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LOU DOBBS TONIGHT

American Civilians Killed in Iraq; Unemployed Americans Take Fight to Washington

Aired March 31, 2004 - 18:00   ET

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


(BEGIN VIDEOTAPE)
JOHN KING, CNN ANCHOR: Tonight, horrific scenes in Iraq, nine Americans killed, four of them civilians, their bodies dragged through the streets.

DAN SENOR, COALITION PROVISIONAL AUTHORITY: They are people who want to turn back to an era of mass graves, rape rooms and torture chambers and chemical attacks.

KING: We'll have a live report from Iraq and I will talk with former CIA analyst Ken Pollack.

Controversy tonight over a Muslim student's insistence on wearing a head scarf at school. The federal government supports the student. We will have two very different views in "Face-Off."

UNIDENTIFIED MALE: Show us the jobs.

KING: The fight to save American jobs from overseas outsourcing. The Show Us the Jobs bus tour arrives in Washington. We will have a special report.

And in "Middle Class Squeeze," more than a million are facing the end of their state unemployment benefits. I will talk with former Democratic presidential candidate Senator John Edwards and senior Republican Congressman Rob Portman.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, March 30. Sitting in for Lou Dobbs for an hour of news, debate and opinion, John King.

KING: Good evening.

A gruesome day in Iraq, even by the violent standards of that troubled country. Nine Americans were killed in two separate attacks. Four of them were civilian contractors who were ambushed in Fallujah, just west of Baghdad. Iraqis mutilated the bodies and dragged them through the streets. In another attack, insurgents killed five American soldiers from the 1st Infantry Division.

Walter Rodgers reports from Baghdad -- Walt. WALTER RODGERS, CNN SR. INTERNATIONAL CORRESPONDENT: Hello, John.

Nine dead ties the record for the bloodiest single day of the war so far this year, at least for Americans. There were two separate incidents. The bloodiest and most tragic was the killing of five U.S. soldiers in an explosion which struck their Humvee vehicle, five of them killed. The blast was so powerful, it left a crater 15 feet by 10 feet in the road. The most dramatic of the day took place in the Sunni Triangle in the epicenter of resistance Fallujah.

Two vehicles, SUVs, carrying private contractors, four American citizens inside, suddenly ambushed. Some Iraqis with hoods over their heads, according the eyewitnesses, stepped out, rolled hand grenades under the SUV,s then sprayed the vehicles with automatic weapons fire and set the vehicles ablaze. That wasn't good enough for the Iraqis who were already dancing in the street, shouting that Fallujah will be the graveyard of Americans. They then started mutilating the bodies, dragging them through the streets, and ultimately hanging at least two of the corpses, or what was left of them, on a bridge, again, rejoicing the whole time -- John.

KING: Walt, three months from now, the United States is supposed to turn over sovereignty to a new government in Iraq. How do officials there answer how they could possibly do that with the security situation still so precarious?

RODGERS: Well, they say it's happening.

And the Dan Senor, the civilian spokesman for the Bush administration here in Iraq, today said -- and I quote -- "Democracy is just around the corner" and that handover will take place at the end of June. Iraqis will then take over their own government in what he calls a democracy.

The general here in charge, Mark Kimmitt, today suggested that these incidents should be put in some sort of context, that they do take place in Fallujah, which has been a hot spot. And General Kimmitt went on to say there is much good that is being accomplished in this country. Still, it is very unsafe for Western businessmen, for private contractors here, and for journalists. This place is a hot bed of resistance -- John.

KING: Walter Rodgers for us tonight on a very difficult day this Baghdad -- thank you, Walter.

And Fallujah is one of the most anti-American cities in Iraq and a hotbed of insurgent activity. Despite today's violence, the White House vowed to stay the course in Iraq.

Senior Pentagon correspondent Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: What made the attack on the U.S. contractors so horrific was the way angry Iraqis mutilated the victims' charred bodies, dragged the remains through the streets of Fallujah, and even strung up two corpses on a bridge. Most images are too gruesome to be shown here.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: It is offensive. It is despicable, the way that these individuals have been treated. And we hope everybody acts responsibly in their coverage of it.

MCINTYRE: In 1993, it was similar television images of jubilant Somalis dancing on a downed Black Hawk helicopter and dragging the bodies of American soldiers through Mogadishu that undercut public support for what was supposed to be a humanitarian mission and resulted in a U.S. pullout within a year.

But in Iraq, which has turned into a deadly guerrilla war, beating a quick retreat is not an politically acceptable option.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: That isn't going to stop us from doing our mission. In fact, it would be disgracing the deaths of these people if we were to stop our missions.

MCINTYRE: Fallujah is in the heart of the so-called Sunni Triangle that extends north and west of Baghdad, the part of Iraq that had the strongest support for Saddam Hussein during his 23 years of rule.

The capture of Saddam last year hasn't taken much fight out of the insurgents. Instead, the Sunni minority now seem even more fearful of the June 30 transfer of sovereignty, which will give their bitter foes, the Shiites, a majority in government.

The U.S. had hoped, by the summer, Iraqis could provide security in Fallujah. But earlier this month, a top U.S. commander admitted to Congress the newly trained Iraqi police force is not yet ready.

GEN. JOHN ABIZAID, CMDR., U.S. CENTRAL COMMAND: In some areas, it certainly is not, and having personally been to the locations that you were talking about in Fallujah, I would say that those forces there are not adequately trained or equipped.

(END VIDEOTAPE)

MCINTYRE: So while the Pentagon strategy is to move American troops off the front lines, the reality is that, for the time being, at least, the U.S. is going to have to provide significant military support well past the June 30 turnover date -- John.

KING: And, Jamie, match that statement you just made, significant military support well past the June 30 deadline, with the optimistic updates we get in briefing after briefing from Secretary Rumsfeld and others that more and more Iraqis are being trained to take over security themselves.

MCINTYRE: Well, they are being trained, but they are still pretty poorly trained, poorly equipped, in particular, and they have morale problems as well, particularly as they become the subjects of these attacks. If you want to see what the bottom line is, just take a look at the U.S. military plans for maintaining forces in Iraq. It's about 100,000 a year over the next several years -- John.

KING: Jamie McIntyre tonight at the Pentagon -- thank you, Jamie.

And I am joined now by Ken Pollack, a former CIA analyst and the author of "The Threatening Storm Director: The Case For Invading Iraq." He is director of Research at the Saban Center at the Brookings Institution.

Ken Pollack, let me follow with that very same question. How can the United States say three months from now, here are the keys, it's your country, when the security situation is obviously so precarious just Iraqis are simply not stepping forward and protecting the streets?

KENNETH POLLACK, CNN ANALYST: Well, this is the point, John.

Ultimately in three months, we are not going to simply give the keys to the Iraqis. As Jamie McIntyre just pointed out, we are going to keep 100,000 troops in the country. There will also be a very sizable U.S. civilian presence in the country. There's some debate as to exactly what it's going to look like, a supersized embassy or some other function. But there are going to be a lot of Americans still there, because the fact of the matter is the Iraqis are just not ready for it on June 30.

KING: Help me understand the politics of this. When the American people in this campaign year, wherein Iraq is already a bit of a dispute in the election campaign, see pictures like this, especially civilians being killed, not just military, but civilians being killed as well, what happens back here?

POLLACK: Well, I think that there's no question that people back here are going to start asking questions what exactly are we doing over there and why are we seeing these kind of deaths? And Fallujah, isn't this a place that we have had problems with all along? Why haven't we taken care of that problem? I think that this is the kind of thing that gives the Bush administration real heartburn.

KING: Is it the responsibility of the Pentagon to protect American civilians, civilians from other coalition countries who are coming in to do nation building, essentially, help build the roads, build the bridges, prepare for this transfer of sovereignty?

POLLACK: No and yes.

No, in the sense that there are just too many people inside of Iraq. There are too many opportunities for the terrorists to mount these kind of attacks. You can't protect every single American, every single foreigner inside of Iraq. But yes in the sense that I think the United States does have a much greater responsibility to take on the day-to-day security tasks. It is something that you hear from Iraqis again and again and again. There was a poll that was taken last week. And the overwhelming response of the Iraqi public is that their biggest single problem is day-to-day security. And the fact is, we are not providing that security. We are leaving it up to Iraqi forces, which, as Jamie McIntyre just said, aren't trained for the job.

KING: Aren't trained for the job. Can they be trained within three more months?

POLLACK: I think it's going to be really tough to do that.

In all honesty, you want six, 12, 18 months to train up the size of Iraqi security forces to really be able to take over this mission.

KING: And step back into your analyst role for me. When you see attacks like this increasingly on civilians, what does it tell you about the motives and perhaps even who?

POLLACK: Well, I think specifically what it says is that the people who are perpetrating these attacks have recognized a vulnerability. They now understand the U.S. is pulling its own troops back into these garrisons where it's harder to get at them and so they're going after the targets of opportunity. You have got lots of civilians coming around Iraq, wandering all over the place. These people are vulnerable. And it's still a way for them to send their message.

KING: Ken Pollack of the Brookings Institute, thank you very much for your time.

POLLACK: OK.

KING: We will more on Iraq later. I will talk with Baghdad bureau chief Rod Nordland of "Newsweek."

Also ahead tonight, world oil exporters vow to cut oil production. Gasoline prices here could climb even higher. We'll tell you what the White House is saying.

In "Exporting America," unemployed Americans take their fight for jobs to Washington. We will have a special report.

And in "Face-Off" tonight, controversy in this country over head scarves in public schools, an issue that has divided France. We will have two opposing views.

Stay with us.

(COMMERCIAL BREAK)

KING: The White House says it is disappointed by OPEC's decision today to cut oil production by 4 percent, a decision that could drive gasoline prices in this country even higher.

Prices at the pump are already a major issue in the election campaign. And today's OPEC decision has Democrats questioning the president's influence on the world stage.

White House correspondent Dana Bash joins us now.

And, Dana, how are they dealing with this rebuke from OPEC at the White House?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, John, as you know, they are all too aware of the fact that OPEC's decision is likely to make already record-high gas prices go higher and that's very dangerous they understand here for an incumbent, especially since both the Bush and Kerry campaigns have been duking it out already on this issue. They think it is really the No. 1 pocketbook issue for voters.

So the White House today tried to shift the discussion from this issue to start blaming Democrats and Senator John Kerry for pushing short-term fixes they say won't work and for blocking the long-term change in energy policy they say would make this OPEC decision irrelevant.

(BEGIN VIDEO CLIP)

MCCLELLAN: We continue to go from crisis to crisis when it comes to -- whether it's electricity or whether it's gas prices. We need comprehensive solutions, not patchwork crisis management. We wouldn't be in this situation today if Senate Democrats were not holding up the national energy plan that the president proposed back in May of 2001.

(END VIDEO CLIP)

BASH: Now, what Senator Kerry and his aides have been saying is that this is another example of the problem when have you a president and a vice president very close to oil companies. You saw Senator John Kerry just yesterday standing in front of a gas station making that very point.

The other thing that the Kerry campaign is saying today is that essentially this is a result of the president's bad foreign policy because they say he has squandered good will with major OPEC countries, major oil-producing countries. And that is a big problem here. And that is what, in part, they say caused this -- John.

KING: And, Dana, as the White House deals with this setback today, a bit of ghost, if you will, in the president's past on this issue, is there not?

BASH: And Democrats have been remaining us of that all day long, from Senator Kerry's campaign to Democrats on the Hill, saying that the president, as a candidate, made a promise that because he knows so much about the oil companies, that he would be the person to deal with OPEC. Let's listen.

(BEGIN VIDEO CLIP)

GOV. GEORGE W. BUSH (R), PRESIDENTIAL CANDIDATE: The president of the United States must jawbone OPEC members to lower the price. And if, in fact, there is collusion amongst big oil, he ought to intercede there as well. I used to be in the oil business. I was little oil, really little oil. And so I understand -- I understand what can happen in the marketplace.

(END VIDEO CLIP)

BASH: So a big part of the Bush campaign message and the Bush White House message today has been that the president and certainly his top aides have been working the phone, jawboning if you will. The secretary of energy, they say, has been making calls today, the national security adviser as well. The Kuwaiti foreign minister showed up here unannounced. He had a meeting today following this OPEC decision with the national security adviser.

So they are trying to make the point that as the president perhaps promised in 2000, his aides are trying to pressure OPEC, although they do it on a quiet level not like they say the Clinton administration did -- John.

KING: Dana Bash at the White House -- pressure unsuccessful so far. Thank you, Dana.

And as Dana just noted, there is a lot of debate and disagreement about what, if anything, the administration can do in the short term to stop this spike in gas prices.

Peter Viles now takes a closer look.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): The OPEC decision in Vienna put pressure on Washington to do something, anything to stop prices from rising at the pump. But it's not clear there is anything the White House can do in the short term. As long as crude prices keep rising like this, gas prices will likely follow suit.

TOM WALLIN, ENERGY INTELLIGENCE GROUP: I don't think there is a whole lot they can do in the short term. This is a global commodity market, oil, and the gasoline market in the U.S. responds to that market.

VILES: But there is now speculation the administration may try to streamline the patchwork system of different blends of gasoline for different cities and states at different times of the year. New York, for example, wants a waiver so it won't have to switch over to gas blends containing ethanol.

JOHN KILDUFF, ENERGY RISK MANAGEMENT GROUP: It's real patchwork regime right now going on. If we had one blend of gasoline for the entire country, prices would be a lot lower.

VILES: A single blend for the whole country is not likely. The Clean Air Act requires cleaner burning gas in polluted areas, but Washington could waive the requirement for different blends in the summertime. FRED LEUFFER, BEAR STEARNS: One of the things that the administration could do would be to order the EPA to change the specifications on winter grade to summer grade gasoline. That could relieve some supply pressures from gasoline as we enter into the summertime driving season.

VILES: But the EPA would have to abide by the Clean Air Act, which led to all of these different blends of gas in the first place.

(END VIDEOTAPE)

VILES: The EPA maintains that this boutique so-called fuel system isn't the problem anyway. It estimates that that different system of different gases adds only 4 to 8 cents to the price of a gallon of gas and is in the long run a cost-effective way to reduce air pollution -- John.

KING: And so, Pete, help me out here. OPEC says it will cut production and everyone thinks that will drive prices up, but at least today prices went down?

VILES: OPEC had previously announced this production cut. There was some worry in the market they would announce another one for maybe May or June. They didn't do that. This production cut was priced in. Also today, late today, we did hear that inventories in the United States are higher than expected. So, on balance, the market had already sold on the news, so -- rather, they sold the rumor and bought the news -- John.

KING: Now I understand. Peter Viles in New York, thank you very much.

And coming up, taking fight over jobs to the streets. A creative nationwide protest rolls into the nation's capital.

And the "Middle Class Squeeze." And Senator Edwards and Congressman Rob Portman have two very different ideas about how to help middle-class America. We'll hear from both of them.

Stay with us.

(COMMERCIAL BREAK)

KING: Fifty-one unemployed March representing each of the 50 states and the District of Columbia wrapped up a bus of the nation here today in Washington. The tour was an effort to call attention to the growing jobs crisis in this country using 51 different stories of how unemployment can affect a family.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT: The eight-day 18-city tour began in Saint Louis. Each person on the trip has a unique story with a common theme. They're all laid-off workers. Many of them have watched their jobs move overseas.

KEN NICKELL, AFL-CIO: To think that good American jobs that pay good benefits and support working families are being shipped out of the country so that we line the pockets of those who sit in corporate boardrooms is atrocious.

PROTESTERS: Show us the jobs! Show us the jobs!

SYLVESTER: It's not just, where are the jobs? It's, where are the good jobs? As companies are increasingly outsourcing work to other countries. The Iowa factory where Jerry Nowadzky worked moved its operations to China. He found a job at another manufacturing plant, but lost that job when it moved to Mexico. Now he worries not only about his future.

JERRY NOWADZKY, LAID-OFF WORKER: I would love for my kids to get an education, to find a good job, a job with good pay, good benefits, a living wage, and I don't know where that's going to be at. I'm just scared for them.

SYLVESTER: For some of the workers, losing their jobs was not the only insult. Myra Bronstein was told, train her replacement or lose her severance.

MYRA BRONSTEIN, LAID-OFF WORKER: Training my replacement was like being handed a shovel and being forced to dig my own grave.

SYLVESTER: Arriving in Washington, D.C., the workers asked their lawmakers to extend uninsurance benefits, finding a few sympathetic ears.

REP. JIM MCDERMOTT (D), WASHINGTON: You go to school, study hard. You try every job. You take anything. You work and you take extra courses and you work your way up. And then you get this.

(END VIDEOTAPE)

SYLVESTER: The Republican National Committee dismissed the bus tour, saying it has everything to do with the politics of electing John Kerry and nothing to do with the policies of job creation -- John.

KING: Well, let's move to the policies of job creation. What is the biggest fight in Washington right now over creating jobs?

SYLVESTER: Well, one of the things the Democrats are really pushing for is the transportation bill which they say will create tens of thousands of jobs, but the White House is asking Congress to hold the line on spending, so it's not budging and not going anywhere at this point, John.

KING: The fight to continue. Lisa Sylvester, thank you very much.

And just ahead, a brutal day of violence in Iraq, nine Americans killed in two separate attacks in Iraq. We'll hear from "Newsweek"'s Rod Nordland in Baghdad.

Also ahead, religious symbols in our public schools, are they a right or a privilege? We'll have two very different views in tonight's "Face-Off."

And it's all liberal all the time. Al Franken's talk radio network kicks off, but in just four cities. We'll tell you about his inaugural day.

Stay with us.

(COMMERCIAL BREAK)

KING: As we reported earlier, insurgents today killed nine Americans in one of the bloodiest days of violence in Iraq this year. Four were civilian contractors. Five were soldiers. The charred bodies of the civilians were mutilated and dragged through the streets of Fallujah, west of Baghdad.

Joining me now is the Baghdad bureau chief of "Newsweek," Rod Nordland.

Rod, how does a day like this in Fallujah impact your situation and the security and the protest situation in Baghdad?

ROD NORDLAND, "NEWSWEEK": Well, it's just the latest in a string of incidents like this that were apparently unprovoked, unplanned attacks on foreigners just because they were foreigners and because they were easy targets.

Fallujah is a particularly bad example. And it's been a dangerous place to go for a long time. And it's getting more dangerous all the time. But we've seen attacks like this elsewhere in Baghdad. In Mosul yesterday, there were 11 attacks on coalition forces and foreigners. And the tempo has really been increasing, especially against soft targets.

KING: Three months from now, the United States government and the coalition want to turn over sovereignty. You say attack on foreigners just because they were foreigners. Is there nothing being done? We focus on how many troops are there, what is the security situation. Is there nothing being done to try to create a culture in which these foreigners are more welcome?

NORDLAND: Well, first, you have to remember that most of Iraq is not Fallujah, thank God. And Fallujah has been probably the worst place in the country and it has a long history of being a Baathist stronghold, a place where they recruited the Mukhabarat intelligence agencies and so on.

And since the beginning, they've tangled with American troops. There was an incident very early on during the occupation when 18 people were killed there, so there is a great reservoir of ill feeling. But that said, there are a lot of other places in Iraq, too, where there is ill feeling and there is just enough people of the mind-set of those in Fallujah to make pretty much anywhere in this country dangerous now.

KING: And how does it affect your work and does it affect the work increasing of these civilian contractors coming in, whether it's to build roads and bridges, whether it's to help with food supplies and education?

NORDLAND: Well, I think after this it is going to be very hard for any aid to get into Fallujah. And it's making it harder for all of us to do our jobs. It's much harder even for journalists to move around because of the security situation.

Some of us didn't go -- most of us, in fact, did not go to Fallujah today after what happened, except those who are -- those Arab journalists working for us. And that's even more of a concern in the reconstruction side, because there are just a lot of things they can't do. These four people who were killed were as it turns out apparently security guards. And it's going to make it that much harder for the people they were guarding to even consider going into Fallujah.

Rod Nordland, bureau chief in Baghdad for "Newsweek," we thank you, sir, for your time on a very difficult day in Iraq. Thank you very much.

NORDLAND: Pleasure.

KING: An astonishing ruling by the World Court today that American officials say could undermine U.S. sovereignty. The U.N. court ruled that the United States has violated the rights of 51 Mexican citizens on death row and is ordering a review of their cases.

Mexico said the United States denied the convicted murderers the right to assistance from their government. But American officials said Mexico was trying to intrude into the U.S. justice system and contradict laws and customs in every city and state.

An emotional legal is under way in Oklahoma. A 12-year-old Muslim girl was suspended from school last year for wearing a head scarf. The religious custom was recently banned in France.

But, as Keith Oppenheim reports, in this country, the young girl is being supported by the U.S. government.

(BEGIN VIDEOTAPE)

EYVINE HEARN, FATHER: Explained to the teacher that we were Muslims and this is, you know, how she dressed.

KEITH OPPENHEIM, CNN CORRESPONDENT (voice-over): Eyvine Hearn was taken aback last September when his 12-year-old daughter, Nashala, was told she couldn't wear a hijab, or head scarf, at her elementary school in Muskogee, Oklahoma.

Mashala had been wearing the hijab for a month, but was told the headdress was a violation of the district's ban on headware in school. She refused to take it off and was suspended twice.

HEARN: They can wear crosses, so why can't I wear my hijab.

OPPENHEIM: You don't think it's fair?

HEARN: No.

OPPENHEIM: Neither did her parents, who fired a lawsuit. Now the U.S. Justice Department is backing the Hearns and will intervene on their behalf in federal court.

ALEX ACOSTA, ASST. ATTY. GENERAL FOR CIVIL RIGHTS: The Constitution says every American has the right to worship as they see fit, as they choose, a student shouldn't leave that right at the schoolhouse door.

UNIDENTIFIED MALE: Sending a message to the (UNINTELLIGIBLE) that there's a lot more heavyweights that's interested in this case. I think it's a plus.

OPPENHEIM: Muskogee school officials say they are actually following existing federal guidelines. They say they are not attacking freedom of religion...

(on camera): ...they say they're protecting it, arguing that if one religious group violates the rules of the dress code then other groups could do the same.

DR. ELDSON GLEICHMAN, MUSKOGEE SCHOOL SUPERINTENDENT: They have there Satanist there, they would have long coats, they'd have pierced bodies all over the place, and they would want a room to go in, and they'd probably kill their chickens, and do all that stuff in the rooms.

OPPENHEIM (voice-over): Now with a bigger government body challenging a smaller one, this is a test whether Americans can identify a dress code in the name of religious freedom. Keith Oppenheim, CNN, Muskogee, Oklahoma.

(END VIDEOTAPE)

KING: And this case is at the center of tonight's faceoff. Dalia Hashad is an attorney with the ACLU. She says Mashalaya Haern has a constitutional right to wear a head scarf. John Tucker, on the other hand, says the young girl was not permitted to wear her head scarf, because of federal rules mandated by the U.S. Department of Education. Mr. Tucker is the attorney representing the Muskogee Public School District.

Sir, let me begin with you, we spoke a bit early to a representative of the Education Department who says the rules are not that strict, that you do have the right to allow this within your school district.

JOHN TUCKER, ATTORNEY: Well, in 1995, the United States Department of Education had guidelines for school dress codes, which expressly permitted the wearing of yamikas and head scarves during the school day as a part of the student's religious practice. In 1998, the United States Supreme Court declared that that act upon which that was based, the Religious Freedom Restoration Act was unconstitutional.

In 1998 the United States Department of Education then amended its guidelines and indicated that that provision was no longer a part of the guidelines for school dress.

I would also point out that Oklahoma is in the 10th federal circuit, and the law of the 10th United States Circuit Court of Appeals have been to the effect to students do not have the right to make an exception to dress codes to accommodate religious head scarves, unless you make the same exception for other students for secular reasons.

KING: Sir, let me stop you right there for a second. Let me stop you right there for a second. Dalia, is Mr. Tucker correct? Is there a need for the federal government to issue clear new guidelines?

DALIA HASHAD, ATTORNEY, ACLU: Well, unfortunately, Mr. Tucker and the Muskogee School District have misinterpreted the law. And that's where the Department of Justice has correctly stepped in. The Department of Justice is charged with evaluating, interpreting, and enforcing the law of the Department of Education. And that's what they did in this case. They are correct in saying that the Muskogee School District has violated the law, and this little girl has the right to practice her religion and to wear the hijab in the school.

KING: Mr. Tucker, school officials every day have to make decisions about discretion, if you will. What is the problem with the young girl wearing a head scarf? How can that be offensive to others.

TUCKER: The school district is more than 50 percent classified as minority, the entire district of 6,000 students, Native-American, African-American and other minorities. It's a district that's very conscious of equality and fairness issues. This is a safety issue with the school. The application of a rule that applies, equally to all persons, unfortunately applies in a way that in this instance seems very unfair, however, if Ms. Hearn is to be treated differently than other students, and under the law other students have the right to wear their gang colors, to wear their baseball caps turned to one side, whatever they wish.

Religious expressions, expressly authorized on, for example, t- shirts and crosses by these regulations, and the Muskogee School District looks forward to a ruling by the court in Oklahoma. The plaintiffs have sought a declaratory judgment, which is asking the court to make a ruling as to what the law and regulations are. If the courts tells us the regulation should be changed, and that it's proper and appropriate, and does constitute equal treatment to permit Ms. Hearn to wear her scarf, we would be willing to change it. This has always been about an issue of providing a safe place.

KING: A safe place. Dalia Hashad, is his interpretation correct. If they allow the head scarf, or other religious symbols, does the school district also have to allow gang colors?

HASHAD: No, the interpretation is not correct. And it's worth noting that there is no gang threat with a group of 12 year old girls wearing the hijab. Muslim women and girls every day all across America wear the hijab and attend school and there is not a problem for any one of them. Why is this a problem for the Muskogee School District?

KING: Dalia Hashad of the ACLU, John Tucker -- I'm sorry, go ahead, sir, quickly.

TUCKER: This is not a religious issue, this is a matter of safety for the students and equality. There is no concern that this young lady is any threat to anyone.

HASHAD: This is a religious issue. As noted, that they did not enforce this policy until September 11. This is not about evenhandedness, this is about retribution and religious discrimination against a young Muslim girl simply trying to practice her right to religious freedom.

KING: Is that correct, sir, did the school district only enforce this after September 11?

TUCKER: That is not correct.

HASHAD: That is correct by all accounts, she was called into the office on September 11 2003, after she has been wearing the hijab for about month, and told only on that date for the first time, that she was not allowed to wear the head scarf.

KING: An emotional issue. Dalia Hashad, John Tucker, we thank you both for your views tonight. A very emotional issue, and we will follow it, we promise, as it makes its way through the court. We thank you both for your time tonight.

And we want to hear your opinion on this issue. In tonight's poll question, "do you believe religious symbols should be banned from public schools? Yes or no." Cast your vote at CNN.com/lou. We'll bring you the results a bit later in the show.

And just ahead, with his unsuccessful bid for the presidency behind him, John Edwards is turning his attention to the nation's unemployed. And a plan to extend their benefits once again. We will hear from the Senator next. Stay with us.

(COMMERCIAL BREAK)

KING: As of tonight, more than 1 million Americans are without unemployment insurance, long-term federal insurance benefits already extended twice by the Congress, started to be phased out in December. The debate over unemployment benefits and other worker's rights issues has divided the Senate.

John Edwards serves on the Health, Education, Labor and Pensions Committee. He says the fact that unemployment benefits have been allow to expire is exasperating. Senator Edwards, Democrat of North Carolina joins me now, welcome.

SEN. JOHN EDWARDS (D-NC), FORMER PRESIDENTIAL CANDIDATE: Glad to be with you.

KING: Exasperating?

Why not extend them more.

EDWARDS: They should be extended more. The president's is against it. And the president and his administration are largely responsible for the fact that we have 1 million people who now have had their unemployment benefit expire. Those people are struggling, hurting, most of them middle class Americans who have done everything in their power to try to find a job. They're part of the millions of people who lost their jobs as a result of this administration's irresponsible economic policy.

KING: The administration would say they were extended twice and in the Clinton administration, when the unemployment rate was even hire they were caught off just as they are now.

EDWARDS: What are these people supposed to do. These are the heart and soul of this country. They have worked hard all their lives, they've raised their families, they've done what they are supposed do. They are out there every day looking for a job, and there is no job for them. I mean, our responsibility is to get this economy going, and create jobs. And as matter of fact, John Kerry laid out an very effective comprehensive job creation proposal. It's why we need change in the White House come November, because it's clear this president has never gotten that the loss of these jobs has an enormous impact out there on main street across America. He has no real plan for job creation. And the American people need change. We need real change in November, and that means John Kerry needs to be president.

KING: Ask a quick political question, since you raised the issue. The Kerry Campaign suggested we talk to you tonight, are you auditioning.

EDWARDS: No, I'm trying to make sure he becomes the next president of the United States. It's not just important for the Democrats. It's important for the country. It's important for my own family and my own kids and my own grand kids.

KING: One of your earlier points early in the campaign was that you were more electable because you came from the south, because Democrats have to compete in the south. If you look at our poll, over the last week or so, President Bush has now passed Senator Kerry who got quite a bounce out of the Democratic primaries, President Bush running ahead. I know it early, the Republicans are making the case as the Americans look closer, now that the Democrats have a nominee, and as they listen to the Bush argument that this is a man who has consistently voted for higher taxes, the polls are changing. Are you worried?

EDWARDS: No, I am not worried. Because what's about to happen is, the American people are going to hear what John Kerry is made of. How he served this country his entire life. How he served our country, put his life at risk in Vietnam. He had an extraordinary period of service in the United States Senate. On the very issue you raise, for 95 percent of Americans, John Kerry will lower their taxes. He is completely for lowering taxes for middle class families who desperately need help. The difference he has with this president is very simple. He does not want to give big tax breaks to rich people. That's what this president wants to do.

KING: Let's deal with two issues in closing on the economy. Any debate in Washington, as you know, can be very frustrating. Takes a lot of time, even if you do the best thing in the world. It can be three, four, five, six years before it actually gets through the pipeline. Let's start with the manufacturing base in this country, more than 2 million jobs lost during the Bush presidency.

What can any president, any Congress do tomorrow that would bring result necessary a matter of say months.

EDWARDS: We can make changes that will bring results over a period of a year or two years, but this is the very reason we shouldn't be at this stage. We are in the fourth year of this president's administration. He is now for the first time taking any steps to deal with the jobs issue. It shows he's out of touch what's been going on in America over the last three years. It's why we need somebody who is in touch. Over the last year, I know, because I went through it myself, John Kerry has been out there in the real world in main streets all over this country having town haul meeting, listening to what people's problems are. He understands jobs are the single biggest issue in domestic policy in American today. That's why he's talking about creating jobs. Talking -- laying out a comprehensive plan not only to create jobs, but to go protect the jobs that we have.

KING: What about more pocketbook politics.

What about gas prices?

The Republicans say Senator Kerry would raise taxes even more and gas prices would perhaps be down a little bit at least if the president's energy bill had passed. Senator Kerry says, this is a president who promised a job on OPEC. OPEC is not listening to this president, what can you do to bring is prices down tomorrow or as we go into the summer driving season.

EDWARDS: What the president saying is a bunch of malarkey as we say where I come from. The truth of the matter is today for the first time, he condemned what OPEC is doing. After the horse is out of the barn. You know, OPEC decided to decrease production yesterday, and after Senator Kerry said yesterday, why is the president not doing what he said he would do during his campaign in putting pressure on OPEC, now for the first time he talks about it.

It's exactly the same thing he's done about job. This is a consistent pattern. He lets things go. Let's things go until they reach crisis stage and then tries to do something built. We need a president of the United States who will be proactive, who understands that these things have to be dealt with on the front end and have some real vision about what needs to be done for our country.

KING: A passionate case in Senator John Edwards. Sir, thank you very much for you time.

EDWARDS: Thanks, John.

KING: And we will hear different views you can bet on unemployment and the economy from a key White House ally, Congressman Rob Portman of Ohio when we return.

KING: Plus the new face of talk radio. Liberals give their conservative counterparts, sharp-tongued competition.

And a missing Wisconsin student is found and returned to her family. We'll have those stories and more when we return in just a moment.

(COMMERCIAL BREAK)

KING: My next guest says unemployment benefits have already been extended more than any other period in history, he says the president's tax cuts are working and will continue to stimulate economic growth and job creation.

Republican Congressman, Rob Portman is a member of the House Ways and Means Committee, and the Budget Committee and he joins me now in the studio.

Senator Edwards just left congressman and he says it's a travesty this administration and the Republican leadership in Congress will not agree again to extend unemployment benefits. Why not.

REP. ROB PORTMAN (R), OHIO: It's interesting, because the last time that we were in the situation was 1994, and then in the Clinton administration, with Democrats in the House and Democrats in the Senate when you had unemployment at 6.4 percent, not 5.6 as it is now, they determined it was time to end this extraordinary help that the federal government gives to the states to extend unemployment. So their may be a little bit of politics here.

KING: Why not flip the politics than, and say in an election year in which the Republican president wants to win a reelection, in a some time difficult economy, and where the Republican Congress wants to keep charge of the Congress, why not say we're here to help?

PORTMAN: What the president is focused on is jobs. What folk in Ohio want is a job. They don't want an unemployment benefit, they want to have a job, and the president is providing lots of incentive for that through these tax cuts. I mean, I just heard Senator Edwards say the president has sat back and not done anything, just the opposite is true. In 2001, just as we got into this recession, which, by the way the president inherited the failing economy, (UNINTELLIGIBLE) went into recession. He put forth a very aggressive (UNINTELLIGIBLE) tax relief. He aimed directly at stimulating the economy, creating jobs.

Franky, he forced it upon the Congress, and some of us even on the Republican side thought it was a little aggressive. Turns out it lead to the most shallow recession in our history. 2002, and did it again in 2003, put forward some very important tax relief to encourage business investment and get people back to work. If you look at the last six months, we have created jobs every month. In fact, the growth in our economy over the previous six months is the highest growth we have had in 20 years, so why we would want know to go back to the old policies of raising taxes instead of continuing this, I don't know.

KING: The growth rate is high, the growth rate in jobs has been rather sluggish and well below what the administration anticipated at the beginning of the year.

Do you worry, we had congressman Marcy Kaptur from your state on last night. She was talking about how in Ohio, she doesn't believe the president can carry Ohio because of the manufacturing problems. If a Republican doesn't carry Ohio, the Republican doesn't win the presidency.

Should the president do more?

PORTMAN: Well, the president is doing a lot. And the president should continue to do what he's doing, which is to encourage us to have more tax relief. And on April 15 a lot of Americans will see that they're not paying as much in tax, others will be getting a refund. More money in their pockets as that tax relief continues. We have got to be sure next year the taxes don't go up which is what my friends on the other side of the aisle, the Democrats would like to see.

The thing the president is doing in Ohio, he's talking about how do you create jobs. And that has to do with lowering liability costs, lowering health care costs, lowering energy costs. Make sure you have retraining, so that people who end up in a job where they don't have a future, can get reemployed, reeducated, and retrained for something else. These are the kinds of things of things that we really need in Ohio. And those are the things the president has been pushing, and pushing very hard and will continue to push.

KING: You mentioned energy costs, the president, obviously want the Senate to move on his energy bill. Is there anything that you think the president and the Congress can and should do in the short term to deal with the price of gas right now.

PORTMAN: Well, what the president has done with regard to OPEC is he has encouraged them strongly not to do what Senator Kerry said he was not doing. He's done that through the appropriate diplomat means and so on. Yes he made a strong statement today, but this isn't the first time his administration has talked to OPEC about not restricting supply. The president also is looking (UNINTELLIGIBLE) options, looking at the Strategic Petroleum Reserve. The president is adamant about not raising the gas tax, and which again is a difference between Republican approach and many of the Democrats including Senator Kerry over time, who's been encouraging raising the tax on gasoline. These are all things that will lead to lowered costs, but...

KING: You said looking at the Strategic Petroleum Reserve. The administration says it is it's policy not to tap that for lower prices, are you saying the administration is -- is there a threshold where the administration would look more seriously at that.

PORTMAN: It's something the administration will look at if necessary, and, again, these are all very important elements. The longer term issue is to have an energy policy that makes us less dependent on foreign oil, allows yes to have more production, allows us to use technology -- new technologies, particularly to get away from dependency on foreign oil, particularly on gasoline. These are things that are in the energy bill. The president has been pushing. It passed the House, it's in the Senate, we are within a few votes of passing it. If we could get Senator Kerry and a few other people to support us, we could actually get that bill passed and that would help with regard to the gas prices as well.

KING: I was going to say I don't think you are going to get Senator Kerry on that bill.

(CROSSTALK)

KING: Rob Portman, Republican of Ohio, thank you very much sir.

PORTMAN: Good to you again.

KING: Good to see you.

Talk radio long dominated by conservative commentators, has some new decidedly left leaning competition. The liberal network Air America launched today with a program called the "O'Franken Factor," a not so subtle reference to the conservative competition.

Kitty Pilgrim reports.

AL FRANKEN, AUTHOR: Programming from an underground bunker 35 feet below Dick Cheney's bunker, Air America radio is on the air.

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Enter stage left. Political author, and former "Saturday Night Live" comedian Al Franken. He has teamed up with actress Janeane Garofolo, and Chuck D from the rap group Public Enemy to take back the airway from conservative radio shows, can they do it.

MATTHEW FELLING, CTR. FOR MEDIA & PUBLIC AFFAIRS: The road behind is full of the caucuses of attempted liberal talk radio programs and liberal talk hosts. What they have lacked that Air America has is a certain personality and a certain entertainment value.

PILGRIM: The competition is tough, Conservative Rush Limbaugh is the country's top talk radio host, 20 million listeners a week through 600 stations. Conservative radio had meteoric rise in the Clinton years. Liberals are hoping the same anti-establishment dynamic works for them.

MARK WALSH, CEO, AIR AMERICA RADIO: Fifty one percent of America voted against George Bush in 2000, those are potential listeners. Anybody who is dissatisfied with the status quo.

PILGRIM: It's also about larger than life personalities. Franken has called his show the "O'Franken Factor," a play on conservatives Bill O'Reilly's show. The two clashed at a book fair last year.

FRANKEN: Shut up. This isn't your show, Bill.

BILL O'REILLY, HOST "O'REILLY FACTOR": This what this guy.

PILGRIM: But this is no shouting match it's business. Right now, conservative talk shows outnumber liberals ones roughly, 5 to 1.

(on camera): Even with programming in New York, Los Angeles, Chicago, and some other markets, Air America will only have a fraction of the audience of conservative radio and a fraction of the revenue.

Kitty Pilgrim, CNN, New York.

(END VIDEOTAPE)

KING: An update on the missing University of Wisconsin student found alive today after vanishing from her apartment four days ago. 20-year-old, Audrey Seiler is in the hospital and we her parents spoke a short time ago. They thank the community for coming together to bring their daughter home safely. Authorities are trying to determine if she was kidnapped and searching for a possible suspect, a white male in his late 20s or 30s.

On weak end to the first quarter on Wall Street, the Dow lost 24 points, the Nasdaq down more than 6, the S&P fell less than a point.

For a look at some first quarter results, we are joined by Christine Romans -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: John, a report today showed business activity in the Midwest slowed and the employment component of that report fell sharply. That dented a market so concerned about jobs and sky high gas prices. Gas prices up 20 percent in the first quarter. That's just the tip of the iceberg. In the first quarter copper soared 30 percent, scrap steel rallied 57 percent, that's China's appetite for natural resources evident there.

And lumber and eggs sharply higher. And so far with the exception of eggs, and gasoline, companies aren't able to pass higher prices to consumers, economist say they absorb that higher raw material prices through productivity, or lower wages and outsourcing. In stocks, a mix quarter, the first weak quarter for the Dow and Nasdaq in about a year. The S&P 500 managed a small gain. And no end for small cap stocks a year long winning streak. The quarters big winners McDonald's, JP Morgan, and Wal-Mart. Losers were General Motors and Intel.

John, a mixed quarter overall. And after such a great run for stocks, some say it's not that much of a surprise really.

KING: Christine Romans, in New York thank you very much.

Now for a look at some of "Your Thoughts" on exporting America.

Wilson Cherry of Richmond, Virginia, "Special thanks to you for representing us, the American worker, in an intelligent and tireles manner. You are truly making a difference."

Sue Anderson of Raymore, Missouri, "Since so many U.S. jobs are being moved offshore, why does the Bush administration keep saying that we need illegal aliens here to work?"

And Haresh Mirpuri of Schaunburg, Illinois, "By outsourcing American jobs, American companies are killing the goose that lays the golden eggs, the American consumer.

We loving hearing from you. As always e-mail us at loudobbs@cnn.com.

And when we return a high school student raising the bar and the roof in Oklahoma, stay with us.

(COMMERCIAL BREAK)

KING: And finally tonight, there is a winner in the power rates slam dunk contest of high school all stars. Candace Parker of Naperville, Illinois beat out five male competitors to earn the top prize. Parker dunked three times finishing with a one handed jam while covering her eye's with the other arm. The win puts her in some pretty impressive company. Previous winners include Vince Carter and LeBron James. Parker plans to play for the University of Tennessee in the fall. And that's our show for tonight. Thanks for being with us. Tomorrow, "Exporting American" and how it's changing the shape of an industry that built this country. Our serious of special reports continues. For all of us here, good night from Washington.

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


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