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LOU DOBBS TONIGHT

Guest Worker Program Proposed; Driver's License Issue Renewed in California; Bill Introduced to Expand Military

Aired December 15, 2003 - 18:00   ET

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

LOU DOBBS, HOST: Tonight: President Bush says there will be no blanket amnesty for illegal aliens. But in California, the issue is whether they should be allowed the privilege of driver's licenses. Tonight, in "Broken Borders," two of California's most influential legislators join us with very different views.
"Exporting America" -- IBM apparently wants to export jobs in a big way, planning to send thousands of high-paying American jobs overseas in one of the largest outsourcing programs ever. Bill Tucker reports.

The Christmas spirit noticeably absent in many of our communities across the country, as the majority of Americans apparently bow to the will of the few this holiday season. Peter Viles reports.

The military is stretched to the limit, fighting wars in Iraq, Afghanistan and against terrorism around the world. Many in Congress are calling for more troops for the military. One of the leading advocates, Congresswoman Ellen Tauscher. She joins us tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, December 15. Here now, Lou Dobbs.

DOBBS: Good evening. "Good riddance. The world is better off without you, Mr. Saddam Hussein." With those words, President Bush today told Iraqis to put their past behind them and to look to their future. President Bush told a news conference in Washington that Iraq is now on the path to freedom. He said also that Saddam Hussein should be put on trial in a way that will stand international scrutiny. Our senior White House correspondent, John King, reports -- John.

JOHN KING, CNN CORRESPONDENT: Lou, that news conference ran 46 minutes. It was dominated by questions about the capture of Saddam Hussein and the impact that capture will have on the situation, especially the security and political situation, in Iraq. Mr. Bush said he believed it was a turning point, in terms of the political transition within Iraq, although he did say, from a military perspective, dangerous days, more sacrifices still ahead for U.S. troops on the ground in Iraq. Mr. Bush would not answer directly when asked if he thought Saddam Hussein should be executed, but the president made his views pretty clear through his body language. And the president also could barely contain his scorn for the former Iraqi leader, calling him just short of a coward. (BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Good riddance. The world is better off without you, Mr. Saddam Hussein. I find it very interesting that when the heat got on, you dug yourself a hole and you crawled in it. And our brave troops, combined with good intelligence, found you. And you'll be brought to justice, something you did not afford the people you -- you brutalized in your own country.

KING: Now, the president could not say exactly when or how Saddam Hussein would be brought to trial, but he made clear he wanted a fair process, an open, transparent process. And Mr. Bush said this much is clear to him: The Iraqis must take the lead in putting their former leader on trial.

(BEGIN VIDEO CLIP)

BUSH: The Iraqis need to be very much involved. He was a person that -- they were the people that were brutalized by this man. He murdered them. He gassed them. He tortured them. He had rape rooms. And they need to be very much involved in the process. And we'll work with Iraqis to develop a process.

(END VIDEO CLIP)

KING: Now, administration lawyers still investigating this issue and reviewing it, but it is the belief of the Bush administration that Saddam could be in U.S. military custody for several months, perhaps six months or more, until he can be turned over to a new sovereign Iraqi government. Administration officials say they will continue to review that and work with the Iraqis on what a war crimes tribunal should look like. And Lou, officials here at the White House also believe that that $750,000 Saddam had in his possession was money to pay for his security and his hiding, his own personal security, not to pay for terrorist attacks on U.S. troops -- Lou.

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

American officers say intelligence from Saddam Hussein and documents in his briefcase have already led to the capture of at least two former regime members in Baghdad. While interrogators are focusing at least initially on gathering intelligence about insurgency, they also want information about weapons of mass destruction and the former regime's links to terrorism. National security correspondent David Ensor has the report -- David.

DAVID ENSOR, CNN CORRESPONDENT: Lou, again today, Saddam Hussein, the prisoner, was interrogated by U.S. military and intelligence officials. In the first questioning yesterday, the former Iraqi leader was said to be defiant -- quite ready to talk, but offering no new information. For example, sources say Saddam has denied having any hidden prisoners -- Americans, Kuwaitis or Iranians, though the latter he certainly had. He's denied having any ties with terrorists, and he's denied having any weapons of mass destruction programs, though the CIA's David Kay has found evidence such programs were continuing.

Now, U.S. officials say the initial questioning, as you said, is focusing primarily on the insurgent attacks against American forces, trying to figure out if there's anything that can be learned from Saddam that might save lives. No one's particularly optimistic, but they're pressing him hard.

(BEGIN VIDEO CLIP)

REP. PORTER GOSS (R-FL), INTELLIGENCE COMMITTEE CHAIRMAN: There are all kinds of methods of professional interrogation, of ways to persuade people, incentivize people, motivate people. Most of them are mental. Some of them involve sleep deprivation or things like that, or what I will call -- your atmosphere is shaped to encourage you to talk to me truthfully.

(END VIDEO CLIP)

ENSOR: At the CIA today, director George Tenet and others met to discuss the hunt in Iraq for weapons of mass destruction. That search, of course has not found any weapons thus far. While officials say they're not counting on Saddam to reveal all about WMD, they are hopeful that his capture will make other Iraqis less fearful and more willing to perhaps tell what they know -- Lou.

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

Insurgent violence today killed more Iraqis. Two car bombs in Baghdad killed 6 Iraqi police officers, 18 other people were wounded. And today we learned more details about the capture of Saddam Hussein from the Army. Senior Pentagon correspondent Jamie McIntyre has that story for us -- Jamie.

JAMIE MCINTYRE, CNN CORRESPONDENT: Well, Lou, apparently not everyone in Iraq is happy to see Saddam Hussein in U.S. custody. Take a look at this confrontation between U.S. troops and pro-Saddam protesters in his hometown of Tikrit. Saddam Hussein is still a hero to many people in the so-called "Sunni triangle," the heartland of the Ba'athist party, and the demonstration underscores the fact that capturing Saddam will not be -- necessarily end the insurgency.

We're learning now also that Saddam Hussein was lucky to survive his capture because, according to one of the commanders leading the raid, a special operations soldier was ready to toss a grenade down the spider hole where Saddam Hussein was hiding if there was any sign of resistance.

Still, U.S. military commanders are pressing the hunt forward for members of the insurgency, still looking for guerrilla fighters. Some of the documents recovered from Saddam Hussein's hiding place have provided leads, and one military commander says some key individuals are among those arrested since Saddam Hussein's capture. While it's believed Saddam was providing some guidance or inspiration to the resistance, commanders don't think he was issuing any orders, and no communications equipment was found with him. So that moves up to No. 1 on the most wanted list now Izzat (ph) Ibrahim al Douri, one of Saddam Hussein's key deputies, No. 6 on the most wanted list, the king of clubs in that famous deck of most wanted. There's a $10 million price tag on his head.

But Lou, it doesn't appear anyone will collect the $25 million on Saddam Hussein's head because Pentagon sources are indicating that the key Iraqi informant who provided the details on his location was a captured Iraqi insurgent -- Lou.

DOBBS: Jamie, thank you very much. David Ensor reporting on improving -- obviously improving U.S. intelligence in Iraq, the U.S. Army obviously working with better intelligence and moving quickly to capture Saddam Hussein. Do they, given that improvement in intelligence and their broader operations and more focused operations -- do they know -- have a very good idea as to who is really directing the insurgency? Because they have talked about the sophistication of the coordination of those attacks.

MCINTYRE: You know, they really don't. They did learn more about some of the cells that were organized against the U.S. forces from some of the documents they captured with Saddam Hussein. But it's still a big question mark to what extent these attacks are coordinated on a broad level. They know they're coordinated on a local level. But as they work through and capture more people, they're hopeful that they're going to essentially break the back of the resistance, at some point. But it's still not clear if there's any one person or persons who are really primarily responsible.

DOBBS: Jamie, thank you. Jamie McIntyre, our senior Pentagon correspondent.

My guest tonight says that although the insurgency continues, the capture of Saddam Hussein is an enormous breakthrough in the liberation of Iraq. Rod Nordland is "Newsweek" magazine's Baghdad bureau chief. Rod is the winner of numerous journalism awards, including the prestigious Pulitzer Prize and the Polk Award for his reporting internationally. He joins us tonight from Baghdad.

Rod, good to have you here.

ROD NORDLAND, BAGHDAD BUREAU CHIEF, "NEWSWEEK": Thank you.

DOBBS: Rod, has there been -- let me ask you the most obvious and perhaps simple-minded question that you'll hear in a while, but in the course of the day in Baghdad, was there a noticeable change in mood amongst the people of Baghdad?

NORDLAND: Well, I think the most striking thing has been the relatively low-key nature of the celebration. You know, after Uday and Qusay, his sons, were killed, there was so much shooting in the air in celebration that it was really dangerous to go out. And there's been much less of that this time. And there's been a kind of -- kind of quiet atmosphere. You know, most -- a large proportion of the people here are Sunnis, like Saddam, and a lot of them felt very both embarrassed and kind of ashamed of the way in which he was captured, the way in which he was found hiding, and the way he was treated as a common prisoner, having his hair checked for lice and so on. And I don't think that went over very well.

Certainly, it did among Shi'ites, who have much more reason to hate him. But amongst people of his own sect, it's a kind of strange reaction. Even though they're glad to see him captured, they're not thrilled that it was Americans who did it.

DOBBS: There is for most of us in the United States a peculiar gap in comprehension. The United States, with considerable force and loss of blood and lives, has -- the United States has liberated the people of Iraq, who have been under the oppression of the Ba'athists for more than three decades. There seems to be no sense of gratitude. There seems to be, in fact, a bit of, if you will -- a sense of entitlement in it all. Could you reconcile us -- reconcile that issue for all of us?

NORDLAND: Well, I don't know. I mean, one way of looking at it is that -- I mean, certainly, that's true. And perhaps it's partly the Iraqi character. Partly this is not just a developing country and a third world country. It's also a country with great riches, and Iraqis are aware of that. So when we come in with developmental aid and reconstruction aid and so on, they feel like, Well, that's all going be paid for from our oil wealth, and so on.

But it's still a little bit hard to understand, for instance, when you have soldiers being paid $50 a month, quitting their jobs for higher pay, when that's 25 times more pay than they earned during Saddam's time.

DOBBS: Your best judgment -- asking you to forecast the next few months -- your best judgment about where the United States goes, in terms of bringing about higher levels of security in Baghdad and around the country, the impact, if you will, of the capture of Saddam Hussein, the effect, if any, on the ability to better control security in Iraq.

NORDLAND: Yes. I think all along, that's been the biggest question. What happens once we get Saddam? Will that cut the ground out from under the insurgency, and will we see fewer attacks and less impetus behind those attacks? I think it's just a bit too early to say. I mean, certainly, in the last 24, 48 hours, there's been no decrease in attacks. And maybe we'll have a better idea in a few days.

I think there are some people who will give up the insurgency, who feel like there's no hope in carrying it on. But there are some dozen groups, and some of them have already -- have already said they're not fighting for Saddam, they're fighting for other interests. And I think we'll see them continue on, and we'll certainly see a pattern of terrorist attacks, perhaps by foreign elements or people inspired by foreign elements. So there's still a pretty long, hard slog ahead.

DOBBS: Rod, thank you very much. Rod Nordland, the bureau chief -- Baghdad bureau chief, "Newsweek" magazine. Coming up next here, "Exporting America" -- reports tonight that IBM is preparing to move thousands upon thousands of highly-paid American jobs to overseas cheap labor markets. Bill Tucker will report. And we'll update the list of companies that we've confirmed to be exporting jobs to those overseas markets.

And building up the U.S. military -- a major push building in Congress. It's gaining momentum. Congresswoman Ellen Tauscher is the author of a bill to significantly expand the military. She's our guest.

And: Bah, humbug. The American Civil Liberties Union is taking on Christmas this holiday season. Peter Viles reports.

(COMMERCIAL BREAK)

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

DOBBS: IBM is already exporting American jobs to cheap foreign labor markets. Tonight, IBM is apparently preparing to export another 4,700 highly-paid American jobs to India, China and other cheap overseas labor markets. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The world's largest computer services provider, leading provider of computer hardware, No. 2 provider of software, appears to be ducking for cover. IBM not commenting on reports that it's about to outsource nearly 5,000 jobs to India, simply issuing this statement. But the statement admits future job growth is outside the United States. For critics of outsourcing, the reasons behind the trend are obvious and not so well thought out.

MARCUS COURTNEY, WASHTECH: Companies are doing this because they only see employees as costs to be cut, and they want to boost short- term profits over long-term economic gain. This is about a short-run strategy and not about a long-run strategy.

TUCKER: A recent study by the Gartner Group found that by the end of this year, 10 percent of U.S.-based information technology jobs will move to emerging markets. Among the other likely implications found by Gartner, seasoned professionals are abandoned, future talent sees little reason to pursue the career, critical knowledge is lost, and the relationship between employer and employees is damaged. But outsourcing is a trend not likely to be reversed. The U.S. Chamber of Commerce supports outsourcing, saying companies which don't respond to competitive price pressures will fail. Employees displaced by outsourcing see it from a different perspective.

NATASHA HUMPHRIES, SOFTWARE ENGINEER: It's been described as an epidemic, and I think that's an accurate representation, at this point. Many corporations across different service industries are going off-shore to tap into the cheaper labor markets. The U.S. does not have a monopoly on engineering talent, and I think this trend will continue.

TUCKER: the logical extension of such thinking? As people lose their jobs, the consumer base for the products being outsourced is eroded.

(END VIDEOTAPE)

In straightforward and unflattering terms, it's known as "the race to the bottom," which is very different from climbing the ladder of success -- Loud.

DOBBS: The idea of competitive price pressures -- it sounds like it's all about just cheapening the price of labor.

TUCKER: Exactly.

DOBBS: Bill Tucker, thank you very much.

Well, we want to take a look now at companies confirmed by our staff here to be "Exporting America." These are companies sending American jobs overseas or choosing to employ foreign labor instead of American workers, as we've been reporting here for some time. These are the companies that today we confirm to be "Exporting America."

They are chipmaker Agere (ph) Systems, Allstate, Best Buy, Goldman Sachs, Google, Pratt & Whitney -- that's a division of United Technologies -- Rome and Haase (ph), a chemical company based in Philadelphia, and of course, Tyco International. IBM, incidentally, is already on that list.

That list will be updated each evening right here, so please keep sending us the names of companies that you know to be exporting jobs. We will be providing this list the next couple of weeks. We'll be putting it on our Web site, as well. Our e-mail address is loudobbs@cnn.com.

As corporate America has too often acted less than American of late, Christmas seems every year to be becoming less Christian and more politically correct. Even Christmas symbols that are non- religious, such as the venerable man from the North Pole -- dare we speak his name? -- Santa Claus, are creating controversy and social calamity. Peter Viles has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Even in Baldwin City, Kansas, Christmas now means controversy because of the stunt that Santa pulled last year.

MARY DAVIDSON, KANSAS ACLU: My view is Santa Claus should just say "Ho, ho, ho" and give out some candy and go home.

VILES: The ACLU upset that a local minister dressed as Santa and then asked school children the meaning of Christmas.

JAMES WHITE, BALDWIN, KANSAS, SUPERINTENDENT: He asked the students what Christmas meant. And in all cases, it was a student immediately popped up and says Jesus' birthday.

VILES: The ACLU says that question crossed the line.

DAVIDSON: What is the meaning of Christmas? That's a very leading question. If you're a little Buddhist kid, what would you say? Or if you're a little Muslim kid, what would you say?

VILES: Parents now divided over this "don't ask, don't tell" policy for school Santas.

UNIDENTIFIED FEMALE: I think it's fun for the kids to have Santa come, but I don't think he should really make any remarks.

UNIDENTIFIED FEMALE: I think that's a legitimate question to ask. I don't have a problem with that.

VILES: Christmas carols like this one were at the heart of a controversy in Albert County, Colorado, where parents and the ACLU tried to stop a school concert. In this case, though, the school got a lawyer and held its ground.

BARRY ARRINGTON, ATTORNEY, ALLIANCE DEFENSE FUND: No court has ever said you can't have religious songs. No court has ever said you can't call it a Christmas program. You can't have it exclusively religion -- religious, rather. The religious component has to be part of an overall cultural celebration. Christmas is a cultural as well as a religious celebration.

(END VIDEOTAPE)

VILES: Now, that Colorado school went ahead with its concert, which included six Christmas carols and two Hanukkah songs. And by the way, Lou, that wonderful Christmas tree that we just showed in front of the United States Capitol is not a Christmas tree at all. Congress calls that a "Capitol holiday tree."

DOBBS: That's a Capitol holiday tree.

VILES: It's a holiday tree. It was a Christmas tree when they cut it down in Idaho, but when it went up in Washington, it became a holiday tree.

DOBBS: Well, by God, if it was a Christmas tree when it was cut down in Idaho, it stays a Christmas tree! It's interesting. We have moved -- as so many of the subjects that we're dealing with here on this broadcast, we are moving, migrating as a nation, over 200 years of history and culture and heritage that seems to be pushing -- being pushed aside by all sorts of minority rights issues, the tyranny of the few. What is the sense that the groups like the ACLU and so forth, they're just simply going too far, that we're torturing reason to get to a desired result that doesn't really serve anybody?

VILES: In this limited case of Christmas, the ACLU has essentially intimidated communities into thinking that there's nothing they can do that acknowledges Christmas in the classroom. That's not the case. You can acknowledge Christmas as a cultural event, even a religious event, as long as you acknowledge other religious holidays. But schools are so afraid of this, they have these policies that essentially say, We are not going to go near it.

DOBBS: So Christmas -- the logical extension of that is the end of Christmas, if you will. There would be no Christmas sales for retailers.

VILES: We're learning a little bit less about what Christmas really means in this country. But the retailers, I think, are safe. They're getting their message out. It's a time to buy. A lot of kids don't know why it's a time to buy, but it's a time to buy.

DOBBS: Well, we look forward to your continuing to explore this issue of majority rule and minority right in this country. Thank you very much, Peter Viles.

That brings us to the subject of tonight's poll. The question: Do you believe that majority rule in this country has been significantly eroded in favor of minority rights? Yes or no. Please cast your vote at cnn.com/lou. We will have the results for you a little later here.

"Tonight's Thought" is on tyranny. "No government power can be abused long. Mankind will not bear it. There is a remedy in human nature against tyranny that will keep us safe under every form of government." English author and genius Samuel Johnson (ph).

Coming up next, "Broken Borders" and the push in Washington to make illegal aliens in this country simply legal. Lisa Sylvester will have our report. And then: Two California state senators share their very different views about a controversial issue, the granting of illegal aliens California state driver's licenses. Gil Cedillo says illegal aliens should have those licenses. Senator Tom McClintock says it undermines enforcement of our immigration laws. They will join us next. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Now, "Broken Borders."

DOBBS: For more now on the dialogue we hope to inspire on this broadcast on a national immigration policy, or perhaps a lack of a national immigration policy, "Broken Borders." The Bush administration claimed last week that significant progress has been made in policing our borders since the September 11 attacks. The administration made the claim despite the fact that 700,000 illegal aliens are estimated to cross our borders each year.

Lisa Sylvester now looks at what concrete steps have actually been taken and whether our national security has actually improved.

We want to apologize. We will -- because of technical problems, we will be getting back to Lisa Sylvester later in the broadcast.

Let's take a quick look at some of your thoughts now on the subject of "Broken Borders. And tonight from San Angelo, Texas. "These politicians -- those politicians," rather, "who are trying to buy the votes of minorities by arranging still another amnesty for illegal aliens would be better advised to spend their time figuring out how to provide universal health care coverage for all American citizens and how to keep illegal aliens from dragging down our economy. With a ready supply of cheap labor, employers have no need to worry about providing better-paying jobs and benefits in order to attract qualified Americans. We should be more concerned with the welfare of our own people than with that of people who have sneaked into our country like thieves." S. Richardson.

From viewer in Scottsdale, Arizona that asked that his name be withheld. "I watched your show in amazement Friday as the spokesman for the illegal aliens saw no reason that the illegals should be denied driver's licenses. Afterwards, it occurred to me that I should seek the medical and retirement benefits that are due to lifelong members of this pipefitter's union. I have never worked as a pipefitter but, by your guest's logic, that should not matter. My family would sure like to receive those generous benefits!"

On "Exporting America" from Orlando, Florida, "The exporting of high-tech American jobs appears to be accelerating. People need to realize that they are really purchasing their pink slips when they acquire cheap labor goods. Fair trade is fine, but the only thing we seem to be exporting is jobs. The good news is that the executives will be getting their bonuses for effective cost cutting measures." Gene Smith.

From Boca Raton, Florida, "Thank you for your continued focus on 'Exporting America.' I am a former IT worker who has a new career as a bartender. Today I read IBM is planning a further migration of IT jobs to India and China. The people affected are expected to train their replacements. There should be a Patriot Act that applies to corporations as well as citizens. God help us all." Warren Cestare.

From Glen Allen, Virginia: "I don't understand why the government is touting an increase in Christmas sales as being good for the American economy. Just about everything I've seen in the stores is made outside the country. Why are people so happy that we're sending our money to countries and people who could care less about us and our way of life, and in many cases would like to see the U.S. destroyed? We're financing our own demise, and we're smiling the whole time. Merry Christmas." Robert Godfrey.

And on the capture of Saddam Hussein, from St. Simons Island, Georgia: "From marble palaces to a deep dark dank hole in the ground. Let other tyrants take note." Lynwood Collins.

From Eagle River, Alaska: "What a wonderful day for the people of Iraq, the U.S. military, and the coalition of the willing!" Kenny Klinger.

We love hearing from you. Send us your e-mails at loudobbs@CNN.com.

Now, "Broken Borders." Lisa Sylvester takes a look at what concrete steps the Bush administration has actually taken and whether our national security has actually improved.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Millions of illegal aliens may get a pass to stay in the United States if they can find someone to hire them.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We need to have a immigration policy that helps match any willing employer with any willing employee.

SYLVESTER: That sounds a lot like a guest worker program, such as the already controversial H1B program for high skilled workers.

This would be a boon for large companies looking for cheap labor. But it could come at the extend of low income U.S. citizens, who could see their wages fall or lose their jobs.

SEN. JEFF SESSIONS (R), ALABAMA: There is no doubt that with eight million workers here, people here illegally, that it is impacting our unemployment situation. I don't think there's any doubt about that.

SYLVESTER: There's widespread disagreement on what do about the eight to 12 million illegal aliens in the United States. Senator Sessions has proposed giving local law enforcement officers more authority to pursue them. Colorado Congressman Tom Tancredo wants to increase money for border patrols.

On the other hand, there's a movement in Congress to officially recognize illegal aliens who are already settled here. Senator Orrin Hatch has proposed giving legal status to high school students of illegal aliens. And Senator John McCain wants to offer temporary visas for low skilled workers.

Those who favor guest worker programs argue if migrants can come and go freely, they will eventually return to their country. But critics say that's not necessarily the case.

STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: It's deceptive to call it a guest worker program, because we know the people are not going to go home. Why would they?

Whenever you've had immigration from a poor country to a rich country, a large share of the guest workers just don't go home. So it doesn't really solve the problem of illegal immigration.

(END VIDEOTAPE)

SYLVESTER: Well, Lou, the White House may not be able to have it both ways. Last Thursday Homeland Security Secretary Tom Ridge hinted the administration may loosen immigration rules, but the very next day the White House was downplaying his comments after being criticized by conservatives -- Lou.

DOBBS: Lisa, thank you very much. Lisa Sylvester. At least the president today had to take a question about immigration. Perhaps there is some hope that we can have a national dialogue on immigration after all.

SYLVESTER: It seems, Lou that here in Washington, we are starting to hear more, both on Capitol Hill and also coming from the White House, that this is now a front burner issue. But what is actually decided, we're going to have to wait and see, Lou.

DOBBS: That is the nature of things. All right, thank you very much, Lisa Sylvester.

The nation's poorest borders have given rise to a host of problems for border states and beyond.

Joining me now, the author of the California law that would have given driver's license to illegal aliens. which was overturned in California this month. We're joined now by Democratic State Senator Gil Cedillo. Also joined by Republican State Senator Tom McClintock, who says licenses for illegals would dangerously undermine law enforcement. Joining us tonight appropriately enough from the state capital, Sacramento.

Gentlemen, good to have you with us.

STATE SEN. TOM MCCLINTOCK (R), CALIFORNIA: Thanks for having us.

DOBBS: Senator Cedillo, this law has been overturned. What is the next step? Is there a deal in the works between you and your supporters and Governor Schwarzenegger?

STATE SEN. GIL CEDILLO (D), CALIFORNIA: Yes. We're working very constructively with the governor, looking forward to craft a bill that will ensure that we have safe highways for all of California.

We want to make sure that the 22 million motorists who take to the highways every day know that we've done all that we can to make sure that every motorist is licensed, inspected and insured.

And so we're working in a very constructive manner with the governor, and we hope to have a bipartisan bill for the next session.

DOBBS: Senator McClintock, your thoughts?

MCCLINTOCK: Well, with all due respect, that's a specious argument. California already accepts a valid foreign driver's license as proof of competence to operate a motor vehicle in California. So this is not a safety issue.

It's not an insurance issue either. A foreign national can obtain insurance in their own country with extend coverage into the United States.

There's one purpose of this measure and only one purpose. It's to place valid state identification documents in the hands of illegal immigrants. And the only reason for doing that is to undermine the enforcement of our immigration laws.

DOBBS: Senator Cedillo, your thoughts?

CEDILLO: Well, I'm the author of the bill, and I'm telling you what the purpose is, why we introduced the bill. We've been working on this for five years. We're very clear.

Every Californian has a right to know, in a state where you are 22 million motorists taking to the highways every day, that we, the elected officials are doing everything we can to make sure that the highways are safe, that all motorists are licensed, tested and insured.

And one of the ways to do that is to make sure that a population of 22 million people who, for 65 years were able to meet the responsibilities of driving with a license, are able to meet those responsibilities again.

MCCLINTOCK: They didn't meet those responsibilities right now.

CEDILLO: That's not accurate.

MCCLINTOCK: It is. They're entitled...

CEDILLO: And we need to make sure that people have a responsibility and an opportunity to fulfill that responsibility. And so that's what we and the governor and I intend do in the upcoming session.

MCCLINTOCK: Gil if you're a foreign national, you can obtain a driver's license in your own country that entitles you to drive on California's roads. This is not a safety issue.

DOBBS: Let me ask you both...

CEDILLO: No, this is a safety issue. This is -- As I said, we have 22 million motorists, and they need know that every day we make sure their highways are safe.

DOBBS: Senator...

CEDILLO: Driving a vehicle is essential to living in California. And they have a right to know that we're doing all that we can.

And that's why, for 65 years this legislation served us well. And it served us well until 1994. Then we tried to play immigration politics with this bill in 1994, and we found out that it had zero effect on immigration. In fact, it was -- the opposite occurred. In fact, after 1994, we had increases in immigration in '94 and '95 and '96.

DOBBS: Senator Cedillo...

CEDILLO: Zero impact on that area.

DOBBS: Senator Cedillo, Senator McClintock, we're going to come right back you to. We're going to take a brief respite, as we settle that issue on this broadcast this evening. We thank you both for trying to do so. And we will be right back.

A major push in Congress to expand the size, the strength of the U.S. military. We'll be joined by Democratic Congresswoman Ellen Tauscher, the author of the bill. She will be joining us later in the broadcast.

We'll be back with senators Cedillo and McClintock in just a moment. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We're talking with Senator Gil Cedillo of California and Tom McClintock.

Gentlemen, I want to turn, if I may, to Senator Cedillo.

Senator McClintock said that any illegal alien, any resident of another nation is entitled to get a driver's license in their country and have it recognized in the state of California. Is that true or is it not?

CEDILLO: Lou, I just think that's inaccurate, and I think tat to the extent that the can (ph) is very time limited. But I think that's beside the point. I think the point is...

DOBBS: But, wait, Senator if I may, it may be beside the point but I just want to understand the veracity of the statement first, and then we can go to the issue of its relevance. Is it true, or is it not?

CEDILLO: I don't believe that's true. I don't believe that's accurate.

MCCLINTOCK: Of course, it's true. We just had a hearing on that, Gil. You asked the California Highway Patrol commissioner that question. And he told you that the state of California recognizes a valid foreign driver's license as proof of competence to operate a motor vehicle in this state.

If you're not going to get trained in your own country to obtain a driver's license, what makes you think you're going to get one here?

The only purpose of this is to obtain a valid state identification document that, before your bill, said not only that you're competent to drive a motor vehicle but you're also legally a resident of California. For that reason, the driver's license was used for everything from financial transactions to security clearance at airports.

By giving these licenses to people who are in this country illegally, you have just destroyed the value of the driver's license as authentic proof of legal residency for every one of the millions of California drivers who currently hold one. CEDILLO: Now, with all due respect, Senator McClintock, I don't believe that statement is accurate. I believe the commissioner indicated that the use was time limited, maybe to 90 days, if I recall correctly. But the point is that we are...

MCCLINTOCK: You're only supposed to be here for 90 days.

CEDILLO: I understand -- trained, licensed and insured, trained by our laws with our regulations...

MCCLINTOCK: Our laws say they're not supposed to be here to begin with. Our laws say they're supposed to be...

CEDILLO: Senator, you know, you and I agree not to interrupt each other, so let me finish.

So we want to make sure people are trained, licensed and insured in compliance with our laws. For 65 years, this was the law of California, and it served us well. It should serve us well again.

The failure of the bill when it was changed was that it made our highways more dangerous. We're trying to reconcile our laws to our reality and work with something that worked for us for 65 years. I think that's a great idea.

MCCLINTOCK: You talk about compliance with our laws. Illegal immigrants are here in direct defiance of the most fundamental of our laws, our immigration laws.

The United States has the most open immigration policy of any nation in the world. There are millions of people who are waiting in line to legally become American citizens and are willing to abide by our immigration laws to do so.

Illegal immigration is the process of people cutting in front of these folks in line. I don't believe that kind of behavior should be rewarded. And when you talk about people who ought to comply with our laws, you're talking about people who are deliberately violating our laws to be here in the first place.

CEDILLO: I understand that, Senator. But you also -- and that's probably an argument you're going to have to take up with the head of homeland security, Mr. Ridge, who has argued that perhaps there is eight to 12 million people we should legalize.

But that is beside the point with respect to what is, as the law indicates, our jurisdictional responsibility. Our jurisdictional responsibility as it applies to California is that you and I have a constitutional obligation to make sure that our highways are safe for all California motorists.

General (ph) and I are obligated to do that. We took an oath to do that, and you and I should work to accomplish that.

MCCLINTOCK: We have an obligation to defend the sovereignty of the United States, and if measures like yours become law, it's going to be infinitely more difficult to do so.

DOBBS: Gentlemen...

CEDILLO: We had a record of 65 years where our sovereignty was well in tact while we ensured all motorists were licensed, tested and insured. And you know that to be a case. That's not an argument, that's history.

DOBBS: We've got very...

MCCLINTOCK: These are very different times.

DOBBS: Sorry, Senator McClintock, I interrupted you.

MCCLINTOCK: I was going to say those were far different times.

DOBBS: Senator Cedillo...

CEDILLO: No. No, they're the same. We had all the same concerns for security that we have today and also concerns for sovereignty.

We went through World War II. We hunted communists in our universities. We were concerned about young people in the '60s. We spied upon them. We were concerned about...

DOBBS: Gentlemen -- Gentlemen, if I may just interject with one thing. Seventy percent of the people of California, gentlemen, in the most recent polls, just about 70 percent, almost 70 percent, said they don't want this, period. Driver's licenses for illegal aliens.

How do you respond to them? And it was one of the principle issues in Governor Schwarzenegger's campaign. How do you respond to them?

CEDILLO: Well, we respond to them like we did, Lou, is we went -- And I personally was one of the co-authors of the recall in a bipartisan effort, working with the governor, we repealed SB-60. I was the author of that bill and worked with on it for five years.

We've listened to the people. We've listened to what their concerns are. And with the governor, and I imagine in a bipartisan manner, we are going to propose new legislation that will address the concerns that were raised during the debates and during the floor debates and come back with legislation shortly in January that will address those concerns. And also address the concerns of 22 million motorists to make sure that our highways are safe and secure.

MCCLINTOCK: I don't understand how that's going to work. You're going to do a background check on people. The background check's going to determine one of two things. Either they're here in the country legally, in which case they don't need this bill; they're already entitled to a driver's license, or they're in this country illegally and the law requires they be deported.

I don't see how you compromise on that issue. DOBBS: Well, General (ph) we'll look forward to finding out how you all do compromise on that issue, if the art of politics is fruitful in this case. Senator Gil Cedillo, Senator Tom McClintock, we thank, gentlemen, both for being here. We hope you'll return to discuss this important issue.

MCCLINTOCK: Thank you.

CEDILLO: Thank you very much.

DOBBS: Coming up next, expanding the size and the strength of the U.S. military, a movement gaining moment in many Congress and leading much of that momentum, Congresswoman Ellen Tauscher, member of the House Armed Services Committee and the author of legislation that would expand the military. She's our guest next.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: My guest tonight says the U.S. military needs to be bigger to help support the hundreds of thousands of troops already serving this country around the world.

Congresswoman Ellen Tauscher has introduced a bill that would increase the number of Army, Marine, and Air Force servicemen and women by just about eight percent over a period of some five years.

A member of the House Armed Services Committee, she joins us tonight from San Francisco.

Good to have you with us.

REP. ELLEN TAUSCHER (D), CALIFORNIA: Thank you, Lou.

DOBBS: This legislation that you've introduced, there seems to be, despite the fact that Secretary of Defense Rumsfeld continues to press back, if you will, on the idea that we need more troops, it seems to be gaining considerable momentum.

Is that a correct impression?

TAUSCHER: It is. I think what we now know after September 11 is that the war on terrorism is very, very labor intensive. And certainly, our experiences in Afghanistan and Iraq has shown us that we need boots on the ground.

Certainly our Army, our Marines and our Air Force and the Navy have done a spectacular job. But we're relying too much right now on our guard and reserve, and frankly I'm deeply concerned about our recruiting retention rates for the guard and reserve.

So I propose that we lift the floor of the minimum number allowed into the military by eight percent over the next five years, specifically for the Army, the Air Force and the Marines. DOBBS: And Congresswoman, as you point out, the demands that we're putting right now on our men and women in the National Guard and the reserves is far from typical of the role that they thought they were going to be assuming. Or that the Pentagon had been planning for literally decades, isn't it?

TAUSCHER: No, I think Secretary Rumsfeld is right. I supported, since I joined the Armed Services Committee seven years ago the transformation of our military. And that is all well and good and necessary for us to do.

But we cannot be in a very labor intensive war on terrorism as we see now in the Middle East, in Afghanistan, Iraq, and have guard and reserve have their deployments doubled and tripled and have them lose their jobs, have their families lose their primary wage earner, have their children be without their family, spouses without any support, and we really have to make some sense out of this.

And I think this is a temporary measure. We are gaining bipartisan support, both in the House and the Senate. I would hope that the Pentagon would begin to work with us to make this right as soon as possible.

DOBBS: And what are the next legislative steps?

TAUSCHER: Well, we would -- we have some hearings obviously in the House Armed Services Committee. I think you'll see some action on the Senate side from somebody like Senator Jack Reid. And I think that what we really need to do is understand what the resistance from the Pentagon really is about.

I know this is going to be expensive. And I know that's the first question I asked, how much is it going to cost? And frankly, it looks like it will cost about $3 billion to $4 billion over five years. That's a lot of money, but it's a small amount of money compared to the overall defense budget of about $400 billion a year.

And it certainly is a small amount of money considering the costs that the Guard and reserve families and the American people are bearing right now in Iraq and in Afghanistan.

DOBBS: An immense strain on our reserves and our National Guard. Congresswoman Tauscher, thank you for being with us. We appreciate it.

TAUSCHER: Thank you.

DOBBS: Secretary of State Colin Powell today underwent prostate surgery. The State Department said his cancer was localized. The two-hour procedure went very well.

The 66-year-old secretary will remain several days at Walter Reed Army Medical Center and then return home to recuperate and take on a limited schedule for awhile. And, of course, we wish the secretary a speedy recovery. Coming up next, Oktoberfest, pints of beer and celebration. It is the image most people have of Germany. But according to the German president, his people are just a bit too cranky. Perhaps a little too grumpy. Kitty Pilgrim will have that story.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: On Wall Street, stocks opened with a rally, but it didn't last. The Dow down 19 points. The NASDAQ down 30. The S&P 500 down six.

Susan Lisovicz, even in a down market is always up. Good to see you.

SUSAN LISOVICZ, CNN CORRESPONDENT: There was sizzle today, Lou, and then there was fizzle.

The capture of Saddam Hussein amounted to basically just a 15- minute rally on Wall Street. The market peaked quickly, the Dow surging nearly 100 points before gradually pulling back to close lower.

The Dow, however, finished above 10,000 for a third straight session. And that's what's remarkable. With little more than two weeks to go for the year, after three years of declines, the Dow is up 20 percent and the NASDAQ has soared 45 percent.

Unfortunately, what's also higher are energy prices. Oil prices today closed above $33 a barrel.

Meanwhile, the dollar closed to a new low against the euro.

Also lower today, the world's biggest retailer, Wal-Mart, on word that sales for the five-week holiday period currently tracking near the low end of the three percent to five percent target. It is crunch time for retailers. And that news dragged the whole sector lower.

The Dow, however, remains at an 18-month high. Wanted to finish on a positive note, Lou.

DOBBS: Absolutely. So we can stay in the holiday spirit.

LISOVICZ: Exactly.

DOBBS: Susan, thank you very much. Susan Lisovicz.

Coming up next, why Germany's president told his country to quit being so grouchy. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In our poll tonight, 61 percent of you said majority rule in this country has been significantly eroded in favor of minority rights. The minority disagree. Finally tonight, Germany's president has a message for his people. Simply put, lighten up.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The jolly German, not exactly.

Germany's president, Johannes Rau, said he is sick of seeing grim-faced and grumpy Germans, adding, quote, "Germans sometimes leave a general impression of being broody." Unquote.

He didn't pull any punches either. He said, quote, "Germans walk around looking as if they have too much gastric acid. I wish they'd relax more." Unquote.

Rau put the gloominess down to self-pity, not paying enough attention to what is happening in other countries.

He might have a point. Maybe Germans should compare how much they relax compared to Americans. It might cheer them up. Germans take, on average, six weeks vacation a year, compared to just two weeks taken by the average American.

Kitty Pilgrim, CNN, New York.

(END VIDEOTAPE)

DOBBS: That's our show for tonight. We thank you for being with us. Tomorrow please join us. Health and Human Services Secretary Tommy Thompson joins us for the latest on the flu that has now spread to all 50 states. Chairman of the Senate Select Intelligence Committee, Senator Pat Roberts, is also our guest.

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

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



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