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Lou Dobbs Tonight

California Firefighters Hope For Break in Weather; Interview With Senator Chuck Hagel; "Exporting America": 14 Million Jobs Could Go Overseas Next Few Years

Aired October 30, 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 30. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

Tonight: Wildfires continue to rage across Southern California. We'll have reports from the hardest hit area.

In tonight's special report, "Exporting America," as many as 14 million American jobs could be moved overseas in the next few years. Peter Viles will report on whether your job could be at risk.

In "The Great American Giveaway" tonight, federal and local governments spending billions of dollars trying to keep illegal aliens out, but millions of illegal aliens still entering the country. Casey Wian will report.

And in "Grange on Point" tonight: Is Iraq becoming the next Vietnam? One of the most highly decorated generals in history, General David Grange, joins us.

And Vietnam veteran Senator Chuck Hagel, a senior member of the Foreign Relations and Intelligence committees, will be here to talk about the building tensions on Iraq and intelligence between the White House and the Republican-controlled Congress.

Tonight, in Southern California, thousands of firefights are in a stalemate, as they struggle to contain massive wildfires. They hope that cooler temperatures and light rain will help dampen the flames. Those fires have now killed at least 20 people, including one firefighter, more than 650,000 acres scorched, an area greater than the size of Rhode Island.

The fires have also destroyed more than 2,600 homes; 13,000 firefighters are battling those blazes in five counties, from Ventura County in the north, to San Diego County in the south. Firefighters have made progress in some areas, but huge fires continue to threaten a number of mountain resort towns.

We begin our coverage tonight with Bob Franken in the former mining town of Julian in San Diego County -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, it is a tourist attraction, a major tourist attraction, for this area, Lou. And the town of Julian is still standing, because the firefighters made a last-ditch stand against the fire that thus far has been successful. And because of the rain that you pointed out and the fog and the cooler temperatures, right now, the fire, for the most part, is embers over more than a quarter million acres.

But the bad part of the story is that there is a heavy wind, gusts up to 40 miles an hour which, of course, could immediately fan those embers into the inferno that has turned the so-called Cedar Fire in this part of the state into the largest brushfire ever. As I said, over 250,000 acres have been consumed by the fire thus far; 14 people have lost their lives, including one person who was actually fighting the blaze.

They have 1,700 structures that have been completely consumed, including about 1,400 homes. Thousands are homeless right now. They're hoping that the weather will continue to keep the flames down, that the winds will subside, and the firemen will finally be able to make some headway.

They have, thus far, contained 38 percent of the flames. Now, contained means that they have surrounded the various fires. They have actually put out, extinguished none of them. They're hoping that they'll start slowly making some progress there. They have to hope that the weather will help them -- Lou.

DOBBS: Bob, thank you -- Bob Franken reporting from Julian, San Diego County, California.

One of the biggest and most destructive of those fires is bearing down on another resort town, Lake Arrowhead in San Bernardino County. Some of the flames have been as 300 feet. That's twice the height of the tallest trees in that area.

Miguel Marquez reports from Lake Arrowhead.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Look at this. It's -- can you believe this?

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Shock and relief in the San Bernardino Mountains east of L.A. But, for every scene like this, there are many more like this. Firefighters are determined to save the popular resort community Lake Arrowhead, now surrounded on three sides by flames that have already destroyed more than 300 homes in the area.

The larger community of Big Bear, home to several ski areas, lies just eight miles away. Residents of both communities are at the mercy of the weather.

CHIEF RANDY CLAUSON, U.S. FOREST SERVICE: The biggest question mark is what the wind is going to do after this. We know it's blowing erratically, like was just said earlier. The gusts are up to 40 miles an hour. That's limiting aircraft usage for today. MARQUEZ: One Forest Service official calls the inferno a tornado made flames with a will of its own. For almost everyone involved, it's an inferno without precedent.

UNIDENTIFIED MALE: This fire's been so unpredictable. Fire behavior has been something that we've never seen before. So when can we get people back into the valley? I don't know. Soon, I hope.

MARQUEZ: Lake Arrowhead is now the latest front in a fire now almost a week old that started as two separate blazes, then merged into one monster.

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GOVERNOR-ELECT: I've had a meeting with Vice President Dick Cheney. And we talked about expediting the funds for the victims, their homes, the people whose homes burned and their businesses burned.

MARQUEZ (on camera): In this community, the fireplaces now mark where homes once stood. They look more like tombstones. Some 300, maybe 350 homes, total were lost in Cedar Glen. All told in the Old Fire, 850 homes officially gone. And the fire is still burning.

Miguel Marquez, CNN, Cedar Glen, California.

(END VIDEOTAPE)

DOBBS: A closer look now at the fires' devastation along the front lines. We focus not only own those who have lost their homes, but those who are still fighting to save them.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Come on back.

UNIDENTIFIED MALE: Whatever plan we come up, it just doesn't work out for us.

UNIDENTIFIED MALE: So we made some saves. But when you lose more than you save, it's real frustrating. It's disheartening, because you know people are losing their lives. They're counting on you, and you can't do it all.

UNIDENTIFIED MALE: For a time, the fire was so dangerous, it was unsafe for firefighters to even be up here. They retreated into their fire truck. They stayed in their fire trucks and waited for the firestorm to pass, one firefighter saying that, it was so hot, you couldn't even touch the window of the fire truck on the inside.

UNIDENTIFIED MALE: We started at the back and we worked all the fire this way. And we saved just about four or five structures.

UNIDENTIFIED FEMALE: We watched as things unfolded and watched as they walked away. And that was -- that was hard. But then again, we looked down the street and we see friends' houses that are just a little damaged. And we know that, when they moved on, they saved those houses. UNIDENTIFIED FEMALE: She's the one who knocked on our house. She's the one who saved my family. She's the one who said, "Get out! Get out! It's coming!"

UNIDENTIFIED FEMALE: If you take a look around here, there aren't a lot of people sitting and crying. Everybody's just, OK, let's get on with things. Come back in a year. This is going to a beautiful neighborhood again.

(END VIDEOTAPE)

DOBBS: Twenty-six hundred families have lost their homes and thousands more are still unable to return to them.

Turning now to the war in Iraq. Insurgents today ambushed a train carrying U.S. Army supplies. The train's engineer escaped without injury, but rocket-propelled grenades set fire to several of the shipping containers. After that attack, dozens of looters arrived on the scene. They stole computers, tents, bottled water and other supplies.

Tonight, graphic evidence of the torture techniques that Saddam Hussein used to intimidate and to control the Iraqi people. CNN has obtained a videotape from an independent source that shows Saddam Hussein's troops handing out brutal punishments to prisoners in a crowded public square. And we want to warn you, this tape is extremely graphic.

Senior Pentagon correspondent Jamie McIntyre has the report -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, while we got the tape from an independent source, it was recovered by U.S. soldiers back in April in Baghdad.

And it shows the brutal discipline used by the Fedayeen Saddam to enforce discipline in their ranks. Here, a segment -- and these aren't even the worst segments -- but here, one shows them throwing people of a building. It appears to be about three-stories high, just high enough for them to be very seriously injured, but not high enough to kill them.

Other parts of the tape also show people getting parts of their bodies cut off, in this case, a finger cut off. Other parts of the tape show people's tongues being cut out as well. This tape apparently was recovered and analyzed by the U.S. military. Here, you see somebody being punished with a public flogging, all of this punishment done in public in order to instill fear in the Iraqi population and to send a message to anyone who would oppose Saddam Hussein.

Again, these were not released by the Pentagon, but they do have a sort of propaganda value for the Pentagon. Today, Defense Secretary Rumsfeld acknowledged that he had seen this tape or one very similar to it and said it -- quote -- showed the -- that they portray a regime that was about as vicious as any regime could conceivably be -- Lou. DOBBS: You raised the issue, Jamie, and I think appropriately so. And that is the propaganda value of such a tape. Where did we obtain this tape? And is there some reason that we should look certainly beyond the obvious here for the source of the tape?

MCINTYRE: Well, we've known about the existence of this tape for some time. And we had requested a copy from the Pentagon, which had not been released to us. We obtained it through another source.

Typically, these kinds of tapes, people make copies of them and they can get out. I just wanted to stress that the Pentagon had not actually given us this tape in this instance. However, as I said, Defense Secretary Rumsfeld commented on it publicly at the briefing today and cited it as evidence of the brutality of the regime.

DOBBS: It is certainly that.

Jamie, thank you -- Jamie McIntyre, our senior Pentagon correspondent.

There was a massive security alert on Capitol Hill today. Someone apparently tried to smuggle a gun, Capitol Police thought, into a congressional building. SWAT teams searched the building. Staff locked themselves in their offices. The House of Representatives suspended its session. After an hour and a half, police announced that the gun was a fake, part of a Halloween costume.

Kathleen Koch reports from Capitol Hill -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Lou, no malice here, as you pointed out. This was just part of a Halloween costume. Two young female staff aides carried it right through a security checkpoint.

Now, again, they weren't trying to hide anything. They put it on the belt. It went through, but the police officer there was not looking. So here you see the dramatic response. Because this police officer was apparently distracted, was chatting, the officer did not look at the image on the screen until the two young women had simply walked away, what could be a potentially very serious security breach here.

So, again, the dramatic search, office-to-office. And police today admit, this clearly does show that their security system needs some fixing.

(BEGIN VIDEO CLIP)

TERRANCE GAINER, CAPITOL HILL POLICE: The very fact that someone brought a toy gun in, it was on the X-ray, and got further into the building than I would prefer, it does show that we've got to reevaluate how the X-ray machines are run. So, to that extent, it's another lesson learned.

(END VIDEO CLIP) KOCH: Now, police believe that they responded very quickly. There is a lot of concern up here on Capitol Hill, though, on the part of lawmakers and staffers who learned about the news, learned about the security alert from television or from other staffers.

They didn't get the BlackBerrys. They didn't get the e-mails. They didn't hear the intercom system that was put in after 9/11 that was supposed to alert everyone in case of just such an emergency -- Lou.

DOBBS: And the way the police actually found these people was that they called the police, correct?

KOCH: Indeed. The lawmaker for whom these two young women, who so far remain unnamed, worked for, the lawmaker called police and said: I believe it is my two staffers.

They were very apologetic. But they have been, again, so far not named. The police say they have broken no laws.

DOBBS: Halloween comes early on Capitol Hill. Kathleen Koch, thank you very much.

Well, stay with us for more on your government at work, our series of special reports on "The Great American Giveaway." Tonight, sealing the loopholes that allow millions of illegal aliens, including convicted sex offenders, to move freely throughout this country. Casey Wian and Kitty Pilgrim have the reports.

And Senator Chuck Hagel says the coalition needs more help in Iraq. And he says it's time for Congress and the White House to work together on Iraqi policy.

"Exporting America" tonight, our special report -- 14 million American service jobs could be heading overseas. Peter Viles will report.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The massive influx of illegal aliens into this country is costing taxpayers billions of dollars. Efforts to stop illegal aliens, of course, begin at our nation's borders.

The Department of Homeland Security, along with local governments, spend billions of dollars every year to secure our borders. And, still, there are 10 million illegal aliens living in this country.

Casey Wian reports from Yuma, Arizona.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Money is tight in Yuma, Arizona, like most counties along the United States' southwestern border, where per capita income is among the lowest in the nation. Adding to the financial squeeze, Yuma County spends nearly $5 million a year arresting, transporting and treating criminal illegal aliens.

KEVIN TUNNELL, YUMA COUNTY OFFICIAL: It's really tough on us. You're looking at any kind of health department. You're talking about our sheriff's department. You're talking about legal up in our county attorney's office, indigent defense, things to that effect.

WIAN: Illegal aliens cost the Yuma Sheriff's Department alone $3.2 million, more than half its annual budget.

(on camera): A 2002 congressional study found that 28 counties along the U.S. border with Mexico spend about $125 million a year on illegal aliens who commit crimes. Only a small fraction of that money is recovered from the federal government.

(voice-over): Last year, Yuma County received $650,000 in federal reimbursements, less than 15 percent of its costs. One reason: Federal resources are stretched thin. The U.S. Customs and Border Protection budget is $6.7 billion, which also funds anti- terrorism, drug enforcement and other programs.

The 9,000-agent strong Border Patrol apprehends about a million people a year trying to enter the United States illegally. About a million others evade capture. The Urban institute says more than half of those come from Mexico. That's about a third of Mexico's annual population growth.

This year, the Homeland Security Department will increase spending by $41 million for 570 additional Border Patrol agents, $48 million for air surveillance of the Canadian border, and $330 million on new technology to identify visitors who overstay their visas.

JACK RILEY, RAND CORPORATION: Right now, the public is bearing the costs of reconfiguration of our border protection strategy. And I think, eventually, technology will help reduce some of those costs as well. But, right now, the burden is on the taxpayers.

WIAN: Taxpayers of border counties will continue to bear a disproportionate share of those costs.

Casey Wian, CNN, Yuma, Arizona.

(END VIDEOTAPE)

DOBBS: Most of the millions of illegal aliens in this country are hard-working. But among them are a large number of sex offenders who have been prosecuted, who have been released, and who have subsequently disappeared from U.S. law enforcement records. Now a massive effort is under way to track sex offenders down and to deport them.

Kitty Pilgrim is here tonight with the story.

This is incredible. KITTY PILGRIM, CNN CORRESPONDENT: It's incredible, Lou.

Many of these sex offenders would serve their jail time and then just be released. And they would simply not show up for their deportation hearing.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): The Immigration and Customs Enforcement Agency has made a flurry of arrests, rapists, pedophiles and predators, all illegal aliens. In New York and New Jersey this week, immigration officials rounded up 56 illegal aliens who have committed sex crimes against children. They are being deported.

MICHAEL GARCIA, ASST. SECY., U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: They come from 25 different countries. They have histories ranging from cases in New York, first-degree rape of a 7- year-old, four counts of sexual abuse by an individual who also possessed a machete, intending to use it on his victim, in New Jersey, felony assault of a 2-year-old, aggravated sexual assault of a 10- year-old.

PILGRIM: But they have managed, up until now, to slip through the system, staying in this country even after they served jail time. They were simply released on to the streets, never showing up for deportation hearings, never found.

ASA HUTCHINSON, UNDERSECRETARY FOR BORDER & TRANSPORTATION SECURITY: It illustrates, actually, things that we need to do better. Prior to the creation of the department, many of those have been processed, escaped through the system, and have been on the streets of America.

PILGRIM: Since July, sweeps have been conducted in cities around the country, hundreds rounded up in Los Angeles, Texas, Denver, Baltimore, Chicago. The new system is called Operation Predator, a four-month-old program that can link immigration data with a list of sex offenders compiled under Megan's Law.

An illegal alien who now commits a sex crime will be prosecuted and jailed. And now, after serving time, they will be turned directly over to immigration authorities and held without bond until they are deported.

(END VIDEOTAPE)

PILGRIM: Now, immigration officials say, since July, they have deported 1,000 illegal aliens who are sex offenders. Some were arrested previously, others rounded up through Operation Predator -- Lou.

DOBBS: Kitty, how many of these sex offenders are in the country illegally?

PILGRIM: It's really not known. They're matching files right now. They're cross-referencing all the different systems. And they don't really know.

DOBBS: So what you're really reporting here is that the United States government, until July...

PILGRIM: Four months ago.

DOBBS: ... simply did not attempt to track these people?

PILGRIM: Well, there were attempts, but the two systems really didn't match. So there were a lot of gaps and a lot of people slipped through. So they have just closed that loophole.

DOBBS: You have to give Asa Hutchinson and his border people some credit here for going public and dealing with this, because they had been scared to death of the political correctness issues in this instance. And to step forward now is at least a healthy beginning.

PILGRIM: I think they've been honest about it and I think they're trying very hard. And thank goodness that loophole is closed.

DOBBS: Well, being closed.

Kitty, thank you very much -- Kitty Pilgrim.

Tomorrow, on our special report on "The Great American Giveaway," the cost of supplying illegal aliens with legal representation, with Medicare, with food stamps, welfare and other benefits. The numbers will simply shock you. That's tomorrow night. We hope you'll join us.

Turning now to tonight's poll question, a number of you have complained about last night's poll, complaining that the wording was awkward, if not outright stupid. In point of fact, occasionally, we do make a mistake here. In an effort to do better, we're going to try again now. Do you believe students should begin each school day reciting the pledge of allegiance without the phrase "under God," yes or no? Cast your vote at CNN.com/Lou. We'll have the results for you later in the show.

I should point out that I actually constructed the phraseology of last night's question.

Coming up next: 14 million jobs in jeopardy of being exported. Cynthia Kroll is the author of a new study from the University of California, Berkeley. She joins us next.

And General David Grange on point. Tonight, valuable lessons learned in Vietnam. Is Iraq Vietnam? General Grange joins us.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: "Exporting America" -- tonight, we focus on an alarming new study on what the United States economy stands to lose from the so-called outsourcing of white-collar and service jobs. The University of California, Berkeley study warns, as many as 14 million American jobs are at risk of being shipped overseas.

Peter Viles is here tonight with some of the findings -- Pete.

PETER VILES, CNN CORRESPONDENT: Lou, this report lays out the kinds of jobs that are at risk. And it really is sobering. If your job involves mainly sitting at a desk, mainly talking on the phone or working on a computer, your job could be outsourced.

(BEGIN VIDEOTAPE)

VILES (voice-over): They call it the new wave in the outsourcing revolution, high-paying white-collar jobs that can be moved overseas easier and faster than factory jobs were, jobs in insurance, legal research, data analysis, call centers, payroll and other back-office activities.

ASHOK DEO BARDHAN, UNIVERSITY OF CALIFORNIA, BERKELEY: I think we are right in the beginning. This trend has just started.

VILES: That from the co-author of a new University of California study that says as many as 14 million jobs are at risk. That's 11 percent of the U.S. work force. Average annual salary in those jobs, a shade under $40,000. The biggest group at risk, 8.6 million in office support.

The threat is strongest in cities built on high-paying service jobs, cities like Boston, New York, San Francisco and San Jose. And where are the jobs going? India, which will have 17 million workers available in information technology by 2008 and is already becoming America's tech support office.

REP. BRAD SHERMAN (D), CALIFORNIA: Let's say you call an 800 number to get information about your computer. You're calling Bombay. As a matter of fact, they train people there to say that you've reached Houston, Texas. But they're in Bombay.

VILES: It really doesn't matter how hard Americans work or how productive they become. These are the average salaries for programmers, $60,000 to $80,000 in the U.S., $23,000 to $34,000 in Ireland, just under $9,000 in China, even cheaper in India. And watch out, India, cheaper yet in Poland and Hungary.

(END VIDEOTAPE)

VILES: Now, whether these jobs at risk are actually sent overseas or not, the very threat of outsourcing can have negative consequences. Chief among them, it does tend to drive down wages in those jobs, Lou, here in the United States.

DOBBS: And what is remarkable about that is that much of the clever strategy around global competitiveness on the part of too many companies appears to be, cut the prices of the workers.

VILES: Sure, cut your costs, which is the price of the workers, send the work somewhere else, and hope that, when the products come back, there's somebody here in the country who has the money to buy them.

DOBBS: Very complex, sophisticated business thinking.

All right, Pete, thank you very much -- Peter Viles.

I'm joined now by one of the authors of the Cal, Berkeley study. Cynthia Kroll is a researcher at the University of California, Berkeley's Haas School of Business. And she joins us tonight from San Francisco.

Good to have you with us.

CYNTHIA KROLL, UNIVERSITY OF CALIFORNIA, BERKELEY: Thank you.

DOBBS: As you have determined, this -- the idea that 14 million jobs are at risk will set off significant reverberations around the country. Is there any way in which, if I may put it this way, that you see to staunch this outflow of jobs from this country around the world?

KROLL: Well, let me start with saying that the 14 million is just that, jobs that have the potential for outsourcing. We don't necessarily expect nearly that number to be outsourced, because there are certainly reasons that some of them would stay here.

DOBBS: Well, let me -- the fact is that, two years ago, nearly everyone analyzing this was saying that this is fine for us to watch American manufacturing jobs, more than three million of them now, go across the waters, because we'll maintain the high-value jobs. What we are seeing now, Cynthia, is the exportation of high-value jobs, by any definition. Do you see any way in which to reverse that trend?

KROLL: Well, it's really problematic, because, as you say, when the manufacturing jobs went, they -- that allowed a lot of investment in other types of new industries and particularly in the services jobs. Now, many of the jobs that have gone so far in services are not the high-paying ones yet. They're more of the call-center, back- office, payroll jobs. But they are close on middle-income jobs there.

What's at risk still are things like programming jobs, higher wage computer design jobs. There's certainly talk about government levels, about passing laws to try and restrict where that can happen, where governments, for example, can buy their services from.

But that's not necessarily the answer either. Probably the best result would be if, indeed, some of that savings went into the development of new industries in the U.S.

DOBBS: I'll put you on the spot, Cynthia, and ask you to give us a suggestion of an industry where people can be retrained.

We hear on this broadcast from hundreds of engineers who can't find work in this country -- highly trained -- I'm talking about civil engineers, mechanical engineers, electrical engineers. Got any ideas for them? KROLL: I think it'll take time. This is a really bad time to find a job in any industry of that type. I think when the economy begins to grow again, they will have more choices.

At the same time, they're probably going to be facing lower wages than they did in 1999 and 2000.

DOBBS: You're at the Haas School of Business. The idea of exporting global competitiveness and for CEOs and organizations, companies, to export these jobs to simply the lowest labor cost market around the world -- that doesn't seem to me to be a solution worthy of a business school degree. Does it you?

KROLL: Well, and that often is not what these businesses are doing. To some extent, some of it is. The call centers, that's exactly what's happening.

But another thing that we're observing is that high-skilled jobs are going as well. And they're not only going, they're going to places like Russia, to Israel. They're not only going because of cost savings but in some cases they're going even more because of the technical advantages that they get in those markets.

So another area to focus on if we want to maintain our competitive edge is education.

DOBBS: Absolutely. And education, as we've reported on this broadcast -- education in this country, in point of fact, our science and mathematical degrees are going just about 40 to 50 percent, depending on the degree, advanced degrees, to foreign students. We're watching also the exportation of a significant intellectual capital, aren't we?

KROLL: Yes, although at the same time, we're importing intellectual capital as well. A significant share of those students that come here to study in the U.S. stay in the U.S. And indeed, many of them are people who have started the new businesses that have grown here.

DOBBS: OK. Well, we appreciate you being here to talk about your study. Fourteen million American jobs at risk, vulnerable, to outsourcing. A remarkable conclusion.

We thank you very much for being with us. Cynthia Kroll, thank you.

KROLL: You're welcome.

DOBBS: The exporting America tonight is contributing to the projected $130 billion trade deficit with China this year. Commerce Secretary Don Evans is returning from China, where he was ostensibly meeting with Chinese officials to discuss shrinking deficit. However, the commerce secretary today told CNN's Rebecca MacKinnon he didn't specifically talk with the Chinese officials about doing anything about that deficit.

(BEGIN VIDEO CLIP)

DON EVANS, COMMERCE SECRETARY: I didn't press China to reduce the trade deficit. What I pressed China to do was provide a level playing field for American workers and American businesses, because we can compete as long as the playing field is level.

(END VIDEO CLIP)

DOBBS: The commerce secretary did talk with Chinese officials about protecting intellectual property rights and making it easier for U.S. companies to sell their products in China.

The economy grew at a rate of 7 percent in the third quarter -- 7.2 percent. The best performance for the economy in any quarter in 19 years.

Tonight's quote from a Congresswoman, however, who was less than pleased by that report. We quote -- "I say to the president, 'Mr. President, on your watch, we've lost more than 3.2 million private sector jobs. You have the worst record of job performance since Herbert Hoover. Mr. President, where are the jobs? The American will not settle, nor should the Republicans celebrate a jobless recovery." That, House minority leader, Congresswoman Nancy Pelosi.

Coming up next, "The Great American Giveaway." Tonight, Americans sound off before Congress on the damaging impact of illegal aliens in this country.

(BEGIN VIDEO CLIP)

TERRY ANDERSON, RADIO HOST: Illegal immigration is killing the workforce. Legal immigration is killing the workforce. And the American worker's the guy that's coming up short.

(END VIDEO CLIP)

DOBBS: Lisa Sylvester will have the report from Washington. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: On Capitol Hill today, Congress heard moving testimony on the impact of illegal aliens on American citizens.

Immigration is on the rise, without question, while the average wage for American workers is falling at a dramatic rate. Today members of Congress heard some startling examples of how the American worker is being squeezed.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNNfn CORRESPONDENT (voice-over): Los Angeles radio host Terry Anderson likes to say he's the voice of popular rage. He told Congressional lawmakers, It's frustrating when people can't find work, even at a fast-food restaurant.

ANDERSON: And they're going -- to get these jobs, you know what they're told? We can't hire you because our entire kitchen is Spanish-speaking. Now, is that fair for a kid who's been in this country his whole life that he cannot get a job flipping a hamburger because he can't speak a foreign language? That is not fair.

SYLVESTER: For those who are able to find a job, they're being offered lessened wages. A study in the quarterly Journal of Economics found immigration in the last two decades pushed down wages for the average American worker by 3 percent. For high school dropouts, wages fell by nearly 9 percent.

STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: Those who support the current high level of unskilled immigration should at least do so with an understanding that those Americans harmed by the policy that they favor, already the poorest and most vulnerable.

SYLVESTER: But those who support a liberal immigration policy say the newcomers pay taxes, help keep the prices of goods and services down and in a roundabout way promote education.

DAN GRISWOLD, CATO INSTITUTE: Competition from immigrants actually gives native-born workers an even greater incentive to stay in school and enhance their skills.

SYLVESTER: But researchers at the National Academy of Science concluded that while the gains to the U.S. economy due to immigration could be as high as $10 billion, the cost is higher -- as much as $20 billion.

(END VIDEOTAPE)

SYLVESTER: According to the National Academy of Sciences, U.S. citizens in California pay $1,200 a year because of immigration. This is on top of the state, local and federal taxes residents are already paying -- Lou.

DOBBS: The economics are beginning to look somewhat convincing, don't you think?

SYLVESTER: It certainly -- if you take a look at the raw numbers, you know, you can take a look at it from the cost versus the benefits. Clearly, the costs seem to be outweighing benefits in this case. And when you take a look at the numbers of the actual impact that immigration is having on wages, it's an interesting study to look at -- Lou.

DOBBS: Lisa Sylvester, an interesting report, and we thank you for it. Lisa Sylvester reporting from Washington.

Coming up next, Senator Chuck Hagel, senior member of the Foreign Relations Committee and the Intelligence Committee, says more Iraqis need to stand up in their own defense. He also says the White House needs to work closely with Congress. Senator Hagel next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Senator Chuck Hagel, Republican of Nebraska, has criticized the White House for not cooperating with Congress and he has critized Congress for its failure to challenge the White House on foreign policy. Senator Chuck Hagel is a senior member of the foreign relations and intelligence committees. And he says, the president needs to work with Congress. Today I asked him why that hasn't happened.

(BEGIN VIDEOTAPE)

SEN. CHUCK HAGEL, (R) NEBRASKA: We need to ask questions, and sometimes that requires a little tension. But tension grinds down flabby policy and flabby arguments. And to just go along with the president because he's my party or my president is not a responsible action on my part. I fail my country when I do that.

And I would hope the president himself and his administration understands that each of us, elected by the people, take the same oath of office as he does. And we have responsibilities to be partners. It is a co-equal branch of government. The Constitution is clear on that.

And I think those where we've had some break down, not only in understanding responsibility but appreciating how much knowledge and experience and help the president can get from the Hill if he will reach out and work as a partner.

DOBBS: Senator, how concerned are you that this White House is not going to be forthcoming with the September 11 intelligence and specifically the daily briefings, turned out to be the focal point of contention at this point?

HAGEL: I think, Lou, that the president will, in fact, if he hasn't already, instruct his officials at the White House to work with the 9/11 commission, be very cooperative and give the commission what they require to finish their job. It's in the interest of the president. It's in the interest of the country. It's in the interest of his governance that we do that.

And my goodness, the families of those people who lost their lives, over 3,000 individuals, slaughtered on September 11, 2001, if for no other reason, they are owed this explanation. They deserve some result here.

And we also need to know more about what happened and why so that we can prevent this from happening again.

DOBBS: What is your reaction to what is happening, specifically, in terms of our men and women in uniform, whether they're in Iraq or returning from Iraq, wounded, and the way in which they're being treated? And the sufficiency of force to carry out the mission that has been outlined over the last several administrations? HAGEL: We've had some breakdowns there. This incident down in Fort Stewart, Georgia, our reserves coming back, the National Guardsmen coming back, and essentially being warehoused there until they can get appropriate medical treatment, in barracks that don't even have running water and toilets. That's atrocious. That's irresponsible. And that cannot stand.

And on one hand, you've got the administration out saying to the American public, "We're taking care of our troops. Everything is fine. Yes, it's a tough go, but our troops are doing just fine and morale has never been higher." But the reality is that that's not exactly the case, when you see situations like that.

Yes, we need more help in Iraq. We need more international help in Iraq. We need more American force structure in Special Operations, police, civil affairs. And those who are dealing with a different kind of counter-insurgency effort in a guerrilla war.

We also need, Lou, something very important here, and this is really the key to getting out of Iraq successfully. And that is more Iraqis being stood up, probably going down into the lower echelons of the Iraqi army, and bringing them onto the field, stand them up, train them, prepare them, so that the Iraqi people can govern themselves, defend themselves and know they are. And we're not seen as occupiers, and we can leave.

DOBBS: Senator Hagel, how confident are you -- how optimistic are you that the White House will, indeed, extend its hand and look for partners in Congress and a partnership with the legislative branch?

HAGEL: Lou, I think we have seen a change in attitude, in procedure, in effort here in the last two weeks. Certainly, the president going through the effort to get his $87 billion supplemental appropriations bill for Iraq through Congress. I've seen some welcome changes, reaching out, phone calls, senior officials coming to Capitol Hill, members of Congress being invited to the White House. We didn't see much of that the last two years.

The forces of reality are now in play here. I think, for whatever reason, the White House, the senior members of the president's National Security Council, clearly understand the dimensions and severity and depth of what we are now in the middle of. This nation is at war. We are involved in a very complicated, dangerous mission in Iraq and Afghanistan.

I think the president understands completely that it's going to take the partnership of the Congress with him so that the American people will be with him to develop a consensus to stay the course here, if he's going to be successful.

I think we're seeing signs of that happening. They need to do more. I think they will do more. So I'm hopeful.

DOBBS: Senator Chuck Hagel, thank you for being with us.

HAGEL: Thank you.

(END VIDEOTAPE)

DOBBS: Coming up next, "Grange On Point" Iraq and Vietnam. I'll be joined by General David Grange on point next.

(COMMERCIAL BREAK)

DOBBS: "Grange On Point," tonight Iraq and Vietnam. As the number of American casualties mounts, there is growing concern that the Iraqi conflict, in the minds of some, could be another Vietnam for America. The comparisons have been made even by perhaps one of the most prominent Vietnam veterans senator John McCain.

I'm joined by General David Grange from Chicago, himself a Vietnam veteran and highly decorated general to boot. General, let me just -- let's talk straight here. Things aren't going very well in Iraq. They're going lousy. Americans are dying, they're being wounded. Is the comparison with Vietnam apt?

GEN. DAVID GRANGE (RET), U.S. ARMY: Lou, I don't think you can compare Vietnam to Iraq. There's some similarities in guerrilla warfare, the tactics that enemy forces of the coalition are facing. But, no, you can't compare it.

DOBBS: What are the lessons that we have learned from, Vietnam, from the Persian Gulf conflict that are not being followed in Iraq?

GRANGE: Well, in Vietnam, you had a -- you had successful tactics, in other words, fighting on the ground, that was not in concert with this overall strategy. In other words, achieving the end state, what they were trying to do in Vietnam. And very frustrating for the troops on the ground with the administration fighting the war that way. Now in Iraq, there is a strategy there is -- there are the tactics on the ground, fighting guerrillas, for instance, maintaining security. But part of the strategy is slipping a little bit. And if the administration, if the Department of Defense, does not focus on the strategic reason of why we're in Iraq, then it could turn into something like Vietnam.

DOBBS: The strategic reason, I recall vividly this winter the president saying that we are in Iraq, Condoleezza Rice saying we're there to Democratize Iraq, we're going to Democratize the entire Middle East.

GRANGE: These are all intermediate objectives. In other words, removing Saddam's regime, the weapons of mass destruction, freedom for the Iraqis, all important, but intermediate objectives. The real reason, the strategic reason, the end state that U.S. forces are in Iraq is to establish a foothold in a center of the Middle East to effect change, change to the roots of radical Islam and also to project one's self in that part of the world to fight terrorist organizes. If that is what the focus gets back to and what is talked about with the administration and Congress in a unified manner, then the strategic aims will be met. DOBBS: United Press International broke the story of the soldiers reservists and national guardsmen, what you and I talked about last week at Fort Stewart, now reports that the same thing has occurred at Fort Knox where American service members, wounded in Iraq, are not being cared for properly. Now you -- I know you well enough to know that you live by the warrior's code.

How in the world can the Pentagon let this happen?

GRANGE: Well, there's a problem with military hospitals throughout the United States. And some of these injuries, some of these wounded GIs, sick GIs those in Iraq or had not gone to Iraq were mobilized to do so. Basically the system needs to be up hauled and upgraded. There's just not enough service to go around.

DOBBS: Do you know of a general in the Pentagon who can say, as Senator Chuck Hagel just said here earlier, this will not stand?

GRANGE: I believe it will be changed and I believe change will come about. But, yes, people need to have backbone and make the change immediately.

DOBBS: General David Grange, thank you, sir.

My pleasure.

Coming up next -- we'll share your thoughts on the "Pledge of Allegiance" and the two-word phrase that has this nation divided -- under god. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll, the question, Do you believe students should begin each school day reciting the pledge of allegiance without the phrase, under God? 26 percent of you said, yes, 74 percent said no.

Well, some of the best economic news to reach Wall Street and investor's ears in a long time had something of a muted effect on Wall Street. The Dow up 12, the Nasdaq down 4, S&P off 1.

Christine Romans is here to talk about the best performance in 19 years that didn't have much effect on the market.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: Not it didn't. Ronald Reagan was the president. The Dow at 1208 last time we had growth at this rate in the economy and it would be another three years before it would surpass 2,000 for the Dow. Really a strong 3rd quarter all around and If earnings keep coming in this strong, Lou, it could be the second best quarter for corporate profits ever. Only about 100 more S&P 500 companies left to report profits so far, up more than 20 percent.

Ironic all of this good news on the economy and all of the bad news for mutual funds. New York Attorney General Eliot Spitzer will bring charges against Strong Funds, its founder Richard Strong and possibly another employee. Spitzer said, Strong market timed on behalf of himself, family and friends made $600,000 market timing while ordinary investors were discouraged from the same practice. It's been a tough week for Putnam Investment. It said today it received a subpoena from the U.S. attorney in New York. It's been fired by Massachusetts Pension Fund, likely could be fired by others. And it was slapped earlier this week with civil fraud charges. Putnam says it is cooperating in the probes. And Eliot Spitzer blasted the Securities and Exchange Commission for being absent in preventing this mutual fund scandal. SEC Chief William Donaldson downplayed the rift. HE said fighting perpetrators is the aim not criticizing each other. He is expected to also to take a bigger role in the investigation of the New York Stock Exchange and he says...

DOBBS: Donaldson.

ROMANS: Donaldson. He is investigating how much capital the specialists use to provide liquidity which is their job.

DOBBS: Maybe he can investigate that ridiculous idea of two boards and maintaining regulatory control at the New York Stock Exchange as well.

ROMANS: A lot of investigating going on.

DOBBS: Christine thanks. Christine Romans.

Taking a look now at some of "Your Thoughts.

From Las Vegas, Nevada, "Lou as a loyal American, I feel that I should be able to 'Pledge Allegiance' to this country without having to acknowledge a belief in the supernatural at the same time. Why complicate things? Remove the words under god so we can all proudly participate in the pledge. Not just those who believe in God." That from Dave Rusyn.

A simple solution offered from, I hope I get this right, Bottineau, North Carolina (sic).

"How about this... if you don't want to say under god, don't. Wow was that easy?" Linda Bechtold, you've got an idea.

And from Broken Arrow (sic), Oklahoma, "We are in our 70's, and still feel a great pride when our flag is saluted and when we hear the 'Star Spangled Banner' and 'God Bless America.' Our very Constitution was based in religious freedom. We need God in our country now more than ever." That from the Reid family.

From Coconut Creek, Florida "How about a compromise? Instead of a pledge to a supreme power or government, why don't we have students start everyday with a pledge to learn? To study topics that will provide a sense of heritage. Or a pledge to develop character or compassion. To develop skills that will assist them to create a brighter future for themselves and fellow Americans?" Liz Knoerlein, a great idea.

On the Dream Act, a bill that would allow illegal aliens to go to state colleges paying in state tuition.

An e-mail from Dallas, Texas.

"Help! How can I enroll my daughter at UCLA as an illegal alien? Her out-of-state tuition if breaking this poor natural-born citizen!" Susan B., we thank you.

And we love hearing from you. E-mail us at loudobbs@cnn.com. That's our show for tonight, thanks for being with us. For all of here good night from New York.

"ANDERSON COOPER 360" next.

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





Interview With Senator Chuck Hagel; "Exporting America": 14 Million Jobs Could Go Overseas Next Few Years>


Aired October 30, 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 30. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

Tonight: Wildfires continue to rage across Southern California. We'll have reports from the hardest hit area.

In tonight's special report, "Exporting America," as many as 14 million American jobs could be moved overseas in the next few years. Peter Viles will report on whether your job could be at risk.

In "The Great American Giveaway" tonight, federal and local governments spending billions of dollars trying to keep illegal aliens out, but millions of illegal aliens still entering the country. Casey Wian will report.

And in "Grange on Point" tonight: Is Iraq becoming the next Vietnam? One of the most highly decorated generals in history, General David Grange, joins us.

And Vietnam veteran Senator Chuck Hagel, a senior member of the Foreign Relations and Intelligence committees, will be here to talk about the building tensions on Iraq and intelligence between the White House and the Republican-controlled Congress.

Tonight, in Southern California, thousands of firefights are in a stalemate, as they struggle to contain massive wildfires. They hope that cooler temperatures and light rain will help dampen the flames. Those fires have now killed at least 20 people, including one firefighter, more than 650,000 acres scorched, an area greater than the size of Rhode Island.

The fires have also destroyed more than 2,600 homes; 13,000 firefighters are battling those blazes in five counties, from Ventura County in the north, to San Diego County in the south. Firefighters have made progress in some areas, but huge fires continue to threaten a number of mountain resort towns.

We begin our coverage tonight with Bob Franken in the former mining town of Julian in San Diego County -- Bob.

BOB FRANKEN, CNN NATIONAL CORRESPONDENT: Well, it is a tourist attraction, a major tourist attraction, for this area, Lou. And the town of Julian is still standing, because the firefighters made a last-ditch stand against the fire that thus far has been successful. And because of the rain that you pointed out and the fog and the cooler temperatures, right now, the fire, for the most part, is embers over more than a quarter million acres.

But the bad part of the story is that there is a heavy wind, gusts up to 40 miles an hour which, of course, could immediately fan those embers into the inferno that has turned the so-called Cedar Fire in this part of the state into the largest brushfire ever. As I said, over 250,000 acres have been consumed by the fire thus far; 14 people have lost their lives, including one person who was actually fighting the blaze.

They have 1,700 structures that have been completely consumed, including about 1,400 homes. Thousands are homeless right now. They're hoping that the weather will continue to keep the flames down, that the winds will subside, and the firemen will finally be able to make some headway.

They have, thus far, contained 38 percent of the flames. Now, contained means that they have surrounded the various fires. They have actually put out, extinguished none of them. They're hoping that they'll start slowly making some progress there. They have to hope that the weather will help them -- Lou.

DOBBS: Bob, thank you -- Bob Franken reporting from Julian, San Diego County, California.

One of the biggest and most destructive of those fires is bearing down on another resort town, Lake Arrowhead in San Bernardino County. Some of the flames have been as 300 feet. That's twice the height of the tallest trees in that area.

Miguel Marquez reports from Lake Arrowhead.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Look at this. It's -- can you believe this?

MIGUEL MARQUEZ, CNN CORRESPONDENT (voice-over): Shock and relief in the San Bernardino Mountains east of L.A. But, for every scene like this, there are many more like this. Firefighters are determined to save the popular resort community Lake Arrowhead, now surrounded on three sides by flames that have already destroyed more than 300 homes in the area.

The larger community of Big Bear, home to several ski areas, lies just eight miles away. Residents of both communities are at the mercy of the weather.

CHIEF RANDY CLAUSON, U.S. FOREST SERVICE: The biggest question mark is what the wind is going to do after this. We know it's blowing erratically, like was just said earlier. The gusts are up to 40 miles an hour. That's limiting aircraft usage for today. MARQUEZ: One Forest Service official calls the inferno a tornado made flames with a will of its own. For almost everyone involved, it's an inferno without precedent.

UNIDENTIFIED MALE: This fire's been so unpredictable. Fire behavior has been something that we've never seen before. So when can we get people back into the valley? I don't know. Soon, I hope.

MARQUEZ: Lake Arrowhead is now the latest front in a fire now almost a week old that started as two separate blazes, then merged into one monster.

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GOVERNOR-ELECT: I've had a meeting with Vice President Dick Cheney. And we talked about expediting the funds for the victims, their homes, the people whose homes burned and their businesses burned.

MARQUEZ (on camera): In this community, the fireplaces now mark where homes once stood. They look more like tombstones. Some 300, maybe 350 homes, total were lost in Cedar Glen. All told in the Old Fire, 850 homes officially gone. And the fire is still burning.

Miguel Marquez, CNN, Cedar Glen, California.

(END VIDEOTAPE)

DOBBS: A closer look now at the fires' devastation along the front lines. We focus not only own those who have lost their homes, but those who are still fighting to save them.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Come on back.

UNIDENTIFIED MALE: Whatever plan we come up, it just doesn't work out for us.

UNIDENTIFIED MALE: So we made some saves. But when you lose more than you save, it's real frustrating. It's disheartening, because you know people are losing their lives. They're counting on you, and you can't do it all.

UNIDENTIFIED MALE: For a time, the fire was so dangerous, it was unsafe for firefighters to even be up here. They retreated into their fire truck. They stayed in their fire trucks and waited for the firestorm to pass, one firefighter saying that, it was so hot, you couldn't even touch the window of the fire truck on the inside.

UNIDENTIFIED MALE: We started at the back and we worked all the fire this way. And we saved just about four or five structures.

UNIDENTIFIED FEMALE: We watched as things unfolded and watched as they walked away. And that was -- that was hard. But then again, we looked down the street and we see friends' houses that are just a little damaged. And we know that, when they moved on, they saved those houses. UNIDENTIFIED FEMALE: She's the one who knocked on our house. She's the one who saved my family. She's the one who said, "Get out! Get out! It's coming!"

UNIDENTIFIED FEMALE: If you take a look around here, there aren't a lot of people sitting and crying. Everybody's just, OK, let's get on with things. Come back in a year. This is going to a beautiful neighborhood again.

(END VIDEOTAPE)

DOBBS: Twenty-six hundred families have lost their homes and thousands more are still unable to return to them.

Turning now to the war in Iraq. Insurgents today ambushed a train carrying U.S. Army supplies. The train's engineer escaped without injury, but rocket-propelled grenades set fire to several of the shipping containers. After that attack, dozens of looters arrived on the scene. They stole computers, tents, bottled water and other supplies.

Tonight, graphic evidence of the torture techniques that Saddam Hussein used to intimidate and to control the Iraqi people. CNN has obtained a videotape from an independent source that shows Saddam Hussein's troops handing out brutal punishments to prisoners in a crowded public square. And we want to warn you, this tape is extremely graphic.

Senior Pentagon correspondent Jamie McIntyre has the report -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, while we got the tape from an independent source, it was recovered by U.S. soldiers back in April in Baghdad.

And it shows the brutal discipline used by the Fedayeen Saddam to enforce discipline in their ranks. Here, a segment -- and these aren't even the worst segments -- but here, one shows them throwing people of a building. It appears to be about three-stories high, just high enough for them to be very seriously injured, but not high enough to kill them.

Other parts of the tape also show people getting parts of their bodies cut off, in this case, a finger cut off. Other parts of the tape show people's tongues being cut out as well. This tape apparently was recovered and analyzed by the U.S. military. Here, you see somebody being punished with a public flogging, all of this punishment done in public in order to instill fear in the Iraqi population and to send a message to anyone who would oppose Saddam Hussein.

Again, these were not released by the Pentagon, but they do have a sort of propaganda value for the Pentagon. Today, Defense Secretary Rumsfeld acknowledged that he had seen this tape or one very similar to it and said it -- quote -- showed the -- that they portray a regime that was about as vicious as any regime could conceivably be -- Lou. DOBBS: You raised the issue, Jamie, and I think appropriately so. And that is the propaganda value of such a tape. Where did we obtain this tape? And is there some reason that we should look certainly beyond the obvious here for the source of the tape?

MCINTYRE: Well, we've known about the existence of this tape for some time. And we had requested a copy from the Pentagon, which had not been released to us. We obtained it through another source.

Typically, these kinds of tapes, people make copies of them and they can get out. I just wanted to stress that the Pentagon had not actually given us this tape in this instance. However, as I said, Defense Secretary Rumsfeld commented on it publicly at the briefing today and cited it as evidence of the brutality of the regime.

DOBBS: It is certainly that.

Jamie, thank you -- Jamie McIntyre, our senior Pentagon correspondent.

There was a massive security alert on Capitol Hill today. Someone apparently tried to smuggle a gun, Capitol Police thought, into a congressional building. SWAT teams searched the building. Staff locked themselves in their offices. The House of Representatives suspended its session. After an hour and a half, police announced that the gun was a fake, part of a Halloween costume.

Kathleen Koch reports from Capitol Hill -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Lou, no malice here, as you pointed out. This was just part of a Halloween costume. Two young female staff aides carried it right through a security checkpoint.

Now, again, they weren't trying to hide anything. They put it on the belt. It went through, but the police officer there was not looking. So here you see the dramatic response. Because this police officer was apparently distracted, was chatting, the officer did not look at the image on the screen until the two young women had simply walked away, what could be a potentially very serious security breach here.

So, again, the dramatic search, office-to-office. And police today admit, this clearly does show that their security system needs some fixing.

(BEGIN VIDEO CLIP)

TERRANCE GAINER, CAPITOL HILL POLICE: The very fact that someone brought a toy gun in, it was on the X-ray, and got further into the building than I would prefer, it does show that we've got to reevaluate how the X-ray machines are run. So, to that extent, it's another lesson learned.

(END VIDEO CLIP) KOCH: Now, police believe that they responded very quickly. There is a lot of concern up here on Capitol Hill, though, on the part of lawmakers and staffers who learned about the news, learned about the security alert from television or from other staffers.

They didn't get the BlackBerrys. They didn't get the e-mails. They didn't hear the intercom system that was put in after 9/11 that was supposed to alert everyone in case of just such an emergency -- Lou.

DOBBS: And the way the police actually found these people was that they called the police, correct?

KOCH: Indeed. The lawmaker for whom these two young women, who so far remain unnamed, worked for, the lawmaker called police and said: I believe it is my two staffers.

They were very apologetic. But they have been, again, so far not named. The police say they have broken no laws.

DOBBS: Halloween comes early on Capitol Hill. Kathleen Koch, thank you very much.

Well, stay with us for more on your government at work, our series of special reports on "The Great American Giveaway." Tonight, sealing the loopholes that allow millions of illegal aliens, including convicted sex offenders, to move freely throughout this country. Casey Wian and Kitty Pilgrim have the reports.

And Senator Chuck Hagel says the coalition needs more help in Iraq. And he says it's time for Congress and the White House to work together on Iraqi policy.

"Exporting America" tonight, our special report -- 14 million American service jobs could be heading overseas. Peter Viles will report.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The massive influx of illegal aliens into this country is costing taxpayers billions of dollars. Efforts to stop illegal aliens, of course, begin at our nation's borders.

The Department of Homeland Security, along with local governments, spend billions of dollars every year to secure our borders. And, still, there are 10 million illegal aliens living in this country.

Casey Wian reports from Yuma, Arizona.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Money is tight in Yuma, Arizona, like most counties along the United States' southwestern border, where per capita income is among the lowest in the nation. Adding to the financial squeeze, Yuma County spends nearly $5 million a year arresting, transporting and treating criminal illegal aliens.

KEVIN TUNNELL, YUMA COUNTY OFFICIAL: It's really tough on us. You're looking at any kind of health department. You're talking about our sheriff's department. You're talking about legal up in our county attorney's office, indigent defense, things to that effect.

WIAN: Illegal aliens cost the Yuma Sheriff's Department alone $3.2 million, more than half its annual budget.

(on camera): A 2002 congressional study found that 28 counties along the U.S. border with Mexico spend about $125 million a year on illegal aliens who commit crimes. Only a small fraction of that money is recovered from the federal government.

(voice-over): Last year, Yuma County received $650,000 in federal reimbursements, less than 15 percent of its costs. One reason: Federal resources are stretched thin. The U.S. Customs and Border Protection budget is $6.7 billion, which also funds anti- terrorism, drug enforcement and other programs.

The 9,000-agent strong Border Patrol apprehends about a million people a year trying to enter the United States illegally. About a million others evade capture. The Urban institute says more than half of those come from Mexico. That's about a third of Mexico's annual population growth.

This year, the Homeland Security Department will increase spending by $41 million for 570 additional Border Patrol agents, $48 million for air surveillance of the Canadian border, and $330 million on new technology to identify visitors who overstay their visas.

JACK RILEY, RAND CORPORATION: Right now, the public is bearing the costs of reconfiguration of our border protection strategy. And I think, eventually, technology will help reduce some of those costs as well. But, right now, the burden is on the taxpayers.

WIAN: Taxpayers of border counties will continue to bear a disproportionate share of those costs.

Casey Wian, CNN, Yuma, Arizona.

(END VIDEOTAPE)

DOBBS: Most of the millions of illegal aliens in this country are hard-working. But among them are a large number of sex offenders who have been prosecuted, who have been released, and who have subsequently disappeared from U.S. law enforcement records. Now a massive effort is under way to track sex offenders down and to deport them.

Kitty Pilgrim is here tonight with the story.

This is incredible. KITTY PILGRIM, CNN CORRESPONDENT: It's incredible, Lou.

Many of these sex offenders would serve their jail time and then just be released. And they would simply not show up for their deportation hearing.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): The Immigration and Customs Enforcement Agency has made a flurry of arrests, rapists, pedophiles and predators, all illegal aliens. In New York and New Jersey this week, immigration officials rounded up 56 illegal aliens who have committed sex crimes against children. They are being deported.

MICHAEL GARCIA, ASST. SECY., U.S. IMMIGRATION AND CUSTOMS ENFORCEMENT: They come from 25 different countries. They have histories ranging from cases in New York, first-degree rape of a 7- year-old, four counts of sexual abuse by an individual who also possessed a machete, intending to use it on his victim, in New Jersey, felony assault of a 2-year-old, aggravated sexual assault of a 10- year-old.

PILGRIM: But they have managed, up until now, to slip through the system, staying in this country even after they served jail time. They were simply released on to the streets, never showing up for deportation hearings, never found.

ASA HUTCHINSON, UNDERSECRETARY FOR BORDER & TRANSPORTATION SECURITY: It illustrates, actually, things that we need to do better. Prior to the creation of the department, many of those have been processed, escaped through the system, and have been on the streets of America.

PILGRIM: Since July, sweeps have been conducted in cities around the country, hundreds rounded up in Los Angeles, Texas, Denver, Baltimore, Chicago. The new system is called Operation Predator, a four-month-old program that can link immigration data with a list of sex offenders compiled under Megan's Law.

An illegal alien who now commits a sex crime will be prosecuted and jailed. And now, after serving time, they will be turned directly over to immigration authorities and held without bond until they are deported.

(END VIDEOTAPE)

PILGRIM: Now, immigration officials say, since July, they have deported 1,000 illegal aliens who are sex offenders. Some were arrested previously, others rounded up through Operation Predator -- Lou.

DOBBS: Kitty, how many of these sex offenders are in the country illegally?

PILGRIM: It's really not known. They're matching files right now. They're cross-referencing all the different systems. And they don't really know.

DOBBS: So what you're really reporting here is that the United States government, until July...

PILGRIM: Four months ago.

DOBBS: ... simply did not attempt to track these people?

PILGRIM: Well, there were attempts, but the two systems really didn't match. So there were a lot of gaps and a lot of people slipped through. So they have just closed that loophole.

DOBBS: You have to give Asa Hutchinson and his border people some credit here for going public and dealing with this, because they had been scared to death of the political correctness issues in this instance. And to step forward now is at least a healthy beginning.

PILGRIM: I think they've been honest about it and I think they're trying very hard. And thank goodness that loophole is closed.

DOBBS: Well, being closed.

Kitty, thank you very much -- Kitty Pilgrim.

Tomorrow, on our special report on "The Great American Giveaway," the cost of supplying illegal aliens with legal representation, with Medicare, with food stamps, welfare and other benefits. The numbers will simply shock you. That's tomorrow night. We hope you'll join us.

Turning now to tonight's poll question, a number of you have complained about last night's poll, complaining that the wording was awkward, if not outright stupid. In point of fact, occasionally, we do make a mistake here. In an effort to do better, we're going to try again now. Do you believe students should begin each school day reciting the pledge of allegiance without the phrase "under God," yes or no? Cast your vote at CNN.com/Lou. We'll have the results for you later in the show.

I should point out that I actually constructed the phraseology of last night's question.

Coming up next: 14 million jobs in jeopardy of being exported. Cynthia Kroll is the author of a new study from the University of California, Berkeley. She joins us next.

And General David Grange on point. Tonight, valuable lessons learned in Vietnam. Is Iraq Vietnam? General Grange joins us.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: "Exporting America" -- tonight, we focus on an alarming new study on what the United States economy stands to lose from the so-called outsourcing of white-collar and service jobs. The University of California, Berkeley study warns, as many as 14 million American jobs are at risk of being shipped overseas.

Peter Viles is here tonight with some of the findings -- Pete.

PETER VILES, CNN CORRESPONDENT: Lou, this report lays out the kinds of jobs that are at risk. And it really is sobering. If your job involves mainly sitting at a desk, mainly talking on the phone or working on a computer, your job could be outsourced.

(BEGIN VIDEOTAPE)

VILES (voice-over): They call it the new wave in the outsourcing revolution, high-paying white-collar jobs that can be moved overseas easier and faster than factory jobs were, jobs in insurance, legal research, data analysis, call centers, payroll and other back-office activities.

ASHOK DEO BARDHAN, UNIVERSITY OF CALIFORNIA, BERKELEY: I think we are right in the beginning. This trend has just started.

VILES: That from the co-author of a new University of California study that says as many as 14 million jobs are at risk. That's 11 percent of the U.S. work force. Average annual salary in those jobs, a shade under $40,000. The biggest group at risk, 8.6 million in office support.

The threat is strongest in cities built on high-paying service jobs, cities like Boston, New York, San Francisco and San Jose. And where are the jobs going? India, which will have 17 million workers available in information technology by 2008 and is already becoming America's tech support office.

REP. BRAD SHERMAN (D), CALIFORNIA: Let's say you call an 800 number to get information about your computer. You're calling Bombay. As a matter of fact, they train people there to say that you've reached Houston, Texas. But they're in Bombay.

VILES: It really doesn't matter how hard Americans work or how productive they become. These are the average salaries for programmers, $60,000 to $80,000 in the U.S., $23,000 to $34,000 in Ireland, just under $9,000 in China, even cheaper in India. And watch out, India, cheaper yet in Poland and Hungary.

(END VIDEOTAPE)

VILES: Now, whether these jobs at risk are actually sent overseas or not, the very threat of outsourcing can have negative consequences. Chief among them, it does tend to drive down wages in those jobs, Lou, here in the United States.

DOBBS: And what is remarkable about that is that much of the clever strategy around global competitiveness on the part of too many companies appears to be, cut the prices of the workers.

VILES: Sure, cut your costs, which is the price of the workers, send the work somewhere else, and hope that, when the products come back, there's somebody here in the country who has the money to buy them.

DOBBS: Very complex, sophisticated business thinking.

All right, Pete, thank you very much -- Peter Viles.

I'm joined now by one of the authors of the Cal, Berkeley study. Cynthia Kroll is a researcher at the University of California, Berkeley's Haas School of Business. And she joins us tonight from San Francisco.

Good to have you with us.

CYNTHIA KROLL, UNIVERSITY OF CALIFORNIA, BERKELEY: Thank you.

DOBBS: As you have determined, this -- the idea that 14 million jobs are at risk will set off significant reverberations around the country. Is there any way in which, if I may put it this way, that you see to staunch this outflow of jobs from this country around the world?

KROLL: Well, let me start with saying that the 14 million is just that, jobs that have the potential for outsourcing. We don't necessarily expect nearly that number to be outsourced, because there are certainly reasons that some of them would stay here.

DOBBS: Well, let me -- the fact is that, two years ago, nearly everyone analyzing this was saying that this is fine for us to watch American manufacturing jobs, more than three million of them now, go across the waters, because we'll maintain the high-value jobs. What we are seeing now, Cynthia, is the exportation of high-value jobs, by any definition. Do you see any way in which to reverse that trend?

KROLL: Well, it's really problematic, because, as you say, when the manufacturing jobs went, they -- that allowed a lot of investment in other types of new industries and particularly in the services jobs. Now, many of the jobs that have gone so far in services are not the high-paying ones yet. They're more of the call-center, back- office, payroll jobs. But they are close on middle-income jobs there.

What's at risk still are things like programming jobs, higher wage computer design jobs. There's certainly talk about government levels, about passing laws to try and restrict where that can happen, where governments, for example, can buy their services from.

But that's not necessarily the answer either. Probably the best result would be if, indeed, some of that savings went into the development of new industries in the U.S.

DOBBS: I'll put you on the spot, Cynthia, and ask you to give us a suggestion of an industry where people can be retrained.

We hear on this broadcast from hundreds of engineers who can't find work in this country -- highly trained -- I'm talking about civil engineers, mechanical engineers, electrical engineers. Got any ideas for them? KROLL: I think it'll take time. This is a really bad time to find a job in any industry of that type. I think when the economy begins to grow again, they will have more choices.

At the same time, they're probably going to be facing lower wages than they did in 1999 and 2000.

DOBBS: You're at the Haas School of Business. The idea of exporting global competitiveness and for CEOs and organizations, companies, to export these jobs to simply the lowest labor cost market around the world -- that doesn't seem to me to be a solution worthy of a business school degree. Does it you?

KROLL: Well, and that often is not what these businesses are doing. To some extent, some of it is. The call centers, that's exactly what's happening.

But another thing that we're observing is that high-skilled jobs are going as well. And they're not only going, they're going to places like Russia, to Israel. They're not only going because of cost savings but in some cases they're going even more because of the technical advantages that they get in those markets.

So another area to focus on if we want to maintain our competitive edge is education.

DOBBS: Absolutely. And education, as we've reported on this broadcast -- education in this country, in point of fact, our science and mathematical degrees are going just about 40 to 50 percent, depending on the degree, advanced degrees, to foreign students. We're watching also the exportation of a significant intellectual capital, aren't we?

KROLL: Yes, although at the same time, we're importing intellectual capital as well. A significant share of those students that come here to study in the U.S. stay in the U.S. And indeed, many of them are people who have started the new businesses that have grown here.

DOBBS: OK. Well, we appreciate you being here to talk about your study. Fourteen million American jobs at risk, vulnerable, to outsourcing. A remarkable conclusion.

We thank you very much for being with us. Cynthia Kroll, thank you.

KROLL: You're welcome.

DOBBS: The exporting America tonight is contributing to the projected $130 billion trade deficit with China this year. Commerce Secretary Don Evans is returning from China, where he was ostensibly meeting with Chinese officials to discuss shrinking deficit. However, the commerce secretary today told CNN's Rebecca MacKinnon he didn't specifically talk with the Chinese officials about doing anything about that deficit.

(BEGIN VIDEO CLIP)

DON EVANS, COMMERCE SECRETARY: I didn't press China to reduce the trade deficit. What I pressed China to do was provide a level playing field for American workers and American businesses, because we can compete as long as the playing field is level.

(END VIDEO CLIP)

DOBBS: The commerce secretary did talk with Chinese officials about protecting intellectual property rights and making it easier for U.S. companies to sell their products in China.

The economy grew at a rate of 7 percent in the third quarter -- 7.2 percent. The best performance for the economy in any quarter in 19 years.

Tonight's quote from a Congresswoman, however, who was less than pleased by that report. We quote -- "I say to the president, 'Mr. President, on your watch, we've lost more than 3.2 million private sector jobs. You have the worst record of job performance since Herbert Hoover. Mr. President, where are the jobs? The American will not settle, nor should the Republicans celebrate a jobless recovery." That, House minority leader, Congresswoman Nancy Pelosi.

Coming up next, "The Great American Giveaway." Tonight, Americans sound off before Congress on the damaging impact of illegal aliens in this country.

(BEGIN VIDEO CLIP)

TERRY ANDERSON, RADIO HOST: Illegal immigration is killing the workforce. Legal immigration is killing the workforce. And the American worker's the guy that's coming up short.

(END VIDEO CLIP)

DOBBS: Lisa Sylvester will have the report from Washington. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: On Capitol Hill today, Congress heard moving testimony on the impact of illegal aliens on American citizens.

Immigration is on the rise, without question, while the average wage for American workers is falling at a dramatic rate. Today members of Congress heard some startling examples of how the American worker is being squeezed.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNNfn CORRESPONDENT (voice-over): Los Angeles radio host Terry Anderson likes to say he's the voice of popular rage. He told Congressional lawmakers, It's frustrating when people can't find work, even at a fast-food restaurant.

ANDERSON: And they're going -- to get these jobs, you know what they're told? We can't hire you because our entire kitchen is Spanish-speaking. Now, is that fair for a kid who's been in this country his whole life that he cannot get a job flipping a hamburger because he can't speak a foreign language? That is not fair.

SYLVESTER: For those who are able to find a job, they're being offered lessened wages. A study in the quarterly Journal of Economics found immigration in the last two decades pushed down wages for the average American worker by 3 percent. For high school dropouts, wages fell by nearly 9 percent.

STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: Those who support the current high level of unskilled immigration should at least do so with an understanding that those Americans harmed by the policy that they favor, already the poorest and most vulnerable.

SYLVESTER: But those who support a liberal immigration policy say the newcomers pay taxes, help keep the prices of goods and services down and in a roundabout way promote education.

DAN GRISWOLD, CATO INSTITUTE: Competition from immigrants actually gives native-born workers an even greater incentive to stay in school and enhance their skills.

SYLVESTER: But researchers at the National Academy of Science concluded that while the gains to the U.S. economy due to immigration could be as high as $10 billion, the cost is higher -- as much as $20 billion.

(END VIDEOTAPE)

SYLVESTER: According to the National Academy of Sciences, U.S. citizens in California pay $1,200 a year because of immigration. This is on top of the state, local and federal taxes residents are already paying -- Lou.

DOBBS: The economics are beginning to look somewhat convincing, don't you think?

SYLVESTER: It certainly -- if you take a look at the raw numbers, you know, you can take a look at it from the cost versus the benefits. Clearly, the costs seem to be outweighing benefits in this case. And when you take a look at the numbers of the actual impact that immigration is having on wages, it's an interesting study to look at -- Lou.

DOBBS: Lisa Sylvester, an interesting report, and we thank you for it. Lisa Sylvester reporting from Washington.

Coming up next, Senator Chuck Hagel, senior member of the Foreign Relations Committee and the Intelligence Committee, says more Iraqis need to stand up in their own defense. He also says the White House needs to work closely with Congress. Senator Hagel next.

Stay with us.

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DOBBS: Senator Chuck Hagel, Republican of Nebraska, has criticized the White House for not cooperating with Congress and he has critized Congress for its failure to challenge the White House on foreign policy. Senator Chuck Hagel is a senior member of the foreign relations and intelligence committees. And he says, the president needs to work with Congress. Today I asked him why that hasn't happened.

(BEGIN VIDEOTAPE)

SEN. CHUCK HAGEL, (R) NEBRASKA: We need to ask questions, and sometimes that requires a little tension. But tension grinds down flabby policy and flabby arguments. And to just go along with the president because he's my party or my president is not a responsible action on my part. I fail my country when I do that.

And I would hope the president himself and his administration understands that each of us, elected by the people, take the same oath of office as he does. And we have responsibilities to be partners. It is a co-equal branch of government. The Constitution is clear on that.

And I think those where we've had some break down, not only in understanding responsibility but appreciating how much knowledge and experience and help the president can get from the Hill if he will reach out and work as a partner.

DOBBS: Senator, how concerned are you that this White House is not going to be forthcoming with the September 11 intelligence and specifically the daily briefings, turned out to be the focal point of contention at this point?

HAGEL: I think, Lou, that the president will, in fact, if he hasn't already, instruct his officials at the White House to work with the 9/11 commission, be very cooperative and give the commission what they require to finish their job. It's in the interest of the president. It's in the interest of the country. It's in the interest of his governance that we do that.

And my goodness, the families of those people who lost their lives, over 3,000 individuals, slaughtered on September 11, 2001, if for no other reason, they are owed this explanation. They deserve some result here.

And we also need to know more about what happened and why so that we can prevent this from happening again.

DOBBS: What is your reaction to what is happening, specifically, in terms of our men and women in uniform, whether they're in Iraq or returning from Iraq, wounded, and the way in which they're being treated? And the sufficiency of force to carry out the mission that has been outlined over the last several administrations? HAGEL: We've had some breakdowns there. This incident down in Fort Stewart, Georgia, our reserves coming back, the National Guardsmen coming back, and essentially being warehoused there until they can get appropriate medical treatment, in barracks that don't even have running water and toilets. That's atrocious. That's irresponsible. And that cannot stand.

And on one hand, you've got the administration out saying to the American public, "We're taking care of our troops. Everything is fine. Yes, it's a tough go, but our troops are doing just fine and morale has never been higher." But the reality is that that's not exactly the case, when you see situations like that.

Yes, we need more help in Iraq. We need more international help in Iraq. We need more American force structure in Special Operations, police, civil affairs. And those who are dealing with a different kind of counter-insurgency effort in a guerrilla war.

We also need, Lou, something very important here, and this is really the key to getting out of Iraq successfully. And that is more Iraqis being stood up, probably going down into the lower echelons of the Iraqi army, and bringing them onto the field, stand them up, train them, prepare them, so that the Iraqi people can govern themselves, defend themselves and know they are. And we're not seen as occupiers, and we can leave.

DOBBS: Senator Hagel, how confident are you -- how optimistic are you that the White House will, indeed, extend its hand and look for partners in Congress and a partnership with the legislative branch?

HAGEL: Lou, I think we have seen a change in attitude, in procedure, in effort here in the last two weeks. Certainly, the president going through the effort to get his $87 billion supplemental appropriations bill for Iraq through Congress. I've seen some welcome changes, reaching out, phone calls, senior officials coming to Capitol Hill, members of Congress being invited to the White House. We didn't see much of that the last two years.

The forces of reality are now in play here. I think, for whatever reason, the White House, the senior members of the president's National Security Council, clearly understand the dimensions and severity and depth of what we are now in the middle of. This nation is at war. We are involved in a very complicated, dangerous mission in Iraq and Afghanistan.

I think the president understands completely that it's going to take the partnership of the Congress with him so that the American people will be with him to develop a consensus to stay the course here, if he's going to be successful.

I think we're seeing signs of that happening. They need to do more. I think they will do more. So I'm hopeful.

DOBBS: Senator Chuck Hagel, thank you for being with us.

HAGEL: Thank you.

(END VIDEOTAPE)

DOBBS: Coming up next, "Grange On Point" Iraq and Vietnam. I'll be joined by General David Grange on point next.

(COMMERCIAL BREAK)

DOBBS: "Grange On Point," tonight Iraq and Vietnam. As the number of American casualties mounts, there is growing concern that the Iraqi conflict, in the minds of some, could be another Vietnam for America. The comparisons have been made even by perhaps one of the most prominent Vietnam veterans senator John McCain.

I'm joined by General David Grange from Chicago, himself a Vietnam veteran and highly decorated general to boot. General, let me just -- let's talk straight here. Things aren't going very well in Iraq. They're going lousy. Americans are dying, they're being wounded. Is the comparison with Vietnam apt?

GEN. DAVID GRANGE (RET), U.S. ARMY: Lou, I don't think you can compare Vietnam to Iraq. There's some similarities in guerrilla warfare, the tactics that enemy forces of the coalition are facing. But, no, you can't compare it.

DOBBS: What are the lessons that we have learned from, Vietnam, from the Persian Gulf conflict that are not being followed in Iraq?

GRANGE: Well, in Vietnam, you had a -- you had successful tactics, in other words, fighting on the ground, that was not in concert with this overall strategy. In other words, achieving the end state, what they were trying to do in Vietnam. And very frustrating for the troops on the ground with the administration fighting the war that way. Now in Iraq, there is a strategy there is -- there are the tactics on the ground, fighting guerrillas, for instance, maintaining security. But part of the strategy is slipping a little bit. And if the administration, if the Department of Defense, does not focus on the strategic reason of why we're in Iraq, then it could turn into something like Vietnam.

DOBBS: The strategic reason, I recall vividly this winter the president saying that we are in Iraq, Condoleezza Rice saying we're there to Democratize Iraq, we're going to Democratize the entire Middle East.

GRANGE: These are all intermediate objectives. In other words, removing Saddam's regime, the weapons of mass destruction, freedom for the Iraqis, all important, but intermediate objectives. The real reason, the strategic reason, the end state that U.S. forces are in Iraq is to establish a foothold in a center of the Middle East to effect change, change to the roots of radical Islam and also to project one's self in that part of the world to fight terrorist organizes. If that is what the focus gets back to and what is talked about with the administration and Congress in a unified manner, then the strategic aims will be met. DOBBS: United Press International broke the story of the soldiers reservists and national guardsmen, what you and I talked about last week at Fort Stewart, now reports that the same thing has occurred at Fort Knox where American service members, wounded in Iraq, are not being cared for properly. Now you -- I know you well enough to know that you live by the warrior's code.

How in the world can the Pentagon let this happen?

GRANGE: Well, there's a problem with military hospitals throughout the United States. And some of these injuries, some of these wounded GIs, sick GIs those in Iraq or had not gone to Iraq were mobilized to do so. Basically the system needs to be up hauled and upgraded. There's just not enough service to go around.

DOBBS: Do you know of a general in the Pentagon who can say, as Senator Chuck Hagel just said here earlier, this will not stand?

GRANGE: I believe it will be changed and I believe change will come about. But, yes, people need to have backbone and make the change immediately.

DOBBS: General David Grange, thank you, sir.

My pleasure.

Coming up next -- we'll share your thoughts on the "Pledge of Allegiance" and the two-word phrase that has this nation divided -- under god. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll, the question, Do you believe students should begin each school day reciting the pledge of allegiance without the phrase, under God? 26 percent of you said, yes, 74 percent said no.

Well, some of the best economic news to reach Wall Street and investor's ears in a long time had something of a muted effect on Wall Street. The Dow up 12, the Nasdaq down 4, S&P off 1.

Christine Romans is here to talk about the best performance in 19 years that didn't have much effect on the market.

CHRISTINE ROMANS, CNNfn CORRESPONDENT: Not it didn't. Ronald Reagan was the president. The Dow at 1208 last time we had growth at this rate in the economy and it would be another three years before it would surpass 2,000 for the Dow. Really a strong 3rd quarter all around and If earnings keep coming in this strong, Lou, it could be the second best quarter for corporate profits ever. Only about 100 more S&P 500 companies left to report profits so far, up more than 20 percent.

Ironic all of this good news on the economy and all of the bad news for mutual funds. New York Attorney General Eliot Spitzer will bring charges against Strong Funds, its founder Richard Strong and possibly another employee. Spitzer said, Strong market timed on behalf of himself, family and friends made $600,000 market timing while ordinary investors were discouraged from the same practice. It's been a tough week for Putnam Investment. It said today it received a subpoena from the U.S. attorney in New York. It's been fired by Massachusetts Pension Fund, likely could be fired by others. And it was slapped earlier this week with civil fraud charges. Putnam says it is cooperating in the probes. And Eliot Spitzer blasted the Securities and Exchange Commission for being absent in preventing this mutual fund scandal. SEC Chief William Donaldson downplayed the rift. HE said fighting perpetrators is the aim not criticizing each other. He is expected to also to take a bigger role in the investigation of the New York Stock Exchange and he says...

DOBBS: Donaldson.

ROMANS: Donaldson. He is investigating how much capital the specialists use to provide liquidity which is their job.

DOBBS: Maybe he can investigate that ridiculous idea of two boards and maintaining regulatory control at the New York Stock Exchange as well.

ROMANS: A lot of investigating going on.

DOBBS: Christine thanks. Christine Romans.

Taking a look now at some of "Your Thoughts.

From Las Vegas, Nevada, "Lou as a loyal American, I feel that I should be able to 'Pledge Allegiance' to this country without having to acknowledge a belief in the supernatural at the same time. Why complicate things? Remove the words under god so we can all proudly participate in the pledge. Not just those who believe in God." That from Dave Rusyn.

A simple solution offered from, I hope I get this right, Bottineau, North Carolina (sic).

"How about this... if you don't want to say under god, don't. Wow was that easy?" Linda Bechtold, you've got an idea.

And from Broken Arrow (sic), Oklahoma, "We are in our 70's, and still feel a great pride when our flag is saluted and when we hear the 'Star Spangled Banner' and 'God Bless America.' Our very Constitution was based in religious freedom. We need God in our country now more than ever." That from the Reid family.

From Coconut Creek, Florida "How about a compromise? Instead of a pledge to a supreme power or government, why don't we have students start everyday with a pledge to learn? To study topics that will provide a sense of heritage. Or a pledge to develop character or compassion. To develop skills that will assist them to create a brighter future for themselves and fellow Americans?" Liz Knoerlein, a great idea.

On the Dream Act, a bill that would allow illegal aliens to go to state colleges paying in state tuition.

An e-mail from Dallas, Texas.

"Help! How can I enroll my daughter at UCLA as an illegal alien? Her out-of-state tuition if breaking this poor natural-born citizen!" Susan B., we thank you.

And we love hearing from you. E-mail us at loudobbs@cnn.com. That's our show for tonight, thanks for being with us. For all of here good night from New York.

"ANDERSON COOPER 360" next.

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Interview With Senator Chuck Hagel; "Exporting America": 14 Million Jobs Could Go Overseas Next Few Years>