having a realistic view of Iraq. And the joke among his staff here is that they're all squabbling over who gets credit for leaking the memo -- Lou.

DOBBS: It will be interesting to see if they're as eager to take that credit as we see the spin unwind over the course of the next several days, as we are certain to. It was interesting to see the defense secretary contending with you on the meaning of the word slog. I commend you for the use of the word disputatious as you confronted the defense secretary.

But the essence is, one, the spin that this was just him bringing up something for people to consider in some high-minded and abstract matter, two years later, the defense worried about how to measure success in the war on terror, the defense secretary saying, quite clearly, that he was not pleased with the situation with the Ansar al- Islam terrorist group, these are rather pragmatic, real, empirical issues to be dealt with.

MCINTYRE: And that's the point the Pentagon makes. I think critics of Rumsfeld can look at this memo -- and they can look at it, because it has been released by the Pentagon -- and find things in it that they think are inconsistent with at least the tone he has given in public.

But defenders of him can also find things in it that basically are consistent. And that's where the debate is. It is debatable exactly what the meaning of the memo is.

DOBBS: And we watched at least part of the debate that you had. Thank you very much, Jamie. And I think, at the very least, we can say that opening up the dialogue that has resulted from this leak may in fact prove to be beneficial to all sides.

Thank you very much, Jamie McIntyre, our senior Pentagon correspondent.

In Iraq today, a bomb attack on a military convoy killed an American soldier north of Baghdad. The soldier was a member of the 4th Infantry Division. Two other soldiers were wounded. And today, the military said two soldiers from the 1st Armored Division have died from noncombat causes.

Coming up: weapons in space and why defending spy satellites could lead to world war. National security correspondent David Ensor will have the special report.

And Congressman Charles Rangel fights back against European Union efforts to bully the United States Congress, Congressman Rangel our guest.

And "America's Bright Future" -- tonight a teenage entrepreneur who succeeded in two businesses and is already hard at work on No. 3. Kitty Pilgrim will have the story.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Space weather forecasters are now predicting a solar storm tomorrow that could damage satellites and power grids, affecting television signals, cellular telephones and pagers all around the world.

During a solar storm, gas and charged particles explode from the surface of the sun, in this case, from a sun spot the size of Jupiter, roughly 10 times the size of Earth, and that explosion obviously forming the storm that will hit the Earth by tomorrow. Tomorrow's solar activity is expected to be strong. And this solar storm is rated as a three on a scale of one to five.

Several major satellites have been knocked out by past solar storms, including AT&T's $200 million Telstar satellite six years ago.

A different kind of satellite has been the topic of a series of special reports that we've brought you this week, spy satellites. Tonight, the possible role that satellites could play if war went beyond Earth into space.

National security correspondent David Ensor with the special report.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): The Chinese launch last week of a manned spacecraft sent a chill down spines at the Pentagon and in U.S. intelligence. A surveillance camera on the orbital module that remains in space will watch targets on Earth, U.S. officials say, for the next six to eight months.

RICHARD HAVER, FORMER DOD INTELLIGENCE OFFICIAL: The Chinese are telling us they're there. And I think, if we ever wind up in a confrontation again with any one of the major powers who has a space capability, we will find, space is a battleground.

LT. GEN. EDWARD ANDERSON, DEPUTY CMDR., USNORTHCOM: They can that see one of the ways that they can certainly diminish our capabilities will be to attack the space systems. Now, how they do that and who that's going to be, I can't tell you in this audience.

ENSOR: It wouldn't necessarily be China. Any nation with a medium-range missile might be able to knock a satellite out of low Earth orbit. U.S. vulnerability is real. From telephones to television to bank transfers, the American economy relies heavily on space satellites. And they gave the U.S. military and intelligence a critical technological edge, both in Afghanistan and in Iraq.

KEITH HALL, VICE PRESIDENT, BOOZ ALLEN HAMILTON: Steps have been taken to protect our satellites. We'll be doing more of that in the future. This is not something that we haven't worried about.

ENSOR: On a converted 747 and in laboratories, scientists are experimenting with laser weapons that could one day be deployed to protect satellites against incoming missiles.

(on camera): There even is talk of one day protecting space satellites and installations with bodyguards in the form of rapid- launch military spacecraft.

(voice-over): Weapons in space? Critics argue that war games conducted by the U.S. Air Force show they could make Americans less safe, not more. UNIDENTIFIED FEMALE: What they found in the last three war games that they've had is that, every time somebody used a space weapon to take out another person's satellites, satellites that could see, the warning satellites, all of a sudden, you had nuclear war very quickly, because the commanders on the other side, the people who lose their space assets and can't see, have to assume the worst.

ENSOR: But, as more satellites are launched each year, the nation's dependence on them grows.

(END VIDEOTAPE)

ENSOR: Secretary of Defense Donald Rumsfeld, among others, is a strong advocate of putting weapons in space to defend them -- Lou.

DOBBS: And related to the satellites David, the use of lasers, Livermore, the laboratory, the weapons laboratory, making significant advances in lasers, Russia, an advanced laser program, give us just a sense of the relationship between the satellites and lasers and what Space Command expects in the near future.

ENSOR: Well, Lou, the view in the United States, and possibly in Russia as well, is that laser technology holds the greatest promise in terms of weapons that could be used to protect satellites. And that's why a lot of money has been put into experimenting with various laser technologies, a lot of money very recently at the Livermore facility, we understand.

And there have been some breakthroughs, although much of this is rather classified and not in the public domain. There have been some breakthroughs lately in the technology, which is causing some optimism among scientists that they might be able to create such a weapon. Now, as we mentioned, optimism is for the people who are in favor of putting weapons in space. Those who think it's a mistake are sorry to see the advances occurring -- Lou.

DOBBS: David, thank you very much. Outstanding reporting -- David Ensor, national security correspondent, from Washington.

Coming up next: President Bush returns from Asia with comments about the North Korean nuclear standoff and the war on terror and radical Islam. Senior White House correspondent John King will report.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: U.N. Secretary-General Kofi Annan today called upon the world to provide billions of dollars to help pay for reconstruction in Iraq. Kofi Annan told a conference if Spain that countries should put aside their differences and make a contribution now.

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY-GENERAL: I know we all look forward to the earlier possible establishment of a sovereign Iraqi government. But a start on reconstruction cannot be deferred until that day. It demands our urgent attention now.

(END VIDEO CLIP)

DOBBS: Also today, a top Iraqi official warned both France and Germany that Iraqis will remember those nations that helped rebuild their country. He said France and Germany should reconsider their decisions not to give money.

Tonight, President Bush is in Hawaii at the end of a six-day tour of Asia -- the main topics of discussion, the North Korean nuclear crisis, Iraq and the global war on terror.

Senior White House correspondent John King has been traveling with the president through this whirlwind tour, reporting now from Honolulu.

John, what did the president actually achieve on this tour?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Lou, the president, a short time ago, called this trip a spectacular experience.

From the White House perspective, the major accomplishment was keeping a consensus with Russia, China, South Korea and Japan for how to proceed next in the negotiations with North Korea over the nuclear standoff, Mr. Bush unveiling a new proposal on this trip to give North Korea written security assurances, but only in the context of those so-called six-party negotiations.

So the White House believes that is a major accomplishment, even though, for now, North Korea is rejecting that plan. The major challenge, though, the president encountered is this. At nearly every stop, he faced criticism that he is a president too willing to go to war, to eager to defy the wishes of the United Nations and other international bodies. We saw that at the Asia-Pacific economic summit. We saw it vividly in Australia, an ally of the United States, where many say this president should not have gone to war without the backing of the United Nations.

So the president says an achievement on North Korea. Clearly, he learned on his trip that he continues to have a perception problem around the world -- Lou.

DOBBS: John, the president's tour remarkable for its speed, six countries, six days. Why an emphasis on traveling to so many countries in such a short period of time?

KING: Well, the President's aides don't dispute the fact, Lou, that this president does not like to linger. Why so many countries so fast? He wanted to personally thank and reward leaders who stood with him in the war on terrorism, so President Arroyo of the Philippines, Prime Minister Goh of Singapore, Prime Minister Thaksin of Thailand, and, of course, Prime Minister John Howard in Australia. The president wanted to travel to their countries to say thank you firsthand and, in most cases, also to bring along either new military cooperation or new economic cooperation as well, the president's way of saying: If you stand with me, I will stand and reward you -- Lou.

DOBBS: John King, thank you. And it's obvious that you are glad to be back in the United States and particularly in the westernmost part of the Pacific United States. Thank you very much, senior White House correspondent John King.

Now to the candidates who hope to replace President Bush in the White House in next year's election. What some might call a risky strategy appears to be gaining momentum among the Democratic presidential hopefuls, promising to roll back the president's tax cuts for wealthy Americans, at least. General Wesley Clark is the latest Democrat to make this campaign promise.

Our senior political analyst, Bill Schneider, is here now with more.

This is something of a risky strategy, isn't it?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Walter Mondale, remember him? He's the one who said: Ronald Reagan will raise your taxes. So will I. He won't tell you. I just did.

Goodbye, Walter Mondale. And believe me, the Republicans are going to say: See the Democrats? They're doing it again. They haven't changed.

DOBBS: And Clark weighing in on this issue, the number of candidates saying they want to roll back taxes, it effectively means a tax increase. Voters aren't stupid.

SCHNEIDER: Well, there are nine Democrats. And, by my count, nine of them, all of them, want to roll back at least part of the president's tax cuts. There's a disagreement on how much.

Seven of them say they want to roll back tax -- they want to increase taxes, that is, roll back the tax cuts for the wealthy. Two of them, Howard Dean and Dick Gephardt, say they want to eliminate all of the tax cuts passed by President Bush. This sounds crazy. It just gives the Republicans an opening, but except for one thing.

One, the tax cuts weren't that popular to begin with. Americans, believe it or not, were not enthusiastic about these tax cuts. Two, people are concerned about the deficit. Three, most of the Democrats are only talking about rolling the tax cuts back for the wealthy. And, four, they're talking about what they want to do with the money, which is primarily health care.

DOBBS: Health care obviously an important issue in this campaign as it's moving forward. Likely to become more so?

SCHNEIDER: I think so. Seniors are very concerned about the rapid escalation of health care costs, which was high in the early '90s, the last time health care became an issue.

DOBBS: Right.

SCHNEIDER: Slowed a bit in the late '90s. And now health care costs are rising very fast again. That's got seniors very concerned.

DOBBS: The risks are not all in the side of the Democrats. There is also a considerable risk for President Bush. That is that these tax cuts, which amount to over 10 years, almost $1.7 trillion, do not generate jobs, do not drive this economy through next year, an election year. Don't you see that the same way?

SCHNEIDER: Of course. The president originally proposed the tax cuts on principle because he said the government is collecting money, there's a surplus. Then he changed gears and said the tax cuts they were an economic stimulus plan. So the now Democrats are saying, Well, if the tax cuts were meant to stimulate the economy, where are the jobs? Where's the stimulative effect? The Jobs haven't materialized. So that argument is wearing a little thin.

DOBBS: Next year, for most voters in this country, what will be the primary issues? Will it be health care? Will it be those jobs? Will it be the overall strength of the economy and the markets?

SCHNEIDER: Well, of course the war on terror has to be considered a major issue. No one knows exactly what world events will happen. That's a big factor overarching in this election.

The economy certainly important. And right now, the fact that almost 3 million jobs have disappeared, Bush would be the first president since Herbert Hoover to suffer a net loss of jobs in his administration. He's hoping some of the jobs will be recovered before Election Day.

Health care is rising fast as an issue because costs are rising, particularly among seniors.

DOBBS: And bringing it all to a more critical level, the Medicare legislation now in the Senate, where we have obviously a major challenge to Majority Leader Frist by the Democrats.

SCHNEIDER: And prescription drugs. Don't forget that.

DOBBS: Not at all. Thank you very much, Bill Schneider, as always.

SCHNEIDER: Sure.

DOBBS: The United States is facing $4 billion in sanctions from the European Union now on essential industries such as steel, agriculture and livestock, the EU claiming that those are actual subsidies and demanding that Congress push back legislation -- in fact, giving Congress until March of next year to resolve the dispute over two proposed solution, one from Congressman Charles Rangel of the Ways and Means Committee, with whom I spoke earlier and asked him if this is a case of the European Union simply telling the U.S. Congress what to do.

(BEGIN VIDEOTAPE)

REP. CHARLES RANGEL (D), NEW YORK: I don't even like to hear you say that. You know, I don't mind having disputes within my own party or with Republicans or with the executive branch. But to have foreigners, and especially the arrogance of the European Union, dictate to us what we have to do to abide by the World Trade Organization rules, I resent.

And I would have hoped that this would be an issue where the White House and the Congress could come together and tell them that if you really want to see what a war looks like, you know, take the 4 billion trade sanctions and see what we could do, not that we need that type of thing, but at least to maintain some degree of our sovereignty.

But, now, Mr. Thomas has taken now a $4 billion problem and created a $128 billion solution, which I don't think is the answer.

DOBBS: Congressman, if I may simply repeat your words. I don't like to hear you say something about saving part of our sovereignty, our diminished sovereignty as the result of these trade deals, particularly with the European Union in this instance. Have we allowed trade, in your judgment, our international trade agreements, to encroach on our sovereignty on a host of issues, whether it be protecting hardworking middle-class American families, whether it be in terms of taxation, whether it be in terms of our control of our borders?

RANGEL: Of course, we have, and I believe that in the long run, each nation has to do that. If we're going to be interdependent on each other, we have to have some international standards that we are going to follow. And standards and regulations don't mean much unless you have some international sanctions. And, of course, we appeal to the World Trade Organization in terms of the sanctions that were against us because of unfair international law practices.

But you would think that if it is our sovereign that is being encroached, then it's our sovereign, not the House of Representatives, not the Senate and not just the White House that will be there to defend it.

With all of the meetings that I've had at the White House on the energy bill and the Medicare prescription bill, this has never come up. There's has been no meetings of the full committee on this issue. And I'm just saying that if because we are the world leader that we have to pay a price for that, diminishing our total influence over commerce, we should at least approach the problem in a united way and in a bipartisan way.

DOBBS: Congressman Rangel, we thank you for being with us.

RANGEL: Thanks for having me back.

DOBBS: Thank you. (END VIDEOTAPE)

DOBBS: The Senate today voted to give itself a pay raise. Senators rejected a proposal that would have blocked them from receiving an automatic cost of living increase for next year. The senators' salary goes next year $3,400 higher. They'll be making $158,000 a year. The salary has increased the past five years by a total of $21,000.

And that's the topic of tonight's poll: "Do you believe the Senate deserves the pay raise it gave itself? Yes or no?" Cast your vote at cnn.com/lou. We'll have the results later here.

And tonight's quote, from one senator who is outraged about the Senate's pay increase. And we quote -- "This automatic stealth pay raise system is just wrong. I, for one, would be interested to hear somehow explain just why Congress should get a $3,400 pay raise in the face of record budget deficits and economic downturn and record unemployment." Senator Russell Feingold, Democrat of Wisconsin

Coming up next -- "Grange on Point," lessons learned the hard way and lessons that are being learned again. Why American troops still on the frontlines still are desperately short of much-needed equipment and supplies. General David Grange "On Point" next.

(COMMERCIAL BREAK)

DOBBS: In tonight's "Grange on Point," General Grange talks about the lessons learned the hard way and learned again.

Every new war brings some of the same old problems, recommendations from the last fight that aren't always implemented before the next. This, plus the constant need to keep up with the latest over weaponry, tactics, equipment posing a critical challenge for the military now engaged in Iraq.

Joining me now, General David Grange.

Let's -- let's talk about first, if we may, the issue of these bulletproof vests. I have heard from a number of people -- certain members of certain units of the U.S. Army buying their own bulletproof vests. That's crazy, isn't it?

GEN. DAVID GRANGE (RET.), U.S. ARMY: Well, there's some reports that parents have sent -- bought and sent the most advanced vests to some of their sons and daughters in Iraq. The problem is, there's not enough vests -- the ones that stop bullets -- to go around with the forces in Iraq. And it's-- and it's not an issue that they don't want to give the soldiers the vests, they just can't make them fast enough.

But the point is, the problem is, the fault is, they should have been made long ago. This technology came out in the '80.

DOBBS: Should have been made long ago.

Let me ask you this. Do we -- do you know who makes these? Is it an American manufacturer? I mean, it's amazing that in this day and age I have to ask this question. Do we know where these vests are made?

GRANGE: There's a -- there were three primary manufacturers. That's been increased by the Department of Defense to six, which is -- which is a great effort -- to try to get twice the production out there to the troops about.

But again, the point is, why do you have to wait for war to start to make something you know you need from the last war? It's criminal. It should have been done years and years ago.

DOBBS: And do you get the sense they are learning the lesson here on at least bulletproof vests?

GRANGE: Well, you know, we know for a fact that several soldiers, Marines have already been saved from the bulletproof vests.

DOBBS: Right.

GRANGE: We also know that some took -- we had casualties that didn't have them. So, I mean, you would think you would outfit the soldier first. And I know in the hearts of the leaders they want to do that. But in the past, it should have been corrected.

DOBBS: And I know, General, you're also concerned about the tankers, the tank units, who simply don't have sufficient weaponry.

GRANGE: Well, what you have is a four-man tank crew, as an example, that you're bringing up, you two rifles per tank crew of four. All four have pistols. But when you dismount and you run a checkpoint or you are on a patrol in a guerrilla type warfare you need a rifle. And so what you have is soldiers scrounging for rifles. Some commanders get them for them. And if they don't, they pick up captured AK-47s and use them as weapons

DOBBS: Any sign that that's changing?

DOBBS: I think there's a lot of signs that it's changing. It's just that, we've been in guerrilla warfare before. So you have to outfit for the task at hand and sometimes your conventional organization doesn't fit what you find on the battlefield.

DOBBS: And we're watching our young men and women in uniform modifying everything from Humvees to other vehicles, trying to provide -- adding armor to those vehicles, reorienting the vehicles, to actually engage in guerrilla fighting. What in the world, why hasn't the U.S. military, the U.S. army in particular, already done this? They know the conflict that they face?

GRANGE: This has been an issue for many years. Vehicles like the Humvee, soft skinned vehicles, even lightly armored vehicles, that the army and the marine corps both use in conflict, this issue's been brought up before and you have land mine issues. Right now, a lot of the casualties come from ambushes. Why would you not have the vehicles sorted out early on for this type of conflict? And this is something going on for years, trying to put some type of armor plating, kits that strap on very rapidly, have seats that face out, for instance, instead of in. In other words, facing enemy so you can return fire. And the other is, ring mounts to hold machine guns. You have vehicles that don't have them. Again lessons learned from years ago that have not been implemented before the war started.

DOBBS: And I know you're concerned and you've talked about it here before, the idea of individual replacements in Iraq, these combat units rather than replacing entire units and rotate those units, is that changing at all?

GRANGE: It's going to change, I believe, Lou, but it's a slow thing to turn around, because it's not the easiest thing to manage by the personnel bureaucracy that assigns and rotates the personnel and units to an area of conflict like Afghanistan and Iraq, because it's difficult to do.

It's also difficult to do with a very small army, because it's hard to rotate these units instead of individual replacements. You have to put the team before the person and that's what unit manning does. And the problem is, the army's very small, it's going to take a wall to implement that. But you have to have predictability for the soldiers and their families, for rotations and future fights that we -- our country's involved in.

DOBBS: And, just so there's no misunderstanding whatsoever as anyone listens to the points that you're making here, it's safe to say, General Grange, is speaking out of concern for the young men and women fighting the nation's battle, he is not in any way anything less than supportive of them and the U.S. military as they engage the enemies of this country. Is that a fair statement, General?

GRANGE: You bet. I'm a nonprofit organization right now. My comments come from the heart, from serving the nation.

DOBBS: And with great distinction. General David Grange, thank you.

Coming up next, America's bright future. Tonight we focus on a young entrepreneur. We'll introduce her to you. She is conquering career No. 3 before she even finishes high school. Kitty Pilgrim will have her amazing story. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight in our series of special reports we're bringing you this week focusing on the young people of this country who will light up the years of our future. We, tonight, introduce you to a young woman who's well on her way of becoming a business tycoon. She is Kenya Jordana James, she's already working on her third business venture while most kids her age are just beginning high school. Kitty Pilgrim is here now and has her remarkable story -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Lou, she is one of most assertive children I have ever encountered. Poised, and focused, Kenya has a very strong sense of self.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): The founder, publisher and editorial director of "Blackgirl" magazine is 14. The magazine has 5,000 subscribers and sells at book stands all over the country. Kenya Jordana James actively plans, writes articles for and helps design every issue.

KENYA JORDANA JAMES, "BLACKGIRL": Have much more ads for the next issue, less editorial. Which is, yay.

PILGRIM: Kenya started the magazine after her first business, a cake baking service, netted $1200. She said, she got the entrepreneur spirit from that first venture.

JAMES: My visions for the magazine is to become the voice of black girls. I like coming up with the ideas and then turning them into businesses. So I just make sure I tell people what I want and make sure I get what I want, because I have to be satisfied with the ending product of whatever I'm trying to produce.

PILGRIM: Founded with the help of her mother Karen, Kenya says her mother is her rock.

KAREN MASON, KENYA'S MOTHER: There's a difference for children between an idea, a concept and actually seeing the manifestation of that concept. And what we've tried to do in her upbringing is to let her know that she can go from that point A to point B.

PILGRIM: Kenya's media career doesn't end there.

JAMES: Five, four, three, two, one...

PILGRIM: She works camera three for an interview program at the local cable channel People TV in Atlanta. And takes local TV and film class and has written two screenplays. She also takes courses at three different local colleges in Georgia.

As if that weren't enough, Kenya has also started a clothing design business sewing and selling her creations to her friends. She expects to expand that venture because demand has been good. She says it's parent-friendly clothing that won't create conflicts at home.

JAMES: I wanted a clothing line that my mom wouldn't nag me about and say, that's too tight, that's too small, you can't wear it.

PILGRIM: She took honors for "Blackgirl" magazine as 2003 teen entrepreneur of the year, but found a moment to plug her next venture.

JAMES: I would like to say I love to sew. And so, when I was very young, I always wanted to make a gala-type dress. So I was very humbled and honored to show you all a product of my clothing line, Modest Apparel and so here it is!

(END VIDEOTAPE) PILGRIM: Kenya can't decide what she wants to do next. Ultimately maybe study to be a doctor. But right now, there's really nothing she won't try, Lou.

DOBBS: What a beautiful dress.

PILGRIM: Yes. Very good designer.

DOBBS: And a terrific marketer as well.

PILGRIM: She's astonishing. And makes us all feel like a slouch.

DOBBS: Kitty, thanks very much. Kitty pilgrim.

Tomorrow night here, we'll introduce you to another extraordinary young person, a painter who is already drawing critical acclaim and some very hefty price tags for her art. Please join us tomorrow night.

Tonight's thought is, of course, on youth and simply stated. "The youth of a nation are the trustees of posterity." British Prime Minister Benjamin Disraeli.

And a reminder to vote in tonight's poll. The question, "do you believe the Senate deserves the pay raise it gave itself, yes or no?" Cast your vote at cnn.com/lou. We'll have the results in just a few moments.

And coming up next, we'll share some of you thoughts about our special reports this week on America's young people, the talented young people who represent the very best of this country and its future. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results now of our poll. Do you believe the Senate deserves the pay raise it gave itself? Eleven percent say yes, 89 percent however disputatious as senior Pentagon correspondent Jamie McIntyre taught us to say tonight.

On Wall Street the major averages held steady throughout the day after they sold off. Dow rose almost 15 points the Nasdaq up -- the Nasdaq down rather, 12.5 points. And the S&P up almost 3.5.

There are 95 million Americans invested in stocks and 8,000 mutual funds, and an investigation into the mutual fund industry and misconduct among some of the funds led to the firing of four broker at Smith Barney. The investigation we now learn is widening.

Christine Romans is here -- Christine.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: And New York Attorney General Eliot Spitzer's office says that investigation is just getting bigger and more than 80 subpoenas have been issued so far to both firms and individuals, and more charges in the probe are expected. Now, while the public awaits those charges, the body count from job losses mount. The four Smith Barney brokers fired today join more than 20 unemployed brokers now from Prudential, Alliance Capital, Merrill Lynch and Fred Alger, among others.

Lou, New York and Massachusetts regulators are pushing this one hard, so is Illinois and the Securities and Exchange Commission is investigating where some mutual funds directs business to brokerage firms that agreed to promote sales of the funds. What's an investor to do, of Christine Bens (ph) of Morning Star said, avoid the Spitzer four. Janus, Strong, Bank One, and Bank of America. We are going to continue to watch this probe. Just about every day we get more news on this.

Low-quality tech stocks. We want to talk about this. Michael Toporek of Brookstone Partners says there are 300 companies sized between $10 million to $20 billion in market cap, that up more than 200 percent this year. Only 30 percent of those show a profit. But the average stock market return was 430 percent. Tech, biotech, telecom, topping this list. Lou, there are some parts of this market that have had an amazing rally and now it's time to take a close look at these companies that are not having any earnings growth but are returning 400 percent.

DOBBS: So you're going back to that old-fashioned idea there should be a correlation between earnings and the prospect of earnings and price?

ROMANS: I'm an old fashioned kind of girl.

DOBBS: I'm a little old fashioned myself about that. It's a sage warning. Thank you very much, Christine Romans.

ROMANS: You're welcome.

DOBBS: Taking a look at some of "Your Thoughts."

From Anaheim, California, Thanks Lou for keeping all the important issues of the day before your viewing audience. People are starting to wake up from the long sleep and not a minute too soon if we are to have any chance at all of saving our country. Keep up the good work." That from S. Hampton.

From Onancock, Virginia, "I would like to express my appreciation for you constant endeavor to lift up the truth in the business, investment, and political arenas. Middle America needs an advocate for honestly and morality, something which seems to be becoming more and more in short supply in America." That from Sam Belote.

From, Indialantic, Florida, "Why is it that with 4 networks running news 24-7, your one hour covers more real news than the rest of them put together? Thank you and keep up the excellent coverage," Karen East. Karen, we thank you.

And from California, "What a break! In the midst of the dismal activities of our own government, financial institutions, medical centers, corporations and the like comes a ray of light and hope our very own young people!

They have hope, dreams plans, and lets all get behind them and do what takes to help them become shooting stars and the leaders of tomorrow. Gail, we couldn't agree with you more. We thank you for your words. We love hearing from you. E-mail us at loudobbs@cnn.com

And finally tonight, the end of an era in aviation. The Concorde today flew its last night from London to New York with paying passengers. The Concorde has been shuttling passengers across the Atlantic across twice the speed of sound for 30 years. Tomorrow the Concorde will make its final trip from New York's Kennedy Airport back to London's Heathrow.

And that's our show for tonight. Thanks for being with us.

Tomorrow, "America's Bright Future," we introduce you to a young art prodigy whose paintings fetch upwards of $20,000 apiece. She's not quite 10- years-old.

And then heroes: tomorrow we bring you the story of a Marine Private Private Joshua Doil (ph) who was injured while patrolling the streets of Iraq. For all of us here, good night from New York. "ANDERSON COOPER 360"

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





Congress Battles Bush Over Medicare Reform>


Aired October 23, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, October 23. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

Federal agents today raided dozens of Wal-Mart stores in 21 states in a massive crackdown on workers who are illegal aliens. The agents arrested about 250 illegal aliens employed by cleaning contractors hired by Wal-Mart. Law enforcement sources say some Wal- Mart executives and store managers knew that members of the cleaning crews were illegal aliens. Federal agents also searched the headquarters of Wal-Mart in Arkansas.

These raids go to the heart of a problem that we've been reporting on here for months, the huge influx of illegal aliens into this country, which now number some 10 million.

Bill Tucker is here tonight and has the report.

BILL TUCKER, CNN CORRESPONDENT: Lou, low-cost goods made in overseas shops on the shelves and illegal aliens working inside the stores -- Wal-Mart says it didn't know. The feds say otherwise.

(BEGIN VIDEOTAPE)

TUCKER (voice-over): Federal grand jury indictments could be in Wal-Mart's future, government sources confirming, search warrants were issued and executed on Wal-Mart's Bentonville, Arkansas, headquarters. But the feds won't say what they were seeking, nor what was found.

However, one federal source says executives for the world's largest retailer knew of the illegal workers and that they had been recorded during surveillance, indicating that they knew their cleaning contractors used illegal alien workers.

The company responded quickly.

TOM WILLIAMS, WAL-MART SPOKESMAN: We're trying to understand the investigation. We're trying to understand what the INS is looking for. We're cooperating fully with them.

TUCKER: Wal-Mart's saying that it used more than 100 cleaning contractors to service more than 700 stores across the country and that it requires contractors to use legal workers, in other words, obey the law. But the law also creates a loophole for employers. Employers are only required to ask if workers' papers are in order. They are not required to verify the paperwork.

SCOTT FELDMAN, LABOR ATTORNEY: Once the employee completes the I-9 form, the law doesn't require any further investigation on the employee's part. The employer, in essence, can take whatever the employee puts down on that form at face value.

TUCKER: And in the case of Wal-Mart, the company could simply blame it on the contractor, which defies the point for many who are critical of current immigration policy. They note, there are an estimated 10 million illegal aliens in this country working in all sorts of industry, from construction, to meat packing, to retailing. And until the government gets serious about the law, they say little is going to change.

IRA MEHLMAN, FAIR: Until companies are made to understand that this is going to cost them significantly and that there is a good chance that they're going to get caught, why should they obey the law? Why should they hire Americans and pay them a decent living wage?

(END VIDEOTAPE)

TUCKER: The Wal-Mart case is reminisce end of the Tyson Foods, case where Tyson was charged with conspiring to smuggle in illegal aliens to work in its plants. The company and its executives were acquitted of all of those charges in March of this year -- Lou.

DOBBS: Bill, thank you very much -- Bill Tucker.

We have reported extensively on this show about the benefits that illegal aliens enjoy in this country. There are now, as we said, an estimated 10 million illegal aliens in the United States. And their presence obviously affects government policy, our society and culture. They are also altering political power in this country, influencing congressional districts in which they live by gaining representation in Congress.

Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Every 10 years, a new census means some states will gain congressional seats and others will lose them. One factor influencing the number is the presence of illegal aliens. They can't vote, but they are counted. That means states with a high number of illegal get more congressional seats.

STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: The political influence of a state in Washington is partly dependent on the size of that state's delegation. Thus, illegal immigration is not just redistributing, in the abstract, seats. It's actually redistributing political power. SYLVESTER: California is a major winner, picking up six seats because of the presence of illegal aliens and other noncitizens, including people on student or work visas. Other states that gained: Texas, Florida and New York, each gaining an additional seat.

Seats were siphoned away from Montana, Utah, Oklahoma, Wisconsin, Michigan, Indiana, Kentucky, Mississippi and Pennsylvania. How can this happen? Well, this is the system laid out by the Constitution, which requires counting every person.

DEMETRIOS PAPADEMETRIOU, MIGRATION POLICY INSTITUTE: Essentially, they are members of the community. Whether we like it or not, they contribute to the labor market. They contribute through their social activities. And, at the same time, they use the services that every community and state and city provide.

SYLVESTER: But votes count more in certain congressional districts, those with heavy immigrant populations that have fewer eligible voters relative to the total population. In two California districts, it takes fewer than 35,000 votes to win, vs. 100,000 votes needed to win in a state like Pennsylvania.

DAN STEIN, FEDERATION FOR AMERICAN IMMIGRATION REFORM: Political subdivisions, political districts are shifted to states to give representation to illegal aliens, at the expense of U.S. citizens, five-, six-, seven-generation American citizens losing congressional representation to people who have crashed our borders. That's not fair.

(END VIDEOTAPE)

SYLVESTER: Only two things can be done fix this, a constitutional amendment -- not an easy thing to do -- or a change in the immigration policy -- Lou.

DOBBS: Lou, obviously a change in immigration policy is not easy either. Is this trend, then, likely to continue?

SYLVESTER: It is, indeed. You have a million and a half immigrants and illegal aliens entering into the country every year, so you can project out into the future that, as we go on, this will have an even greater impact on congressional district seats -- Lou.

DOBBS: Lisa, thank you very much -- Lisa Sylvester reporting from Washington.

On Capitol Hill tonight, a Medicare prescription drug benefit that could save money for millions of Americans is now in jeopardy; 40 Democratic senators and one Republican have sent a letter to President Bush. They are threatening to block the bill unless changes are made.

Congressional correspondent Jonathan Karl is live on Capitol Hill and has the latest for us -- Jonathan.

JONATHAN KARL, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, those 41 senators are objecting to an emerging compromise that still isn't done yet between House and Senate negotiators on a final prescription drug bill for Medicare.

Those 41 senators, in their letter, wrote to the conference committee, as well as to President Bush -- quote -- "A partisan conference report that jeopardizes Medicare and does not provide meaningful assistance to the elderly and disabled should not and will not pass." Their main objection is not to the drug benefit itself, but to changes the bill would make into Medicare itself, changes that would make Medicare compete with private insurance companies.

Now, 41's a significant number. That is enough to block the bill here in the Senate. One of those today on that letter today was Senator Ted Kennedy, who issued the letter with a challenge to President Bush.

(BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: We're reaching the final hours. We call on the president to intervene and to exercise judgment in this conference.

(END VIDEO CLIP)

KARL: Now, the response -- he has a challenge for the president to get involved this, and the president needs to show leadership. The response comes just a short while ago from the White House from spokesman Trent Duffy, who says that the president is engaged, is working with Democrats and Republicans on this.

And Duffy says -- quote -- "It would be a disservice to seniors to miss this historic opportunity to get prescription drug coverage." Now, this is not done yet. Certainly, it's way too early to say that this will kill the bill. As a matter of fact, one of the Democrats who is working with the Republicans on this, Senator John Breaux of Louisiana, told CNN a short while ago that he believes that progress is being made.

(BEGIN VIDEO CLIP)

SEN. JOHN BREAUX (D), LOUISIANA: I think we're making real progress. This is a monumental effort. We're talking about not only adding prescription drugs to the Medicare program. We're talking about bringing about some major reform in the program to make sure that it's financially viable in the future and that it does what the challenge is for seniors and gives them adequate medical care. This is not easy. It's a monumental task. We're making real progress. There's still a lot left to be done.

(END VIDEO CLIP)

KARL: But Breaux acknowledges that there is a limited amount of time here. He says that this needs to be done within the next few weeks. He believes, though, that possibly as early as next week, that there could be a deal that would have substantial support from Republicans and Democrats here in the United States Senate and enough to pass both houses of Congress -- Lou.

DOBBS: Jonathan, thank you.

Last night here on the show, Majority Leader Frist said he expected this to get done within the next couple of weeks. This is -- and we should point this out -- this is a hugely expensive proposition. We're talking $40 billion. Is it your sense there on Capitol Hill that there is a real stomach for the kind of fight that would end up killing this legislation for seniors?

KARL: Well, in over 10 years, it's $400 billion. It's something that the president has said is his No. 1 domestic priority right now after education.

So there is great political risk to watching this die, some would say especially for the Republicans. Democrats are at risk, too. If they block this in the Senate, Republicans will certainly charge, here was something that was going to spend $400 billion on seniors to help them get drug coverage that was killed in the Senate. So both sides have enormous political stakes here. And although there are major obstacles here, major obstacles, there is still a significant chance that it will work. John Breaux puts it at 60/40 that it will ultimately passed and be signed into law.

DOBBS: Jonathan, I'm not sure I quite understand. If 40 Democratic senators would block this, it seems that the political liability would be theirs, would it not?

KARL: Well, certainly. But what they're going to say is that what was offered here was something that was simply not acceptable, that it was going to destroy Medicare. So you'll have a political back-and-forth.

Republicans would certainly argue it was the Democrats' fall. Democrats will say that the president simply didn't work with them to get something done that would be satisfactory.

DOBBS: Jonathan Karl, thank you very much, reporting from Capitol Hill.

Defense Secretary Donald Rumsfeld today made a surprise appearance at the Pentagon's news briefing to dispute the meaning of the word "slog." That word appeared in a leaked memo saying the United States faces what the defense secretary termed a long, hard slog in Iraq and Afghanistan. According to Secretary Rumsfeld, slog does not mean a slow, heavy pace.

And someone who took on the issue of the rather disputatious meanings is our senior Pentagon correspondent, Jamie McIntyre. And he has the report for us tonight -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, the Pentagon briefing was proceeding routinely with a spokesman and a military briefer when, suddenly, a surprise appearance by Defense Secretary Donald Rumsfeld, who bounded to the podium and issued a short statement about the anniversary of the bombing of the Marine barracks in Beirut, and then challenged the press corps about the definition of the word slog. He said he found a definition he likes in the Oxford English Dictionary.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: Slog, to hit or strike hard, to drive with blows, to assail violently. And that's precisely what the U.S. has been doing and intends to continue to do.

QUESTION: Is that what you thought it meant when you wrote it?

RUMSFELD: It's close enough for government work.

(LAUGHTER)

(CROSSTALK)

MCINTYRE: ... to be disputatious. The American Heritage Dictionary

(CROSSTALK)

RUMSFELD: There are a lot of different definitions. I know that.

MCINTYRE: Well, this is its preferred definition, to walk or progress with a slow, heavy pace, plod, as in slog across the swamp.

RUMSFELD: Right. I've seen that one.

(LAUGHTER)

RUMSFELD: I read the one I liked.

(END VIDEO CLIP)

MCINTYRE: Well, the Pentagon say it's not going to investigate this leak, but it has acknowledged its chagrin that a memo appeared on the front page of "USA Today" so quickly after Rumsfeld wrote it.

He says now, after rereading it in the newspaper, he thinks it's a pretty good memo for discussion. And he's not apologizing for it at all. His theory was that it was leaked by one of the staff members who is -- because it only went to four of his trusted advisers, his theory is that they copied it for distribution to draw up discussion points and then somebody leaked it, in his words, thought it was a press release.

That's really interesting Pentagon spin here today. Now the spin is that leaking this memo was really a good thing, that it portrays Rumsfeld as having a realistic view of Iraq. And the joke among his staff here is that they're all squabbling over who gets credit for leaking the memo -- Lou.

DOBBS: It will be interesting to see if they're as eager to take that credit as we see the spin unwind over the course of the next several days, as we are certain to. It was interesting to see the defense secretary contending with you on the meaning of the word slog. I commend you for the use of the word disputatious as you confronted the defense secretary.

But the essence is, one, the spin that this was just him bringing up something for people to consider in some high-minded and abstract matter, two years later, the defense worried about how to measure success in the war on terror, the defense secretary saying, quite clearly, that he was not pleased with the situation with the Ansar al- Islam terrorist group, these are rather pragmatic, real, empirical issues to be dealt with.

MCINTYRE: And that's the point the Pentagon makes. I think critics of Rumsfeld can look at this memo -- and they can look at it, because it has been released by the Pentagon -- and find things in it that they think are inconsistent with at least the tone he has given in public.

But defenders of him can also find things in it that basically are consistent. And that's where the debate is. It is debatable exactly what the meaning of the memo is.

DOBBS: And we watched at least part of the debate that you had. Thank you very much, Jamie. And I think, at the very least, we can say that opening up the dialogue that has resulted from this leak may in fact prove to be beneficial to all sides.

Thank you very much, Jamie McIntyre, our senior Pentagon correspondent.

In Iraq today, a bomb attack on a military convoy killed an American soldier north of Baghdad. The soldier was a member of the 4th Infantry Division. Two other soldiers were wounded. And today, the military said two soldiers from the 1st Armored Division have died from noncombat causes.

Coming up: weapons in space and why defending spy satellites could lead to world war. National security correspondent David Ensor will have the special report.

And Congressman Charles Rangel fights back against European Union efforts to bully the United States Congress, Congressman Rangel our guest.

And "America's Bright Future" -- tonight a teenage entrepreneur who succeeded in two businesses and is already hard at work on No. 3. Kitty Pilgrim will have the story.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Space weather forecasters are now predicting a solar storm tomorrow that could damage satellites and power grids, affecting television signals, cellular telephones and pagers all around the world.

During a solar storm, gas and charged particles explode from the surface of the sun, in this case, from a sun spot the size of Jupiter, roughly 10 times the size of Earth, and that explosion obviously forming the storm that will hit the Earth by tomorrow. Tomorrow's solar activity is expected to be strong. And this solar storm is rated as a three on a scale of one to five.

Several major satellites have been knocked out by past solar storms, including AT&T's $200 million Telstar satellite six years ago.

A different kind of satellite has been the topic of a series of special reports that we've brought you this week, spy satellites. Tonight, the possible role that satellites could play if war went beyond Earth into space.

National security correspondent David Ensor with the special report.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): The Chinese launch last week of a manned spacecraft sent a chill down spines at the Pentagon and in U.S. intelligence. A surveillance camera on the orbital module that remains in space will watch targets on Earth, U.S. officials say, for the next six to eight months.

RICHARD HAVER, FORMER DOD INTELLIGENCE OFFICIAL: The Chinese are telling us they're there. And I think, if we ever wind up in a confrontation again with any one of the major powers who has a space capability, we will find, space is a battleground.

LT. GEN. EDWARD ANDERSON, DEPUTY CMDR., USNORTHCOM: They can that see one of the ways that they can certainly diminish our capabilities will be to attack the space systems. Now, how they do that and who that's going to be, I can't tell you in this audience.

ENSOR: It wouldn't necessarily be China. Any nation with a medium-range missile might be able to knock a satellite out of low Earth orbit. U.S. vulnerability is real. From telephones to television to bank transfers, the American economy relies heavily on space satellites. And they gave the U.S. military and intelligence a critical technological edge, both in Afghanistan and in Iraq.

KEITH HALL, VICE PRESIDENT, BOOZ ALLEN HAMILTON: Steps have been taken to protect our satellites. We'll be doing more of that in the future. This is not something that we haven't worried about.

ENSOR: On a converted 747 and in laboratories, scientists are experimenting with laser weapons that could one day be deployed to protect satellites against incoming missiles.

(on camera): There even is talk of one day protecting space satellites and installations with bodyguards in the form of rapid- launch military spacecraft.

(voice-over): Weapons in space? Critics argue that war games conducted by the U.S. Air Force show they could make Americans less safe, not more. UNIDENTIFIED FEMALE: What they found in the last three war games that they've had is that, every time somebody used a space weapon to take out another person's satellites, satellites that could see, the warning satellites, all of a sudden, you had nuclear war very quickly, because the commanders on the other side, the people who lose their space assets and can't see, have to assume the worst.

ENSOR: But, as more satellites are launched each year, the nation's dependence on them grows.

(END VIDEOTAPE)

ENSOR: Secretary of Defense Donald Rumsfeld, among others, is a strong advocate of putting weapons in space to defend them -- Lou.

DOBBS: And related to the satellites David, the use of lasers, Livermore, the laboratory, the weapons laboratory, making significant advances in lasers, Russia, an advanced laser program, give us just a sense of the relationship between the satellites and lasers and what Space Command expects in the near future.

ENSOR: Well, Lou, the view in the United States, and possibly in Russia as well, is that laser technology holds the greatest promise in terms of weapons that could be used to protect satellites. And that's why a lot of money has been put into experimenting with various laser technologies, a lot of money very recently at the Livermore facility, we understand.

And there have been some breakthroughs, although much of this is rather classified and not in the public domain. There have been some breakthroughs lately in the technology, which is causing some optimism among scientists that they might be able to create such a weapon. Now, as we mentioned, optimism is for the people who are in favor of putting weapons in space. Those who think it's a mistake are sorry to see the advances occurring -- Lou.

DOBBS: David, thank you very much. Outstanding reporting -- David Ensor, national security correspondent, from Washington.

Coming up next: President Bush returns from Asia with comments about the North Korean nuclear standoff and the war on terror and radical Islam. Senior White House correspondent John King will report.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: U.N. Secretary-General Kofi Annan today called upon the world to provide billions of dollars to help pay for reconstruction in Iraq. Kofi Annan told a conference if Spain that countries should put aside their differences and make a contribution now.

(BEGIN VIDEO CLIP)

KOFI ANNAN, U.N. SECRETARY-GENERAL: I know we all look forward to the earlier possible establishment of a sovereign Iraqi government. But a start on reconstruction cannot be deferred until that day. It demands our urgent attention now.

(END VIDEO CLIP)

DOBBS: Also today, a top Iraqi official warned both France and Germany that Iraqis will remember those nations that helped rebuild their country. He said France and Germany should reconsider their decisions not to give money.

Tonight, President Bush is in Hawaii at the end of a six-day tour of Asia -- the main topics of discussion, the North Korean nuclear crisis, Iraq and the global war on terror.

Senior White House correspondent John King has been traveling with the president through this whirlwind tour, reporting now from Honolulu.

John, what did the president actually achieve on this tour?

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Lou, the president, a short time ago, called this trip a spectacular experience.

From the White House perspective, the major accomplishment was keeping a consensus with Russia, China, South Korea and Japan for how to proceed next in the negotiations with North Korea over the nuclear standoff, Mr. Bush unveiling a new proposal on this trip to give North Korea written security assurances, but only in the context of those so-called six-party negotiations.

So the White House believes that is a major accomplishment, even though, for now, North Korea is rejecting that plan. The major challenge, though, the president encountered is this. At nearly every stop, he faced criticism that he is a president too willing to go to war, to eager to defy the wishes of the United Nations and other international bodies. We saw that at the Asia-Pacific economic summit. We saw it vividly in Australia, an ally of the United States, where many say this president should not have gone to war without the backing of the United Nations.

So the president says an achievement on North Korea. Clearly, he learned on his trip that he continues to have a perception problem around the world -- Lou.

DOBBS: John, the president's tour remarkable for its speed, six countries, six days. Why an emphasis on traveling to so many countries in such a short period of time?

KING: Well, the President's aides don't dispute the fact, Lou, that this president does not like to linger. Why so many countries so fast? He wanted to personally thank and reward leaders who stood with him in the war on terrorism, so President Arroyo of the Philippines, Prime Minister Goh of Singapore, Prime Minister Thaksin of Thailand, and, of course, Prime Minister John Howard in Australia. The president wanted to travel to their countries to say thank you firsthand and, in most cases, also to bring along either new military cooperation or new economic cooperation as well, the president's way of saying: If you stand with me, I will stand and reward you -- Lou.

DOBBS: John King, thank you. And it's obvious that you are glad to be back in the United States and particularly in the westernmost part of the Pacific United States. Thank you very much, senior White House correspondent John King.

Now to the candidates who hope to replace President Bush in the White House in next year's election. What some might call a risky strategy appears to be gaining momentum among the Democratic presidential hopefuls, promising to roll back the president's tax cuts for wealthy Americans, at least. General Wesley Clark is the latest Democrat to make this campaign promise.

Our senior political analyst, Bill Schneider, is here now with more.

This is something of a risky strategy, isn't it?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Walter Mondale, remember him? He's the one who said: Ronald Reagan will raise your taxes. So will I. He won't tell you. I just did.

Goodbye, Walter Mondale. And believe me, the Republicans are going to say: See the Democrats? They're doing it again. They haven't changed.

DOBBS: And Clark weighing in on this issue, the number of candidates saying they want to roll back taxes, it effectively means a tax increase. Voters aren't stupid.

SCHNEIDER: Well, there are nine Democrats. And, by my count, nine of them, all of them, want to roll back at least part of the president's tax cuts. There's a disagreement on how much.

Seven of them say they want to roll back tax -- they want to increase taxes, that is, roll back the tax cuts for the wealthy. Two of them, Howard Dean and Dick Gephardt, say they want to eliminate all of the tax cuts passed by President Bush. This sounds crazy. It just gives the Republicans an opening, but except for one thing.

One, the tax cuts weren't that popular to begin with. Americans, believe it or not, were not enthusiastic about these tax cuts. Two, people are concerned about the deficit. Three, most of the Democrats are only talking about rolling the tax cuts back for the wealthy. And, four, they're talking about what they want to do with the money, which is primarily health care.

DOBBS: Health care obviously an important issue in this campaign as it's moving forward. Likely to become more so?

SCHNEIDER: I think so. Seniors are very concerned about the rapid escalation of health care costs, which was high in the early '90s, the last time health care became an issue.

DOBBS: Right.

SCHNEIDER: Slowed a bit in the late '90s. And now health care costs are rising very fast again. That's got seniors very concerned.

DOBBS: The risks are not all in the side of the Democrats. There is also a considerable risk for President Bush. That is that these tax cuts, which amount to over 10 years, almost $1.7 trillion, do not generate jobs, do not drive this economy through next year, an election year. Don't you see that the same way?

SCHNEIDER: Of course. The president originally proposed the tax cuts on principle because he said the government is collecting money, there's a surplus. Then he changed gears and said the tax cuts they were an economic stimulus plan. So the now Democrats are saying, Well, if the tax cuts were meant to stimulate the economy, where are the jobs? Where's the stimulative effect? The Jobs haven't materialized. So that argument is wearing a little thin.

DOBBS: Next year, for most voters in this country, what will be the primary issues? Will it be health care? Will it be those jobs? Will it be the overall strength of the economy and the markets?

SCHNEIDER: Well, of course the war on terror has to be considered a major issue. No one knows exactly what world events will happen. That's a big factor overarching in this election.

The economy certainly important. And right now, the fact that almost 3 million jobs have disappeared, Bush would be the first president since Herbert Hoover to suffer a net loss of jobs in his administration. He's hoping some of the jobs will be recovered before Election Day.

Health care is rising fast as an issue because costs are rising, particularly among seniors.

DOBBS: And bringing it all to a more critical level, the Medicare legislation now in the Senate, where we have obviously a major challenge to Majority Leader Frist by the Democrats.

SCHNEIDER: And prescription drugs. Don't forget that.

DOBBS: Not at all. Thank you very much, Bill Schneider, as always.

SCHNEIDER: Sure.

DOBBS: The United States is facing $4 billion in sanctions from the European Union now on essential industries such as steel, agriculture and livestock, the EU claiming that those are actual subsidies and demanding that Congress push back legislation -- in fact, giving Congress until March of next year to resolve the dispute over two proposed solution, one from Congressman Charles Rangel of the Ways and Means Committee, with whom I spoke earlier and asked him if this is a case of the European Union simply telling the U.S. Congress what to do.

(BEGIN VIDEOTAPE)

REP. CHARLES RANGEL (D), NEW YORK: I don't even like to hear you say that. You know, I don't mind having disputes within my own party or with Republicans or with the executive branch. But to have foreigners, and especially the arrogance of the European Union, dictate to us what we have to do to abide by the World Trade Organization rules, I resent.

And I would have hoped that this would be an issue where the White House and the Congress could come together and tell them that if you really want to see what a war looks like, you know, take the 4 billion trade sanctions and see what we could do, not that we need that type of thing, but at least to maintain some degree of our sovereignty.

But, now, Mr. Thomas has taken now a $4 billion problem and created a $128 billion solution, which I don't think is the answer.

DOBBS: Congressman, if I may simply repeat your words. I don't like to hear you say something about saving part of our sovereignty, our diminished sovereignty as the result of these trade deals, particularly with the European Union in this instance. Have we allowed trade, in your judgment, our international trade agreements, to encroach on our sovereignty on a host of issues, whether it be protecting hardworking middle-class American families, whether it be in terms of taxation, whether it be in terms of our control of our borders?

RANGEL: Of course, we have, and I believe that in the long run, each nation has to do that. If we're going to be interdependent on each other, we have to have some international standards that we are going to follow. And standards and regulations don't mean much unless you have some international sanctions. And, of course, we appeal to the World Trade Organization in terms of the sanctions that were against us because of unfair international law practices.

But you would think that if it is our sovereign that is being encroached, then it's our sovereign, not the House of Representatives, not the Senate and not just the White House that will be there to defend it.

With all of the meetings that I've had at the White House on the energy bill and the Medicare prescription bill, this has never come up. There's has been no meetings of the full committee on this issue. And I'm just saying that if because we are the world leader that we have to pay a price for that, diminishing our total influence over commerce, we should at least approach the problem in a united way and in a bipartisan way.

DOBBS: Congressman Rangel, we thank you for being with us.

RANGEL: Thanks for having me back.

DOBBS: Thank you. (END VIDEOTAPE)

DOBBS: The Senate today voted to give itself a pay raise. Senators rejected a proposal that would have blocked them from receiving an automatic cost of living increase for next year. The senators' salary goes next year $3,400 higher. They'll be making $158,000 a year. The salary has increased the past five years by a total of $21,000.

And that's the topic of tonight's poll: "Do you believe the Senate deserves the pay raise it gave itself? Yes or no?" Cast your vote at cnn.com/lou. We'll have the results later here.

And tonight's quote, from one senator who is outraged about the Senate's pay increase. And we quote -- "This automatic stealth pay raise system is just wrong. I, for one, would be interested to hear somehow explain just why Congress should get a $3,400 pay raise in the face of record budget deficits and economic downturn and record unemployment." Senator Russell Feingold, Democrat of Wisconsin

Coming up next -- "Grange on Point," lessons learned the hard way and lessons that are being learned again. Why American troops still on the frontlines still are desperately short of much-needed equipment and supplies. General David Grange "On Point" next.

(COMMERCIAL BREAK)

DOBBS: In tonight's "Grange on Point," General Grange talks about the lessons learned the hard way and learned again.

Every new war brings some of the same old problems, recommendations from the last fight that aren't always implemented before the next. This, plus the constant need to keep up with the latest over weaponry, tactics, equipment posing a critical challenge for the military now engaged in Iraq.

Joining me now, General David Grange.

Let's -- let's talk about first, if we may, the issue of these bulletproof vests. I have heard from a number of people -- certain members of certain units of the U.S. Army buying their own bulletproof vests. That's crazy, isn't it?

GEN. DAVID GRANGE (RET.), U.S. ARMY: Well, there's some reports that parents have sent -- bought and sent the most advanced vests to some of their sons and daughters in Iraq. The problem is, there's not enough vests -- the ones that stop bullets -- to go around with the forces in Iraq. And it's-- and it's not an issue that they don't want to give the soldiers the vests, they just can't make them fast enough.

But the point is, the problem is, the fault is, they should have been made long ago. This technology came out in the '80.

DOBBS: Should have been made long ago.

Let me ask you this. Do we -- do you know who makes these? Is it an American manufacturer? I mean, it's amazing that in this day and age I have to ask this question. Do we know where these vests are made?

GRANGE: There's a -- there were three primary manufacturers. That's been increased by the Department of Defense to six, which is -- which is a great effort -- to try to get twice the production out there to the troops about.

But again, the point is, why do you have to wait for war to start to make something you know you need from the last war? It's criminal. It should have been done years and years ago.

DOBBS: And do you get the sense they are learning the lesson here on at least bulletproof vests?

GRANGE: Well, you know, we know for a fact that several soldiers, Marines have already been saved from the bulletproof vests.

DOBBS: Right.

GRANGE: We also know that some took -- we had casualties that didn't have them. So, I mean, you would think you would outfit the soldier first. And I know in the hearts of the leaders they want to do that. But in the past, it should have been corrected.

DOBBS: And I know, General, you're also concerned about the tankers, the tank units, who simply don't have sufficient weaponry.

GRANGE: Well, what you have is a four-man tank crew, as an example, that you're bringing up, you two rifles per tank crew of four. All four have pistols. But when you dismount and you run a checkpoint or you are on a patrol in a guerrilla type warfare you need a rifle. And so what you have is soldiers scrounging for rifles. Some commanders get them for them. And if they don't, they pick up captured AK-47s and use them as weapons

DOBBS: Any sign that that's changing?

DOBBS: I think there's a lot of signs that it's changing. It's just that, we've been in guerrilla warfare before. So you have to outfit for the task at hand and sometimes your conventional organization doesn't fit what you find on the battlefield.

DOBBS: And we're watching our young men and women in uniform modifying everything from Humvees to other vehicles, trying to provide -- adding armor to those vehicles, reorienting the vehicles, to actually engage in guerrilla fighting. What in the world, why hasn't the U.S. military, the U.S. army in particular, already done this? They know the conflict that they face?

GRANGE: This has been an issue for many years. Vehicles like the Humvee, soft skinned vehicles, even lightly armored vehicles, that the army and the marine corps both use in conflict, this issue's been brought up before and you have land mine issues. Right now, a lot of the casualties come from ambushes. Why would you not have the vehicles sorted out early on for this type of conflict? And this is something going on for years, trying to put some type of armor plating, kits that strap on very rapidly, have seats that face out, for instance, instead of in. In other words, facing enemy so you can return fire. And the other is, ring mounts to hold machine guns. You have vehicles that don't have them. Again lessons learned from years ago that have not been implemented before the war started.

DOBBS: And I know you're concerned and you've talked about it here before, the idea of individual replacements in Iraq, these combat units rather than replacing entire units and rotate those units, is that changing at all?

GRANGE: It's going to change, I believe, Lou, but it's a slow thing to turn around, because it's not the easiest thing to manage by the personnel bureaucracy that assigns and rotates the personnel and units to an area of conflict like Afghanistan and Iraq, because it's difficult to do.

It's also difficult to do with a very small army, because it's hard to rotate these units instead of individual replacements. You have to put the team before the person and that's what unit manning does. And the problem is, the army's very small, it's going to take a wall to implement that. But you have to have predictability for the soldiers and their families, for rotations and future fights that we -- our country's involved in.

DOBBS: And, just so there's no misunderstanding whatsoever as anyone listens to the points that you're making here, it's safe to say, General Grange, is speaking out of concern for the young men and women fighting the nation's battle, he is not in any way anything less than supportive of them and the U.S. military as they engage the enemies of this country. Is that a fair statement, General?

GRANGE: You bet. I'm a nonprofit organization right now. My comments come from the heart, from serving the nation.

DOBBS: And with great distinction. General David Grange, thank you.

Coming up next, America's bright future. Tonight we focus on a young entrepreneur. We'll introduce her to you. She is conquering career No. 3 before she even finishes high school. Kitty Pilgrim will have her amazing story. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight in our series of special reports we're bringing you this week focusing on the young people of this country who will light up the years of our future. We, tonight, introduce you to a young woman who's well on her way of becoming a business tycoon. She is Kenya Jordana James, she's already working on her third business venture while most kids her age are just beginning high school. Kitty Pilgrim is here now and has her remarkable story -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Lou, she is one of most assertive children I have ever encountered. Poised, and focused, Kenya has a very strong sense of self.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): The founder, publisher and editorial director of "Blackgirl" magazine is 14. The magazine has 5,000 subscribers and sells at book stands all over the country. Kenya Jordana James actively plans, writes articles for and helps design every issue.

KENYA JORDANA JAMES, "BLACKGIRL": Have much more ads for the next issue, less editorial. Which is, yay.

PILGRIM: Kenya started the magazine after her first business, a cake baking service, netted $1200. She said, she got the entrepreneur spirit from that first venture.

JAMES: My visions for the magazine is to become the voice of black girls. I like coming up with the ideas and then turning them into businesses. So I just make sure I tell people what I want and make sure I get what I want, because I have to be satisfied with the ending product of whatever I'm trying to produce.

PILGRIM: Founded with the help of her mother Karen, Kenya says her mother is her rock.

KAREN MASON, KENYA'S MOTHER: There's a difference for children between an idea, a concept and actually seeing the manifestation of that concept. And what we've tried to do in her upbringing is to let her know that she can go from that point A to point B.

PILGRIM: Kenya's media career doesn't end there.

JAMES: Five, four, three, two, one...

PILGRIM: She works camera three for an interview program at the local cable channel People TV in Atlanta. And takes local TV and film class and has written two screenplays. She also takes courses at three different local colleges in Georgia.

As if that weren't enough, Kenya has also started a clothing design business sewing and selling her creations to her friends. She expects to expand that venture because demand has been good. She says it's parent-friendly clothing that won't create conflicts at home.

JAMES: I wanted a clothing line that my mom wouldn't nag me about and say, that's too tight, that's too small, you can't wear it.

PILGRIM: She took honors for "Blackgirl" magazine as 2003 teen entrepreneur of the year, but found a moment to plug her next venture.

JAMES: I would like to say I love to sew. And so, when I was very young, I always wanted to make a gala-type dress. So I was very humbled and honored to show you all a product of my clothing line, Modest Apparel and so here it is!

(END VIDEOTAPE) PILGRIM: Kenya can't decide what she wants to do next. Ultimately maybe study to be a doctor. But right now, there's really nothing she won't try, Lou.

DOBBS: What a beautiful dress.

PILGRIM: Yes. Very good designer.

DOBBS: And a terrific marketer as well.

PILGRIM: She's astonishing. And makes us all feel like a slouch.

DOBBS: Kitty, thanks very much. Kitty pilgrim.

Tomorrow night here, we'll introduce you to another extraordinary young person, a painter who is already drawing critical acclaim and some very hefty price tags for her art. Please join us tomorrow night.

Tonight's thought is, of course, on youth and simply stated. "The youth of a nation are the trustees of posterity." British Prime Minister Benjamin Disraeli.

And a reminder to vote in tonight's poll. The question, "do you believe the Senate deserves the pay raise it gave itself, yes or no?" Cast your vote at cnn.com/lou. We'll have the results in just a few moments.

And coming up next, we'll share some of you thoughts about our special reports this week on America's young people, the talented young people who represent the very best of this country and its future. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results now of our poll. Do you believe the Senate deserves the pay raise it gave itself? Eleven percent say yes, 89 percent however disputatious as senior Pentagon correspondent Jamie McIntyre taught us to say tonight.

On Wall Street the major averages held steady throughout the day after they sold off. Dow rose almost 15 points the Nasdaq up -- the Nasdaq down rather, 12.5 points. And the S&P up almost 3.5.

There are 95 million Americans invested in stocks and 8,000 mutual funds, and an investigation into the mutual fund industry and misconduct among some of the funds led to the firing of four broker at Smith Barney. The investigation we now learn is widening.

Christine Romans is here -- Christine.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: And New York Attorney General Eliot Spitzer's office says that investigation is just getting bigger and more than 80 subpoenas have been issued so far to both firms and individuals, and more charges in the probe are expected. Now, while the public awaits those charges, the body count from job losses mount. The four Smith Barney brokers fired today join more than 20 unemployed brokers now from Prudential, Alliance Capital, Merrill Lynch and Fred Alger, among others.

Lou, New York and Massachusetts regulators are pushing this one hard, so is Illinois and the Securities and Exchange Commission is investigating where some mutual funds directs business to brokerage firms that agreed to promote sales of the funds. What's an investor to do, of Christine Bens (ph) of Morning Star said, avoid the Spitzer four. Janus, Strong, Bank One, and Bank of America. We are going to continue to watch this probe. Just about every day we get more news on this.

Low-quality tech stocks. We want to talk about this. Michael Toporek of Brookstone Partners says there are 300 companies sized between $10 million to $20 billion in market cap, that up more than 200 percent this year. Only 30 percent of those show a profit. But the average stock market return was 430 percent. Tech, biotech, telecom, topping this list. Lou, there are some parts of this market that have had an amazing rally and now it's time to take a close look at these companies that are not having any earnings growth but are returning 400 percent.

DOBBS: So you're going back to that old-fashioned idea there should be a correlation between earnings and the prospect of earnings and price?

ROMANS: I'm an old fashioned kind of girl.

DOBBS: I'm a little old fashioned myself about that. It's a sage warning. Thank you very much, Christine Romans.

ROMANS: You're welcome.

DOBBS: Taking a look at some of "Your Thoughts."

From Anaheim, California, Thanks Lou for keeping all the important issues of the day before your viewing audience. People are starting to wake up from the long sleep and not a minute too soon if we are to have any chance at all of saving our country. Keep up the good work." That from S. Hampton.

From Onancock, Virginia, "I would like to express my appreciation for you constant endeavor to lift up the truth in the business, investment, and political arenas. Middle America needs an advocate for honestly and morality, something which seems to be becoming more and more in short supply in America." That from Sam Belote.

From, Indialantic, Florida, "Why is it that with 4 networks running news 24-7, your one hour covers more real news than the rest of them put together? Thank you and keep up the excellent coverage," Karen East. Karen, we thank you.

And from California, "What a break! In the midst of the dismal activities of our own government, financial institutions, medical centers, corporations and the like comes a ray of light and hope our very own young people!

They have hope, dreams plans, and lets all get behind them and do what takes to help them become shooting stars and the leaders of tomorrow. Gail, we couldn't agree with you more. We thank you for your words. We love hearing from you. E-mail us at loudobbs@cnn.com

And finally tonight, the end of an era in aviation. The Concorde today flew its last night from London to New York with paying passengers. The Concorde has been shuttling passengers across the Atlantic across twice the speed of sound for 30 years. Tomorrow the Concorde will make its final trip from New York's Kennedy Airport back to London's Heathrow.

And that's our show for tonight. Thanks for being with us.

Tomorrow, "America's Bright Future," we introduce you to a young art prodigy whose paintings fetch upwards of $20,000 apiece. She's not quite 10- years-old.

And then heroes: tomorrow we bring you the story of a Marine Private Private Joshua Doil (ph) who was injured while patrolling the streets of Iraq. For all of us here, good night from New York. "ANDERSON COOPER 360"

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Congress Battles Bush Over Medicare Reform>