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Lou Dobbs Tonight

Howard Dean Pulls Further Ahead; President Bush Set to Unveil Space Plan

Aired January 13, 2004 - 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.


LOU DOBBS, CNN ANCHOR: Tonight: Howard Dean, the Democratic front-runner in Iowa, pulls further ahead. We'll have a live report from Iowa. I'll be joined by three of the country's top political journalists.
President Bush prepares to unveil a dramatic new initiative on space exploration. But a new opinion poll suggests some Americans aren't convinced.

In "Made in America" tonight, we'll show you why it's really tough to buy American-made products. We'll have a special report.

The president of Mexico and the president of United States embrace each other's views on immigration. We'll be joined by a Harvard economist who says the president's immigration proposal couldn't have come at a worse time.

And an astonishing breakdown in security during the heightened terror alert. Investigators say they could have planted a dirty bomb under a national monument on the second anniversary of the September 11 attacks.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, January 13. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, six days before the Iowa caucuses, the Democratic presidential front-runner, Howard Dean, has increased his lead over his nearest rival. The latest tracking poll shows Dean now has a lead of five percentage points over Congressman Richard Gephardt. That's an increase of two percentage points since the last Zogby poll. There's a tight race, however, for third place between Senator John Kerry and Senator John Edwards.

Judy Woodruff is in Ames, Iowa tonight.

Judy, is this a sign that Howard Dean's lead is stabilizing or is it a sign of greater volatility?

JUDY WOODRUFF, CNN ANCHOR: The fact is, Lou, it's impossible to say.

These caucuses are not like a primary. In terms of turnout, it's hard the know who is going to be there. There is still volatility among the voters in Iowa, a number of them still undecided. I do think it's possible to say that Howard Dean has solidified his vote, to an extent. He's hovering at around 25, 26 percent. He probably will do at least that well on caucus night. The question is, what will the other candidates do? Is John Edwards, who got the endorsement of "The Des Moines Register" on Sunday -- he's moved down a little bit in this poll. Other polls show him doing a little bit better.

The point is, we are still, what, five, six days away from these caucuses. It is still in many ways a wide-open race here.

DOBBS: Kerry and Edwards are in a tight race, at least according to this latest tracking poll, for third place. And Edwards has, as I'm sure you have done, as I have, gone through some of the background in this poll, he has very high -- Edwards -- very high favorable ratings in this race and very low unfavorable ratings. Can anything be made of Edwards, just based on the statistics behind these pollings?

WOODRUFF: Well, Lou, Edwards -- John Edwards has made it a point in this campaign for the last many weeks to say he is running a positive campaign. He's tried to stay out of the sniping, as he calls it, that's gone on among all the other candidates, Dean, Kerry, Lieberman and so forth.

What he said is that: I don't think that benefits the American people. It certainly doesn't benefit the Democratic Party right now.

I interviewed Edwards today. And even when I threw at him some criticism Dean had made of all the other contenders and some comments that Dick Gephardt had made, he wouldn't bite, Edwards basically saying: I'm going to stick to the chosen path. And I'm going to try to stay on the high road, stay positive.

Whether this is going to benefit him ultimately, it is really impossible to say. Clearly, though, Lou, I think you can say there's a hunger here in Iowa and in other places around the country for a candidate who is not sniping at the other guy. So, whether it's going to pay off on election night here in Iowa, we don't know.

DOBBS: Judy, thank you very much -- Judy Woodruff from Ames, Iowa.

In Washington today, former Treasury Secretary Paul O'Neill did not exactly apologize, but he did say he wished he could take back those unflattering comments that he uttered about President Bush. In those comments, O'Neill said the president looked -- quote -- "like a blind man in a room full of deaf people" -- end quote. The former treasury secretary also backed away from comments he made suggesting President Bush decided to go to war against Iraq in the first days of his administration.

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

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, that softer tone from former Secretary O'Neill, some would say even a retreat from his comments on Iraq, came on a day that his version of those early National Security Council meetings here at the Bush White House came under questioning from two senior people in the room, the defense secretary, Donald Rumsfeld, and the former top commander of the U.S. military, General Hugh Shelton.

Now, Secretary O'Neill was out on "The Today Show" this morning on NBC giving an interview. For starters, as you said, he wishes he could back that very critical comment of the president's management style and interestingly and noteworthy to the White House, former Secretary O'Neill also said that he never meant to suggest in his new book now out called "The Price of Royalty" that Mr. Bush was in a rush to war in Iraq from day one.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, FORMER TREASURY SECRETARY: People are trying to make the case that I said the president was planning war in Iraq early in the administration. Actually, there was a continuation of work that had been going on in the Clinton administration, with a notion that there needed to be regime change in Iraq.

(END VIDEO CLIP)

KING: Now, O'Neill also stood by his assertion that he never saw any firm evidence of weapons of mass destruction in Iraq, but he also said there was intelligence suggesting weapons.

And he went on to say in that NBC interview that that's why we elect presidents, that it was Mr. Bush's decision in the end to go on to war, Paul O'Neill, Lou, also saying that he never meant to suggest in this new book that he did not think it was right to knock Saddam Hussein from power, again, on a day when both Secretary Rumsfeld and retired General now Hugh Shelton telling CNN, Secretary Rumsfeld speaking at a briefing, saying Mr. Bush was talking about regime changes.

He was talking about the no-fly zones over Iraq. But, as General Shelton put it, he never saw any evidence that President Bush was any more inclined toward war in Iraq in those early days than President Clinton had been when he left office -- Lou.

DOBBS: Has the White House, has the administration backed off from what I think at the best could be called perhaps an unseemly rush to discuss an investigation of the former treasury secretary on those so-called classified documents?

KING: Not backing off at all, Lou.

But the Treasury Department is clarifying media accounts of this investigation. They say they believe they have no choice and the responsibility to ask the inspector general at the department simply to launch a preliminary inquire to match up what Secretary O'Neill said he took with him and was authorized to take with him with any documents that were shown on a "60 Minutes" report on that. No one is making any accusation. They say they have a responsibility to look at this. And, in fact, the White House says it received no heads-up that investigation was to be launched, an inquiry, the Treasury Department prefers to call it, again, an internal inquiry by the department's inspector general, not any referral to the Justice Department or anything more serious like that.

DOBBS: In such a politically savvy administration, surely there is the understanding there at the White House the perception this could look like intimidation against one who has broken trust with his former boss.

KING: There is that perception, certainly the openness to that perception.

And that is what Democrats are saying, that this is an administration that, in the past, has been very tough toward its critics and now is being very tough, recriminations, even some are saying, against former Secretary O'Neill. Noteworthy that the former secretary himself did say this morning that, if he were the treasury secretary now and he saw a report that did refer to a secret document, that he himself would have ordered exactly the same investigation.

DOBBS: Well, the former secretary was doing a number of flip- flops on his assertions and comments. John, the White House doing at least one of its own today on, this time, Canada, permitting Canada to join, if you will, post-data membership in the coalition of the willing on those Iraqi construction contracts.

What did the president have to say about the about-face?

KING: A major policy change there, Lou.

The president was in Mexico, of course, for the Summit of the Americas. He had his first one-on-one meeting with the new Canadian prime minister, Paul Martin. And Mr. Bush saying that Canada will now be allowed to bid on those major reconstruction contracts, U.S.-funded contracts in Iraq. The first $5 billion in contracts will go only to those who were part of the coalition of the willing, as Mr. Bush calls it.

But Mr. Bush now saying that Canada, which, of course, firmly opposed the war in Iraq, can participate in the $13.5 billion in contracts that will be left over in the second and subsequent rounds, the president saying that Canada has been very supportive of the postwar efforts in Iraq, especially the efforts to reduce Iraq's debt and to come up with more money to help pay for efforts in postwar Iraq, the president taking a very different tone today than he did just a month ago here at the White House.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The taxpayers understand why it makes sense for countries that risk lives to participate in the contracts in Iraq. It's very simple. Our people risked their lives. Coalition -- friendly coalition folks risked their lives. And, therefore, the contracting is going to reflect that. And that's what the U.S. taxpayers expect.

(END VIDEO CLIP)

KING: So, Lou, certainly a change of policy here at the White House. Administration officials say it is simply time to move on and that Canada has been helpful on other issues, including the war in Afghanistan and again on debt relief and other postwar efforts in Iraq, some would say a flip-flop. The administration says, time to move on and get some diplomatic relationships back on track.

DOBBS: Others might talk about flexibility on the part of the administration.

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

The man who runs the war today said a report published by the Army War College is wrong. As we reported last night, that War College study said the war in Iraq was unnecessary and, in fact, a detour from the threats posed by the al Qaeda terrorist network globally.

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

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, the question is, was the U.S. invasion of Iraq an unnecessary preventative war of choice that wasn't really integral to the war on terrorism, but, as you said, a detour from it?

That is the argument put forward by Jeffrey Record. He's a visiting professor at the U.S. Army War College in Carlisle, Pennsylvania, and the former aide to two Democratic senators, Sam Nunn and Lloyd Bentsen. Record writes in his record -- quote -- "The global war on terrorism is strategically unfocused, promises more than it can deliver, and threatens to dissipate scarce U.S. military means over too many ends."

A disclaimer makes clear that that's not the official policy of the U.S. Army, something that Defense Secretary Rumsfeld underscored when he dismissed the criticism today.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: A person wrote an article, like an op-ed piece. And it's out there. And everyone is free to say whatever they think. That is the position of some people in the United States and in the world, what he repeated. And that's fine. It, obviously, is inaccurate.

(LAUGHTER)

(END VIDEO CLIP)

MCINTYRE: The professor also echoed the sentiments of congressional critics and others, who say the U.S. military is too small, something that Rumsfeld also rejects.

He began his briefing today with a lengthy outline of his rationale for why he believes that the stress on the U.S. military is a temporary spike and that increasing the size of the military would be the slowest and most expensive solution.

And to critics who say that the U.S. military needs two more Army divisions, Rumsfeld has a ready answer. The U.S. military already has them because of the emergency measures put into effect to hold troops in their positions. Right now, there are some 36,000 troops higher than the authorized end strength by Congress, roughly equivalent of two divisions -- Lou.

DOBBS: Jamie, one quick question. Is there any criticism from the War College, from within or without the U.S. military, that the secretary of defense has accepted?

MCINTYRE: Well, I think he would argue that he weighs all of the criticism, that these are issues that they wrestle with.

He says that, if it turns out that the U.S. military does need an increase in end strength, he will propose it. But he continues to believe and he laid out a long reason, rationale, why this is the case, that they will be able to get through this temporary period and avoid the expensive solution of adding is 100,000 troops or something like that in the future.

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

Still ahead here: "Made in America." We all know it's tough to buy an American-made product these days. It's made even more difficult when foreign manufacturers turn out cheap imitations of the few products still made in this country. We'll have a special report.

And President Bush says his plan for a dramatic new space initiative is affordable. Some Americans, however, aren't convinced.

And an amazing security breakdown on the National Mall. You will not believe what Park Police were doing when investigators planted what could have been a bomb at the base of a national monument.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our special report tonight on what, if anything, is still really made in America. Many of the American companies that have moved their manufacturing and many American jobs overseas still claim that their products are made in the USA.

Lisa Sylvester has the story.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): It's become a lot harder to find a toy that is still made in America, even George W. Bushes made in China. A made-in-the-USA label means a product is not only crafted by American workers, but the materials are of American origin as well.

But some companies will still try to skirt the rules. The Kubota Corporation advertised its tractors as made in the USA. But in 2000, the Federal Trade Commission found they were actually made with significant foreign parts.

ELAINE KOLISH, FEDERAL TRADE COMMISSION: Sometimes, consumers write to us. They will have Bush something which on the package says made in the USA. They will open the package, find the product, and it will say, made in Mexico, made in China or some other foreign country. And they will say, hey, what's going on here?

SYLVESTER: Violators are asked to stop making false claims, but there are no penalties.

Corporations have also become quite savvy at using terms that sound a lot like they are American-made, but fall short of the gold standard, made in the USA: manufactured by a North American company, but made in China, or made in the USA of imported fabric, or a new buzzword, brand America. The new ad campaign promises to promote products by American companies, even though they could be made entirely overseas.

JOE MESSINA, BUYAMERICAN.COM: There are a large number of manufacturers that have shipped most of their operations offshore, although they are American companies. They come back to the United States and want to label it as brand America.

SYLVESTER: But what about the buy-American law? That applies to the Pentagon and requires military systems include at least 50 percent domestic contents.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: We have to assume that foreign sources of supply, even from countries that have been friendly to the United States for a long, long time, are intrinsically less secure than sources of supply at home.

SYLVESTER: While there are buy-American provisions for defense- related industries, those do not apply to other sectors. So the real Air Force One plane is made in America. This toy version is made by the People's Republic of China.

(END VIDEOTAPE)

SYLVESTER: There was a push in Congress last year to raise the Pentagon's buy-American to 65 percent of domestic content, but it did not pass, after heavy lobbying by the European Union -- Lou.

DOBBS: One of my favorite labels amongst those trying to get into the made-in-USA game, if you will, amongst retailers and manufacturers is, packaged, proudly packaged in the USA.

SYLVESTER: There are a lot of ways that they can get around by just playing on the words, Lou.

DOBBS: Any effort by the Federal Trade Commission to bring the hammer down and start making people mean what they say and say what they mean?

SYLVESTER: Well, the Federal Trade Commission does keep track of this.

But part of the problem is that there are no immediate penalties. So, while they can essentially tell the companies, stop doing it, since there are no penalties, the companies might take a little bit of liberty there, Lou.

DOBBS: It sounds like a job for Congress.

Lisa, thank you -- Lisa Sylvester reporting from Washington.

SYLVESTER: Thank you.

DOBBS: Let's take a look now at some of your thoughts.

Michael Royce of Sunset Beach, Hawaii, wrote to say: "Immigrants are not taking jobs that Americans don't want. The truth is, they are simply willing to work at poverty-level wages that most Americans are not willing to accept."

Ricardo Aulet of Bronx, New York: "I imagine that American citizens would be more than happy to take those unwanted jobs that foreigners seem to only want if those jobs were given a fair wage with health benefits."

Norman Peyser of Boynton Beach, Florida: "The immigration problem will resolve itself. Once most of our jobs are in Mexico, the illegals will return to get those better jobs."

And Nancy in Glendale, Arizona: "Can you explain to me why President Bush thinks he should create jobs, medical and Social Security benefits for millions of illegal Mexicans in our country, instead of spending his time figuring out how to do that for unemployed American citizens?"

Mark Williamson of Richmond, Virginia, echoes those same thoughts: "In the past week, President Bush has announced programs which will give jobs to illegal aliens and Indian technology companies. Since he's so generous in finding work for the rest of the world, I wonder if he would help me out. I'm a U.S. citizen with degrees in engineering and computer science and I can't find a job."

We love hearing from you. E-mail us at LouDobbs@CNN.com.

Coming up here next, back to the moon and beyond, the White House preparing to announce a new space program and it reacts to criticism that America can't afford it.

Tonight, "Broken Borders." President Bush's new immigration proposal would hurt wages for hard-working American citizens. Harvard University economist George Borjas is our guest.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: NASA's Spirit rover is moving closer to its first encounter with Martian soil. Spirit today rolled for the first time on its lander, moving just about a foot. It also cut the final cable tying it to the lander. If all goes well, NASA expects to send Spirit rolling again by early Thursday down the lander's ramp and on to the Martian surface.

Sending American astronauts to Mars is part of a sweeping new space initiative that President Bush is expected to announce tomorrow. Today, the president said the United States can afford the program, despite the projected half-trillion dollar deficit this year.

Our space correspondent, Miles O'Brien, joins us tonight from Washington, D.C. with a report -- Miles.

MILES O'BRIEN, CNN SPACE CORRESPONDENT: Well, Lou, as you well know, for 30 years or so, NASA has been flying around in circles. And now it appears the Bush administration is going to give it a whole new direction, literally and figuratively.

The Bush plan, in a nutshell, calls to finish the International Space Station, get it completed, retire the aging space shuttle fleet, and then move on far beyond, flying a whole new class of vehicles. Crew exploration vehicles, they will be called. First to the moon to test technologies and techniques, and as a weigh station to Mars and then ultimately to the red planet.

To start the ball rolling, the administration will ask Congress for 5 percent annual increases in NASA's $15 billion budget over the next five years. Tally that up, that only comes to about $4 billion. It doesn't seem like enough to get you to Mars, but that is just the beginning of the story, of course. NASA will also be shifting money away from the International Space Station program and NASA's shuttle program, as those programs are phased out, hopefully providing enough to keep -- get the ball rolling on this new adventure.

Now, the proposal calls for retiring the space shuttle fleet by the year 2010. That is the date, you will recall, Lou, when the Columbia Accident Investigation Board said the shuttle fleet would be need to be recertified, a very expensive proposition and something that is probably not worth the money, given the aging shuttle fleet. And so 2010 is kind of a date around which much of this hinges.

This whole discussion began before the loss of the space shuttle Columbia, February 1, last year, but clearly was given much greater focus and attention after the loss of Columbia. The question was, what next for the space agency, a return to flight, but a return to a flight where? And the question became, what are the goals of the space agency And what should the goals be? -- Lou.

DOBBS: Miles, I know no one would be more excited than you and me about a new initiative to go into space. But the president's father, when he proposed returning to the moon and a mission to Mars 15 years ago, the estimate was $500 billion then. This seems like a very small amount of money. The Augustine Commission assumed a 10 percent growth in the NASA budget going back to 1990. And now we're talking 5 percent. This does not seem to be even close to adequate.

O'BRIEN: Well, yes, it's not enough, clearly.

But, nevertheless, first of all, we're talking about just getting the ball rolling, for one thing. Secondly, what happened in 1989, when the senior George Bush made that proposal, NASA came back with a chrome-plated, gold-plated proposal with all the tail fins, $400 billion. It read like a science fiction novel.

The person in charge of NASA right now, Sean O'Keefe, who I know you know well, is a bean counter by trade, has looked at the numbers carefully and is trying to offer a leaner approach. The question is, is it too lean?

DOBBS: Well, there's got to be something in between all of that chrome and all those beans rolling around. If we have to err on one side or the other, I would go for all of that chrome, as I know you would, Miles, in a moment of declarative honesty.

(LAUGHTER)

O'BRIEN: Bring on the chrome and the tail fins.

DOBBS: Miles O'Brien, thank you very much.

Tonight's quote is the from the Mars rover mission flight director, who today talked about the rover's progress -- and we quote -- "The engineering team is just elated that we're driving, finally. We've cut our ties loose and we're ready to rove" -- that from Chris Lewicki, flight director at NASA's Jet Propulsion Laboratory.

Coming up next here, security failures, a shocking report on the lack of security at monuments in our nation's capital during a heightened terrorist alert.

Also, on the trail. The Democratic presidential candidates are running out of time as they try to seize victory in the first key primary contest in the Iowa caucuses. We'll be joined by three of the top political journalists in the country.

And "America Works." Tonight, you know all those jobs that Americans don't want? We'll introduce you to an American-born gardener doing a job that the administration says Americans really don't want. We'll have his inspirational story, as we continue to celebrate work in this great country.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Scathing criticism tonight for the police responsible for protecting some of this country's most important landmarks. Government investigators found what they call persistent and severe security deficiencies around the National Mall, an area patrolled by the U.S. Park Service and on the second anniversary of the September 11 attacks.

Kathleen Koch has the report for us from the Mall in Washington -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Lou, it was a stunning lapse of security turned up by investigators for the U.S. Interior Department. And according to a report obtained by CNN they conducted their undercover tests on two days they assumed law enforcement would be on high alert at sites like the Washington Monument the day before and the actual anniversary of the 9/11 terrorist attacks. Investigators, however, found so little security on 9/11 that they took a black plastic bag, walked up to the rear of the monument and placed it at the base. The bag of garbage though could have just as easily contained explosives. And it sat there for 20 minutes unnoticed. Investigators then carried it around to the front of the monument and put it right next to the security kiosk where visitors enter. Again it sat there unnoticed for about 15 minutes.

Now where were police you're asking? the day before investigators found some sitting inside the monument, but they never left. On 9/11 while there were some park rangers present, the only U.S. Park Police Officer around was asleep in an unmarked car at the base of the monument. The D.C.'s Congressional delegate said it is not at all clear all monuments are equally vulnerable.

(BEGIN VIDEO CLIP)

ELEANOR HOLMES NORTON (D), WASHINGTON, D.C. DELEGATE: I don't think it tells us anything about the country generally. I think it tells us a lot more about the Park Service and about the Interior Department and where their priorities have been placed. They have certainly not been placed on training their personnel or getting enough personnel in place to guard and make secure our great monuments.

(END VIDEO CLIP)

KOCH: U.S. Park police say after the September report they beefed up security and accountability.

(BEGIN VIDEO CLIP)

SGT. SCOTT FEAR, U.S. PARK POLICE: I tell you, once that report reached the United States Park Police, we took it seriously. We are very concerned about the report. We met with National Park Service, the Department of Interior Office of Law Enforcement Security, and we device a new plan, and we implemented it as soon as we could. So, changes were made.

(END VIDEO CLIP)

KOCH: Now this comes as the Park Service is -- the U.S. Park Police is about to lose its chief, Teresa Chamber (ph). She has been charged with insubordination for talking to the media about security and budget issues. She is credited, however, with making some of the improvements that the park police says it has made since this report came out in September. However, Chambers could be fired as soon as this week.

DOBBS: Amazing. The suggestion that there needs to be more training and a new plan, does that really seem necessary to -- for park police to not be chatting and to not be sleeping in their cars?

Does that require special training?

KOCH: Well, they do say they need more training more money, if they can't do their job there's even been one suggestion private security officers be brought in to guard the nation's monuments.

DOBBS: Well, somebody certainly needs to be guarding them.

News from the campaign trail tonight. Charlie Fisher of Denver wins moveon.org move on President Bush ad contest by focus on the debt that our children will inherit. CNN runs it this weekend. It may also become the first political ad ever broadcast during the Super Bowl. Financier George Soros heavily funded the group which was attacked for ads on its Web site that compared George Bush to Hitler. Soros told CNN, in fact Wolf Blitzer, that he has never compared Bush to Hitler.

(BEGIN VIDEO CLIP)

GEORGE SOROS, SOROS FOUNDATIONS: I have also been accused of comparing Bush to a Nazi and I did not do it, would not do it, exactly because I have lived under a Nazi regime.

(END VIDEO CLIP)

DOBBS: But a "Washington Post" interview two months ago contradicted Soros' statement. Reporter Laura Blumenfeld quotes him saying "When I hear Bush saying you are either with us or against us, it reminds me of the Germans."

According to the post, Soros said it conjurers up memories of Nazi slogans on the wall.

Joining me tonight from the campaign trail in Des Moines, Iowa, Ron Brownstein CNN political analyst, columnist for "The L.A. Times."

And in Iowa with him, Roger Simon, political editor of "U.S. News and World Report."

And from Washington national political correspondent for "Time" magazine Karen Tumulty.

Good to have you all here.

DOBBS: Thanks let's start with the tracking poll, and Ron I'll begin with you. Is this a big deal for Howard Dean?

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, Dean seems to have a small but fairly steady lead here in Iowa in our poll that was conducted last week and the tracking poll that's going on this week. It's tight enough though, Lou, it's still up in the air because Iowa is predominantly a battle of organization. And you have two very strong organizations here in Dick Gephardt and Howard Dean. And you also have some movement clearly apparent for John Edwards and a little bit for John Kerry as well. So, it's still in the mix for everyone but I do think Dean has a slight edge here as we're headed for the final days.

DOBBS: Roger, the "Des Moines Register" endorsing Senator John Edwards.

How important is that in Iowa?

ROGER SIMON, "U.S. NEWS & WORLD REPORT": I'd love to say it's of critical importance because I like newspaper and what them to be influential. But newspaper endorsements probably don't move a lot of voters. And especially as Ron said in a contest that gets down to organizations, the reason being just to give the shorthand for the difference between a caucus and primary is you can't go throughout the day and vote in Iowa. Have you to show up at 6:30 at night. You have to stay around there for three hours. It's not a secret ballet. It's not a very difficult to get people out to do it, which is why 90 percent of the people don't do it. So, things like endorsements of newspaper, even Senator Tom Harkin who endorsed Dean the other day. I mean, less here than in primary states where it is less easy to vote.

DOBBS: And that obviously discouraging absolutely no one.

Karen Tumulty the president, Monterey in Mexico embracing President Vincente Fox and President Fox embracing his the immigration policy.

How big a deal is the immigration proposal?

What is the likely impact.

KAREN TUMULTY, "TIME MAGAZINE": I think the President Fox embracing it helps both of them. It allows President Fox to say, look, you know, I've been patient with this U.S. president and it's paid off. And I think that with President Fox's endorsement President Bush gets a very powerful ally in Washington because President Fox is, in fact, very well thought of here.

DOBBS: Gentlemen, in Iowa, let me ask either one of you, I'll start with Ron, any fall-out there, any reaction, positive or negative, to the immigration proposal?

BROWNSTEIN: Well, you know, Lou it isn't really an issue among the Democrats. It's an issue between them and President Bush. They are all for a version that Bush has proposed that would be more generous to people who are here legally. They all want to have a broader path toward legalization, toward citizenship for people who come forward to who have been here illegally. It will clearly be an issue in the general election. Bush's has come of with a version of this plan the probably most favorable to business of any of the proposals on the table. The Democrats will argue it create as second class kind of citizen. And as you know, we've already seen, many conservatives will argue it goes too far. The initial polling hasn't been too great for the president, both in CNN and ABC. It shows a lot of skepticism about this from the public. It's always a tough sale. It took a long time for Ronald Reagan to reach consensus. So, this is probably not something that's going to happen overnight.

TUMULTY: Although, Ron, I must say when I was in Iowa last week, I found it was in fact, coming up particularly Dick Gephardt, almost every event people would ask a question about it. People seem just sort of mystified and they want to know more about it.

BROWNSTEIN: Probably in a critical way, Karen. The Gephardt events. All the Democrats are to the left of Bush on this. It's not clear where the electorate is. Another quick point on Iowa, we were talking about where the polls are, one indication of where people may feel it is, if Howard Dean went on TV today on an ad attacking the other three Democrats who are seriously contesting him over the war in Iraq. Very rare to see an ad in the Iowa caucus attacking other candidates by name. It may be sign that he's hearing footsteps.

DOBBS: Roger, Howard Dean says doesn't want to be a pin cushion for all of those other Democrats who have been kicking him from every angle at every opportunity.

How do you think that's going to work there in Iowa?

SIMON: Well, I think if you are going to be the leader of the pack, you're going to get hit from behind, that goes with being the frontrunner. Howard Dean knows that intellectually, I don't think he has accepted it emotionally yet. He does attack the four for war so called in his speeches. He hasn't done it on TV. And that is a ratcheting up of things. Maybe even more significant is the fact Howard Dean went home today. He is not in Iowa. He went to Burlington for a down day in the critical last days before the caucuses. I think it's just to get his head together and just to spend some time with his family and get away from politics for a day.

BROWNTEIN: (UNINTELLIGIBLE) he's not going to be asking Terry McAuliffe to intervene any more.

DOBBS: Well, that we'll have to wait and see what happens. We appreciate it.

Ron Brownstein, Roger Simon, Karen Tumulty, thank you all for being here.

That brings us to "Tonight's Poll." The question are our elected officials in Washington focused on the issues that are of greatest importance to you?

Cast your vote, yes or no, at cnn.com/lou. We'll have the results later in the show.

Coming right up, "Broken Borders," we're joined by George Borjas. He's professor of economics and social policy at Harvard University and he says President Bush's immigration policy rewards illegal behavior couldn't have come at a worst time.

And in our segment, America works. We bring you tonight the story of an American born worker doing a job the president says Americans don't want.

We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Tonight we want to introduce you to an American citizen who is happily working hard at one of those jobs some say Americans don't want. Jim Haynes is a gardener and a family man in southern California. He also has some pretty strong opinions about immigration policy. Casey Wian has this story from Menifee, California.

(BEGIN VIDEOTAPE)

JIM HAYNES, HAYNES LAWN SERVICE: Come on, baby.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Jim Haynes is a rarity in southern California. A self-employed American-born gardener in a business dominated by immigrants.

HAYNES: It doesn't take a college degree to know how to do this, this is pretty simple.

WIAN: Actually Haynes does have a degree from UCLA.

HAYNES: I was a landscape architect, I went from being an architect to a gardener and I tell you what I make 20 times more than an architect makes.

WIAN: At least, he used to. Haynes sold his large maintenance business in Las Vegas last year and moved to the Riverside county suburb of Menifee to be with his new wife Renee (ph). Now he's starting over.

HAYNES: Let's say you have a hundred clients and you're charging each client $70 a month. That's $7,000 a month. You can live on that.

WIAN: Haynes has 25 clients now and expects 100 by spring. The fact that he's a licensed English-speaking American citizen has helped him win customers like Arlynne Hessel. She went through five Spanish- speaking gardeners in three years.

ARLYNNE HESSEL, HOMEOWNER: If I need a sprinkler head fixed, he understands. The other thing I like is he gets here when he says he's going to. So many others just don't show up.

WIAN: You hear so many people say that only illegal aliens or immigrants will do this kind of work. What do you say to people who say that?

HAYNES: That's not true. It's not true at all. You know, people -- they talk about it all the time. I would never do that. Why not? I get to work outside. I don't have a boss. The money is good. I'm home every night with my wife. I could spend time with my kids. I love my job.

WIAN: Haynes is a Republican but he's no fan of President Bush's plan to give illegal aliens work visas.

HAYNES: Don't do it Mr. President, because it will kill my business. We don't need illegals here and people who work for us. Americans can do fine here.

WIAN: After 25 years in the business, Jim Haynes is proof of that. Casey Wian, CNN, Menifee, California.

(END VIDEOTAPE)

DOBBS: My guest tonight says the massive influx of immigrants into this country has cost American workers what amounts to now about $200 billion in wages each year. That's excessive immigration, not only illegal, immigration. And he says the president's proposal to legalize, in effect, millions of illegal aliens fails to address the real problem. A lack of enforcement when it comes to our immigration laws.

George Borjas is professor of economics and social policy at Harvard University. The professor is also an editor of the "Review of Economics and Statistics." Formerly a consultant to the World Bank. He joins us tonight from Boston. Professor, good to have you with us.

GEORGE BORJAS, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: Thank you very much.

DOBBS: The president's immigration proposal, in your judgment, does it go too far, as some have suggested? Does it not go far enough as others and that usually is split left and right, conservative and liberal in this country?

BORJAS: The problem is that there are really two components to any kind of long-run solution to the illegal immigration problem. One component is what do we do about the 10 million or so illegal immigrants already in the country?

The other component is what do we do to prevent this problem from recurring five years from now, ten years from now. In other words, what do we do to make sure we don't have to address this problem again in the future? Addressing the proposal is addressing the first of these issues by basically providing amnesty to 8 or 10 million illegal immigrants. It really doesn't address the second issue.

DOBBS: Professor, the president says he's opposed to amnesty.

BORJAS: I know he says that, but he's proposing a guest worker program where after three years or after renewal you can apply for a green card and he is also proposing to increase the number of green cards available to people by some amount he hasn't specified yet. You can call it what you want but it really is a way of legalizing the status of people.

DOBBS: The cost of illegal immigration. There are, as you know, immigrant and illegal immigrant advocacy groups that simply want to ignore the tremendous economic costs in this country as a result of illegal immigration. When you have -- when you have done your research and you come up with a number $200 billion per year as a result of excessive immigration and much of that illegal immigration. Is that money lost to the economy or is that really going into the pockets of those who are hiring illegal aliens?

BORJAS: Oh, it's definitely going into the pockets of those who hire illegal immigrants. Part of that also gets transmitted eventually to lower prices to consumers. But I would suspect a huge chunk of it is kept by employers which explains why employers happen to be one of the biggest supporters of these types of open immigration programs.

DOBBS: And that money that would otherwise be in the hands of American workers, it's depressing wages. And in addition, we have huge healthcare costs as a result of illegal immigration. We have huge social services costs that people do not want to recognize. What is, in your judgment, having studied this seriously, you're a former immigrant, you are an immigrant yourself, you have experienced immigration to this country. You have researched the topic. What are the answers to this very difficult complex question?

BORJAS: Actually, Lou, the way you propose the question, reminds me of an old quote from the German experience about guest workers which is what the president is proposing. And that is that we wanted workers but we got people instead. And that's one thing that people tend to forget that when illegal immigrants come here, the guest workers come here they get sick, they need healthcare, they have children who are American citizens.

DOBBS: Absolutely.

BORJAS: And all that introduces all kinds of issues into the society and economy that people don't quite appreciate. I think the long-term solution and here is where I agree with the president. We do have to do something about the 10 million people already here illegally.

But I think it will be a great mistake to do anything about them until we do something to prevent the problem from recurring in the future. In other words, we have got to take action and impose real strict border control as well as enforce our laws recording employer sanctions.

DOBBS: Professor, that just makes simply too much sense that one would have to enforce border security before moving to the next stage of immigration.

Professor Borjas, I hope you will come back and join us as we continue this dialogue often and we will take even more time to discuss the solutions to this problem. We thank you for being here tonight before.

BORJAS: Thank you very much.

DOBBS: A reminder now to vote in our poll. The question, "are elected officials in Washington focused on the issues that are important to you? yes or no?" Cast your vote, please, at CNN.com/lou. We'll have the results coming right up.

Still to come, a company whose biggest growth area is telling other companies that the best way to do business is to export their jobs from America to cheap overseas labor markets. They call that higher productivity. We'll have their story and how well they are doing next.

(COMMERCIAL BREAK)

DOBBS: Taking a look at news in brief tonight. Editors at "USA Today" say one of their former reporters engaged in what they call elaborate deception in a story claiming the Serb military ordered ethnic cleansing in Kosovo. The "USA Today" investigation of Jack Kelly prompted by the scandal of the stories fabricated by former "New York Times" reporter Jayson Blair.

More arctic air is headed for the northern parts of the country. Upstate New York, much of New England will see temperatures well below zero tomorrow. The storm system delivering those temperatures is also expected to drop light snow from the Great Lakes to New England.

President Bush and Canadian Prime Minister Paul Martin today promised to restore confidence in the North American beef industry. More than 40 countries stopped buying U.S. beef after last month's discovery of mad cow disease in Washington state.

Accenture reported its corporate earnings and the company made it clear it sees its future in exporting American jobs. Of course, that shouldn't be surprising from a company that has exported itself off American soil to Bermuda. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Accenture is accentuating the outsourcing, the company making it clear that's where it sees its future. Revenues for that part of Accenture's business, up 45 percent in the first quarter. Outsourcing now accounts for more than a third of the company's total revenue, just over a billion dollars in the latest quarter alone.

DAVID GARRITY, ANALYST, AMERICAN TECHNOLOGY RESEARCH: There is more opportunity now than they can effectively address so why not try to optimize.

TUCKER: There is a catch, though. Outsourcing doesn't have nearly as sweet a margin as does consulting and it's a very competitive sector making it hard to raise prices. But the income it generates is steady, more reliable, if not also a great deal more controversial.

JOHN BAUMAN, FORMER TECH WORKER: I know they do have many, many state and federal contracts. Some of which are for unemployment and welfare systems. I wonder how many people are now unemployed are now on the welfare system because of their contracts.

TUCKER: Accenture is headquartered and incorporated in Bermuda.

(END VIDEOTAPE)

TUCKER: The company has 86,000 employees. Of those 25,000 are American citizens -- Lou.

DOBBS: As of right now.

TUCKER: Yes.

DOBBS: Bill Tucker, thank you very much.

On Wall Street stocks fell after yesterday's gain, the Dow down 58 points. The NASDAQ fell 15. The S&P dropped 6 points. Federal Reserve Chairman Alan Greenspan maintained that the U.S. huge current account deficit is what he calls manageable. Christine Romans is here with that story and the market and a whole bunch of other things..

CHRISTINE ROMANS, CNN CORRESPONDENT: Seemingly uneventful, he said. You know, Alan Greenspan in Europe this afternoon just the mention of the word current account deficit had traders concerned. In particular they are concerned about a $125 billion deficit with China.

China on the other side of the equation, though today, just over $200 billion in deals, half of that a big equipment purchase from Motorola for cell phone base stations.

Also, some computer equipment, Lucent among them, Intel and some wheat. But one trade official, Lou, expressed frustration, a U.S. trade official that China was just throwing the U.S. a bone responding to our trade complaints with a few deals but no change in policy.

At the same time the Wall Street speculators are in love with Chinese stock. One analyst told me, Lou, whispering China at a cocktail party today is like whispering Internet in the late 1990s.

It doesn't matter what the company does, how much money it makes, how corrupt the government could be, the hot money loves it. The charts almost interchangeable whether it's aluminum, a minor, a railroad, an airline, or a telecom, all of the stocks have powered higher even better than the stocks here on this chart, the Chinese Internet stocks, the perfect intersection of what speculators love.

So China and the Internet analogy brings me to an update on Internet stocks. Yahoo, today, Lou, remember Yahoo from the bubble, back above $50 a share early this morning. That was the first time that's happened since 2000. And, also, fell below that promptly, though a dollar lower. Earnings tomorrow. DOBBS: I don't know why people would say that was throwing U.S. a bone, $130 billion deficit, 2 billion in deals. And storage stocks. My gosh. I guess we can all hope investors have all wised up to the last run.

Coming up next after two years, a family reunited with a long- lost member. All with some very unlikely assistance. But first an update on the list of American companies that we've confirmed to be sending jobs to cheap foreign labor markets or employing cheap foreign labor instead of American workers.

Our additions tonight include Bellsouth, Maritz Corporation, a travel and marketing company, ON Semiconductor, Sovereign Bank Corp., TeleTech, the No. 2 teleservices company in this country and the No. 3 teleservices company.

Please continue to send us the names of those companies you know to be exporting America. We'll be right back. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Before we go to the results of tonight's poll, our "Exporting America" list of companies doing so. You can go to CNN.com/lou and that list is now available.

The poll. Two percent of you said that elected officials in Washington are focusing on issues that are important to you. An incredible 98 percent say they are not.

Well, finally tonight, cutting-edge technology has helped a wayward dog find her way home after two years. Foxy James, her name, she disappeared from a Denver home when she was only a puppy.

She turned up at an animal shelter in El Paso, Texas, that's more than 700 miles away thanks to a microchip embedded in the dog's shoulder. The employees at the shelter were able to locate her owners. The microchip identification technology we're told has already helped 180,000 lost pets find their way back home so those microchips are paying off.

That's our show for tonight. We thank you for being with us. Tomorrow in "Made in America" we take a look at a retailer that's made its clothing in this country for more than 100 years and continues to do so. For more on the president's space plan, I'll be joined by astrophysicist Charles Liu and the president of the Mars society, Robert Zubrin.

Please join us tomorrow. Thanks for being with us tonight. 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





Unveil Space Plan>


Aired January 13, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Tonight: Howard Dean, the Democratic front-runner in Iowa, pulls further ahead. We'll have a live report from Iowa. I'll be joined by three of the country's top political journalists.
President Bush prepares to unveil a dramatic new initiative on space exploration. But a new opinion poll suggests some Americans aren't convinced.

In "Made in America" tonight, we'll show you why it's really tough to buy American-made products. We'll have a special report.

The president of Mexico and the president of United States embrace each other's views on immigration. We'll be joined by a Harvard economist who says the president's immigration proposal couldn't have come at a worse time.

And an astonishing breakdown in security during the heightened terror alert. Investigators say they could have planted a dirty bomb under a national monument on the second anniversary of the September 11 attacks.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, January 13. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, six days before the Iowa caucuses, the Democratic presidential front-runner, Howard Dean, has increased his lead over his nearest rival. The latest tracking poll shows Dean now has a lead of five percentage points over Congressman Richard Gephardt. That's an increase of two percentage points since the last Zogby poll. There's a tight race, however, for third place between Senator John Kerry and Senator John Edwards.

Judy Woodruff is in Ames, Iowa tonight.

Judy, is this a sign that Howard Dean's lead is stabilizing or is it a sign of greater volatility?

JUDY WOODRUFF, CNN ANCHOR: The fact is, Lou, it's impossible to say.

These caucuses are not like a primary. In terms of turnout, it's hard the know who is going to be there. There is still volatility among the voters in Iowa, a number of them still undecided. I do think it's possible to say that Howard Dean has solidified his vote, to an extent. He's hovering at around 25, 26 percent. He probably will do at least that well on caucus night. The question is, what will the other candidates do? Is John Edwards, who got the endorsement of "The Des Moines Register" on Sunday -- he's moved down a little bit in this poll. Other polls show him doing a little bit better.

The point is, we are still, what, five, six days away from these caucuses. It is still in many ways a wide-open race here.

DOBBS: Kerry and Edwards are in a tight race, at least according to this latest tracking poll, for third place. And Edwards has, as I'm sure you have done, as I have, gone through some of the background in this poll, he has very high -- Edwards -- very high favorable ratings in this race and very low unfavorable ratings. Can anything be made of Edwards, just based on the statistics behind these pollings?

WOODRUFF: Well, Lou, Edwards -- John Edwards has made it a point in this campaign for the last many weeks to say he is running a positive campaign. He's tried to stay out of the sniping, as he calls it, that's gone on among all the other candidates, Dean, Kerry, Lieberman and so forth.

What he said is that: I don't think that benefits the American people. It certainly doesn't benefit the Democratic Party right now.

I interviewed Edwards today. And even when I threw at him some criticism Dean had made of all the other contenders and some comments that Dick Gephardt had made, he wouldn't bite, Edwards basically saying: I'm going to stick to the chosen path. And I'm going to try to stay on the high road, stay positive.

Whether this is going to benefit him ultimately, it is really impossible to say. Clearly, though, Lou, I think you can say there's a hunger here in Iowa and in other places around the country for a candidate who is not sniping at the other guy. So, whether it's going to pay off on election night here in Iowa, we don't know.

DOBBS: Judy, thank you very much -- Judy Woodruff from Ames, Iowa.

In Washington today, former Treasury Secretary Paul O'Neill did not exactly apologize, but he did say he wished he could take back those unflattering comments that he uttered about President Bush. In those comments, O'Neill said the president looked -- quote -- "like a blind man in a room full of deaf people" -- end quote. The former treasury secretary also backed away from comments he made suggesting President Bush decided to go to war against Iraq in the first days of his administration.

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

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, that softer tone from former Secretary O'Neill, some would say even a retreat from his comments on Iraq, came on a day that his version of those early National Security Council meetings here at the Bush White House came under questioning from two senior people in the room, the defense secretary, Donald Rumsfeld, and the former top commander of the U.S. military, General Hugh Shelton.

Now, Secretary O'Neill was out on "The Today Show" this morning on NBC giving an interview. For starters, as you said, he wishes he could back that very critical comment of the president's management style and interestingly and noteworthy to the White House, former Secretary O'Neill also said that he never meant to suggest in his new book now out called "The Price of Royalty" that Mr. Bush was in a rush to war in Iraq from day one.

(BEGIN VIDEO CLIP)

PAUL O'NEILL, FORMER TREASURY SECRETARY: People are trying to make the case that I said the president was planning war in Iraq early in the administration. Actually, there was a continuation of work that had been going on in the Clinton administration, with a notion that there needed to be regime change in Iraq.

(END VIDEO CLIP)

KING: Now, O'Neill also stood by his assertion that he never saw any firm evidence of weapons of mass destruction in Iraq, but he also said there was intelligence suggesting weapons.

And he went on to say in that NBC interview that that's why we elect presidents, that it was Mr. Bush's decision in the end to go on to war, Paul O'Neill, Lou, also saying that he never meant to suggest in this new book that he did not think it was right to knock Saddam Hussein from power, again, on a day when both Secretary Rumsfeld and retired General now Hugh Shelton telling CNN, Secretary Rumsfeld speaking at a briefing, saying Mr. Bush was talking about regime changes.

He was talking about the no-fly zones over Iraq. But, as General Shelton put it, he never saw any evidence that President Bush was any more inclined toward war in Iraq in those early days than President Clinton had been when he left office -- Lou.

DOBBS: Has the White House, has the administration backed off from what I think at the best could be called perhaps an unseemly rush to discuss an investigation of the former treasury secretary on those so-called classified documents?

KING: Not backing off at all, Lou.

But the Treasury Department is clarifying media accounts of this investigation. They say they believe they have no choice and the responsibility to ask the inspector general at the department simply to launch a preliminary inquire to match up what Secretary O'Neill said he took with him and was authorized to take with him with any documents that were shown on a "60 Minutes" report on that. No one is making any accusation. They say they have a responsibility to look at this. And, in fact, the White House says it received no heads-up that investigation was to be launched, an inquiry, the Treasury Department prefers to call it, again, an internal inquiry by the department's inspector general, not any referral to the Justice Department or anything more serious like that.

DOBBS: In such a politically savvy administration, surely there is the understanding there at the White House the perception this could look like intimidation against one who has broken trust with his former boss.

KING: There is that perception, certainly the openness to that perception.

And that is what Democrats are saying, that this is an administration that, in the past, has been very tough toward its critics and now is being very tough, recriminations, even some are saying, against former Secretary O'Neill. Noteworthy that the former secretary himself did say this morning that, if he were the treasury secretary now and he saw a report that did refer to a secret document, that he himself would have ordered exactly the same investigation.

DOBBS: Well, the former secretary was doing a number of flip- flops on his assertions and comments. John, the White House doing at least one of its own today on, this time, Canada, permitting Canada to join, if you will, post-data membership in the coalition of the willing on those Iraqi construction contracts.

What did the president have to say about the about-face?

KING: A major policy change there, Lou.

The president was in Mexico, of course, for the Summit of the Americas. He had his first one-on-one meeting with the new Canadian prime minister, Paul Martin. And Mr. Bush saying that Canada will now be allowed to bid on those major reconstruction contracts, U.S.-funded contracts in Iraq. The first $5 billion in contracts will go only to those who were part of the coalition of the willing, as Mr. Bush calls it.

But Mr. Bush now saying that Canada, which, of course, firmly opposed the war in Iraq, can participate in the $13.5 billion in contracts that will be left over in the second and subsequent rounds, the president saying that Canada has been very supportive of the postwar efforts in Iraq, especially the efforts to reduce Iraq's debt and to come up with more money to help pay for efforts in postwar Iraq, the president taking a very different tone today than he did just a month ago here at the White House.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The taxpayers understand why it makes sense for countries that risk lives to participate in the contracts in Iraq. It's very simple. Our people risked their lives. Coalition -- friendly coalition folks risked their lives. And, therefore, the contracting is going to reflect that. And that's what the U.S. taxpayers expect.

(END VIDEO CLIP)

KING: So, Lou, certainly a change of policy here at the White House. Administration officials say it is simply time to move on and that Canada has been helpful on other issues, including the war in Afghanistan and again on debt relief and other postwar efforts in Iraq, some would say a flip-flop. The administration says, time to move on and get some diplomatic relationships back on track.

DOBBS: Others might talk about flexibility on the part of the administration.

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

The man who runs the war today said a report published by the Army War College is wrong. As we reported last night, that War College study said the war in Iraq was unnecessary and, in fact, a detour from the threats posed by the al Qaeda terrorist network globally.

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

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, the question is, was the U.S. invasion of Iraq an unnecessary preventative war of choice that wasn't really integral to the war on terrorism, but, as you said, a detour from it?

That is the argument put forward by Jeffrey Record. He's a visiting professor at the U.S. Army War College in Carlisle, Pennsylvania, and the former aide to two Democratic senators, Sam Nunn and Lloyd Bentsen. Record writes in his record -- quote -- "The global war on terrorism is strategically unfocused, promises more than it can deliver, and threatens to dissipate scarce U.S. military means over too many ends."

A disclaimer makes clear that that's not the official policy of the U.S. Army, something that Defense Secretary Rumsfeld underscored when he dismissed the criticism today.

(BEGIN VIDEO CLIP)

DONALD RUMSFELD, SECRETARY OF DEFENSE: A person wrote an article, like an op-ed piece. And it's out there. And everyone is free to say whatever they think. That is the position of some people in the United States and in the world, what he repeated. And that's fine. It, obviously, is inaccurate.

(LAUGHTER)

(END VIDEO CLIP)

MCINTYRE: The professor also echoed the sentiments of congressional critics and others, who say the U.S. military is too small, something that Rumsfeld also rejects.

He began his briefing today with a lengthy outline of his rationale for why he believes that the stress on the U.S. military is a temporary spike and that increasing the size of the military would be the slowest and most expensive solution.

And to critics who say that the U.S. military needs two more Army divisions, Rumsfeld has a ready answer. The U.S. military already has them because of the emergency measures put into effect to hold troops in their positions. Right now, there are some 36,000 troops higher than the authorized end strength by Congress, roughly equivalent of two divisions -- Lou.

DOBBS: Jamie, one quick question. Is there any criticism from the War College, from within or without the U.S. military, that the secretary of defense has accepted?

MCINTYRE: Well, I think he would argue that he weighs all of the criticism, that these are issues that they wrestle with.

He says that, if it turns out that the U.S. military does need an increase in end strength, he will propose it. But he continues to believe and he laid out a long reason, rationale, why this is the case, that they will be able to get through this temporary period and avoid the expensive solution of adding is 100,000 troops or something like that in the future.

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

Still ahead here: "Made in America." We all know it's tough to buy an American-made product these days. It's made even more difficult when foreign manufacturers turn out cheap imitations of the few products still made in this country. We'll have a special report.

And President Bush says his plan for a dramatic new space initiative is affordable. Some Americans, however, aren't convinced.

And an amazing security breakdown on the National Mall. You will not believe what Park Police were doing when investigators planted what could have been a bomb at the base of a national monument.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our special report tonight on what, if anything, is still really made in America. Many of the American companies that have moved their manufacturing and many American jobs overseas still claim that their products are made in the USA.

Lisa Sylvester has the story.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): It's become a lot harder to find a toy that is still made in America, even George W. Bushes made in China. A made-in-the-USA label means a product is not only crafted by American workers, but the materials are of American origin as well.

But some companies will still try to skirt the rules. The Kubota Corporation advertised its tractors as made in the USA. But in 2000, the Federal Trade Commission found they were actually made with significant foreign parts.

ELAINE KOLISH, FEDERAL TRADE COMMISSION: Sometimes, consumers write to us. They will have Bush something which on the package says made in the USA. They will open the package, find the product, and it will say, made in Mexico, made in China or some other foreign country. And they will say, hey, what's going on here?

SYLVESTER: Violators are asked to stop making false claims, but there are no penalties.

Corporations have also become quite savvy at using terms that sound a lot like they are American-made, but fall short of the gold standard, made in the USA: manufactured by a North American company, but made in China, or made in the USA of imported fabric, or a new buzzword, brand America. The new ad campaign promises to promote products by American companies, even though they could be made entirely overseas.

JOE MESSINA, BUYAMERICAN.COM: There are a large number of manufacturers that have shipped most of their operations offshore, although they are American companies. They come back to the United States and want to label it as brand America.

SYLVESTER: But what about the buy-American law? That applies to the Pentagon and requires military systems include at least 50 percent domestic contents.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: We have to assume that foreign sources of supply, even from countries that have been friendly to the United States for a long, long time, are intrinsically less secure than sources of supply at home.

SYLVESTER: While there are buy-American provisions for defense- related industries, those do not apply to other sectors. So the real Air Force One plane is made in America. This toy version is made by the People's Republic of China.

(END VIDEOTAPE)

SYLVESTER: There was a push in Congress last year to raise the Pentagon's buy-American to 65 percent of domestic content, but it did not pass, after heavy lobbying by the European Union -- Lou.

DOBBS: One of my favorite labels amongst those trying to get into the made-in-USA game, if you will, amongst retailers and manufacturers is, packaged, proudly packaged in the USA.

SYLVESTER: There are a lot of ways that they can get around by just playing on the words, Lou.

DOBBS: Any effort by the Federal Trade Commission to bring the hammer down and start making people mean what they say and say what they mean?

SYLVESTER: Well, the Federal Trade Commission does keep track of this.

But part of the problem is that there are no immediate penalties. So, while they can essentially tell the companies, stop doing it, since there are no penalties, the companies might take a little bit of liberty there, Lou.

DOBBS: It sounds like a job for Congress.

Lisa, thank you -- Lisa Sylvester reporting from Washington.

SYLVESTER: Thank you.

DOBBS: Let's take a look now at some of your thoughts.

Michael Royce of Sunset Beach, Hawaii, wrote to say: "Immigrants are not taking jobs that Americans don't want. The truth is, they are simply willing to work at poverty-level wages that most Americans are not willing to accept."

Ricardo Aulet of Bronx, New York: "I imagine that American citizens would be more than happy to take those unwanted jobs that foreigners seem to only want if those jobs were given a fair wage with health benefits."

Norman Peyser of Boynton Beach, Florida: "The immigration problem will resolve itself. Once most of our jobs are in Mexico, the illegals will return to get those better jobs."

And Nancy in Glendale, Arizona: "Can you explain to me why President Bush thinks he should create jobs, medical and Social Security benefits for millions of illegal Mexicans in our country, instead of spending his time figuring out how to do that for unemployed American citizens?"

Mark Williamson of Richmond, Virginia, echoes those same thoughts: "In the past week, President Bush has announced programs which will give jobs to illegal aliens and Indian technology companies. Since he's so generous in finding work for the rest of the world, I wonder if he would help me out. I'm a U.S. citizen with degrees in engineering and computer science and I can't find a job."

We love hearing from you. E-mail us at LouDobbs@CNN.com.

Coming up here next, back to the moon and beyond, the White House preparing to announce a new space program and it reacts to criticism that America can't afford it.

Tonight, "Broken Borders." President Bush's new immigration proposal would hurt wages for hard-working American citizens. Harvard University economist George Borjas is our guest.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: NASA's Spirit rover is moving closer to its first encounter with Martian soil. Spirit today rolled for the first time on its lander, moving just about a foot. It also cut the final cable tying it to the lander. If all goes well, NASA expects to send Spirit rolling again by early Thursday down the lander's ramp and on to the Martian surface.

Sending American astronauts to Mars is part of a sweeping new space initiative that President Bush is expected to announce tomorrow. Today, the president said the United States can afford the program, despite the projected half-trillion dollar deficit this year.

Our space correspondent, Miles O'Brien, joins us tonight from Washington, D.C. with a report -- Miles.

MILES O'BRIEN, CNN SPACE CORRESPONDENT: Well, Lou, as you well know, for 30 years or so, NASA has been flying around in circles. And now it appears the Bush administration is going to give it a whole new direction, literally and figuratively.

The Bush plan, in a nutshell, calls to finish the International Space Station, get it completed, retire the aging space shuttle fleet, and then move on far beyond, flying a whole new class of vehicles. Crew exploration vehicles, they will be called. First to the moon to test technologies and techniques, and as a weigh station to Mars and then ultimately to the red planet.

To start the ball rolling, the administration will ask Congress for 5 percent annual increases in NASA's $15 billion budget over the next five years. Tally that up, that only comes to about $4 billion. It doesn't seem like enough to get you to Mars, but that is just the beginning of the story, of course. NASA will also be shifting money away from the International Space Station program and NASA's shuttle program, as those programs are phased out, hopefully providing enough to keep -- get the ball rolling on this new adventure.

Now, the proposal calls for retiring the space shuttle fleet by the year 2010. That is the date, you will recall, Lou, when the Columbia Accident Investigation Board said the shuttle fleet would be need to be recertified, a very expensive proposition and something that is probably not worth the money, given the aging shuttle fleet. And so 2010 is kind of a date around which much of this hinges.

This whole discussion began before the loss of the space shuttle Columbia, February 1, last year, but clearly was given much greater focus and attention after the loss of Columbia. The question was, what next for the space agency, a return to flight, but a return to a flight where? And the question became, what are the goals of the space agency And what should the goals be? -- Lou.

DOBBS: Miles, I know no one would be more excited than you and me about a new initiative to go into space. But the president's father, when he proposed returning to the moon and a mission to Mars 15 years ago, the estimate was $500 billion then. This seems like a very small amount of money. The Augustine Commission assumed a 10 percent growth in the NASA budget going back to 1990. And now we're talking 5 percent. This does not seem to be even close to adequate.

O'BRIEN: Well, yes, it's not enough, clearly.

But, nevertheless, first of all, we're talking about just getting the ball rolling, for one thing. Secondly, what happened in 1989, when the senior George Bush made that proposal, NASA came back with a chrome-plated, gold-plated proposal with all the tail fins, $400 billion. It read like a science fiction novel.

The person in charge of NASA right now, Sean O'Keefe, who I know you know well, is a bean counter by trade, has looked at the numbers carefully and is trying to offer a leaner approach. The question is, is it too lean?

DOBBS: Well, there's got to be something in between all of that chrome and all those beans rolling around. If we have to err on one side or the other, I would go for all of that chrome, as I know you would, Miles, in a moment of declarative honesty.

(LAUGHTER)

O'BRIEN: Bring on the chrome and the tail fins.

DOBBS: Miles O'Brien, thank you very much.

Tonight's quote is the from the Mars rover mission flight director, who today talked about the rover's progress -- and we quote -- "The engineering team is just elated that we're driving, finally. We've cut our ties loose and we're ready to rove" -- that from Chris Lewicki, flight director at NASA's Jet Propulsion Laboratory.

Coming up next here, security failures, a shocking report on the lack of security at monuments in our nation's capital during a heightened terrorist alert.

Also, on the trail. The Democratic presidential candidates are running out of time as they try to seize victory in the first key primary contest in the Iowa caucuses. We'll be joined by three of the top political journalists in the country.

And "America Works." Tonight, you know all those jobs that Americans don't want? We'll introduce you to an American-born gardener doing a job that the administration says Americans really don't want. We'll have his inspirational story, as we continue to celebrate work in this great country.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Scathing criticism tonight for the police responsible for protecting some of this country's most important landmarks. Government investigators found what they call persistent and severe security deficiencies around the National Mall, an area patrolled by the U.S. Park Service and on the second anniversary of the September 11 attacks.

Kathleen Koch has the report for us from the Mall in Washington -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Lou, it was a stunning lapse of security turned up by investigators for the U.S. Interior Department. And according to a report obtained by CNN they conducted their undercover tests on two days they assumed law enforcement would be on high alert at sites like the Washington Monument the day before and the actual anniversary of the 9/11 terrorist attacks. Investigators, however, found so little security on 9/11 that they took a black plastic bag, walked up to the rear of the monument and placed it at the base. The bag of garbage though could have just as easily contained explosives. And it sat there for 20 minutes unnoticed. Investigators then carried it around to the front of the monument and put it right next to the security kiosk where visitors enter. Again it sat there unnoticed for about 15 minutes.

Now where were police you're asking? the day before investigators found some sitting inside the monument, but they never left. On 9/11 while there were some park rangers present, the only U.S. Park Police Officer around was asleep in an unmarked car at the base of the monument. The D.C.'s Congressional delegate said it is not at all clear all monuments are equally vulnerable.

(BEGIN VIDEO CLIP)

ELEANOR HOLMES NORTON (D), WASHINGTON, D.C. DELEGATE: I don't think it tells us anything about the country generally. I think it tells us a lot more about the Park Service and about the Interior Department and where their priorities have been placed. They have certainly not been placed on training their personnel or getting enough personnel in place to guard and make secure our great monuments.

(END VIDEO CLIP)

KOCH: U.S. Park police say after the September report they beefed up security and accountability.

(BEGIN VIDEO CLIP)

SGT. SCOTT FEAR, U.S. PARK POLICE: I tell you, once that report reached the United States Park Police, we took it seriously. We are very concerned about the report. We met with National Park Service, the Department of Interior Office of Law Enforcement Security, and we device a new plan, and we implemented it as soon as we could. So, changes were made.

(END VIDEO CLIP)

KOCH: Now this comes as the Park Service is -- the U.S. Park Police is about to lose its chief, Teresa Chamber (ph). She has been charged with insubordination for talking to the media about security and budget issues. She is credited, however, with making some of the improvements that the park police says it has made since this report came out in September. However, Chambers could be fired as soon as this week.

DOBBS: Amazing. The suggestion that there needs to be more training and a new plan, does that really seem necessary to -- for park police to not be chatting and to not be sleeping in their cars?

Does that require special training?

KOCH: Well, they do say they need more training more money, if they can't do their job there's even been one suggestion private security officers be brought in to guard the nation's monuments.

DOBBS: Well, somebody certainly needs to be guarding them.

News from the campaign trail tonight. Charlie Fisher of Denver wins moveon.org move on President Bush ad contest by focus on the debt that our children will inherit. CNN runs it this weekend. It may also become the first political ad ever broadcast during the Super Bowl. Financier George Soros heavily funded the group which was attacked for ads on its Web site that compared George Bush to Hitler. Soros told CNN, in fact Wolf Blitzer, that he has never compared Bush to Hitler.

(BEGIN VIDEO CLIP)

GEORGE SOROS, SOROS FOUNDATIONS: I have also been accused of comparing Bush to a Nazi and I did not do it, would not do it, exactly because I have lived under a Nazi regime.

(END VIDEO CLIP)

DOBBS: But a "Washington Post" interview two months ago contradicted Soros' statement. Reporter Laura Blumenfeld quotes him saying "When I hear Bush saying you are either with us or against us, it reminds me of the Germans."

According to the post, Soros said it conjurers up memories of Nazi slogans on the wall.

Joining me tonight from the campaign trail in Des Moines, Iowa, Ron Brownstein CNN political analyst, columnist for "The L.A. Times."

And in Iowa with him, Roger Simon, political editor of "U.S. News and World Report."

And from Washington national political correspondent for "Time" magazine Karen Tumulty.

Good to have you all here.

DOBBS: Thanks let's start with the tracking poll, and Ron I'll begin with you. Is this a big deal for Howard Dean?

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, Dean seems to have a small but fairly steady lead here in Iowa in our poll that was conducted last week and the tracking poll that's going on this week. It's tight enough though, Lou, it's still up in the air because Iowa is predominantly a battle of organization. And you have two very strong organizations here in Dick Gephardt and Howard Dean. And you also have some movement clearly apparent for John Edwards and a little bit for John Kerry as well. So, it's still in the mix for everyone but I do think Dean has a slight edge here as we're headed for the final days.

DOBBS: Roger, the "Des Moines Register" endorsing Senator John Edwards.

How important is that in Iowa?

ROGER SIMON, "U.S. NEWS & WORLD REPORT": I'd love to say it's of critical importance because I like newspaper and what them to be influential. But newspaper endorsements probably don't move a lot of voters. And especially as Ron said in a contest that gets down to organizations, the reason being just to give the shorthand for the difference between a caucus and primary is you can't go throughout the day and vote in Iowa. Have you to show up at 6:30 at night. You have to stay around there for three hours. It's not a secret ballet. It's not a very difficult to get people out to do it, which is why 90 percent of the people don't do it. So, things like endorsements of newspaper, even Senator Tom Harkin who endorsed Dean the other day. I mean, less here than in primary states where it is less easy to vote.

DOBBS: And that obviously discouraging absolutely no one.

Karen Tumulty the president, Monterey in Mexico embracing President Vincente Fox and President Fox embracing his the immigration policy.

How big a deal is the immigration proposal?

What is the likely impact.

KAREN TUMULTY, "TIME MAGAZINE": I think the President Fox embracing it helps both of them. It allows President Fox to say, look, you know, I've been patient with this U.S. president and it's paid off. And I think that with President Fox's endorsement President Bush gets a very powerful ally in Washington because President Fox is, in fact, very well thought of here.

DOBBS: Gentlemen, in Iowa, let me ask either one of you, I'll start with Ron, any fall-out there, any reaction, positive or negative, to the immigration proposal?

BROWNSTEIN: Well, you know, Lou it isn't really an issue among the Democrats. It's an issue between them and President Bush. They are all for a version that Bush has proposed that would be more generous to people who are here legally. They all want to have a broader path toward legalization, toward citizenship for people who come forward to who have been here illegally. It will clearly be an issue in the general election. Bush's has come of with a version of this plan the probably most favorable to business of any of the proposals on the table. The Democrats will argue it create as second class kind of citizen. And as you know, we've already seen, many conservatives will argue it goes too far. The initial polling hasn't been too great for the president, both in CNN and ABC. It shows a lot of skepticism about this from the public. It's always a tough sale. It took a long time for Ronald Reagan to reach consensus. So, this is probably not something that's going to happen overnight.

TUMULTY: Although, Ron, I must say when I was in Iowa last week, I found it was in fact, coming up particularly Dick Gephardt, almost every event people would ask a question about it. People seem just sort of mystified and they want to know more about it.

BROWNSTEIN: Probably in a critical way, Karen. The Gephardt events. All the Democrats are to the left of Bush on this. It's not clear where the electorate is. Another quick point on Iowa, we were talking about where the polls are, one indication of where people may feel it is, if Howard Dean went on TV today on an ad attacking the other three Democrats who are seriously contesting him over the war in Iraq. Very rare to see an ad in the Iowa caucus attacking other candidates by name. It may be sign that he's hearing footsteps.

DOBBS: Roger, Howard Dean says doesn't want to be a pin cushion for all of those other Democrats who have been kicking him from every angle at every opportunity.

How do you think that's going to work there in Iowa?

SIMON: Well, I think if you are going to be the leader of the pack, you're going to get hit from behind, that goes with being the frontrunner. Howard Dean knows that intellectually, I don't think he has accepted it emotionally yet. He does attack the four for war so called in his speeches. He hasn't done it on TV. And that is a ratcheting up of things. Maybe even more significant is the fact Howard Dean went home today. He is not in Iowa. He went to Burlington for a down day in the critical last days before the caucuses. I think it's just to get his head together and just to spend some time with his family and get away from politics for a day.

BROWNTEIN: (UNINTELLIGIBLE) he's not going to be asking Terry McAuliffe to intervene any more.

DOBBS: Well, that we'll have to wait and see what happens. We appreciate it.

Ron Brownstein, Roger Simon, Karen Tumulty, thank you all for being here.

That brings us to "Tonight's Poll." The question are our elected officials in Washington focused on the issues that are of greatest importance to you?

Cast your vote, yes or no, at cnn.com/lou. We'll have the results later in the show.

Coming right up, "Broken Borders," we're joined by George Borjas. He's professor of economics and social policy at Harvard University and he says President Bush's immigration policy rewards illegal behavior couldn't have come at a worst time.

And in our segment, America works. We bring you tonight the story of an American born worker doing a job the president says Americans don't want.

We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Tonight we want to introduce you to an American citizen who is happily working hard at one of those jobs some say Americans don't want. Jim Haynes is a gardener and a family man in southern California. He also has some pretty strong opinions about immigration policy. Casey Wian has this story from Menifee, California.

(BEGIN VIDEOTAPE)

JIM HAYNES, HAYNES LAWN SERVICE: Come on, baby.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Jim Haynes is a rarity in southern California. A self-employed American-born gardener in a business dominated by immigrants.

HAYNES: It doesn't take a college degree to know how to do this, this is pretty simple.

WIAN: Actually Haynes does have a degree from UCLA.

HAYNES: I was a landscape architect, I went from being an architect to a gardener and I tell you what I make 20 times more than an architect makes.

WIAN: At least, he used to. Haynes sold his large maintenance business in Las Vegas last year and moved to the Riverside county suburb of Menifee to be with his new wife Renee (ph). Now he's starting over.

HAYNES: Let's say you have a hundred clients and you're charging each client $70 a month. That's $7,000 a month. You can live on that.

WIAN: Haynes has 25 clients now and expects 100 by spring. The fact that he's a licensed English-speaking American citizen has helped him win customers like Arlynne Hessel. She went through five Spanish- speaking gardeners in three years.

ARLYNNE HESSEL, HOMEOWNER: If I need a sprinkler head fixed, he understands. The other thing I like is he gets here when he says he's going to. So many others just don't show up.

WIAN: You hear so many people say that only illegal aliens or immigrants will do this kind of work. What do you say to people who say that?

HAYNES: That's not true. It's not true at all. You know, people -- they talk about it all the time. I would never do that. Why not? I get to work outside. I don't have a boss. The money is good. I'm home every night with my wife. I could spend time with my kids. I love my job.

WIAN: Haynes is a Republican but he's no fan of President Bush's plan to give illegal aliens work visas.

HAYNES: Don't do it Mr. President, because it will kill my business. We don't need illegals here and people who work for us. Americans can do fine here.

WIAN: After 25 years in the business, Jim Haynes is proof of that. Casey Wian, CNN, Menifee, California.

(END VIDEOTAPE)

DOBBS: My guest tonight says the massive influx of immigrants into this country has cost American workers what amounts to now about $200 billion in wages each year. That's excessive immigration, not only illegal, immigration. And he says the president's proposal to legalize, in effect, millions of illegal aliens fails to address the real problem. A lack of enforcement when it comes to our immigration laws.

George Borjas is professor of economics and social policy at Harvard University. The professor is also an editor of the "Review of Economics and Statistics." Formerly a consultant to the World Bank. He joins us tonight from Boston. Professor, good to have you with us.

GEORGE BORJAS, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: Thank you very much.

DOBBS: The president's immigration proposal, in your judgment, does it go too far, as some have suggested? Does it not go far enough as others and that usually is split left and right, conservative and liberal in this country?

BORJAS: The problem is that there are really two components to any kind of long-run solution to the illegal immigration problem. One component is what do we do about the 10 million or so illegal immigrants already in the country?

The other component is what do we do to prevent this problem from recurring five years from now, ten years from now. In other words, what do we do to make sure we don't have to address this problem again in the future? Addressing the proposal is addressing the first of these issues by basically providing amnesty to 8 or 10 million illegal immigrants. It really doesn't address the second issue.

DOBBS: Professor, the president says he's opposed to amnesty.

BORJAS: I know he says that, but he's proposing a guest worker program where after three years or after renewal you can apply for a green card and he is also proposing to increase the number of green cards available to people by some amount he hasn't specified yet. You can call it what you want but it really is a way of legalizing the status of people.

DOBBS: The cost of illegal immigration. There are, as you know, immigrant and illegal immigrant advocacy groups that simply want to ignore the tremendous economic costs in this country as a result of illegal immigration. When you have -- when you have done your research and you come up with a number $200 billion per year as a result of excessive immigration and much of that illegal immigration. Is that money lost to the economy or is that really going into the pockets of those who are hiring illegal aliens?

BORJAS: Oh, it's definitely going into the pockets of those who hire illegal immigrants. Part of that also gets transmitted eventually to lower prices to consumers. But I would suspect a huge chunk of it is kept by employers which explains why employers happen to be one of the biggest supporters of these types of open immigration programs.

DOBBS: And that money that would otherwise be in the hands of American workers, it's depressing wages. And in addition, we have huge healthcare costs as a result of illegal immigration. We have huge social services costs that people do not want to recognize. What is, in your judgment, having studied this seriously, you're a former immigrant, you are an immigrant yourself, you have experienced immigration to this country. You have researched the topic. What are the answers to this very difficult complex question?

BORJAS: Actually, Lou, the way you propose the question, reminds me of an old quote from the German experience about guest workers which is what the president is proposing. And that is that we wanted workers but we got people instead. And that's one thing that people tend to forget that when illegal immigrants come here, the guest workers come here they get sick, they need healthcare, they have children who are American citizens.

DOBBS: Absolutely.

BORJAS: And all that introduces all kinds of issues into the society and economy that people don't quite appreciate. I think the long-term solution and here is where I agree with the president. We do have to do something about the 10 million people already here illegally.

But I think it will be a great mistake to do anything about them until we do something to prevent the problem from recurring in the future. In other words, we have got to take action and impose real strict border control as well as enforce our laws recording employer sanctions.

DOBBS: Professor, that just makes simply too much sense that one would have to enforce border security before moving to the next stage of immigration.

Professor Borjas, I hope you will come back and join us as we continue this dialogue often and we will take even more time to discuss the solutions to this problem. We thank you for being here tonight before.

BORJAS: Thank you very much.

DOBBS: A reminder now to vote in our poll. The question, "are elected officials in Washington focused on the issues that are important to you? yes or no?" Cast your vote, please, at CNN.com/lou. We'll have the results coming right up.

Still to come, a company whose biggest growth area is telling other companies that the best way to do business is to export their jobs from America to cheap overseas labor markets. They call that higher productivity. We'll have their story and how well they are doing next.

(COMMERCIAL BREAK)

DOBBS: Taking a look at news in brief tonight. Editors at "USA Today" say one of their former reporters engaged in what they call elaborate deception in a story claiming the Serb military ordered ethnic cleansing in Kosovo. The "USA Today" investigation of Jack Kelly prompted by the scandal of the stories fabricated by former "New York Times" reporter Jayson Blair.

More arctic air is headed for the northern parts of the country. Upstate New York, much of New England will see temperatures well below zero tomorrow. The storm system delivering those temperatures is also expected to drop light snow from the Great Lakes to New England.

President Bush and Canadian Prime Minister Paul Martin today promised to restore confidence in the North American beef industry. More than 40 countries stopped buying U.S. beef after last month's discovery of mad cow disease in Washington state.

Accenture reported its corporate earnings and the company made it clear it sees its future in exporting American jobs. Of course, that shouldn't be surprising from a company that has exported itself off American soil to Bermuda. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Accenture is accentuating the outsourcing, the company making it clear that's where it sees its future. Revenues for that part of Accenture's business, up 45 percent in the first quarter. Outsourcing now accounts for more than a third of the company's total revenue, just over a billion dollars in the latest quarter alone.

DAVID GARRITY, ANALYST, AMERICAN TECHNOLOGY RESEARCH: There is more opportunity now than they can effectively address so why not try to optimize.

TUCKER: There is a catch, though. Outsourcing doesn't have nearly as sweet a margin as does consulting and it's a very competitive sector making it hard to raise prices. But the income it generates is steady, more reliable, if not also a great deal more controversial.

JOHN BAUMAN, FORMER TECH WORKER: I know they do have many, many state and federal contracts. Some of which are for unemployment and welfare systems. I wonder how many people are now unemployed are now on the welfare system because of their contracts.

TUCKER: Accenture is headquartered and incorporated in Bermuda.

(END VIDEOTAPE)

TUCKER: The company has 86,000 employees. Of those 25,000 are American citizens -- Lou.

DOBBS: As of right now.

TUCKER: Yes.

DOBBS: Bill Tucker, thank you very much.

On Wall Street stocks fell after yesterday's gain, the Dow down 58 points. The NASDAQ fell 15. The S&P dropped 6 points. Federal Reserve Chairman Alan Greenspan maintained that the U.S. huge current account deficit is what he calls manageable. Christine Romans is here with that story and the market and a whole bunch of other things..

CHRISTINE ROMANS, CNN CORRESPONDENT: Seemingly uneventful, he said. You know, Alan Greenspan in Europe this afternoon just the mention of the word current account deficit had traders concerned. In particular they are concerned about a $125 billion deficit with China.

China on the other side of the equation, though today, just over $200 billion in deals, half of that a big equipment purchase from Motorola for cell phone base stations.

Also, some computer equipment, Lucent among them, Intel and some wheat. But one trade official, Lou, expressed frustration, a U.S. trade official that China was just throwing the U.S. a bone responding to our trade complaints with a few deals but no change in policy.

At the same time the Wall Street speculators are in love with Chinese stock. One analyst told me, Lou, whispering China at a cocktail party today is like whispering Internet in the late 1990s.

It doesn't matter what the company does, how much money it makes, how corrupt the government could be, the hot money loves it. The charts almost interchangeable whether it's aluminum, a minor, a railroad, an airline, or a telecom, all of the stocks have powered higher even better than the stocks here on this chart, the Chinese Internet stocks, the perfect intersection of what speculators love.

So China and the Internet analogy brings me to an update on Internet stocks. Yahoo, today, Lou, remember Yahoo from the bubble, back above $50 a share early this morning. That was the first time that's happened since 2000. And, also, fell below that promptly, though a dollar lower. Earnings tomorrow. DOBBS: I don't know why people would say that was throwing U.S. a bone, $130 billion deficit, 2 billion in deals. And storage stocks. My gosh. I guess we can all hope investors have all wised up to the last run.

Coming up next after two years, a family reunited with a long- lost member. All with some very unlikely assistance. But first an update on the list of American companies that we've confirmed to be sending jobs to cheap foreign labor markets or employing cheap foreign labor instead of American workers.

Our additions tonight include Bellsouth, Maritz Corporation, a travel and marketing company, ON Semiconductor, Sovereign Bank Corp., TeleTech, the No. 2 teleservices company in this country and the No. 3 teleservices company.

Please continue to send us the names of those companies you know to be exporting America. We'll be right back. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Before we go to the results of tonight's poll, our "Exporting America" list of companies doing so. You can go to CNN.com/lou and that list is now available.

The poll. Two percent of you said that elected officials in Washington are focusing on issues that are important to you. An incredible 98 percent say they are not.

Well, finally tonight, cutting-edge technology has helped a wayward dog find her way home after two years. Foxy James, her name, she disappeared from a Denver home when she was only a puppy.

She turned up at an animal shelter in El Paso, Texas, that's more than 700 miles away thanks to a microchip embedded in the dog's shoulder. The employees at the shelter were able to locate her owners. The microchip identification technology we're told has already helped 180,000 lost pets find their way back home so those microchips are paying off.

That's our show for tonight. We thank you for being with us. Tomorrow in "Made in America" we take a look at a retailer that's made its clothing in this country for more than 100 years and continues to do so. For more on the president's space plan, I'll be joined by astrophysicist Charles Liu and the president of the Mars society, Robert Zubrin.

Please join us tomorrow. Thanks for being with us tonight. For all of us here, good night from New York.

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