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Lou Dobbs Tonight

Policy Reversal in Iraq; California to Ban Electronic Voting?

Aired April 22, 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.

(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, a stunning policy reversal. The United States now says former members of Saddam Hussein's Baath Party may be offered jobs in the new Iraqi government.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Punitive action doesn't need to be taken against people that have clean records.

DOBBS: Is Iraq reaching the boiling point? Former National Security Adviser Samuel Berger says it is. He's our guest tonight. I'll also be joined by Senator Evan Bayh.

Only half of Iraq's police force may be loyal to the coalition. I'll be joined by the man who trained Iraq's police, former New York City Police Commission Bernard Kerik.

E-democracy. Are electronic voting machines really better? California is now threatening to ban thousands of e-voting machines after big computer glitches in its primary elections. We'll have the report.

And across the country, state lawmakers are trying to stop taxpayer-financed jobs being exported to cheap overseas labor markets.

CAROL LIU, CALIFORNIA STATE ASSEMBLY: If we had hired to those people here in California, they would be paying taxes to California.

DOBBS: Tonight, our special report on "Exporting America."

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, April 22. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

Tonight, a dramatic shift in U.S. policy in Iraq. The Bush administration today said it may give former members of Saddam Hussein's Baath Party military and civilian jobs in Iraq. Until now, the coalition has blocked former regime officials and Baath Party members from taking Iraqi government jobs. This shift in policy reflects rising concerns about the continuing violence in parts about Iraq that were once strongholds of Saddam Hussein.

(BEGIN VIDEOTAPE) DOBBS (voice-over): Administrator Paul Bremer made de- Baathification a priority nearly a year ago. On Air Force One, on its way to Maine, White House spokesman Scott McClellan told reporters, "We are reviewing the policy to see if we can better balance the expertise and experience."

Critics say the ban on Baathists has kept valuable people such as teachers, engineers and military personnel on the sidelines during the transition.

BOUCHER: The idea is that punitive action doesn't need to be taken against people who have clean records.

DOBBS: The Coalition Provisional Authority is being more than ambiguous. Spokesman Dan Senor said the overall de-Baathification policy remains intact, but it's being implemented differently.

DAN SENOR, COALITION PROVISIONAL AUTHORITY: It sometimes excludes innocent capable people who are Baathists in name only from playing a role in reconstructing Iraq. And those are the sorts of people for which there was a process built in to allow exceptions, to allow for appeals, but the exceptions and appeals process doesn't do anybody any good if it is not expeditious.

DOBBS: U.S. military spokesman Brigadier General Mark Kimmitt said the new Iraqi military will need the experience of senior officers who can meet the de-Baathification requirements.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: You're going to need generals. You're going to need full colonels. You're going to need senior officers to command and control these organizations. Obviously, that is not a skill level that you can get in a series of weeks.

DOBBS: And a series of weeks is all the CPA has to separate the criminal elements of the Baathist Party from those who are not criminals. (END VIDEOTAPE)

DOBBS: The British military today said it's too early to say who is responsible for yesterday's deadly suicide bomb attacks in the southern Iraqi city of Basra. Those attacks killed 73 people, among them, 18 children. Today, about 1,000 Iraqis carried mock coffins through the streets of Basra to protest those attacks.

Jim Clancy reports from Baghdad.

(BEGIN VIDEOTAPE)

JIM CLANCY, CNN CORRESPONDENT (voice-over): Teachers hung their heads and mourned for the children who will never return to their classrooms, their young lives snuffed out in a fiery instant by suicide car bombs. While Basra mourned, some demonstrated against the U. S. -led occupation.

Supporters of the radical Shia leader Muqtada al-Sadr exploited the grief for political gain. Al-Sadr is locked in a struggle with the coalition to avoid arrest on murder charges and hold on to his paid militia, the al Mahdi Army, many of the young men marching wore the trademark black of al-Sadr's militiamen.

Wednesday's attacks were the most devastating suffered by the people of Basra since the U. S. -load coalition launched its invasion more than a year ago. Washington put the blame on terrorists associated with Abu Musab al-Zarqawi, whose strategy of trying to incite civil war appeared the most likely explanation for the savagery of the attacks. But no group has yet claimed responsibility.

Jim Clancy, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: In Baghdad, a gunman today killed a South African security guard. It is the latest in a series of attacks by insurgents against foreign contractors. The violence has prompted two of the biggest companies in Iraq, General Electric and Bechtel, to scale back their operations.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Some private contractors are leaving. Some are pulling back inside the green zone in Baghdad. They've stopped work on some power plants, telecommunications and water projects. USAID, which funds contractors, said 10 percent of its workers have left the country. And others have been moved out of the volatile area between Baghdad and Najaf.

USAID-funded work on water and sewer products has stopped in Central Iraq. KBR had to stop convoys of fuel and water delivery in recent days and has just resumed operations after stepping up security, the company a subsidiary of Halliburton, which has lost 33 civilian workers since the war began.

Bechtel says work on 10 percent of its projects, power, water, and telecommunications, has stopped. General Electric says there have been delays on power projects in recent days because of security concerns. Security experts say the kidnapping of civilians in recent weeks made it harder for contractors to protect their employees and proceed with projects.

CRISPIN HAWES, EURASIA GROUP: The security protocols that a company follows all change because there's a different risk applied to their personnel. Their personnel become targets, rather than bystanders.

PILGRIM: Still, KBR said Thursday it still is processing several hundred personnel a week to send to the region. At a recent recruiting session, applicants were lined up to apply.

Says the company -- quote -- "During the training process, we spend most of our time giving recruits all the reasons why they should not accept the job."

(END VIDEOTAPE)

PILGRIM: All the main contractors we spoke to today say they plan on continuing to do their work. But security experts say the problem may be with the subcontractors. Some may be reluctant to continue as security costs skyrocket -- Lou.

DOBBS: Thank you very much, Kitty.

Well, the coalition's decision to offer former Baath Party jobs in new Iraqi government jobs reflects growing concern about the effectiveness of Iraq's security forces. A U.S. general said 10 percent of those security forces actually worked against American troops during the recent violence. The general said another 40 percent of the security forces abandoned their post altogether.

Joining me now is former New York City Police Commissioner Bernard Kerik, who is a former senior policy adviser to the White House on Iraq and served as interim interior minister in Iraq.

Good to have you with us.

BERNARD KERIK, FORMER NEW YORK CITY POLICE COMMISSIONER: Thanks, Lou.

DOBBS: This has to be, I would have to imagine, a great disappointment to you to see the way in which those security forces and police officers are responding.

KERIK: Well, I think there's a couple issues.

You have a lot of political rhetoric both in this country and there that they now witness, they get to see. So, you have some of those security forces that are saying on June 30, is the U.S. leaving? Do I have something to be afraid of? Should I get out while the going is good? Sort of like that. And then you have others that we have vetted, maybe not vetted good enough. And they're reversing what they were doing.

And it is extremely difficult for us as Americans in the military to vet the Iraqis. That's why it really depends on the Iraqi leadership. You have got to make sure that the Iraqi leaders are the ones that's vetting the Iraqis because they know them best.

DOBBS: And that leadership is about to expand to Baath Party members.

KERIK: Honestly, Lou, I didn't hear everything that was just said. I couldn't hear.

But I will tell you we had several Iraqis that were former Baath Party members working for us in the security field, in the educational field. You've got to remember, 90 percent of everything in Iraq was Baath Party. The only thing that we changed initially going in was the top three levels of the Baath Party. They would be removed from military or police presence.

And I think that may be what they're changing now. And if they are changing that, that's a strategy that the commanders are making on site. And strategies in wartime, policing, if we stuck to one strategy changing and reducing crime in New York City from 1994 to 2000, we wouldn't have reduced crime by 63 percent. So you have to change the strategies going forward. And I really -- I'd have to leave it up to the commanders in the field.

DOBBS: Leaving it up to the commanders in the field, it appears that in doing so we've left them about six weeks to make a lot of very important decisions up against that June 30 deadline. We have Iraqi security forces that are not performing, half of them, in point of fact, abandoning their positions. We have an Iraqi military that's disbanded but now Baath Party is being talked about as coming back as full generals, colonels, the full command structure of an army that is responsible for carrying out Saddam Hussein's torture and murder of his own citizens.

These may be changes in policies and adaptation and being flexible and reasonable. As men, I think it's something that's incumbent upon all of us. But these changes being driven so quickly before the June 30 headline looks almost expedient to some.

KERIK: Well, I think we have to look at the people they're going to bring back. There are senior members of the Baath Party that were in there. And they were committing torture and murders and acting as Saddam's assassins. And I would be hard-pressed to say that's the people we're really going to depend on as the leaders.

They may change -- in the transition, they may change and bring some of the Baath Party members back. But I would be hard-pressed to say that's them. On the other hand, June 30, we're going to turn over sovereignty, we're going to turn over power. That doesn't necessarily mean we're leaving. And that's really important for the Iraqis to recognize and understand. We're not turning around. We're not leaving. We're still going to have our military there.

We're still going to be training them. We're still going to teaching them. We're still going to be securing what's there in Iraq.

DOBBS: As the president puts it, we're not cutting and running.

KERIK: Right.

DOBBS: One hundred and thirty-five thousand American troops will be there on July 1, with the handover. The United States will not be under the control or the direction of any authority, a sovereign Iraqi authority.

What is, in your judgment, the direction in which we're headed. The Iraqis as a general population seem to be very divided as to whether or not we're occupiers, whether we're, in fact, worse in the minds of many -- I would assume that would include some of the Baathists -- Saddam Hussein. And we're talking about spending immense treasure, hundreds of billions of dollar, potentially, to restore Iraq to an ideal that has never existed, and costing 700 American lives.

KERIK: Well, I think a couple things.

One, the Iraqis have to realize, one, we're not turning and running. Two, there is a transitional process with regard to the U.N., the electoral process. The U.N. is involved in that. The U.N. is going to be involved in the transition. The Iraqis have to realize that. The occupation thing is a real concern to the Iraqis. And they have to realize this June 30 date is a part of us not occupying them. We are not going to occupy Iraq.

We have to make sure we get that message to the Iraqis, the general public, everyday public. And I think that's going to be beneficial. And this transition, this June 30 date, that's going to be a big benefit to us, I think, to the general public, so they know we're not occupying them. We're going to turn over power to them. But I think we have to remain behind. We have to be committed. We have to make sure that we help secure Iraq as much as possible to let the rest of the country grow.

And we have to look at the progress that's already happened. You know, we concentrate on the attacks, on the deaths, but we don't concentrate on the education, the medical, the economy, and all the great things that have happened. I think sometimes we just put that behind us and don't recognize it.

DOBBS: Well, obviously, a sizable portion of the Iraqi population isn't concentrating on those positives either.

Bernard Kerik, as always, good to have you with us.

KERIK: Lou, thank you.

DOBBS: Thank you.

Next, we'll have much more on Iraq, U.S. Marines fighting insurgents in Fallujah. The U.S. Army tells thousands of soldiers to stay in Iraq longer than planned. What is the effect on our troops? General David Grange joins me in "Grange on Point" tonight.

E-voting failed a big test in California's primary last month. Now California is threatening to ban thousands of those electronic voting machines.

And more states joining the fight to save American jobs are being exported to cheap foreign labor markets. We'll have that special report for you.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Army has extended the combat tours of 20,000 American troops in Iraq to deal with the escalating violence. Military experts, many of them, say the longer tours of duty will only add to the already considerable strain on our military. Joining me now, General David Grange in "Grange On Point."

General, let me ask you. This 20,000 extended, this is starting to feel a lot like Pentagon math. Is this a -- tell us what it is.

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, I agree with the decision to extend 20,000 veterans of Iraq in Iraq during this period. Either you had to put more in up front or you had to extend some there that knew the environment.

It's very difficult to deploy from the United States or Germany or elsewhere and hit the street running unless it's a raid that you just go in and kill people. When you're trying to nation build, maybe kill a person here or there, do the other tests that are given, you have to have some street savvy. You have to understand what's going on around you. And it takes a little time. They had no choice, I don't think, but to extend the 20,000 troops.

DOBBS: Perhaps no choice given that this Pentagon, this secretary of defense has resisted any effort on the part of Congress to raise the number of men and women in uniform. How much longer can we ask our young men and women in uniform to meet the global challenges that face us and to pursue U.S. policy without more help?

GRANGE: Well, it's definitely going to have an effect over the years, a cumulative effect of stress on the military. There's barely enough time to get back, reorganize, recruit, train new personnel, integrate them into a unit, train the standard, and deploy for the next mission.

Part of it, it is not just, though, on the administration. I think it is Congress as well. It's easy to say, hey, grow the military or the Army, let's say in this case by 30,000 more troops. But if you don't put the funding behind it, then the military has to strip it out of modernization, out of medical programs, other programs that doesn't work out.

DOBBS: Senator Hagel here this week said it's time to consider the draft, bringing back the draft. What's your reaction?

GRANGE: I don't feel, Lou, the draft will work.

But I do believe in another version of his statements made of some type of national service. The military needs more people in the long run. And so do some the other homeland security and defense issues, with police, with firefighters, with our elderly, with our hospitals. I think it should be some kind of a national effort of service with some choice involved. I doubt if we'll see it this year. But I think in the long term, the United States of America, with its commitments, is going to have to do that.

DOBBS: It's interesting you put it that way, General. What is wrong with the idea that was so much a part of this country's history in the past century of young men and, presumably, women, being eligible for the draft, for the U.S. military, sharing burdens across all walks of American life, so that we share the pain of the decisions that our leaders make and pay particular attention, because we know that that will affect each and every one of us?

GRANGE: Well, that's right on.

The problem in the past, though, it wasn't fair. It should be. If you're going to do it, it should be for men and women. It should be for all peoples of all the different makeup of our society. There should not be loopholes. If it's done right, I'm for it. But if you just do it for the military, you are going to have really too many people. You need to do it for other national requirements as well.

DOBBS: General David Grange, thank you, sir.

GRANGE: My pleasure.

DOBBS: Still ahead, a special advisory panel tells California not to touch electronic touch-screen voting machines in this year's general election. That panel says the machines are simply riddled with errors. We'll have that story for you coming up next here.

Also, "Exporting America." Lawmakers in a number of states are trying to prevent taxpayer-funded jobs from being shipped to cheap overseas labor markets. But they're running into high-level resistance. In some cases, governors are making the right decision for their constituents.

We'll have that story ahead and a great deal more still ahead here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: An advisory panel today recommended California ban 15,000 of its electronic voting machines mailed by Diebold Election Systems. California's secretary of state says computer glitches in the company's machines -- quote -- "jeopardized the outcome of the March 2 presidential primary in California."

And today, protesters gathered outside the annual meeting of parent company Diebold Incorporated in Ohio, the protests voicing their concerns about the overall security of electronic voting, asking why Diebold doesn't provide voters with paper receipts of their electronic votes.

As we've reported here extensively, state governments are exporting, in some cases, state contract work to cheaper foreign labor markets using, of course, taxpayer money. Now three dozen states have legislation pending that would block the export of government work. So far, however, lawmakers are facing some powerful resistance.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): When California welfare recipients call for help their benefits, it is likely to be answered in India or Mexico. Though supporters say cheaper foreign workers save taxpayers money, some lawmakers say, in the long run, U.S. workers are losing. And they want practice stopped.

LIU: We don't know whether or not any of savings -- quote -- "savings," is coming back to the coffers California. What would we know is that, if we had hired to those people here in California, they would be paying taxes to California.

WIAN: One Indian outsourcing contract costs California $400 million. Lawmakers here and in most states don't even know how much taxpayer-funded work is being outsourced overseas. But a growing number are trying to bring the jobs home; 36 state legislatures are working on bills to limit offshoring of state contracts, up from just eight last week.

Florida state Senator Skip Campbell says he became involved after his brother-in-law lost his high-tech job to India. But Campbell's anti-offshoring amendment was defeated largely because of opposition from Florida Governor Jeb Bush.

SKIP CAMPBELL (D), FLORIDA STATE SENATOR: It is a very hot political issue. And his brother is in fact the president of the United States. And there's no doubt that the president is being pressured not to allow any type of legislation either on a statewide level or a national level to have legislation which prohibits offshoring or outsourcing of jobs.

WIAN: Some of that pressure comes from business lobby groups like the Information Technology Association of America.

HARRIS MILLER, PRESIDENT, ITAA: Our study showed that offshore competition added 90,000 more jobs to the U.S. last year, will add 300,000 jobs to the U.S. by the year 2008. We don't need this kind of restrictionist legislation.

WIAN: Four governors most recently in Michigan and Arizona have bypassed their state legislators and acted on their own to block offshoring of state jobs.

(END VIDEOTAPE)

WIAN: Here in California, anti-offshoring proponents are expecting a fierce battle in the state legislature. And, at this point, no one knows where Governor Arnold Schwarzenegger stands on the issue -- Lou.

DOBBS: Do we have any sense of the prospects for the success of this legislation?

WIAN: In California, supporters say they're optimistic. They also say that they have been told by their legal analyzers and legal aides that it will pass constitutional challenges, which, as you've reported, is an issue in this debate, Lou.

DOBBS: Casey, thank you very much -- Casey Wian. Filmmaker Michael Moore is an outspoken advocate of workers rights, the author of the book "Dude, Where's My Country?" Moore also uses a Canadian company to create and maintain his Web sites. The director of the documentaries "Bowling For Columbine" and so forth told CNN he does not pay for the work on his Web site. He says the publisher of his book, Time Warner, actually contracted the work to Montreal-based Plank Multimedia. Plank has designed three Web sites for Moore's various projects. Time Warner, of course, is the parent of this network.

Still ahead here, former National Security Adviser Samuel Berger says the government needs to spend hundreds of millions of dollars more in Iraq. He's our guest next here.

Also, I'll be joined by Senator Evan Bayh of the Armed Services Committee, who says the June 30 transfer of power in Iraq needs to be discussed and considered further. He joins us.

And another pair of highly radioactive nuclear fuel rods are missing in the Northeast. It is the second time this has happened in four years -- that and much more still ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says Iraq is approaching the boiling point.

Samuel Berger testified before the Senate Foreign Relations Committee this week about the rising in Iraq and the rising cost of this war. Berger says Iraq will cost the United States at least another $200 billion over the next three years. Samuel Berger served as national security adviser under President Clinton. He's also a senior foreign policy adviser for Senator Kerry's campaign, joining us tonight from Washington.

Good to have you with us.

SAMUEL BERGER, FORMER NATIONAL SECURITY ADVISER: Good to be here, Lou. Good to see you.

DOBBS: You've said that, given the military and the security situation extant now in Iraq, that we are at the knife's edge. What do you mean by that?

BERGER: Well, I think what is happening now in Iraq, with the violence we've seen in the last two or three weeks, is still an insurrection. But I think we're getting very close to something that could become a much more wide-scale popular uprising.

We have got to restore public order and public security, or the Iraqi people are simply going to increasingly resent our presence. We have not provided that kind of assurance that lawlessness would end, in addition to protecting our own forces. I think that's going to take a larger American presence. It's going to take other people's forces. It's going to take us to change the way we're operating in Iraq.

DOBBS: Let's consider if we may here, Sammy, a larger military force? Are you saying a larger coalition force made of a greater number of international troops or are you talking about even more U.S. troops?

BERGER: I think both. You know, Lou, if we extrapolated from the force we had in Kosovo, we would have 500,000 troops in Iraq. If we extrapolated per capita from Bosnia, we would have 350,000 troops in Iraq. The power doctrine that we learned at the end of Vietnam, which is an overwhelming military power needs to be committed to war, applies equally to keeping -- making the peace. We don't have enough troops there to have a kind of dissuasive authority that stops the looting that stops the lawlessness and protects our own people.

So I think, number one, we going to have to put more of our own people in in the short term. No. 2, I think we're going to have to go to our allies in an ungrudging way and say, what is it going to take to get you guys in this thing. They're going to say it's going to take, a, a U.N. umbrella, and, obviously, we're not going to put our forces under anything other than American command. But with the U.N. blessing and it's going to take, obviously, a transfer authority to an Iraqi government that has a great deal more legitimacy than the current government has.

DOBBS: There have been breathtaking adjustments, if you will, on the part of the coalition provisional authority and the Bush administration over the past year. In August, when the United Nations was in Iraq, the bombing, they left Iraq, and the administration suggested that their participation in this transfer of power was not necessary. De-Baathfication was a priority of the CPA, that has been reversed now although the administration suggests it is a question of implementation rather than actually the substance of the policy itself. Is there some point that the administration and the United States begins to lose some credibility in Iraq simply because of these adaptations to, as the administration is fond of saying new circumstances on the ground?

BERGER: We've been playing catch-up from the beginning. I think -- whether one believed we should invade Iraq or not, I think most Americans agree, we have to stay the course and our exit strategy is a success. But when General Shinseki said it would take hundreds of thousands of American forces to secure the peace once we won the war, he was derided, essentially run out of town on a rail. He was right. The fact is we don't have enough troops there in my judgment, to have a kind of intimidating and also reassuring presence that is going to give Iraqis confidence that we can help provide security. We have to do that, partly with additional American forces, and we have to go to our allies, not grudgingly, not arrogantly, but saying, listen, guys, we all have a stake in Iraq succeeding. We need your help. What will it take to get you there.

DOBBS: The president in this administration deserves some credit, don't you think, for initiating a policy that would bring democratic values, (UNINTELLIGIBLE) values, to its foreign policy in the Middle East. The centerpiece of that, obviously, Iraq. That the case, the French have behaved, I think it can be fairly said, badly on the issue of Iraq. The Germans, with whom there was some considerable attention have been extraordinarily helpful in Afghanistan and have been far more forthcoming.

Is there a point at which this administration and this country can simply say, we're not going to beg here. Your interests are at stake. Why is there not a better consciousness about your responsibilities to world peace in the war against terrorism?

BERGER: Lou, this is the premiere business show. Let me make a business analogy since I'm now in the private sector. If you are in a bad deal, you either get out of it or you bring in partners. If you bring in partners, you won't get 100 cents on the dollar. We're in a bad deal right now in Iraq, it seems to me. We have to bring in partners and make compromises with our partners to bring them in. Do I think the French and the Germans and others and Europeans have shirked responsibility? Absolutely. Do I think that they're going to somehow be held harmless because they didn't participate in the invasion of Iraq's descent into turmoil? Absolutely not.

They have as much stake in the success of Iraq as we do, but we have to go to them and not say, you come in and help share the burdens and risks, but we're going to make the decisions. We have to be prepared to set up some kind of international working group that stands alongside this new Iraqi governing authority. It's going to be very weak at the beginning as a partner and give it some strength and vitality.

DOBBS: Sammy Berger, good to have you here as always. Good talking with you.

BERGER: Good to talk to you, Lou.

DOBBS: Turning now to the subject of tonight's poll. The question, do you believe the U.S. military should significantly reduce its bases around the world, particularly in Europe and Asia? Yes or no. Cast your vote at CNN.com/lou. We'll have the results for you later in the show.

Nuclear officials in Vermont tonight are searching for two missing highly radioactive fuel rods. Inspectors realized two days ago the pencil thin rods about 17 inches in length, at least one of them, was missing from the spent fuel pool at the Vermont Yankee nuclear power plant. Officials say the danger posed by the material and the high security at the plant rule out the possibility of foul play.

(BEGIN VIDEO CLIP)

CURT HEBERT JR., ENTERGY CORPORATION: We're putting a video down in that pool to find out if they are at the bottom of that pool. We're also looking at documentation since 1979 to see exactly what the process has been and where they are, in fact. We will find it. You mentioned, you know, could someone steal them. It's not possible.

(END VIDEO CLIP) DOBBS: The Nuclear Regulatory Commission will soon dispatch a special inspection team to the Vermont Yankee Plant. Two similar fuel rods disappeared from a Connecticut power plant four years ago. They have never been found. The NRC closed that case after the plant paid an almost $300,000 fine.

A federal appellate court tonight allowed the government to proceed with the case against the terrorist suspect Zacarias Moussaoui. The appellate court in Virginia also said prosecutors can present evidence related to the September 11 attacks. Moussaui is the only person charged in this country with being a conspirator in the September 11 attacks.

When we continue, the Senate examines the growing cost of war, the looming June 30 deadline for the transfer of power in Iraq. I'll be joined by Senator Evan Bayh of the Senate armed services committee and a Texas- sized celebration honoring 16,000 of our soldiers arriving home from Iraq. Those stories are next.

(COMMERCIAL BREAK)

DOBBS: We've been reporting extensively on the hearings on Capitol Hill this week on the transfer of power in Iraq, the rising costs of war. My next guest is a member of the Senate Arms Services Committee which held some of those hearings. Senator Evan Bayh says the June 30 hand over date is arbitrary and should be discussed. Joining us tonight from Capitol Hill. Senator, good to have you here.

SEN. EVAN BAYH, (D) INDIANA : Good to be with you, Lou.

DOBBS: The June 30 deadline, do you think it would be reasonable at this point to consider shifting it?

BAYH: Well, if we reach the conclusion that we can't be successful, it's better to delay it a little bit than to not have it work out the way we'd like.

My major concern, Lou, is this: it's important to set deadlines, otherwise, the Iraqis will never make some of the tough decisions they have to make. It's important that we at least get started on this transition process so that they know that we don't intend to stay there indefinitely. But I'm concerned that this June 30 date has been hyped a little bit, and in fact, it's going to be more symbolic than it is substantive.

And if that's the case, if we've heightened expectations, both among the Iraqis and the American people, that something really significant is taking place, or some transfer of power, if that then doesn't happen, you could have disappointment, disillusionment and ultimately opposition both there and here. And that would not be a good thing for our ultimate success.

DOBBS: Obviously, most worrisome, because it is most dangerous as opposition within Iraq itself, which is already in full presence and we have already experienced the deadliest month of this war. Senator, would it not be, perhaps, an invitation to each greater trouble? To change that deadline and to dash the expectations and, again, put the United States in an extraordinarily bad light by not being powerful enough to implement its own deadlines?

BAYH: Well, it's one of those situations, Lou, where there are risks either way. It may be that we have to go forward with this and make the best of it. My point simply is, we shouldn't raise expectations unnecessarily.

When we say we're transferring sovereignty to this new Iraqi entity, what does it mean? They don't have the ability to provide order in their country, they don't have the ability to pay for their own reconstruction. This is not the result of a free election.

So my major concern is that these individuals, whoever they may be, do they have legitimacy, do they have a following with the Iraqi people,because that, ultimately, is necessary, Lou, for Iraqis to fight and die for their country. It is not enough for Americans to fight and die for their country.

So, look, if we can make a go of this, let's go forward and take the first step, but let's not oversell it, I guess that's the point I'm making. Because July 1, Lou, there's going to be more that's the same in Iraq then more that is changed.

DOBBS: And the well-being of our men and women in uniform within Iraq obviously, we have lost an extraordinary number of young Americans in combat, in Iraq this month. To what degree are you, as a member of the armed forces, committee, Senate Armed Forces Committee, concerned about the U.S. security, that is, security for U.S. forces and the strategy going forward to protect American lives our men and women in uniform?

BAYH: I'm very concerned, Lou. I think that the level of violence that we've seen, it has plateaued, but at a higher level. That is, in my opinion, likely to remain that way until about June 30, if not beyond June the 30th.

So, I am concerned. I'm concerned we haven't had enough troops there. I'm very disappointed in the performance, as pointed out earlier on your show, about the performance of the Iraqi police and armed forces. That was very disappointing, and something we have to focus on like a laser if we're ever going to get this situation right.

Because, as I said, it is not enough we're willing to die for a free Iraq. They have to do be willing to do that.

DOBBS: Senator Evan Bayh, thanks for being here.

BAYH: Thank you.

DOBBS: Taking a look at some of your thoughts.

Judy Su of Seattle, Washington, "it is not only how much is being spent in Iraq, but where it is being spent and who is making exorbitant profits."

Nickels from Locust Grove, Virginia, "the American Armed Forces were given an impossible task, extend an olive leaf while the folks you are trying to win over are desperately trying to kill you. Vietnam politics all over again."

Mack in Illinois writes, "I hope congress will reinstate the military draft so our border patrol can post the signs reading welcome to the U.S.A, we just reinstated the military draft and we need you. You are enrolled now."

On exporting America, Mike from South Charleston, West Virginia, "until Americans get in the habit of leaving it on the lot, on the rack or on the shelf of the great Wal-Mart of China, if it is not made in America, the disastrous balance of trade deficit will continue."

And Thomas in Beavercreek, Ohio, "Why is it OK for U.S. companies to go outside this country for cheap labor, but not OK for U.S. citizens to go outside this country for cheaper prescription drugs?"

Frank Thompson in Anchorage, Alaska, "very little is being mentioned concerning outsourcing American taxpayers with each job, since foreign workers don't pay U.S. taxes. Maybe our leaders will figure this out when they run out of money."

And Mark in Lebanon, Pennsylvania, "3 million manufacturing jobs lost, 300,000 fast food jobs gained, looks like the economy is heading in the right direction to me."

We love hearing from you. Send you are your thoughts at loudobbs@cnn.com.

Still ahead here, a major policy shift in Iraq. I'll be talking to a veteran of political developments programs in war-torn regions.

And in Ft. Hood, Texas today, nothing less than a hero's welcome would do for the troops who captured Saddam Hussein. Welcome home. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: As we've reported, a major reversal today from the Bush administration in Iraq. The coalition says it may offer former members of Saddam Hussein's Ba'ath party jobs in the new Iraqi government security forces as well.

Joining me now is Rick Barton. He's helped to start political development programs in more than 20 war-torn regions. He did that while working for the U.S. Agency for International Development. Now a senior adviser at the Center for Strategic and International Studies in Washington. Good to have you with us.

RICK BARTON, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Thank you. Nice to be here.

DOBBS: This decision to suddenly bring in some members of the Ba'ath party is a reversal from the priorities, at least it appears so, that Paul Bremer put in place last year. What's your reaction?

BARTON: Well, it was probably a bad decision at the beginning, because if you have proclamations without plans and you cannot carry through with them in these volatile places, you get yourself into a lot of trouble. And when you had a Ba'ath party with 2.5 million members out of 25 million people in the country and you get rid of 120,000 civil servants all at once, you're going to make a lot of mistakes. And they're trying to make the correction right now.

DOBBS: Those corrections and adaptations, responding to failed policies or policies that aren't working as well, anyone deserves credit for that, but the June 30 handover has a lot of people on Capital Hill concerned and nervous. What's your thought on that?

BARTON: Well, one of the reasons they've had to reverse this policy is that they have a shortage of talent. They're just not meeting the targets that they wanted to meet. You've seen it in the police. You're seeing it in the military. But it's also happening in the civilian side. And, clearly, they're grabbing back, trying to find some talent they can plug into these jobs.

The June 30 deadline is another one of these arbitrary choices that was made, probably -- on paper it sounds good, but these are chaotic places, and when you get into these arbitrary choices you're going to pay the price.

DOBBS: Your best assessment of where the Bush administration is now turning to the United Nations for the transition to internationalize now the Iraqi situation. Give us your best forecast for what you expect to happen from here through.

BARTON: Well, what we're seeing is that the policies have been, really, a day late, and, therefore, a dollar long. When you make a mistake, there's only a few ways you can get out of it. One is to spend money. We've seen a lot of money being thrown at the problem. But it is not sticking right now because it's not reaching the Iraqis. So I think we're in for a muddled period. Even the June 30 deadline, the details are very much up for grabs. At the very simplest level we don't know who is going to be in charge. And that kind of complication means there's going to be confusion in Iraq. Confusion means you're not building the confidence or the trust. Fundamentally, those are the two pieces the Iraqi people need to move ahead.

DOBBS: If it were only a lack of confidence and trust, it's not out right to violence and aggression as more American troops are being killed. Rick, the role of the United Nations here. They have never demonstrated great success in any part of the world and the mission that is apparently being attempted to be assumed by them. What's your best judgment as to what we can expect from the U.N. role in Iraq?

BARTON: I think the U.N. has been very honest so far in what they are saying they can do. They recognize they don't have huge standby capacity. Their employees are not eager to put their lives at risk in this kind of setting, and they realize many more probably will die, even in performing something as straightforward as an election. So they have been reluctant to move ahead. But fundamentally, what we have here is very low capacity anywhere in the world. So it's a race between tortoises rather than thinking that one the U.S. Government or the other the U.N. is a hare in this race.

DOBBS: Rick, thank you very much for being with us. Rick Barton.

BARTON: Thank you, my pleasure.

DOBBS: Let's turn to some of the business of the day and business in this case means markets. And today, a big rally on Wall Street where the Dow jumped almost 144 point itself, the Nasdaq up 37, the S&P up almost 16.

Christine Romans is here to tell us about these higher prices.

CHRISTINE ROMAN, CNN CORRESPONDENT: What petrified Wall Street didn't bother anyone today. It was the best day in a month on monster (ph) volume for stock. A couple great earnings reports there, and three shares rose for each group that fall. Just about every grouped rallied. The message on the economy was mixed. More people lined up for benefits than economist had expect. Baxter International will slash 4,000 jobs. And nail biting in Gateway as they report hefty job cuts there could be imminent. Still, Treasury Secretary, John Snow promised economy would create, " A lot more job,s" in the coming months. And he also downplayed the impact of record budget deficit. Lou, he said it is too large but it is understandable and manageable and under the president's plans, the deficit will be cut in half over five years. And then it would be low by historical standards.

DOBBS: It would be low by historical standards, not by half, actually it wouldn't. Maybe recent standards. The fact is, it's remarkable to hear a man like John Snow as Treasury Secretary to say this huge deficit is understandable and manageable. When it was a Democratic budget, which was considerably smaller, they were not understandable, they weren't manageable and had to be removed immediately. What's the difference here?

ROMANS: I don't know. I guess, the difference might be politics, Lou.

DOBBS: I think that's probably as good an answer as there, Christine. Thank you very much as always.

Still ahead, the results of the polls and a happy homecoming in Texas. Cheers and tears greeting the soldiers who captured Saddam Hussein. 16,000 of our men and women in uniform back home. We'll continue in a moment. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Results now of "Tonight's Poll." Seventy-eight percent of you said the U.S. military should significantly reduce our bases in Europe and Asia, and, obviously, 22 percent say not.

And turning to a joyful homecoming for 16,000 troops of the Army's 4th Infantry Division. They arrived home after more than a year of service in Iraq. Tens of thousands of friends and family turning out to welcome them home.

(BEGIN VIDEOTAPE)

(SINGING "STAR SPANGLED BANNER")

UNIDENTIFIED MALE: 79 soldiers paid the ultimate price for the freedom of Iraq. Their sacrifice was not in vain and will not be forgotten.

UNIDENTIFIED FEMALE: Welcome home.

UNIDENTIFIED FEMALE: We still have troops over there. So, my heart goes out to the ones just starting their one-year deployment.

(APPLAUSE)

UNIDENTIFIED MALE: It was worth it. We got our job done. We all did good. But it's all time for us to go home.

(END VIDEO CLIP)

DOBBS: Welcome home, 4th I.D., Fort Hood, Texas.

Well, that is the broadcast for tonight. We thank you for being with us. Please join us tomorrow, we'll have more on our special continuing series of special reports. "Exporting American," what American company has learned an important and costly lesson, but perhaps it's a beginning of a trend. We will have their story about jobs coming a back to this country. And former coalition advisor on Iraq, Michael Ruben, joins us to talk about the transfer of power, the rising violence in Iraq, and the strategy of the coalition in Iraq.

All of that tomorrow, we hope you'll please join us. Thanks for being here tonight, good night from New York.

"ANDERSON COOPER 360" is next.

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

Aired April 22, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, a stunning policy reversal. The United States now says former members of Saddam Hussein's Baath Party may be offered jobs in the new Iraqi government.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Punitive action doesn't need to be taken against people that have clean records.

DOBBS: Is Iraq reaching the boiling point? Former National Security Adviser Samuel Berger says it is. He's our guest tonight. I'll also be joined by Senator Evan Bayh.

Only half of Iraq's police force may be loyal to the coalition. I'll be joined by the man who trained Iraq's police, former New York City Police Commission Bernard Kerik.

E-democracy. Are electronic voting machines really better? California is now threatening to ban thousands of e-voting machines after big computer glitches in its primary elections. We'll have the report.

And across the country, state lawmakers are trying to stop taxpayer-financed jobs being exported to cheap overseas labor markets.

CAROL LIU, CALIFORNIA STATE ASSEMBLY: If we had hired to those people here in California, they would be paying taxes to California.

DOBBS: Tonight, our special report on "Exporting America."

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, April 22. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

Tonight, a dramatic shift in U.S. policy in Iraq. The Bush administration today said it may give former members of Saddam Hussein's Baath Party military and civilian jobs in Iraq. Until now, the coalition has blocked former regime officials and Baath Party members from taking Iraqi government jobs. This shift in policy reflects rising concerns about the continuing violence in parts about Iraq that were once strongholds of Saddam Hussein.

(BEGIN VIDEOTAPE) DOBBS (voice-over): Administrator Paul Bremer made de- Baathification a priority nearly a year ago. On Air Force One, on its way to Maine, White House spokesman Scott McClellan told reporters, "We are reviewing the policy to see if we can better balance the expertise and experience."

Critics say the ban on Baathists has kept valuable people such as teachers, engineers and military personnel on the sidelines during the transition.

BOUCHER: The idea is that punitive action doesn't need to be taken against people who have clean records.

DOBBS: The Coalition Provisional Authority is being more than ambiguous. Spokesman Dan Senor said the overall de-Baathification policy remains intact, but it's being implemented differently.

DAN SENOR, COALITION PROVISIONAL AUTHORITY: It sometimes excludes innocent capable people who are Baathists in name only from playing a role in reconstructing Iraq. And those are the sorts of people for which there was a process built in to allow exceptions, to allow for appeals, but the exceptions and appeals process doesn't do anybody any good if it is not expeditious.

DOBBS: U.S. military spokesman Brigadier General Mark Kimmitt said the new Iraqi military will need the experience of senior officers who can meet the de-Baathification requirements.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: You're going to need generals. You're going to need full colonels. You're going to need senior officers to command and control these organizations. Obviously, that is not a skill level that you can get in a series of weeks.

DOBBS: And a series of weeks is all the CPA has to separate the criminal elements of the Baathist Party from those who are not criminals. (END VIDEOTAPE)

DOBBS: The British military today said it's too early to say who is responsible for yesterday's deadly suicide bomb attacks in the southern Iraqi city of Basra. Those attacks killed 73 people, among them, 18 children. Today, about 1,000 Iraqis carried mock coffins through the streets of Basra to protest those attacks.

Jim Clancy reports from Baghdad.

(BEGIN VIDEOTAPE)

JIM CLANCY, CNN CORRESPONDENT (voice-over): Teachers hung their heads and mourned for the children who will never return to their classrooms, their young lives snuffed out in a fiery instant by suicide car bombs. While Basra mourned, some demonstrated against the U. S. -led occupation.

Supporters of the radical Shia leader Muqtada al-Sadr exploited the grief for political gain. Al-Sadr is locked in a struggle with the coalition to avoid arrest on murder charges and hold on to his paid militia, the al Mahdi Army, many of the young men marching wore the trademark black of al-Sadr's militiamen.

Wednesday's attacks were the most devastating suffered by the people of Basra since the U. S. -load coalition launched its invasion more than a year ago. Washington put the blame on terrorists associated with Abu Musab al-Zarqawi, whose strategy of trying to incite civil war appeared the most likely explanation for the savagery of the attacks. But no group has yet claimed responsibility.

Jim Clancy, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: In Baghdad, a gunman today killed a South African security guard. It is the latest in a series of attacks by insurgents against foreign contractors. The violence has prompted two of the biggest companies in Iraq, General Electric and Bechtel, to scale back their operations.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Some private contractors are leaving. Some are pulling back inside the green zone in Baghdad. They've stopped work on some power plants, telecommunications and water projects. USAID, which funds contractors, said 10 percent of its workers have left the country. And others have been moved out of the volatile area between Baghdad and Najaf.

USAID-funded work on water and sewer products has stopped in Central Iraq. KBR had to stop convoys of fuel and water delivery in recent days and has just resumed operations after stepping up security, the company a subsidiary of Halliburton, which has lost 33 civilian workers since the war began.

Bechtel says work on 10 percent of its projects, power, water, and telecommunications, has stopped. General Electric says there have been delays on power projects in recent days because of security concerns. Security experts say the kidnapping of civilians in recent weeks made it harder for contractors to protect their employees and proceed with projects.

CRISPIN HAWES, EURASIA GROUP: The security protocols that a company follows all change because there's a different risk applied to their personnel. Their personnel become targets, rather than bystanders.

PILGRIM: Still, KBR said Thursday it still is processing several hundred personnel a week to send to the region. At a recent recruiting session, applicants were lined up to apply.

Says the company -- quote -- "During the training process, we spend most of our time giving recruits all the reasons why they should not accept the job."

(END VIDEOTAPE)

PILGRIM: All the main contractors we spoke to today say they plan on continuing to do their work. But security experts say the problem may be with the subcontractors. Some may be reluctant to continue as security costs skyrocket -- Lou.

DOBBS: Thank you very much, Kitty.

Well, the coalition's decision to offer former Baath Party jobs in new Iraqi government jobs reflects growing concern about the effectiveness of Iraq's security forces. A U.S. general said 10 percent of those security forces actually worked against American troops during the recent violence. The general said another 40 percent of the security forces abandoned their post altogether.

Joining me now is former New York City Police Commissioner Bernard Kerik, who is a former senior policy adviser to the White House on Iraq and served as interim interior minister in Iraq.

Good to have you with us.

BERNARD KERIK, FORMER NEW YORK CITY POLICE COMMISSIONER: Thanks, Lou.

DOBBS: This has to be, I would have to imagine, a great disappointment to you to see the way in which those security forces and police officers are responding.

KERIK: Well, I think there's a couple issues.

You have a lot of political rhetoric both in this country and there that they now witness, they get to see. So, you have some of those security forces that are saying on June 30, is the U.S. leaving? Do I have something to be afraid of? Should I get out while the going is good? Sort of like that. And then you have others that we have vetted, maybe not vetted good enough. And they're reversing what they were doing.

And it is extremely difficult for us as Americans in the military to vet the Iraqis. That's why it really depends on the Iraqi leadership. You have got to make sure that the Iraqi leaders are the ones that's vetting the Iraqis because they know them best.

DOBBS: And that leadership is about to expand to Baath Party members.

KERIK: Honestly, Lou, I didn't hear everything that was just said. I couldn't hear.

But I will tell you we had several Iraqis that were former Baath Party members working for us in the security field, in the educational field. You've got to remember, 90 percent of everything in Iraq was Baath Party. The only thing that we changed initially going in was the top three levels of the Baath Party. They would be removed from military or police presence.

And I think that may be what they're changing now. And if they are changing that, that's a strategy that the commanders are making on site. And strategies in wartime, policing, if we stuck to one strategy changing and reducing crime in New York City from 1994 to 2000, we wouldn't have reduced crime by 63 percent. So you have to change the strategies going forward. And I really -- I'd have to leave it up to the commanders in the field.

DOBBS: Leaving it up to the commanders in the field, it appears that in doing so we've left them about six weeks to make a lot of very important decisions up against that June 30 deadline. We have Iraqi security forces that are not performing, half of them, in point of fact, abandoning their positions. We have an Iraqi military that's disbanded but now Baath Party is being talked about as coming back as full generals, colonels, the full command structure of an army that is responsible for carrying out Saddam Hussein's torture and murder of his own citizens.

These may be changes in policies and adaptation and being flexible and reasonable. As men, I think it's something that's incumbent upon all of us. But these changes being driven so quickly before the June 30 headline looks almost expedient to some.

KERIK: Well, I think we have to look at the people they're going to bring back. There are senior members of the Baath Party that were in there. And they were committing torture and murders and acting as Saddam's assassins. And I would be hard-pressed to say that's the people we're really going to depend on as the leaders.

They may change -- in the transition, they may change and bring some of the Baath Party members back. But I would be hard-pressed to say that's them. On the other hand, June 30, we're going to turn over sovereignty, we're going to turn over power. That doesn't necessarily mean we're leaving. And that's really important for the Iraqis to recognize and understand. We're not turning around. We're not leaving. We're still going to have our military there.

We're still going to be training them. We're still going to teaching them. We're still going to be securing what's there in Iraq.

DOBBS: As the president puts it, we're not cutting and running.

KERIK: Right.

DOBBS: One hundred and thirty-five thousand American troops will be there on July 1, with the handover. The United States will not be under the control or the direction of any authority, a sovereign Iraqi authority.

What is, in your judgment, the direction in which we're headed. The Iraqis as a general population seem to be very divided as to whether or not we're occupiers, whether we're, in fact, worse in the minds of many -- I would assume that would include some of the Baathists -- Saddam Hussein. And we're talking about spending immense treasure, hundreds of billions of dollar, potentially, to restore Iraq to an ideal that has never existed, and costing 700 American lives.

KERIK: Well, I think a couple things.

One, the Iraqis have to realize, one, we're not turning and running. Two, there is a transitional process with regard to the U.N., the electoral process. The U.N. is involved in that. The U.N. is going to be involved in the transition. The Iraqis have to realize that. The occupation thing is a real concern to the Iraqis. And they have to realize this June 30 date is a part of us not occupying them. We are not going to occupy Iraq.

We have to make sure we get that message to the Iraqis, the general public, everyday public. And I think that's going to be beneficial. And this transition, this June 30 date, that's going to be a big benefit to us, I think, to the general public, so they know we're not occupying them. We're going to turn over power to them. But I think we have to remain behind. We have to be committed. We have to make sure that we help secure Iraq as much as possible to let the rest of the country grow.

And we have to look at the progress that's already happened. You know, we concentrate on the attacks, on the deaths, but we don't concentrate on the education, the medical, the economy, and all the great things that have happened. I think sometimes we just put that behind us and don't recognize it.

DOBBS: Well, obviously, a sizable portion of the Iraqi population isn't concentrating on those positives either.

Bernard Kerik, as always, good to have you with us.

KERIK: Lou, thank you.

DOBBS: Thank you.

Next, we'll have much more on Iraq, U.S. Marines fighting insurgents in Fallujah. The U.S. Army tells thousands of soldiers to stay in Iraq longer than planned. What is the effect on our troops? General David Grange joins me in "Grange on Point" tonight.

E-voting failed a big test in California's primary last month. Now California is threatening to ban thousands of those electronic voting machines.

And more states joining the fight to save American jobs are being exported to cheap foreign labor markets. We'll have that special report for you.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Army has extended the combat tours of 20,000 American troops in Iraq to deal with the escalating violence. Military experts, many of them, say the longer tours of duty will only add to the already considerable strain on our military. Joining me now, General David Grange in "Grange On Point."

General, let me ask you. This 20,000 extended, this is starting to feel a lot like Pentagon math. Is this a -- tell us what it is.

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, I agree with the decision to extend 20,000 veterans of Iraq in Iraq during this period. Either you had to put more in up front or you had to extend some there that knew the environment.

It's very difficult to deploy from the United States or Germany or elsewhere and hit the street running unless it's a raid that you just go in and kill people. When you're trying to nation build, maybe kill a person here or there, do the other tests that are given, you have to have some street savvy. You have to understand what's going on around you. And it takes a little time. They had no choice, I don't think, but to extend the 20,000 troops.

DOBBS: Perhaps no choice given that this Pentagon, this secretary of defense has resisted any effort on the part of Congress to raise the number of men and women in uniform. How much longer can we ask our young men and women in uniform to meet the global challenges that face us and to pursue U.S. policy without more help?

GRANGE: Well, it's definitely going to have an effect over the years, a cumulative effect of stress on the military. There's barely enough time to get back, reorganize, recruit, train new personnel, integrate them into a unit, train the standard, and deploy for the next mission.

Part of it, it is not just, though, on the administration. I think it is Congress as well. It's easy to say, hey, grow the military or the Army, let's say in this case by 30,000 more troops. But if you don't put the funding behind it, then the military has to strip it out of modernization, out of medical programs, other programs that doesn't work out.

DOBBS: Senator Hagel here this week said it's time to consider the draft, bringing back the draft. What's your reaction?

GRANGE: I don't feel, Lou, the draft will work.

But I do believe in another version of his statements made of some type of national service. The military needs more people in the long run. And so do some the other homeland security and defense issues, with police, with firefighters, with our elderly, with our hospitals. I think it should be some kind of a national effort of service with some choice involved. I doubt if we'll see it this year. But I think in the long term, the United States of America, with its commitments, is going to have to do that.

DOBBS: It's interesting you put it that way, General. What is wrong with the idea that was so much a part of this country's history in the past century of young men and, presumably, women, being eligible for the draft, for the U.S. military, sharing burdens across all walks of American life, so that we share the pain of the decisions that our leaders make and pay particular attention, because we know that that will affect each and every one of us?

GRANGE: Well, that's right on.

The problem in the past, though, it wasn't fair. It should be. If you're going to do it, it should be for men and women. It should be for all peoples of all the different makeup of our society. There should not be loopholes. If it's done right, I'm for it. But if you just do it for the military, you are going to have really too many people. You need to do it for other national requirements as well.

DOBBS: General David Grange, thank you, sir.

GRANGE: My pleasure.

DOBBS: Still ahead, a special advisory panel tells California not to touch electronic touch-screen voting machines in this year's general election. That panel says the machines are simply riddled with errors. We'll have that story for you coming up next here.

Also, "Exporting America." Lawmakers in a number of states are trying to prevent taxpayer-funded jobs from being shipped to cheap overseas labor markets. But they're running into high-level resistance. In some cases, governors are making the right decision for their constituents.

We'll have that story ahead and a great deal more still ahead here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: An advisory panel today recommended California ban 15,000 of its electronic voting machines mailed by Diebold Election Systems. California's secretary of state says computer glitches in the company's machines -- quote -- "jeopardized the outcome of the March 2 presidential primary in California."

And today, protesters gathered outside the annual meeting of parent company Diebold Incorporated in Ohio, the protests voicing their concerns about the overall security of electronic voting, asking why Diebold doesn't provide voters with paper receipts of their electronic votes.

As we've reported here extensively, state governments are exporting, in some cases, state contract work to cheaper foreign labor markets using, of course, taxpayer money. Now three dozen states have legislation pending that would block the export of government work. So far, however, lawmakers are facing some powerful resistance.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): When California welfare recipients call for help their benefits, it is likely to be answered in India or Mexico. Though supporters say cheaper foreign workers save taxpayers money, some lawmakers say, in the long run, U.S. workers are losing. And they want practice stopped.

LIU: We don't know whether or not any of savings -- quote -- "savings," is coming back to the coffers California. What would we know is that, if we had hired to those people here in California, they would be paying taxes to California.

WIAN: One Indian outsourcing contract costs California $400 million. Lawmakers here and in most states don't even know how much taxpayer-funded work is being outsourced overseas. But a growing number are trying to bring the jobs home; 36 state legislatures are working on bills to limit offshoring of state contracts, up from just eight last week.

Florida state Senator Skip Campbell says he became involved after his brother-in-law lost his high-tech job to India. But Campbell's anti-offshoring amendment was defeated largely because of opposition from Florida Governor Jeb Bush.

SKIP CAMPBELL (D), FLORIDA STATE SENATOR: It is a very hot political issue. And his brother is in fact the president of the United States. And there's no doubt that the president is being pressured not to allow any type of legislation either on a statewide level or a national level to have legislation which prohibits offshoring or outsourcing of jobs.

WIAN: Some of that pressure comes from business lobby groups like the Information Technology Association of America.

HARRIS MILLER, PRESIDENT, ITAA: Our study showed that offshore competition added 90,000 more jobs to the U.S. last year, will add 300,000 jobs to the U.S. by the year 2008. We don't need this kind of restrictionist legislation.

WIAN: Four governors most recently in Michigan and Arizona have bypassed their state legislators and acted on their own to block offshoring of state jobs.

(END VIDEOTAPE)

WIAN: Here in California, anti-offshoring proponents are expecting a fierce battle in the state legislature. And, at this point, no one knows where Governor Arnold Schwarzenegger stands on the issue -- Lou.

DOBBS: Do we have any sense of the prospects for the success of this legislation?

WIAN: In California, supporters say they're optimistic. They also say that they have been told by their legal analyzers and legal aides that it will pass constitutional challenges, which, as you've reported, is an issue in this debate, Lou.

DOBBS: Casey, thank you very much -- Casey Wian. Filmmaker Michael Moore is an outspoken advocate of workers rights, the author of the book "Dude, Where's My Country?" Moore also uses a Canadian company to create and maintain his Web sites. The director of the documentaries "Bowling For Columbine" and so forth told CNN he does not pay for the work on his Web site. He says the publisher of his book, Time Warner, actually contracted the work to Montreal-based Plank Multimedia. Plank has designed three Web sites for Moore's various projects. Time Warner, of course, is the parent of this network.

Still ahead here, former National Security Adviser Samuel Berger says the government needs to spend hundreds of millions of dollars more in Iraq. He's our guest next here.

Also, I'll be joined by Senator Evan Bayh of the Armed Services Committee, who says the June 30 transfer of power in Iraq needs to be discussed and considered further. He joins us.

And another pair of highly radioactive nuclear fuel rods are missing in the Northeast. It is the second time this has happened in four years -- that and much more still ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says Iraq is approaching the boiling point.

Samuel Berger testified before the Senate Foreign Relations Committee this week about the rising in Iraq and the rising cost of this war. Berger says Iraq will cost the United States at least another $200 billion over the next three years. Samuel Berger served as national security adviser under President Clinton. He's also a senior foreign policy adviser for Senator Kerry's campaign, joining us tonight from Washington.

Good to have you with us.

SAMUEL BERGER, FORMER NATIONAL SECURITY ADVISER: Good to be here, Lou. Good to see you.

DOBBS: You've said that, given the military and the security situation extant now in Iraq, that we are at the knife's edge. What do you mean by that?

BERGER: Well, I think what is happening now in Iraq, with the violence we've seen in the last two or three weeks, is still an insurrection. But I think we're getting very close to something that could become a much more wide-scale popular uprising.

We have got to restore public order and public security, or the Iraqi people are simply going to increasingly resent our presence. We have not provided that kind of assurance that lawlessness would end, in addition to protecting our own forces. I think that's going to take a larger American presence. It's going to take other people's forces. It's going to take us to change the way we're operating in Iraq.

DOBBS: Let's consider if we may here, Sammy, a larger military force? Are you saying a larger coalition force made of a greater number of international troops or are you talking about even more U.S. troops?

BERGER: I think both. You know, Lou, if we extrapolated from the force we had in Kosovo, we would have 500,000 troops in Iraq. If we extrapolated per capita from Bosnia, we would have 350,000 troops in Iraq. The power doctrine that we learned at the end of Vietnam, which is an overwhelming military power needs to be committed to war, applies equally to keeping -- making the peace. We don't have enough troops there to have a kind of dissuasive authority that stops the looting that stops the lawlessness and protects our own people.

So I think, number one, we going to have to put more of our own people in in the short term. No. 2, I think we're going to have to go to our allies in an ungrudging way and say, what is it going to take to get you guys in this thing. They're going to say it's going to take, a, a U.N. umbrella, and, obviously, we're not going to put our forces under anything other than American command. But with the U.N. blessing and it's going to take, obviously, a transfer authority to an Iraqi government that has a great deal more legitimacy than the current government has.

DOBBS: There have been breathtaking adjustments, if you will, on the part of the coalition provisional authority and the Bush administration over the past year. In August, when the United Nations was in Iraq, the bombing, they left Iraq, and the administration suggested that their participation in this transfer of power was not necessary. De-Baathfication was a priority of the CPA, that has been reversed now although the administration suggests it is a question of implementation rather than actually the substance of the policy itself. Is there some point that the administration and the United States begins to lose some credibility in Iraq simply because of these adaptations to, as the administration is fond of saying new circumstances on the ground?

BERGER: We've been playing catch-up from the beginning. I think -- whether one believed we should invade Iraq or not, I think most Americans agree, we have to stay the course and our exit strategy is a success. But when General Shinseki said it would take hundreds of thousands of American forces to secure the peace once we won the war, he was derided, essentially run out of town on a rail. He was right. The fact is we don't have enough troops there in my judgment, to have a kind of intimidating and also reassuring presence that is going to give Iraqis confidence that we can help provide security. We have to do that, partly with additional American forces, and we have to go to our allies, not grudgingly, not arrogantly, but saying, listen, guys, we all have a stake in Iraq succeeding. We need your help. What will it take to get you there.

DOBBS: The president in this administration deserves some credit, don't you think, for initiating a policy that would bring democratic values, (UNINTELLIGIBLE) values, to its foreign policy in the Middle East. The centerpiece of that, obviously, Iraq. That the case, the French have behaved, I think it can be fairly said, badly on the issue of Iraq. The Germans, with whom there was some considerable attention have been extraordinarily helpful in Afghanistan and have been far more forthcoming.

Is there a point at which this administration and this country can simply say, we're not going to beg here. Your interests are at stake. Why is there not a better consciousness about your responsibilities to world peace in the war against terrorism?

BERGER: Lou, this is the premiere business show. Let me make a business analogy since I'm now in the private sector. If you are in a bad deal, you either get out of it or you bring in partners. If you bring in partners, you won't get 100 cents on the dollar. We're in a bad deal right now in Iraq, it seems to me. We have to bring in partners and make compromises with our partners to bring them in. Do I think the French and the Germans and others and Europeans have shirked responsibility? Absolutely. Do I think that they're going to somehow be held harmless because they didn't participate in the invasion of Iraq's descent into turmoil? Absolutely not.

They have as much stake in the success of Iraq as we do, but we have to go to them and not say, you come in and help share the burdens and risks, but we're going to make the decisions. We have to be prepared to set up some kind of international working group that stands alongside this new Iraqi governing authority. It's going to be very weak at the beginning as a partner and give it some strength and vitality.

DOBBS: Sammy Berger, good to have you here as always. Good talking with you.

BERGER: Good to talk to you, Lou.

DOBBS: Turning now to the subject of tonight's poll. The question, do you believe the U.S. military should significantly reduce its bases around the world, particularly in Europe and Asia? Yes or no. Cast your vote at CNN.com/lou. We'll have the results for you later in the show.

Nuclear officials in Vermont tonight are searching for two missing highly radioactive fuel rods. Inspectors realized two days ago the pencil thin rods about 17 inches in length, at least one of them, was missing from the spent fuel pool at the Vermont Yankee nuclear power plant. Officials say the danger posed by the material and the high security at the plant rule out the possibility of foul play.

(BEGIN VIDEO CLIP)

CURT HEBERT JR., ENTERGY CORPORATION: We're putting a video down in that pool to find out if they are at the bottom of that pool. We're also looking at documentation since 1979 to see exactly what the process has been and where they are, in fact. We will find it. You mentioned, you know, could someone steal them. It's not possible.

(END VIDEO CLIP) DOBBS: The Nuclear Regulatory Commission will soon dispatch a special inspection team to the Vermont Yankee Plant. Two similar fuel rods disappeared from a Connecticut power plant four years ago. They have never been found. The NRC closed that case after the plant paid an almost $300,000 fine.

A federal appellate court tonight allowed the government to proceed with the case against the terrorist suspect Zacarias Moussaoui. The appellate court in Virginia also said prosecutors can present evidence related to the September 11 attacks. Moussaui is the only person charged in this country with being a conspirator in the September 11 attacks.

When we continue, the Senate examines the growing cost of war, the looming June 30 deadline for the transfer of power in Iraq. I'll be joined by Senator Evan Bayh of the Senate armed services committee and a Texas- sized celebration honoring 16,000 of our soldiers arriving home from Iraq. Those stories are next.

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DOBBS: We've been reporting extensively on the hearings on Capitol Hill this week on the transfer of power in Iraq, the rising costs of war. My next guest is a member of the Senate Arms Services Committee which held some of those hearings. Senator Evan Bayh says the June 30 hand over date is arbitrary and should be discussed. Joining us tonight from Capitol Hill. Senator, good to have you here.

SEN. EVAN BAYH, (D) INDIANA : Good to be with you, Lou.

DOBBS: The June 30 deadline, do you think it would be reasonable at this point to consider shifting it?

BAYH: Well, if we reach the conclusion that we can't be successful, it's better to delay it a little bit than to not have it work out the way we'd like.

My major concern, Lou, is this: it's important to set deadlines, otherwise, the Iraqis will never make some of the tough decisions they have to make. It's important that we at least get started on this transition process so that they know that we don't intend to stay there indefinitely. But I'm concerned that this June 30 date has been hyped a little bit, and in fact, it's going to be more symbolic than it is substantive.

And if that's the case, if we've heightened expectations, both among the Iraqis and the American people, that something really significant is taking place, or some transfer of power, if that then doesn't happen, you could have disappointment, disillusionment and ultimately opposition both there and here. And that would not be a good thing for our ultimate success.

DOBBS: Obviously, most worrisome, because it is most dangerous as opposition within Iraq itself, which is already in full presence and we have already experienced the deadliest month of this war. Senator, would it not be, perhaps, an invitation to each greater trouble? To change that deadline and to dash the expectations and, again, put the United States in an extraordinarily bad light by not being powerful enough to implement its own deadlines?

BAYH: Well, it's one of those situations, Lou, where there are risks either way. It may be that we have to go forward with this and make the best of it. My point simply is, we shouldn't raise expectations unnecessarily.

When we say we're transferring sovereignty to this new Iraqi entity, what does it mean? They don't have the ability to provide order in their country, they don't have the ability to pay for their own reconstruction. This is not the result of a free election.

So my major concern is that these individuals, whoever they may be, do they have legitimacy, do they have a following with the Iraqi people,because that, ultimately, is necessary, Lou, for Iraqis to fight and die for their country. It is not enough for Americans to fight and die for their country.

So, look, if we can make a go of this, let's go forward and take the first step, but let's not oversell it, I guess that's the point I'm making. Because July 1, Lou, there's going to be more that's the same in Iraq then more that is changed.

DOBBS: And the well-being of our men and women in uniform within Iraq obviously, we have lost an extraordinary number of young Americans in combat, in Iraq this month. To what degree are you, as a member of the armed forces, committee, Senate Armed Forces Committee, concerned about the U.S. security, that is, security for U.S. forces and the strategy going forward to protect American lives our men and women in uniform?

BAYH: I'm very concerned, Lou. I think that the level of violence that we've seen, it has plateaued, but at a higher level. That is, in my opinion, likely to remain that way until about June 30, if not beyond June the 30th.

So, I am concerned. I'm concerned we haven't had enough troops there. I'm very disappointed in the performance, as pointed out earlier on your show, about the performance of the Iraqi police and armed forces. That was very disappointing, and something we have to focus on like a laser if we're ever going to get this situation right.

Because, as I said, it is not enough we're willing to die for a free Iraq. They have to do be willing to do that.

DOBBS: Senator Evan Bayh, thanks for being here.

BAYH: Thank you.

DOBBS: Taking a look at some of your thoughts.

Judy Su of Seattle, Washington, "it is not only how much is being spent in Iraq, but where it is being spent and who is making exorbitant profits."

Nickels from Locust Grove, Virginia, "the American Armed Forces were given an impossible task, extend an olive leaf while the folks you are trying to win over are desperately trying to kill you. Vietnam politics all over again."

Mack in Illinois writes, "I hope congress will reinstate the military draft so our border patrol can post the signs reading welcome to the U.S.A, we just reinstated the military draft and we need you. You are enrolled now."

On exporting America, Mike from South Charleston, West Virginia, "until Americans get in the habit of leaving it on the lot, on the rack or on the shelf of the great Wal-Mart of China, if it is not made in America, the disastrous balance of trade deficit will continue."

And Thomas in Beavercreek, Ohio, "Why is it OK for U.S. companies to go outside this country for cheap labor, but not OK for U.S. citizens to go outside this country for cheaper prescription drugs?"

Frank Thompson in Anchorage, Alaska, "very little is being mentioned concerning outsourcing American taxpayers with each job, since foreign workers don't pay U.S. taxes. Maybe our leaders will figure this out when they run out of money."

And Mark in Lebanon, Pennsylvania, "3 million manufacturing jobs lost, 300,000 fast food jobs gained, looks like the economy is heading in the right direction to me."

We love hearing from you. Send you are your thoughts at loudobbs@cnn.com.

Still ahead here, a major policy shift in Iraq. I'll be talking to a veteran of political developments programs in war-torn regions.

And in Ft. Hood, Texas today, nothing less than a hero's welcome would do for the troops who captured Saddam Hussein. Welcome home. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: As we've reported, a major reversal today from the Bush administration in Iraq. The coalition says it may offer former members of Saddam Hussein's Ba'ath party jobs in the new Iraqi government security forces as well.

Joining me now is Rick Barton. He's helped to start political development programs in more than 20 war-torn regions. He did that while working for the U.S. Agency for International Development. Now a senior adviser at the Center for Strategic and International Studies in Washington. Good to have you with us.

RICK BARTON, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: Thank you. Nice to be here.

DOBBS: This decision to suddenly bring in some members of the Ba'ath party is a reversal from the priorities, at least it appears so, that Paul Bremer put in place last year. What's your reaction?

BARTON: Well, it was probably a bad decision at the beginning, because if you have proclamations without plans and you cannot carry through with them in these volatile places, you get yourself into a lot of trouble. And when you had a Ba'ath party with 2.5 million members out of 25 million people in the country and you get rid of 120,000 civil servants all at once, you're going to make a lot of mistakes. And they're trying to make the correction right now.

DOBBS: Those corrections and adaptations, responding to failed policies or policies that aren't working as well, anyone deserves credit for that, but the June 30 handover has a lot of people on Capital Hill concerned and nervous. What's your thought on that?

BARTON: Well, one of the reasons they've had to reverse this policy is that they have a shortage of talent. They're just not meeting the targets that they wanted to meet. You've seen it in the police. You're seeing it in the military. But it's also happening in the civilian side. And, clearly, they're grabbing back, trying to find some talent they can plug into these jobs.

The June 30 deadline is another one of these arbitrary choices that was made, probably -- on paper it sounds good, but these are chaotic places, and when you get into these arbitrary choices you're going to pay the price.

DOBBS: Your best assessment of where the Bush administration is now turning to the United Nations for the transition to internationalize now the Iraqi situation. Give us your best forecast for what you expect to happen from here through.

BARTON: Well, what we're seeing is that the policies have been, really, a day late, and, therefore, a dollar long. When you make a mistake, there's only a few ways you can get out of it. One is to spend money. We've seen a lot of money being thrown at the problem. But it is not sticking right now because it's not reaching the Iraqis. So I think we're in for a muddled period. Even the June 30 deadline, the details are very much up for grabs. At the very simplest level we don't know who is going to be in charge. And that kind of complication means there's going to be confusion in Iraq. Confusion means you're not building the confidence or the trust. Fundamentally, those are the two pieces the Iraqi people need to move ahead.

DOBBS: If it were only a lack of confidence and trust, it's not out right to violence and aggression as more American troops are being killed. Rick, the role of the United Nations here. They have never demonstrated great success in any part of the world and the mission that is apparently being attempted to be assumed by them. What's your best judgment as to what we can expect from the U.N. role in Iraq?

BARTON: I think the U.N. has been very honest so far in what they are saying they can do. They recognize they don't have huge standby capacity. Their employees are not eager to put their lives at risk in this kind of setting, and they realize many more probably will die, even in performing something as straightforward as an election. So they have been reluctant to move ahead. But fundamentally, what we have here is very low capacity anywhere in the world. So it's a race between tortoises rather than thinking that one the U.S. Government or the other the U.N. is a hare in this race.

DOBBS: Rick, thank you very much for being with us. Rick Barton.

BARTON: Thank you, my pleasure.

DOBBS: Let's turn to some of the business of the day and business in this case means markets. And today, a big rally on Wall Street where the Dow jumped almost 144 point itself, the Nasdaq up 37, the S&P up almost 16.

Christine Romans is here to tell us about these higher prices.

CHRISTINE ROMAN, CNN CORRESPONDENT: What petrified Wall Street didn't bother anyone today. It was the best day in a month on monster (ph) volume for stock. A couple great earnings reports there, and three shares rose for each group that fall. Just about every grouped rallied. The message on the economy was mixed. More people lined up for benefits than economist had expect. Baxter International will slash 4,000 jobs. And nail biting in Gateway as they report hefty job cuts there could be imminent. Still, Treasury Secretary, John Snow promised economy would create, " A lot more job,s" in the coming months. And he also downplayed the impact of record budget deficit. Lou, he said it is too large but it is understandable and manageable and under the president's plans, the deficit will be cut in half over five years. And then it would be low by historical standards.

DOBBS: It would be low by historical standards, not by half, actually it wouldn't. Maybe recent standards. The fact is, it's remarkable to hear a man like John Snow as Treasury Secretary to say this huge deficit is understandable and manageable. When it was a Democratic budget, which was considerably smaller, they were not understandable, they weren't manageable and had to be removed immediately. What's the difference here?

ROMANS: I don't know. I guess, the difference might be politics, Lou.

DOBBS: I think that's probably as good an answer as there, Christine. Thank you very much as always.

Still ahead, the results of the polls and a happy homecoming in Texas. Cheers and tears greeting the soldiers who captured Saddam Hussein. 16,000 of our men and women in uniform back home. We'll continue in a moment. Stay with us.

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DOBBS: Results now of "Tonight's Poll." Seventy-eight percent of you said the U.S. military should significantly reduce our bases in Europe and Asia, and, obviously, 22 percent say not.

And turning to a joyful homecoming for 16,000 troops of the Army's 4th Infantry Division. They arrived home after more than a year of service in Iraq. Tens of thousands of friends and family turning out to welcome them home.

(BEGIN VIDEOTAPE)

(SINGING "STAR SPANGLED BANNER")

UNIDENTIFIED MALE: 79 soldiers paid the ultimate price for the freedom of Iraq. Their sacrifice was not in vain and will not be forgotten.

UNIDENTIFIED FEMALE: Welcome home.

UNIDENTIFIED FEMALE: We still have troops over there. So, my heart goes out to the ones just starting their one-year deployment.

(APPLAUSE)

UNIDENTIFIED MALE: It was worth it. We got our job done. We all did good. But it's all time for us to go home.

(END VIDEO CLIP)

DOBBS: Welcome home, 4th I.D., Fort Hood, Texas.

Well, that is the broadcast for tonight. We thank you for being with us. Please join us tomorrow, we'll have more on our special continuing series of special reports. "Exporting American," what American company has learned an important and costly lesson, but perhaps it's a beginning of a trend. We will have their story about jobs coming a back to this country. And former coalition advisor on Iraq, Michael Ruben, joins us to talk about the transfer of power, the rising violence in Iraq, and the strategy of the coalition in Iraq.

All of that tomorrow, we hope you'll please join us. Thanks for being here tonight, good night from New York.

"ANDERSON COOPER 360" is next.

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