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Lou Dobbs Tonight

Nearly 100 People Killed in Iraq; Supreme Court Says Energy Task Force Documents Do Not Have To Be Released

Aired June 24, 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.


KITTY PILGRIM, GUEST HOST: Tonight, carnage in Iraq. One week before the United States hands over power to the Iraqis, insurgents kill nearly 100 people, including three American troops.
(BEGIN VIDEO CLIP)

IYAD ALLAWI, IRAQI PRIME MINISTER: UNIDENTIFIED MALE: The acts were cowardly acts committed by criminals, by hypocrites, infidels who are trying to inflict damage on the Iraqi people.

(END VIDEO CLIP)

PILGRIM: I will talk about the risk of a civil war in Iraq with Professor Ahmed Hashim at the U.S. Naval War College and military analyst General David Grange.

A major victory for the Bush administration and Vice President Dick Cheney. The Supreme Court rules the White House does not have to reveal secret information about the vice president's energy task force.

Hundreds of thousands of American jobs have been shipped overseas. Exporting America is now the subject of a new film. Producer Greg Spotts is my guest.

And NASA announces a dramatic shake-up to meet the challenges of space exploration in the 21st Century.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's the kind of stuff we do. It's what has made this agency great.

(END VIDEO CLIP)

PILGRIM: Tonight, NASA's New Mission, a special report.

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, June 24. Here now an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

Insurgents today killed nearly 100 people in one of the worst days of violence in Iraq since the fall of Saddam Hussein. Three American soldiers are among the dead. The attacks come just six days before the United States transfers sovereignty is the new Iraqi government. The insurgents targeted police and government buildings in the Sunni triangle.

Brent Sadler reports from Baghdad.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN BEIRUT BUREAU CHIEF (voice-over): Insurgents launched a wave of attacks on five major cities, including Baghdad. The onslaught targeted police stations in Mosul to the north of the capital, as well as Ba'qubah to the northeast and Ramadi in the west, at the heart of the so-called Sunni triangle, a persistent hotbed of anti-coalition violence. Mosul was hit by a series of large explosions, claiming the lives of dozens of Iraqi victims. One U.S. soldier also died in the Mosul blasts.

In Ba'qubah, scene of some of the heaviest clashes with U.S. forces, assailants launched attacks on police and government buildings, inflicting more loss of life, including two American soldiers from the 1st Infantry Division. Gunfire rattled across the city, as the authorities warned people to stay indoors, imposing a dusk-to-dawn curfew. Gunmen claiming loyalty to wanted Jordanian militant Abu Masab al-Zarqawi appeared on the streets of Ba'qubah for what appears to be the first time in street combat.

In Ramadi, the tactics were similar, insurgents directing volleys of rocket-propelled grenades and machine-gun fire at more police targets. U.S. military officials say the series of attacks demonstrated a level of coordination, but they were at pains to play down the extent of damage done, claiming the attacks soon ran out of steam.

In further hostilities, U.S. forces around Fallujah ordered air strikes against insurgent positions after more clashes with U.S. Marines. A U.S. Cobra helicopter gunship was forced down by small- arms fire during battles, but the crew reportedly escaped unhurt. Iraqis suffered the most casualties, just days before the hand-over of sovereignty to an interim government.

Prime Minister Iyad Allawi denounced the attacks as the work of desperate criminals who've lost the battle to prevent a transfer of power, but he predicted there may be worse to come.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: There were also terrorist attacks in Turkey today just before a visit by President Bush. One bomb exploded in front of a hotel in Ankara where President Bush will stay this weekend. Three people were wounded. The worst attack was in Istanbul where a bomb exploded on a bus.

Alphonso Van Marsh reports from Turkey.

(BEGIN VIDEOTAPE)

ALPHONSO VAN MARSH, CNN CORRESPONDENT (voice-over): An explosion rips through a bus in a crowded neighborhood in Istanbul. Officials say at least four people were killed, including the person carrying the bomb, and more than a dozen people injured.

President George W. Bush will still attend as planned and that he'll also visit the capital, Ankara, for talks with Turkey's president and prime minister this weekend.

Hours before the Istanbul explosion, a much smaller device went off outside the Ankara hotel where the U.S. president is expected to stay. Police say they were tipped off to a suspicious package near a parking garage next to the hotel.

Police also say that, as they examined the package, the bomb went off, injuring one officer and at least two other people.

(on camera): The blast outside the Ankara Hilton and the much larger explosion in Istanbul may not be linked, but, with just days before the NATO summit in Turkey, the explosions will be putting Turkish officials on edge here.

Alphonso Van Marsh, CNN, Ankara.

(END VIDEOTAPE)

PILGRIM: Iran today released eight British Marines three days after they were captured. The Marines were handed over to British diplomats in Tehran. The troops are likely to return to their base in Iraq. The Marines were arrested after they strayed into Iranian waters.

In Washington today, President Bush met with the special prosecutor investigating an alleged White House leak. This is the first time the president has been questioned in a criminal probe involving his administration. Investigators want to know whether someone in the administration leaked the identity of an undercover CIA agent.

White House Correspondent Dana Bash has the report -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, the president met with that special prosecutor for one hour and 10 minutes, and it took place in the Oval Office. Mr. Bush had nobody by his side from the White House. He simply had a personal attorney, Jim Sharp, whom he hired especially for this, and the president was not under oath during the session.

Now the White House will not go into details of it, except to say that he did meet with a special prosecutor, who is a U.S. Attorney, Patrick Fitzgerald, who has been investigating this for some months and that he did so simply because he asked his staff to cooperate and answer all the questions that the prosecutors want answered about who leaked the covert name of a CIA agent. And at issue here is a column written by Robert Novak saying that -- revealing essentially the name of Ambassador Joe Wilson's wife, who was a CIA agent, and Wilson had said that that was done, he believed, by the White House for political retaliation because he had come out and questioned -- publicly questioned -- a claim that the president had made about prewar claims about Iraq.

Essentially, he had said that Saddam Hussein tried to buy uranium from Africa, and the White House essentially at the end had to disavow that. Now this session by the president comes just about a month after a similar session by the vice president.

He also was not questioned under oath, but several senior White House aides have been. They have been before the grand jury, including just this past Friday, White House Counsel Alberto Gonzales.

Now, Kitty, it's important to note that most legal experts don't think that the president is actually the target of this probe. Simply, he is somebody that they are questioning to try to get more information, but they also do think that perhaps because they have reached this level in their questioning that this probe could be coming to an end soon -- Kitty.

PILGRIM: All right. Thanks very much.

Dana Bash in Washington.

Another development involving the White House today: The Supreme Court declined to force the release of papers linked to Vice President Cheney's energy task force. A lawsuit claims the vice president's secret meetings might have unfairly influenced U.S. energy policy.

Bob Franken has the report.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): It was a victory for the vice president and the administration, but a temporary one.

By a 7-2 margin, the court decided, as Justice Anthony Kennedy wrote, "Special considerations applicable to the president and vice president" meant that Cheney did not yet have to publicly release documents accumulated by his energy task force, documents critics charge would show policy was secretly influenced by corporate interests.

The justices bought the vice president's arguments.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: We're setting a terrible precedent. We're saying the vice president cannot have confidential meetings.

FRANKEN: Justice Kennedy described it as a "paramount necessity of protecting the executive branch from vexatious litigation." JOHN ASHCROFT, ATTORNEY GENERAL: It was a case in which there's substantial agreement on the court. It's a 7-2 victory in this respect.

FRANKEN: Lower courts can still ultimately order the documents released under an open government law, but not for a while.

DAVID BOOKBINDER, SIERRA CLUB SENIOR ATTORNEY: In the Bush administration's eyes, keeping things secret as long as possible is a victory, and so they will be pleased by the court's decision because it does delay the ultimate day of reckoning.

FRANKEN: Justice Antonin Scalia had added to the controversy by refusing to remove himself after disclosures he had accepted an invitation to go duck hunting with the vice president. He ruled in favor of Cheney.

(END VIDEOTAPE)

FRANKEN: A ruling that means the politically charged documents will probably not see the light of day until at least after the election -- Kitty.

PILGRIM: Bob Franken.

Thanks very much.

That brings us to the subject of tonight's poll. Should the Supreme Court have forced the White House to release papers tied to Vice President Cheney's secret energy task force? Yes or no? Cast your vote at cnn.com/lou, and we will bring you the results later in the broadcast.

Still ahead tonight, one of the worst days of violence in months in Iraq. One expert on the Iraqi insurgency says today's attacks put the hand-over of power in danger. Professor Ahmed Hashim is my guest next.

Plus, a new poll tonight shows the race for the White House is closer than ever. We'll have the details on that.

And then, a new documentary captures the devastation of losing a job to overseas labor. We'll report on the film "American Jobs." Director and producer Greg Spotts will be our guest.

That and much more still head here tonight.

(COMMERCIAL BREAK)

PILGRIM: Today's insurgent attacks in Iraq were clearly designed to create chaos ahead of the transfer of power to the Iraqs next week. My guest says U.S. policy in Iraq is not far from disaster. Ahmed Hashim is a professor at the U.S. Naval War College in Rhode Island, and he joins me from Providence.

And thanks very much for joining us, sir. PROF. AHMED HASHIM, U.S. NAVAL WAR COLLEGE: You're welcome, ma'am. Good evening.

PILGRIM: Good evening. What do you mean by not far from disaster?

HASHIM: Well, I think we don't have a complete -- a good handle on the situation in Iraq. Tactically, we've been doing very well, but the strategic and political levels, we have been doing pretty badly, and, in a counterinsurgency campaign, the most important aspects are to do well in the political and strategic and operational levels, but we've, I think, headed towards a disastrous situation.

PILGRIM: Not far from disaster. We are today not far from disaster, a quote from T.E. Lawrence, which you give voice to, fear, but today's attacks -- does that put the June 30 hand-over deadline in jeopardy?

HASHIM: No. The hand-over will continue as planned, but, as long as the interim government does not have effective security forces, does not have a plan for restoring security, stability and a plan for reconstruction of the country, it will not have legitimacy, and the center of gravity in a counterinsurgency campaign are the people. The people want security, stability and law and order in Iraq, and they're not seeing any of that.

PILGRIM: You have vast experience in the region. You have just returned from Iraq. What, in your opinion, is the size of the insurgency and who are we facing here?

HASHIM: I think the insurgency has mushroomed. We are facing a large group of Islamists, nationalists, foreign jihadis, former regime elements, and people sympathetic to them who have given up on the Coalition Provisional Authority and do not feel that the interim government will succeed in restoring stability, law and order. So a lot of people are gravitating to the insurgents who seem to have provided a kind of rough-and-ready justice in places that they seem to be in control of.

PILGRIM: You seem to paint a very dire picture, and you point to a level of coordination in your comments with us. Do you these think these attacks are very coordinated or scattered?

HASHIM: Well, it really -- it's not centralized or hierarchical control, but the fact that it's not does not mean there is no element of organization in decentralized networks, as this insurgency is. Now it stretches the imagination to think that a large number of insurgents got up today on June 24 and said we are going to attack separately.

It is not coincidence, there has been some form of coordination, and people move freely in Iraq. It's not only a free fire zone for everybody. People do move freely, and there is coordination between various insurgent groups.

Even if some of these groups are not ideologically aligned with one another, there has been growth in the tactical coordination between, say, former regime elements and Islamists.

PILGRIM: Do you think, very quickly, that we need more troops in Iraq at this point to maintain control?

HASHIM: Troops will help. The security situation will -- will be the United States' burden to bear for quite a while, but we mustn't fall into the trap and believe that the answer to the problem is troops and yet more troops.

We need a plan for the reconstruction as well as the restoration of security, law and order in Iraq, and we need to get the Iraqi people on board as well as rebuild the Iraqi security forces. More American troops would, I think, help, but it really isn't the panacea that a lot of people think it is.

Insurgencies are defeated by a coordinated political socioeconomic information operations and psychological campaign, as well as military operations. It cannot be one or the other. All of them have to proceed in parallel with one another, not in sequence.

PILGRIM: Thanks very much for your analysis tonight.

Professor Ahmed Hashim.

Thank you.

HASHIM: You're welcome, ma'am.

PILGRIM: Still ahead here tonight, Grange on Point on Iraq. Coordinated bombings kill dozens of people less than a week before the planned transfer of power, and General David Grange will join us.

Plus, Broken Borders. A high-tech new program is underway to stop illegal aliens from crossing our borders. We'll have a special report.

And conservatives question whether TV ads for a new film blasting the president could unfairly impact voters. That and much more still ahead here tonight.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: In tonight's Campaign Journal, the focus is on technology. President Bush talked about innovation today during a demonstration of new technology at the Department of Commerce. He urged Congress to ban any taxes on Internet access, and President Bush also said the economy is strong right now, but said the government faces the challenge of securing the nation's economic future.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The fundamental question is: What do we need to do to make sure we're not only strong today and tomorrow, but for the decades to come?

(END VIDEO CLIP)

PILGRIM: In San Jose, California, Senator John Kerry today talked about creating high-tech jobs in the United States. Senator Kerry said the best way to keep jobs in America is to invest in America.

(BEGIN VIDEO CLIP)

SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL CANDIDATE: There is no reason in the world, no common sense, no economic rationale that American workers should actually be forced to use their hard-earned dollars in order to reward a company that makes the decision to go overseas.

(END VIDEO CLIP)

PILGRIM: Senator Kerry is speaking right now at the American Federation of State, County and Municipal Employees, the 36th international convention in Anaheim.

A new CNN/"USA Today"/Gallup poll tonight shows most Americans believe sending troops to Iraq was a mistake.

Our CNN Senior Political Analyst Bill Schneider has been looking at the new numbers. He joins us now from Washington.

Bill, a big drop in support for the war?

BILL SCHNEIDER, CNN SENIOR POLITICAL CORRESPONDENT: That's true. And a big turnaround. And this could be a big turning point because when this happened in -- after the tet offensive in 1968 during the Vietnam War, it was the real turning point. It never turned back. Americans concluded that war was a mistake. They turned against it.

Well, this has happened for the first time now. A majority of Americans now say that for the United States to send troops into Iraq was a mistake. As you can see, in early June, it was 58 percent saying it was not a mistake. Now 54 percent say it was a mistake.

What happened over the last few weeks? Well, first of all, the poll shows most Americans feel that the war in Iraq has not made the U.S. safer from terrorism, and, second of all, we had that 9/11 commission staff report that said no credible evidence that Iraq and al Qaeda cooperated on attacks against the United States.

This poll shows that, for the first time, most Americans now believe that Saddam Hussein was not personally involved in those attacks.

PILGRIM: Bill, let's go to another topic. Tell us what Americans are saying about the economy these days.

SCHNEIDER: Well, if that was bad news on Iraq for President Bush, there's some good news on the economy. The figures have been good, and Americans are giving him higher ratings now on the economy.

At the beginning of June, the ratings were negative. Fifty-eight percent said he was not doing well. Forty-one percent said he was -- they approved of the way he was handling the economy. That now -- that number now is up a little bit to 47 percent.

This is the first clear evidence that we have that the improving economic figures are beginning to sink in and Americans are getting a tentatively more positive view of the economy. Still not a majority, but there's still four-and-a-half months to go to the election.

PILGRIM: And, Bill, where does this leave the race for the White House?

SCHNEIDER: Absolutely tied. Iraq is down, the economy is up, so where is the race? Take a look. Bush, 49 percent. Kerry, 48 percent. Throw Ralph Nader in, and it's still virtually a tie. Bush, 1 point ahead.

This is interesting because what it shows is that the ground is shifting in this campaign. Iraq is becoming a problem for President Bush, while the economy may not turn out to have a big payoff for the Democrats.

What it says is it's just a mirror image of when his father ran for reelection in 1992, and the Democrats grabbed the economy issue. Remember "the economy, stupid"? Well, that may not work for the Democrats this time, and, in that campaign, the Persian Gulf War, which the United States had clearly won, was a long distant memory, but Iraq is right at the center of this campaign -- Kitty.

PILGRIM: Interesting stuff.

Bill Schneider.

Thanks, Bill.

SCHNEIDER: Sure.

PILGRIM: While the new polls reflect growing public anxiety about American policy in Iraq, the U.S. military is making contingency plans to send more troops to Iraq if the violence escalates, and Pentagon Correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): CNN has learned that, if the violence grows worse, U.S. military planners are preparing for the possibility of sending in as many as 15,000 additional ground troops, three brigades, on an emergency basis.

Separately, at his Senate confirmation hearing, General George Casey, who will soon take over as head of coalition forces, confirmed only that a plan is in the works because of the concerns the insurgency may gain strength. GEN. GEORGE CASEY, JR., NOMINEE, MULTINATIONAL IRAQ FORCE COMMANDER: CENTCOM is doing some contingency planning for increased levels of violence.

STARR: Officials now readily acknowledge the security situation is likely to be very bad for some time. Attacks are expected well past the June 30 date for returning sovereignty to Iraqis and perhaps into next year when elections will be scheduled. The continuing high levels of violence now a major concern for Congress and the military in dealing with Iraq.

CASEY: It is not how I envisioned it to be, Senator.

SEN. JOHN MCCAIN (D), ARIZONA: What do you think has gone wrong?

CASEY: I think the insurgency is much stronger than I certainly would have anticipated.

STARR: As the next commander, Casey says his priorities are protecting a U.N. mission that will help with elections, providing security in the violent Sunni triangle, getting better intelligence from Iraqis to fight the insurgency. But getting Iraqis to provide for their own security still remains a challenge.

General Casey says, so far, Iraqi forces are not capable of protecting their own country, opening the door to the continuing possibility U.S. troops will remain in Iraq for months to come.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PILGRIM: Joining me now is General David Grange in Grange on Point.

Thank you for joining us, General. Do you believe the Iraqi military is up to defending Iraq against insurgents?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, not at all at this time. I mean, I think they have some well-trained units, but it's a fledgling army, a new civil defense force, a police force, and it's going to take some time.

I mean, the United States and the rest of the coalition cannot defend all the Iraqis right now themselves. It doesn't take a lot of insurgents to disrupt, to terrorize, try to make an area unstable, which is happening right now. This is a strategy by the enemy. It's hard to contain.

But, when the going gets tough, someone's got to hold the line, and so it's not the time to back down, but to continue to provide the security the best that you can and surge, if necessary.

PILGRIM: A difficult day in Iraq, 100 dead, hundreds wounded, and do you think that the U.S. troops should be doing more at this point? Should they be taking on more? GRANGE: Well, you know, the focus is going to change, I think, the priority, to training the Iraqi military and the other security forces, which is appropriate, but don't think at all that the U.S. military or any of the coalition forces are not prepared or will not conduct offensive operations especially against intelligence cells, Zarqawi or the rest of them, when that becomes apparent. I mean, offensive operations will continue.

PILGRIM: Will we be able to train 200,000 Iraqis -- that's the number that's tossed about -- and do offensive operations? Are we overstretched at this point?

GRANGE: Well, I think that the military may be overstretched because of all the commitment elsewhere. You cannot look at Iraq as an entity by itself. I mean, the whole region's involved in counterterrorist operations and small insurgencies. There's still a big task from Afghanistan and other places in the region, as well as other probable or possible, at least, combat operations in the rest of the world.

But I think that the coalition is doing a great job -- I really do -- on this, but if surge is needed to apply additional force, the time is not later but now during the critical changeover periods.

PILGRIM: Let me ask you about the insurgents. A lot of emphasis put on al-Zarqawi. Do you think that that's misplaced? Do you think it's bigger than that?

GRANGE: It's bigger than that. I mean, he is a dirty rat, he is a key enemy figure that has to be taken down, but there's other insurgent organizations involved. They have a loose confederation, I believe.

The common enemy is us. The common enemy is the Iraqi people that have committed themselves to a new type of government, a way of life, and they don't want that, and so they smell blood right now because they look at polls. They hear the polls announced tonight.

Now I hope that they do something very similar to the tet in Vietnam where they come out, they group, they become visible to the coalition forces, where they will be destroyed. You know, Tet was a success. It was reported as a failure. But in fact it destroyed the whole Viet Cong insurgency and the North had to send massive regular forces down South to take on the U.S. after that Tet offensive.

PILGRIM: General Grange, we've been talking about the military options. We just talked to Professor Ahmed Hashim at the U.S. Naval War College. He said troops alone won't do it. Do you think there's a question of tone or approach that should be shifted?

GRANGE: Troops alone can never do any fight. The military never operates by itself. First of all, a political process even deploys the military. It's not their decision.

But yes the combination of means of power is diplomacy, it's the military, it's economic, it's the transition of this democratic governance. And as he stated, it's an information operations campaign that's probably more powerful than any weapon.

And I think in the information campaign, that part, those operations that are critical, that influence people, that give people perceptions, I think we're losing on that front. And that's where we have to put a big surge to get that turned around.

PILGRIM: All right, thanks very much, General David Grange.

GRANGE: Thank you.

PILGRIM: That brings us to tonight's thought. "America was not built on fear, America was built on courage and imagination and unbeatable determination to do the job at hand." And that from the 33rd president of the United States, Harry Truman.

Well here's what many of you thought about the Bush administration offering aid to North Korea.

Fran Skinner wrote, "The question you posed today seems to be asking should we negotiate with a terrorist country that Bush called evil. I thought we did not do this."

Marcia from Rhode Island writes, "Why is it then when we reach an impasse with North Korea we offer them sweet deals, yet when we reach an impasse with Saddam Hussein, we invaded Iraq?"

T.M. Trissel of Reno, Nevada says, "I do not believe that we should give North Korea anything for the dismantling of their nuclear program. The either dismantle it or suffer the consequences. No other alternative should be allowed."

John from California says, "So what happens when another country that is not our friend decides to start nuclear research and say they won't stop unless the U.S. gives them oil or money or technology or lifts sanctions? It's like giving a thief a reward if he turns in what he stole."

We absolutely love hearing from you. Send us an e-mail at loudobbs@cnn.com.

Tonight, in "Broken Borders," an exclusive look at a new Department of Homeland Security experiment. The U.S. Border Patrol is testing unmanned aerial vehicles to patrol our southern borders with Mexico. Homeland security correspondent Jeanne Meserve joins us now from Sierra Vista, Arizona -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Kitty is Hermes 450. This is an Israeli unmanned aerial vehicle. This UAV and its twin are being used by the U.S. Customs and Border Protection to determine whether these UAVs have an important part to play in policing the nation's borders.

(BEGIN VIDEO CLIP)

MICHAEL WIMBERLY, U.S. BORDER PATROL: I'm optimistic that it can, personally with my knowledge and what I've learned about UAVs in the last year, I think it can. Right now, it is costly. As with any technology, I believe those costs will start coming down the more that they're developed, the more that they're used. It remains to be seen, again, exactly what it is they can do for us.

(END VIDEO CLIP)

MESERVE: Now, these UAVs can stay in the air for 18-20 hours at a stretch sending back realtime images from their sensors. At the altitudes they fly, they're virtually invisible and inaudible making them very effective as surveillance tools for illegal activity.

There's also belief that they may bring efficiency to the system. Right now if a sensor goes off on the ground, there there's a massive response to that by the Border Patrol. What they're thinking is that the UAVs will be able to go in quickly and then do an assessment from the air and determine if any response at all is necessary. And if one is, how large it should be.

There are, however, some questions from some quarters about the reliability of the UAVs.

(BEGIN VIDEO CLIP)

CHRISTOPHER BOLKOM, CONGRESSIONAL RESEARCH SERVICE: I think that the reliability and safety is one of the primary concerns, and one of the wrinkles that needs to be ironed out. UAVs in the military application tend to crash about 100 times more often than manned airplanes.

(END VIDEO CLIP)

MESERVE: We are told by people here that this particular UAV, which already used by the Israelis to patrol its borders, that does in fact have a very good safety record. There are many hurdles to overcome. Many things still to be investigated. Nobody with Customs and Border Protection believes this is a silver bullet, but there is hope that this could be another tool in the arsenal against illegal immigration.

Kitty, back to you.

PILGRIM: Fascinating. Jeanne Meserve, thank you.

Coming up, the exporting of American jobs is captured on film for the first time. Documentary director Greg Spotts will be our guest.

Then, a risky mission in space ends early tonight. We'll have the latest from the International Space Station.

And new directions for the American Space Program. We'll here details from the head of NASA.

(COMMERCIAL BREAK)

PILGRIM: Michael Moore's new movie, "Fahrenheit 9/11," is stirring up new controversy tonight. According to the director, record numbers of people are going to see the movie, but the film may face some advertising trouble later this summer. The conservative advocacy group called Citizens United filed a formal complaint with the Federal Election Commission against the film's distributor, Lion's Gate Entertainment.

Now, the complaint says any advertising for the film after July 31 will break the law since it would contain images and sounds of President Bush within 30 days of the Republican National Convention. The FEC says it will review the claim's legal merit.

Another documentary filmmaker has directed and produced the first feature film about the exporting of American jobs to cheap foreign labor markets. The film is called "American Jobs." It will be released on DVD appropriately enough on Labor Day. And Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNNfn CORRESPONDENT (voice-over): Thirty-six- year-old Gregory Spotts is a former television producer who came up with the idea for his film "American Jobs" after watching his friends lose their jobs.

GREG SPOTTS, "AMERICAN JOBS": I wanted to find out if indeed the sort of ups and downs of the business cycle were masking more permanent and important changes taking place.

SYLVESTER: It's a homegrown project. Spotts' editing on his laptop computer and spending $40,000 from his savings. He also shot most of the interviews himself, using a $3,000 camera, as he traveled to more than 15 towns in eight states. From textile employees who used to work at the now shuttered Pillowtex plant in Kannapolis, North Carolina to Boeing workers in Seattle, Washington to high-tech employees in Orlando, Florida.

He heard similar stories of heartache and fear as jobs moved overseas.

CHARLES CRAFT, BOEING MACHINIST: They're going to mothball the area, they're just going to shut four machines down. The other four go to Turkey.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) I worked in the mill for ten years. It would have been ten years this August.

SPOTTS: I met people who basically go from social service provider to church group, basically begging to get their next dose of thyroid medicine that they need to stay alive. And people who are at risk of losing their homes, losing their cars.

SYLVESTER: Spotts also captures the ripple effect on a community when anchor tenant like Pillowtex closes down.

His goal in making the movie was not to solve the problem, but to start a dialogue. SPOTTS: A lot of these changes have been made very quietly, they've been designed to benefit a rather narrow set of interests that are mostly multinational corporations and their investors. And we haven't really talked about how that's going to affect the average person, how that's going affect the middle class.

(END VIDEOTAPE)

SYLVESTER: The film will be available in September on DVD. Now Spotts is also planning a national tour to show his film in non- traditional venues including union halls and universities -- Kitty.

PILGRIM: Thanks, Lisa.

Joining us is the man behind the first film on outsourcing, film maker Greg Spotts joins us. And thanks very much for joining us, Greg.

SPOTTS: Thank you for having me, kitty.

PILGRIM: We can see that people gave you amazing access, they seem very candid.

How hard was it to gain access and have people open up to you?

SPOTTS: It really wasn't that hard. It involved a lot of research, but sometimes, you know, I would find a social service center, like in Kannapolis where the pillow text workers were getting help from the government. And they put up a flier, and people started calling me up saying they would like to tell me their story. And people invited me into their homes, you know, serve my some iced tea, and we would set up a couple lights, and they'd tell me some pretty personal stuff even though they had never met me before.

PILGRIM: You know, a lot of economists say it's really not outsourcing, it's productivity that has caused this dislocation in the economy and that's the kind of language they use. It seems clinical compared to what we have just seen.

What do you think of that theory?

SPOTTS: That's a good point. Actually technological gains in product activity drive the ability of multinational corporations to use lower-cost labor. Here's an example. I interviewed guy named Charles Craft (ph) who's a machinist in Seattle for Boeing. He's a journeyman, which is the top rating for machinist, meaning he can make almost any part in a Boeing airliner. And gradually they've developed computerized machine tools that make the part themselves. And so once you have that, then the operator job becomes deskilled and now you can take that job and move it to Turkey and Pakistan. So, he's watching his work site gradually get moth-balled as these large machines get moved to lower waged countries.

PILGRIM: Where do the people you talk to lay the blame?

I'm sure there's a variety of places. But are they -- do they understand what's happening in the economy?

Did they explain it to you or did you explain it to them?

SPOTTS: You know, we kind of had a dialogue about it. I learned some things from them. I mean, when you're involved in it yourself, sometimes you have a more intuitive understanding than somebody who's in the ivory tower looking at it, you know, from a macroeconomics perspective. So people had a pretty good sense of what was going on, but you know, the thing I'm trying to -- the point I'm trying to really lay out is, you know, we never really had a national conversation about these changes that we're making, and now we're seeing the effects. We don't have a plan necessarily on how to stay being a high-wage nation, and we're going to need that pretty soon.

PILGRIM: You put a lot of time and energy into this. It comes out on DVD on Labor Day.

What would you like to do with it now?

SPOTTS: What I would really like to do is to start a more honest and thoughtful conversation than what we've had in the past. It can be very frustrating when anybody expresses a view different than the sort of dominant free-trade view. They're derided as backward or protectionist, but in fact, you know, we're looking at something different than anything the U.S. has ever experienced. If we want to stay a high-wage nation. If we want to stay a country where our consumption is really a driver of global prosperity, we're going to have to figure out a strategy on how to do that. Because there's a lot of money to be made in manufacturing in low wage and selling back into the high-wage country.

PILGRIM: All right. Thanks very much for joining us to talk about it, and good luck with your project. Greg Spotts. Thanks Greg.

SPOTTS: Thank you for having me.

PILGRIM: On a musical topic, 56 pieces of musical history are being auctioned off tonight in New York. Eric Clapton donated a selection of guitars that he calls the cream of his collection, and the proceeds of the auction held at Christie's will go to the Crossroads Center for Drug Treatment in Antigua. Now, Clapton, who over came an addiction to heroin, founded the center in 1997. He held another guitar auction in 1999, and at that time, Clapton said he was not yet ready to part with any of the guitars in tonight's auction.

Well, A Reminder now, vote in "Tonight's Poll."

And the question is, "Should the Supreme Court have forced the white House to release papers tied to Vice Presidents Cheney's Secret Energy Task Force, yes or no?"

And cast your vote at cnn.com/lou. We'll bring you the results later in the broadcast.

Coming up, a risky walk in space for the crew of the international space station. It ends prematurely.

Plus a bold new plan for NASA. We have a special report next.

(COMMERCIAL BREAK)

PILGRIM: An American astronaut and a Russian cosmonaut tonight were ordered to abandon a risky spacewalk. Now, the astronaut Mike Fincke oxygen tank began losing air pressure shortly after he left the space station. And mission control ordered both men back to the station. NASA says they were in no immediate danger. Now, the two residents of the International Space Station were planning one of the riskiest spacewalks in history. The mission was to travel an unprecedented 80 to 100 feet to repair a broken circuit board on the American side of the station. Now, there's no word when the astronauts might try it again.

Meanwhile, NASA outlined a plan for a massive overhaul of the space program. A presidential commission said this week that NASA must transform itself into a, quote, leaner, more focused agency. That report comes in the same week that a private company launched the first ever non-government-funded manned mission into space. Space Correspondent, Miles O'Brien reports.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN SPACE CORRESPONDENT: A sign of the times, new minted as the worlds first private astronaut, Mike Melville took a shot at NASA this week in Mojave. And the man who designed the ship Burt Rutan, rarely misses the opportunity to tweak the agency.

BURT RUTAN, SCALED COMPOSITES: Because if things are dangerous, then you take the NASA approach and go in and make so many redundancies, and do so much training, and you do so much preparing for a flight that you can't afford to fly.

O'BRIEN: And while NASA may never be able to justify the risks that Rutan and Melville accepted, high above the desert, Administrator Sean O'Keefe is trying to find ways to run NASA more like a business and less like a bureaucracy.

Is there a NASA role in what we saw unfold in there at the Mojave Desert?

SEAN O'KEEFE, NASA ADMINISTRATOR: There's certainly a public role in encouraging that kind of behavior, that kind of risk-taking, that kind of exciting breakthrough of capability.

O'BRIEN: This was the thrust of a report from a presidential commission charged with helping NASA realize the Bush administration's vision for NASA. A return to the moon and eventually, a manned mission to Mars. The commission concurred with O'Keefe's own assessment of his agency.

We aren't terribly friendly here towards entrepreneurs, innovators, technology developers, people who do really cutting-edge kind of things. So, O'Keefe, is rolling out some new flow charts at NASA. NASA Centers and managers are now divvied up by a focus on science, exploration systems, space operations and aeronautics research. The idea is to keep their eye on the prize, pushing the bounds of exploration, and then letting the private sector step into the void, al la Spaceship One.

You've been contracting from day one. How is this different -- how is it more entrepreneurial than what you've been doing.

O'KEEFE: The jet propulsion lab, that managed the Mars expedition rovers, that's run by a university on behalf of the government. And so as a consequence, there's a lot of entrepreneurial attitude there. But we're going look at a variety of other management models that may call for other than the United States Government running the activity directly.

O'BRIEN: Necessity is the mother of invention here. The Bush Moon and Mars Proposal is a scantily funded proposition with modest budget increases earmarked for NASA over the next five years, pay as you go.

O'KEEFE: What the president has articulated here is a strategy, a direction, a focus that you build on one step at a time. And the goal is not a destination.

O'BRIEN: Getting there from here will not be easy. And while NASA will never be as nimble as Burt Rutan and SpaceShip One, O'Keefe is convinced he must launch a new way of doing business before the can-do space agent can meet the Bush challenge. Miles O'Brien, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: We found an editorial cartoon we wanted to share on some potential future competition for NASA. And it shows a NASA shuttle with the caption "uh, oh, we could be out of business." Why? A shuttle in the distance labelled "Wal-Mart Shuttle." And our thanks to Steve Benson at the "Arizona Republic" for the cartoon.

Still to come, we'll share some of your thoughts on the U.S. Olympic team wearing uniforms that were not made in the USA.

And some high-profile figures are speaking out on the nation's deficit. And they say it should be one of the country's top priorities. Details when we return in a moment.

(COMMERCIAL BREAK)

PILGRIM: Stocks fell slightly on Wall Street. The Dow lost almost 36 points, the Nasdaq fell 5 and the S&P dropped 3. New concerns tonight about this country's worsening deficits. Christine Romans is here with the report.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well, Kitty, deficits are a long-term problem, a long-term problem that need to be tackled and fixed right now, particularly, as baby boomers age and Social Security and Medicare buckle under the strain. That was the message on Capitol Hill today where Federal Reserve Governor Edward Gramlich warned of what he called a worsening fiscal outlook.

(BEGIN VIDEO CLIP)

EDWARD GRAMLICH, FEDERAL RESERVE GOVERNOR: It's no secret, I think, to anybody in the budget process that these programs face long- term imbalances. This information has been widely known and supplied in depth for many years by many agencies. And yet, despite that fact, we still find ourself on a fiscal trajectory that is probably unsustainable.

(END VIDEO CLIP)

ROMANS: Unsustainable. Gramlich said budget deficits don't necessarily hurt now, oh, but they will later. They will crimp economic growth and require what he calls wrenching changes. In the meantime, deficit hawks worry politicians are less focused on what they think is a long-term is a problem and are instead a little more focused on the short-term problem reelection, their own reelections -- Kitty.

PILGRIM: Well everyone nods so sagely when you talk about it long term, it's much tougher to talk about the short-term fixes.

ROMANS: Absolutely, long term, a lot of people, almost everyone agrees that the problems short-term -- oh, well there are a lot of reasons why it's OK for now. We will point out that the president has pledged to halve the deficit in the next five years.

PILGRIM: Thanks very much, Christine Romans.

Let's look at some of your thoughts on the U.S. Olympic team wearing foreign made uniforms.

And Pamela from Minnesota wrote, "what's this I hear about our Olympic teams outfits being made by a company outside the United States. This is outrageous when people in this country can't find a job."

And Bruce from Pennsylvania, "this is yet another example of the erosion of American jobs to foreign countries. I can not believe there is no company in this country that can outfit our own Olympic team. This is about national pride and not the almighty dollar."

Monica from Kentucky, "it seems to be the complete opposite of what the Olympics represent: pride for the USA. Before this, it was border patrol uniforms, and now the Olympic uniforms. I suppose this is the result of the helpful (insert sarcasm here) outsourcing of American jobs."

And Pat of Denver, Colorado, "I'm surprised the Olympic committed hasn't found athletes from overseas to compete by now."

We love hearing from you. Email us, loudobbs@cnn.com Still ahead, the results of tonight's poll. First, a reminder to check our Web site for the complete list of more than 800 companies we've confirmed to be exporting America. CNN.com/lou.

(COMMERCIAL BREAK)

The results of our poll. 97 percent of you said the Supreme Court should have forced the White House to release papers tied to Vice President Cheney's secret energy taskforce.

Well, thanks for joining us tonight. Please join us tomorrow. Michael Weir of "Time" magazine will join us from Baghdad on the latest violence in Iraq as the hand-over of power approaches.

And three of the nation's leading journalists on Iraq, the election and the economy.

For all of us here, 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 June 24, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, GUEST HOST: Tonight, carnage in Iraq. One week before the United States hands over power to the Iraqis, insurgents kill nearly 100 people, including three American troops.
(BEGIN VIDEO CLIP)

IYAD ALLAWI, IRAQI PRIME MINISTER: UNIDENTIFIED MALE: The acts were cowardly acts committed by criminals, by hypocrites, infidels who are trying to inflict damage on the Iraqi people.

(END VIDEO CLIP)

PILGRIM: I will talk about the risk of a civil war in Iraq with Professor Ahmed Hashim at the U.S. Naval War College and military analyst General David Grange.

A major victory for the Bush administration and Vice President Dick Cheney. The Supreme Court rules the White House does not have to reveal secret information about the vice president's energy task force.

Hundreds of thousands of American jobs have been shipped overseas. Exporting America is now the subject of a new film. Producer Greg Spotts is my guest.

And NASA announces a dramatic shake-up to meet the challenges of space exploration in the 21st Century.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's the kind of stuff we do. It's what has made this agency great.

(END VIDEO CLIP)

PILGRIM: Tonight, NASA's New Mission, a special report.

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, June 24. Here now an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

Insurgents today killed nearly 100 people in one of the worst days of violence in Iraq since the fall of Saddam Hussein. Three American soldiers are among the dead. The attacks come just six days before the United States transfers sovereignty is the new Iraqi government. The insurgents targeted police and government buildings in the Sunni triangle.

Brent Sadler reports from Baghdad.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN BEIRUT BUREAU CHIEF (voice-over): Insurgents launched a wave of attacks on five major cities, including Baghdad. The onslaught targeted police stations in Mosul to the north of the capital, as well as Ba'qubah to the northeast and Ramadi in the west, at the heart of the so-called Sunni triangle, a persistent hotbed of anti-coalition violence. Mosul was hit by a series of large explosions, claiming the lives of dozens of Iraqi victims. One U.S. soldier also died in the Mosul blasts.

In Ba'qubah, scene of some of the heaviest clashes with U.S. forces, assailants launched attacks on police and government buildings, inflicting more loss of life, including two American soldiers from the 1st Infantry Division. Gunfire rattled across the city, as the authorities warned people to stay indoors, imposing a dusk-to-dawn curfew. Gunmen claiming loyalty to wanted Jordanian militant Abu Masab al-Zarqawi appeared on the streets of Ba'qubah for what appears to be the first time in street combat.

In Ramadi, the tactics were similar, insurgents directing volleys of rocket-propelled grenades and machine-gun fire at more police targets. U.S. military officials say the series of attacks demonstrated a level of coordination, but they were at pains to play down the extent of damage done, claiming the attacks soon ran out of steam.

In further hostilities, U.S. forces around Fallujah ordered air strikes against insurgent positions after more clashes with U.S. Marines. A U.S. Cobra helicopter gunship was forced down by small- arms fire during battles, but the crew reportedly escaped unhurt. Iraqis suffered the most casualties, just days before the hand-over of sovereignty to an interim government.

Prime Minister Iyad Allawi denounced the attacks as the work of desperate criminals who've lost the battle to prevent a transfer of power, but he predicted there may be worse to come.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: There were also terrorist attacks in Turkey today just before a visit by President Bush. One bomb exploded in front of a hotel in Ankara where President Bush will stay this weekend. Three people were wounded. The worst attack was in Istanbul where a bomb exploded on a bus.

Alphonso Van Marsh reports from Turkey.

(BEGIN VIDEOTAPE)

ALPHONSO VAN MARSH, CNN CORRESPONDENT (voice-over): An explosion rips through a bus in a crowded neighborhood in Istanbul. Officials say at least four people were killed, including the person carrying the bomb, and more than a dozen people injured.

President George W. Bush will still attend as planned and that he'll also visit the capital, Ankara, for talks with Turkey's president and prime minister this weekend.

Hours before the Istanbul explosion, a much smaller device went off outside the Ankara hotel where the U.S. president is expected to stay. Police say they were tipped off to a suspicious package near a parking garage next to the hotel.

Police also say that, as they examined the package, the bomb went off, injuring one officer and at least two other people.

(on camera): The blast outside the Ankara Hilton and the much larger explosion in Istanbul may not be linked, but, with just days before the NATO summit in Turkey, the explosions will be putting Turkish officials on edge here.

Alphonso Van Marsh, CNN, Ankara.

(END VIDEOTAPE)

PILGRIM: Iran today released eight British Marines three days after they were captured. The Marines were handed over to British diplomats in Tehran. The troops are likely to return to their base in Iraq. The Marines were arrested after they strayed into Iranian waters.

In Washington today, President Bush met with the special prosecutor investigating an alleged White House leak. This is the first time the president has been questioned in a criminal probe involving his administration. Investigators want to know whether someone in the administration leaked the identity of an undercover CIA agent.

White House Correspondent Dana Bash has the report -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, the president met with that special prosecutor for one hour and 10 minutes, and it took place in the Oval Office. Mr. Bush had nobody by his side from the White House. He simply had a personal attorney, Jim Sharp, whom he hired especially for this, and the president was not under oath during the session.

Now the White House will not go into details of it, except to say that he did meet with a special prosecutor, who is a U.S. Attorney, Patrick Fitzgerald, who has been investigating this for some months and that he did so simply because he asked his staff to cooperate and answer all the questions that the prosecutors want answered about who leaked the covert name of a CIA agent. And at issue here is a column written by Robert Novak saying that -- revealing essentially the name of Ambassador Joe Wilson's wife, who was a CIA agent, and Wilson had said that that was done, he believed, by the White House for political retaliation because he had come out and questioned -- publicly questioned -- a claim that the president had made about prewar claims about Iraq.

Essentially, he had said that Saddam Hussein tried to buy uranium from Africa, and the White House essentially at the end had to disavow that. Now this session by the president comes just about a month after a similar session by the vice president.

He also was not questioned under oath, but several senior White House aides have been. They have been before the grand jury, including just this past Friday, White House Counsel Alberto Gonzales.

Now, Kitty, it's important to note that most legal experts don't think that the president is actually the target of this probe. Simply, he is somebody that they are questioning to try to get more information, but they also do think that perhaps because they have reached this level in their questioning that this probe could be coming to an end soon -- Kitty.

PILGRIM: All right. Thanks very much.

Dana Bash in Washington.

Another development involving the White House today: The Supreme Court declined to force the release of papers linked to Vice President Cheney's energy task force. A lawsuit claims the vice president's secret meetings might have unfairly influenced U.S. energy policy.

Bob Franken has the report.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): It was a victory for the vice president and the administration, but a temporary one.

By a 7-2 margin, the court decided, as Justice Anthony Kennedy wrote, "Special considerations applicable to the president and vice president" meant that Cheney did not yet have to publicly release documents accumulated by his energy task force, documents critics charge would show policy was secretly influenced by corporate interests.

The justices bought the vice president's arguments.

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: We're setting a terrible precedent. We're saying the vice president cannot have confidential meetings.

FRANKEN: Justice Kennedy described it as a "paramount necessity of protecting the executive branch from vexatious litigation." JOHN ASHCROFT, ATTORNEY GENERAL: It was a case in which there's substantial agreement on the court. It's a 7-2 victory in this respect.

FRANKEN: Lower courts can still ultimately order the documents released under an open government law, but not for a while.

DAVID BOOKBINDER, SIERRA CLUB SENIOR ATTORNEY: In the Bush administration's eyes, keeping things secret as long as possible is a victory, and so they will be pleased by the court's decision because it does delay the ultimate day of reckoning.

FRANKEN: Justice Antonin Scalia had added to the controversy by refusing to remove himself after disclosures he had accepted an invitation to go duck hunting with the vice president. He ruled in favor of Cheney.

(END VIDEOTAPE)

FRANKEN: A ruling that means the politically charged documents will probably not see the light of day until at least after the election -- Kitty.

PILGRIM: Bob Franken.

Thanks very much.

That brings us to the subject of tonight's poll. Should the Supreme Court have forced the White House to release papers tied to Vice President Cheney's secret energy task force? Yes or no? Cast your vote at cnn.com/lou, and we will bring you the results later in the broadcast.

Still ahead tonight, one of the worst days of violence in months in Iraq. One expert on the Iraqi insurgency says today's attacks put the hand-over of power in danger. Professor Ahmed Hashim is my guest next.

Plus, a new poll tonight shows the race for the White House is closer than ever. We'll have the details on that.

And then, a new documentary captures the devastation of losing a job to overseas labor. We'll report on the film "American Jobs." Director and producer Greg Spotts will be our guest.

That and much more still head here tonight.

(COMMERCIAL BREAK)

PILGRIM: Today's insurgent attacks in Iraq were clearly designed to create chaos ahead of the transfer of power to the Iraqs next week. My guest says U.S. policy in Iraq is not far from disaster. Ahmed Hashim is a professor at the U.S. Naval War College in Rhode Island, and he joins me from Providence.

And thanks very much for joining us, sir. PROF. AHMED HASHIM, U.S. NAVAL WAR COLLEGE: You're welcome, ma'am. Good evening.

PILGRIM: Good evening. What do you mean by not far from disaster?

HASHIM: Well, I think we don't have a complete -- a good handle on the situation in Iraq. Tactically, we've been doing very well, but the strategic and political levels, we have been doing pretty badly, and, in a counterinsurgency campaign, the most important aspects are to do well in the political and strategic and operational levels, but we've, I think, headed towards a disastrous situation.

PILGRIM: Not far from disaster. We are today not far from disaster, a quote from T.E. Lawrence, which you give voice to, fear, but today's attacks -- does that put the June 30 hand-over deadline in jeopardy?

HASHIM: No. The hand-over will continue as planned, but, as long as the interim government does not have effective security forces, does not have a plan for restoring security, stability and a plan for reconstruction of the country, it will not have legitimacy, and the center of gravity in a counterinsurgency campaign are the people. The people want security, stability and law and order in Iraq, and they're not seeing any of that.

PILGRIM: You have vast experience in the region. You have just returned from Iraq. What, in your opinion, is the size of the insurgency and who are we facing here?

HASHIM: I think the insurgency has mushroomed. We are facing a large group of Islamists, nationalists, foreign jihadis, former regime elements, and people sympathetic to them who have given up on the Coalition Provisional Authority and do not feel that the interim government will succeed in restoring stability, law and order. So a lot of people are gravitating to the insurgents who seem to have provided a kind of rough-and-ready justice in places that they seem to be in control of.

PILGRIM: You seem to paint a very dire picture, and you point to a level of coordination in your comments with us. Do you these think these attacks are very coordinated or scattered?

HASHIM: Well, it really -- it's not centralized or hierarchical control, but the fact that it's not does not mean there is no element of organization in decentralized networks, as this insurgency is. Now it stretches the imagination to think that a large number of insurgents got up today on June 24 and said we are going to attack separately.

It is not coincidence, there has been some form of coordination, and people move freely in Iraq. It's not only a free fire zone for everybody. People do move freely, and there is coordination between various insurgent groups.

Even if some of these groups are not ideologically aligned with one another, there has been growth in the tactical coordination between, say, former regime elements and Islamists.

PILGRIM: Do you think, very quickly, that we need more troops in Iraq at this point to maintain control?

HASHIM: Troops will help. The security situation will -- will be the United States' burden to bear for quite a while, but we mustn't fall into the trap and believe that the answer to the problem is troops and yet more troops.

We need a plan for the reconstruction as well as the restoration of security, law and order in Iraq, and we need to get the Iraqi people on board as well as rebuild the Iraqi security forces. More American troops would, I think, help, but it really isn't the panacea that a lot of people think it is.

Insurgencies are defeated by a coordinated political socioeconomic information operations and psychological campaign, as well as military operations. It cannot be one or the other. All of them have to proceed in parallel with one another, not in sequence.

PILGRIM: Thanks very much for your analysis tonight.

Professor Ahmed Hashim.

Thank you.

HASHIM: You're welcome, ma'am.

PILGRIM: Still ahead here tonight, Grange on Point on Iraq. Coordinated bombings kill dozens of people less than a week before the planned transfer of power, and General David Grange will join us.

Plus, Broken Borders. A high-tech new program is underway to stop illegal aliens from crossing our borders. We'll have a special report.

And conservatives question whether TV ads for a new film blasting the president could unfairly impact voters. That and much more still ahead here tonight.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: In tonight's Campaign Journal, the focus is on technology. President Bush talked about innovation today during a demonstration of new technology at the Department of Commerce. He urged Congress to ban any taxes on Internet access, and President Bush also said the economy is strong right now, but said the government faces the challenge of securing the nation's economic future.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The fundamental question is: What do we need to do to make sure we're not only strong today and tomorrow, but for the decades to come?

(END VIDEO CLIP)

PILGRIM: In San Jose, California, Senator John Kerry today talked about creating high-tech jobs in the United States. Senator Kerry said the best way to keep jobs in America is to invest in America.

(BEGIN VIDEO CLIP)

SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL CANDIDATE: There is no reason in the world, no common sense, no economic rationale that American workers should actually be forced to use their hard-earned dollars in order to reward a company that makes the decision to go overseas.

(END VIDEO CLIP)

PILGRIM: Senator Kerry is speaking right now at the American Federation of State, County and Municipal Employees, the 36th international convention in Anaheim.

A new CNN/"USA Today"/Gallup poll tonight shows most Americans believe sending troops to Iraq was a mistake.

Our CNN Senior Political Analyst Bill Schneider has been looking at the new numbers. He joins us now from Washington.

Bill, a big drop in support for the war?

BILL SCHNEIDER, CNN SENIOR POLITICAL CORRESPONDENT: That's true. And a big turnaround. And this could be a big turning point because when this happened in -- after the tet offensive in 1968 during the Vietnam War, it was the real turning point. It never turned back. Americans concluded that war was a mistake. They turned against it.

Well, this has happened for the first time now. A majority of Americans now say that for the United States to send troops into Iraq was a mistake. As you can see, in early June, it was 58 percent saying it was not a mistake. Now 54 percent say it was a mistake.

What happened over the last few weeks? Well, first of all, the poll shows most Americans feel that the war in Iraq has not made the U.S. safer from terrorism, and, second of all, we had that 9/11 commission staff report that said no credible evidence that Iraq and al Qaeda cooperated on attacks against the United States.

This poll shows that, for the first time, most Americans now believe that Saddam Hussein was not personally involved in those attacks.

PILGRIM: Bill, let's go to another topic. Tell us what Americans are saying about the economy these days.

SCHNEIDER: Well, if that was bad news on Iraq for President Bush, there's some good news on the economy. The figures have been good, and Americans are giving him higher ratings now on the economy.

At the beginning of June, the ratings were negative. Fifty-eight percent said he was not doing well. Forty-one percent said he was -- they approved of the way he was handling the economy. That now -- that number now is up a little bit to 47 percent.

This is the first clear evidence that we have that the improving economic figures are beginning to sink in and Americans are getting a tentatively more positive view of the economy. Still not a majority, but there's still four-and-a-half months to go to the election.

PILGRIM: And, Bill, where does this leave the race for the White House?

SCHNEIDER: Absolutely tied. Iraq is down, the economy is up, so where is the race? Take a look. Bush, 49 percent. Kerry, 48 percent. Throw Ralph Nader in, and it's still virtually a tie. Bush, 1 point ahead.

This is interesting because what it shows is that the ground is shifting in this campaign. Iraq is becoming a problem for President Bush, while the economy may not turn out to have a big payoff for the Democrats.

What it says is it's just a mirror image of when his father ran for reelection in 1992, and the Democrats grabbed the economy issue. Remember "the economy, stupid"? Well, that may not work for the Democrats this time, and, in that campaign, the Persian Gulf War, which the United States had clearly won, was a long distant memory, but Iraq is right at the center of this campaign -- Kitty.

PILGRIM: Interesting stuff.

Bill Schneider.

Thanks, Bill.

SCHNEIDER: Sure.

PILGRIM: While the new polls reflect growing public anxiety about American policy in Iraq, the U.S. military is making contingency plans to send more troops to Iraq if the violence escalates, and Pentagon Correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): CNN has learned that, if the violence grows worse, U.S. military planners are preparing for the possibility of sending in as many as 15,000 additional ground troops, three brigades, on an emergency basis.

Separately, at his Senate confirmation hearing, General George Casey, who will soon take over as head of coalition forces, confirmed only that a plan is in the works because of the concerns the insurgency may gain strength. GEN. GEORGE CASEY, JR., NOMINEE, MULTINATIONAL IRAQ FORCE COMMANDER: CENTCOM is doing some contingency planning for increased levels of violence.

STARR: Officials now readily acknowledge the security situation is likely to be very bad for some time. Attacks are expected well past the June 30 date for returning sovereignty to Iraqis and perhaps into next year when elections will be scheduled. The continuing high levels of violence now a major concern for Congress and the military in dealing with Iraq.

CASEY: It is not how I envisioned it to be, Senator.

SEN. JOHN MCCAIN (D), ARIZONA: What do you think has gone wrong?

CASEY: I think the insurgency is much stronger than I certainly would have anticipated.

STARR: As the next commander, Casey says his priorities are protecting a U.N. mission that will help with elections, providing security in the violent Sunni triangle, getting better intelligence from Iraqis to fight the insurgency. But getting Iraqis to provide for their own security still remains a challenge.

General Casey says, so far, Iraqi forces are not capable of protecting their own country, opening the door to the continuing possibility U.S. troops will remain in Iraq for months to come.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PILGRIM: Joining me now is General David Grange in Grange on Point.

Thank you for joining us, General. Do you believe the Iraqi military is up to defending Iraq against insurgents?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, not at all at this time. I mean, I think they have some well-trained units, but it's a fledgling army, a new civil defense force, a police force, and it's going to take some time.

I mean, the United States and the rest of the coalition cannot defend all the Iraqis right now themselves. It doesn't take a lot of insurgents to disrupt, to terrorize, try to make an area unstable, which is happening right now. This is a strategy by the enemy. It's hard to contain.

But, when the going gets tough, someone's got to hold the line, and so it's not the time to back down, but to continue to provide the security the best that you can and surge, if necessary.

PILGRIM: A difficult day in Iraq, 100 dead, hundreds wounded, and do you think that the U.S. troops should be doing more at this point? Should they be taking on more? GRANGE: Well, you know, the focus is going to change, I think, the priority, to training the Iraqi military and the other security forces, which is appropriate, but don't think at all that the U.S. military or any of the coalition forces are not prepared or will not conduct offensive operations especially against intelligence cells, Zarqawi or the rest of them, when that becomes apparent. I mean, offensive operations will continue.

PILGRIM: Will we be able to train 200,000 Iraqis -- that's the number that's tossed about -- and do offensive operations? Are we overstretched at this point?

GRANGE: Well, I think that the military may be overstretched because of all the commitment elsewhere. You cannot look at Iraq as an entity by itself. I mean, the whole region's involved in counterterrorist operations and small insurgencies. There's still a big task from Afghanistan and other places in the region, as well as other probable or possible, at least, combat operations in the rest of the world.

But I think that the coalition is doing a great job -- I really do -- on this, but if surge is needed to apply additional force, the time is not later but now during the critical changeover periods.

PILGRIM: Let me ask you about the insurgents. A lot of emphasis put on al-Zarqawi. Do you think that that's misplaced? Do you think it's bigger than that?

GRANGE: It's bigger than that. I mean, he is a dirty rat, he is a key enemy figure that has to be taken down, but there's other insurgent organizations involved. They have a loose confederation, I believe.

The common enemy is us. The common enemy is the Iraqi people that have committed themselves to a new type of government, a way of life, and they don't want that, and so they smell blood right now because they look at polls. They hear the polls announced tonight.

Now I hope that they do something very similar to the tet in Vietnam where they come out, they group, they become visible to the coalition forces, where they will be destroyed. You know, Tet was a success. It was reported as a failure. But in fact it destroyed the whole Viet Cong insurgency and the North had to send massive regular forces down South to take on the U.S. after that Tet offensive.

PILGRIM: General Grange, we've been talking about the military options. We just talked to Professor Ahmed Hashim at the U.S. Naval War College. He said troops alone won't do it. Do you think there's a question of tone or approach that should be shifted?

GRANGE: Troops alone can never do any fight. The military never operates by itself. First of all, a political process even deploys the military. It's not their decision.

But yes the combination of means of power is diplomacy, it's the military, it's economic, it's the transition of this democratic governance. And as he stated, it's an information operations campaign that's probably more powerful than any weapon.

And I think in the information campaign, that part, those operations that are critical, that influence people, that give people perceptions, I think we're losing on that front. And that's where we have to put a big surge to get that turned around.

PILGRIM: All right, thanks very much, General David Grange.

GRANGE: Thank you.

PILGRIM: That brings us to tonight's thought. "America was not built on fear, America was built on courage and imagination and unbeatable determination to do the job at hand." And that from the 33rd president of the United States, Harry Truman.

Well here's what many of you thought about the Bush administration offering aid to North Korea.

Fran Skinner wrote, "The question you posed today seems to be asking should we negotiate with a terrorist country that Bush called evil. I thought we did not do this."

Marcia from Rhode Island writes, "Why is it then when we reach an impasse with North Korea we offer them sweet deals, yet when we reach an impasse with Saddam Hussein, we invaded Iraq?"

T.M. Trissel of Reno, Nevada says, "I do not believe that we should give North Korea anything for the dismantling of their nuclear program. The either dismantle it or suffer the consequences. No other alternative should be allowed."

John from California says, "So what happens when another country that is not our friend decides to start nuclear research and say they won't stop unless the U.S. gives them oil or money or technology or lifts sanctions? It's like giving a thief a reward if he turns in what he stole."

We absolutely love hearing from you. Send us an e-mail at loudobbs@cnn.com.

Tonight, in "Broken Borders," an exclusive look at a new Department of Homeland Security experiment. The U.S. Border Patrol is testing unmanned aerial vehicles to patrol our southern borders with Mexico. Homeland security correspondent Jeanne Meserve joins us now from Sierra Vista, Arizona -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Kitty is Hermes 450. This is an Israeli unmanned aerial vehicle. This UAV and its twin are being used by the U.S. Customs and Border Protection to determine whether these UAVs have an important part to play in policing the nation's borders.

(BEGIN VIDEO CLIP)

MICHAEL WIMBERLY, U.S. BORDER PATROL: I'm optimistic that it can, personally with my knowledge and what I've learned about UAVs in the last year, I think it can. Right now, it is costly. As with any technology, I believe those costs will start coming down the more that they're developed, the more that they're used. It remains to be seen, again, exactly what it is they can do for us.

(END VIDEO CLIP)

MESERVE: Now, these UAVs can stay in the air for 18-20 hours at a stretch sending back realtime images from their sensors. At the altitudes they fly, they're virtually invisible and inaudible making them very effective as surveillance tools for illegal activity.

There's also belief that they may bring efficiency to the system. Right now if a sensor goes off on the ground, there there's a massive response to that by the Border Patrol. What they're thinking is that the UAVs will be able to go in quickly and then do an assessment from the air and determine if any response at all is necessary. And if one is, how large it should be.

There are, however, some questions from some quarters about the reliability of the UAVs.

(BEGIN VIDEO CLIP)

CHRISTOPHER BOLKOM, CONGRESSIONAL RESEARCH SERVICE: I think that the reliability and safety is one of the primary concerns, and one of the wrinkles that needs to be ironed out. UAVs in the military application tend to crash about 100 times more often than manned airplanes.

(END VIDEO CLIP)

MESERVE: We are told by people here that this particular UAV, which already used by the Israelis to patrol its borders, that does in fact have a very good safety record. There are many hurdles to overcome. Many things still to be investigated. Nobody with Customs and Border Protection believes this is a silver bullet, but there is hope that this could be another tool in the arsenal against illegal immigration.

Kitty, back to you.

PILGRIM: Fascinating. Jeanne Meserve, thank you.

Coming up, the exporting of American jobs is captured on film for the first time. Documentary director Greg Spotts will be our guest.

Then, a risky mission in space ends early tonight. We'll have the latest from the International Space Station.

And new directions for the American Space Program. We'll here details from the head of NASA.

(COMMERCIAL BREAK)

PILGRIM: Michael Moore's new movie, "Fahrenheit 9/11," is stirring up new controversy tonight. According to the director, record numbers of people are going to see the movie, but the film may face some advertising trouble later this summer. The conservative advocacy group called Citizens United filed a formal complaint with the Federal Election Commission against the film's distributor, Lion's Gate Entertainment.

Now, the complaint says any advertising for the film after July 31 will break the law since it would contain images and sounds of President Bush within 30 days of the Republican National Convention. The FEC says it will review the claim's legal merit.

Another documentary filmmaker has directed and produced the first feature film about the exporting of American jobs to cheap foreign labor markets. The film is called "American Jobs." It will be released on DVD appropriately enough on Labor Day. And Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNNfn CORRESPONDENT (voice-over): Thirty-six- year-old Gregory Spotts is a former television producer who came up with the idea for his film "American Jobs" after watching his friends lose their jobs.

GREG SPOTTS, "AMERICAN JOBS": I wanted to find out if indeed the sort of ups and downs of the business cycle were masking more permanent and important changes taking place.

SYLVESTER: It's a homegrown project. Spotts' editing on his laptop computer and spending $40,000 from his savings. He also shot most of the interviews himself, using a $3,000 camera, as he traveled to more than 15 towns in eight states. From textile employees who used to work at the now shuttered Pillowtex plant in Kannapolis, North Carolina to Boeing workers in Seattle, Washington to high-tech employees in Orlando, Florida.

He heard similar stories of heartache and fear as jobs moved overseas.

CHARLES CRAFT, BOEING MACHINIST: They're going to mothball the area, they're just going to shut four machines down. The other four go to Turkey.

UNIDENTIFIED MALE: (UNINTELLIGIBLE) I worked in the mill for ten years. It would have been ten years this August.

SPOTTS: I met people who basically go from social service provider to church group, basically begging to get their next dose of thyroid medicine that they need to stay alive. And people who are at risk of losing their homes, losing their cars.

SYLVESTER: Spotts also captures the ripple effect on a community when anchor tenant like Pillowtex closes down.

His goal in making the movie was not to solve the problem, but to start a dialogue. SPOTTS: A lot of these changes have been made very quietly, they've been designed to benefit a rather narrow set of interests that are mostly multinational corporations and their investors. And we haven't really talked about how that's going to affect the average person, how that's going affect the middle class.

(END VIDEOTAPE)

SYLVESTER: The film will be available in September on DVD. Now Spotts is also planning a national tour to show his film in non- traditional venues including union halls and universities -- Kitty.

PILGRIM: Thanks, Lisa.

Joining us is the man behind the first film on outsourcing, film maker Greg Spotts joins us. And thanks very much for joining us, Greg.

SPOTTS: Thank you for having me, kitty.

PILGRIM: We can see that people gave you amazing access, they seem very candid.

How hard was it to gain access and have people open up to you?

SPOTTS: It really wasn't that hard. It involved a lot of research, but sometimes, you know, I would find a social service center, like in Kannapolis where the pillow text workers were getting help from the government. And they put up a flier, and people started calling me up saying they would like to tell me their story. And people invited me into their homes, you know, serve my some iced tea, and we would set up a couple lights, and they'd tell me some pretty personal stuff even though they had never met me before.

PILGRIM: You know, a lot of economists say it's really not outsourcing, it's productivity that has caused this dislocation in the economy and that's the kind of language they use. It seems clinical compared to what we have just seen.

What do you think of that theory?

SPOTTS: That's a good point. Actually technological gains in product activity drive the ability of multinational corporations to use lower-cost labor. Here's an example. I interviewed guy named Charles Craft (ph) who's a machinist in Seattle for Boeing. He's a journeyman, which is the top rating for machinist, meaning he can make almost any part in a Boeing airliner. And gradually they've developed computerized machine tools that make the part themselves. And so once you have that, then the operator job becomes deskilled and now you can take that job and move it to Turkey and Pakistan. So, he's watching his work site gradually get moth-balled as these large machines get moved to lower waged countries.

PILGRIM: Where do the people you talk to lay the blame?

I'm sure there's a variety of places. But are they -- do they understand what's happening in the economy?

Did they explain it to you or did you explain it to them?

SPOTTS: You know, we kind of had a dialogue about it. I learned some things from them. I mean, when you're involved in it yourself, sometimes you have a more intuitive understanding than somebody who's in the ivory tower looking at it, you know, from a macroeconomics perspective. So people had a pretty good sense of what was going on, but you know, the thing I'm trying to -- the point I'm trying to really lay out is, you know, we never really had a national conversation about these changes that we're making, and now we're seeing the effects. We don't have a plan necessarily on how to stay being a high-wage nation, and we're going to need that pretty soon.

PILGRIM: You put a lot of time and energy into this. It comes out on DVD on Labor Day.

What would you like to do with it now?

SPOTTS: What I would really like to do is to start a more honest and thoughtful conversation than what we've had in the past. It can be very frustrating when anybody expresses a view different than the sort of dominant free-trade view. They're derided as backward or protectionist, but in fact, you know, we're looking at something different than anything the U.S. has ever experienced. If we want to stay a high-wage nation. If we want to stay a country where our consumption is really a driver of global prosperity, we're going to have to figure out a strategy on how to do that. Because there's a lot of money to be made in manufacturing in low wage and selling back into the high-wage country.

PILGRIM: All right. Thanks very much for joining us to talk about it, and good luck with your project. Greg Spotts. Thanks Greg.

SPOTTS: Thank you for having me.

PILGRIM: On a musical topic, 56 pieces of musical history are being auctioned off tonight in New York. Eric Clapton donated a selection of guitars that he calls the cream of his collection, and the proceeds of the auction held at Christie's will go to the Crossroads Center for Drug Treatment in Antigua. Now, Clapton, who over came an addiction to heroin, founded the center in 1997. He held another guitar auction in 1999, and at that time, Clapton said he was not yet ready to part with any of the guitars in tonight's auction.

Well, A Reminder now, vote in "Tonight's Poll."

And the question is, "Should the Supreme Court have forced the white House to release papers tied to Vice Presidents Cheney's Secret Energy Task Force, yes or no?"

And cast your vote at cnn.com/lou. We'll bring you the results later in the broadcast.

Coming up, a risky walk in space for the crew of the international space station. It ends prematurely.

Plus a bold new plan for NASA. We have a special report next.

(COMMERCIAL BREAK)

PILGRIM: An American astronaut and a Russian cosmonaut tonight were ordered to abandon a risky spacewalk. Now, the astronaut Mike Fincke oxygen tank began losing air pressure shortly after he left the space station. And mission control ordered both men back to the station. NASA says they were in no immediate danger. Now, the two residents of the International Space Station were planning one of the riskiest spacewalks in history. The mission was to travel an unprecedented 80 to 100 feet to repair a broken circuit board on the American side of the station. Now, there's no word when the astronauts might try it again.

Meanwhile, NASA outlined a plan for a massive overhaul of the space program. A presidential commission said this week that NASA must transform itself into a, quote, leaner, more focused agency. That report comes in the same week that a private company launched the first ever non-government-funded manned mission into space. Space Correspondent, Miles O'Brien reports.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN SPACE CORRESPONDENT: A sign of the times, new minted as the worlds first private astronaut, Mike Melville took a shot at NASA this week in Mojave. And the man who designed the ship Burt Rutan, rarely misses the opportunity to tweak the agency.

BURT RUTAN, SCALED COMPOSITES: Because if things are dangerous, then you take the NASA approach and go in and make so many redundancies, and do so much training, and you do so much preparing for a flight that you can't afford to fly.

O'BRIEN: And while NASA may never be able to justify the risks that Rutan and Melville accepted, high above the desert, Administrator Sean O'Keefe is trying to find ways to run NASA more like a business and less like a bureaucracy.

Is there a NASA role in what we saw unfold in there at the Mojave Desert?

SEAN O'KEEFE, NASA ADMINISTRATOR: There's certainly a public role in encouraging that kind of behavior, that kind of risk-taking, that kind of exciting breakthrough of capability.

O'BRIEN: This was the thrust of a report from a presidential commission charged with helping NASA realize the Bush administration's vision for NASA. A return to the moon and eventually, a manned mission to Mars. The commission concurred with O'Keefe's own assessment of his agency.

We aren't terribly friendly here towards entrepreneurs, innovators, technology developers, people who do really cutting-edge kind of things. So, O'Keefe, is rolling out some new flow charts at NASA. NASA Centers and managers are now divvied up by a focus on science, exploration systems, space operations and aeronautics research. The idea is to keep their eye on the prize, pushing the bounds of exploration, and then letting the private sector step into the void, al la Spaceship One.

You've been contracting from day one. How is this different -- how is it more entrepreneurial than what you've been doing.

O'KEEFE: The jet propulsion lab, that managed the Mars expedition rovers, that's run by a university on behalf of the government. And so as a consequence, there's a lot of entrepreneurial attitude there. But we're going look at a variety of other management models that may call for other than the United States Government running the activity directly.

O'BRIEN: Necessity is the mother of invention here. The Bush Moon and Mars Proposal is a scantily funded proposition with modest budget increases earmarked for NASA over the next five years, pay as you go.

O'KEEFE: What the president has articulated here is a strategy, a direction, a focus that you build on one step at a time. And the goal is not a destination.

O'BRIEN: Getting there from here will not be easy. And while NASA will never be as nimble as Burt Rutan and SpaceShip One, O'Keefe is convinced he must launch a new way of doing business before the can-do space agent can meet the Bush challenge. Miles O'Brien, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: We found an editorial cartoon we wanted to share on some potential future competition for NASA. And it shows a NASA shuttle with the caption "uh, oh, we could be out of business." Why? A shuttle in the distance labelled "Wal-Mart Shuttle." And our thanks to Steve Benson at the "Arizona Republic" for the cartoon.

Still to come, we'll share some of your thoughts on the U.S. Olympic team wearing uniforms that were not made in the USA.

And some high-profile figures are speaking out on the nation's deficit. And they say it should be one of the country's top priorities. Details when we return in a moment.

(COMMERCIAL BREAK)

PILGRIM: Stocks fell slightly on Wall Street. The Dow lost almost 36 points, the Nasdaq fell 5 and the S&P dropped 3. New concerns tonight about this country's worsening deficits. Christine Romans is here with the report.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well, Kitty, deficits are a long-term problem, a long-term problem that need to be tackled and fixed right now, particularly, as baby boomers age and Social Security and Medicare buckle under the strain. That was the message on Capitol Hill today where Federal Reserve Governor Edward Gramlich warned of what he called a worsening fiscal outlook.

(BEGIN VIDEO CLIP)

EDWARD GRAMLICH, FEDERAL RESERVE GOVERNOR: It's no secret, I think, to anybody in the budget process that these programs face long- term imbalances. This information has been widely known and supplied in depth for many years by many agencies. And yet, despite that fact, we still find ourself on a fiscal trajectory that is probably unsustainable.

(END VIDEO CLIP)

ROMANS: Unsustainable. Gramlich said budget deficits don't necessarily hurt now, oh, but they will later. They will crimp economic growth and require what he calls wrenching changes. In the meantime, deficit hawks worry politicians are less focused on what they think is a long-term is a problem and are instead a little more focused on the short-term problem reelection, their own reelections -- Kitty.

PILGRIM: Well everyone nods so sagely when you talk about it long term, it's much tougher to talk about the short-term fixes.

ROMANS: Absolutely, long term, a lot of people, almost everyone agrees that the problems short-term -- oh, well there are a lot of reasons why it's OK for now. We will point out that the president has pledged to halve the deficit in the next five years.

PILGRIM: Thanks very much, Christine Romans.

Let's look at some of your thoughts on the U.S. Olympic team wearing foreign made uniforms.

And Pamela from Minnesota wrote, "what's this I hear about our Olympic teams outfits being made by a company outside the United States. This is outrageous when people in this country can't find a job."

And Bruce from Pennsylvania, "this is yet another example of the erosion of American jobs to foreign countries. I can not believe there is no company in this country that can outfit our own Olympic team. This is about national pride and not the almighty dollar."

Monica from Kentucky, "it seems to be the complete opposite of what the Olympics represent: pride for the USA. Before this, it was border patrol uniforms, and now the Olympic uniforms. I suppose this is the result of the helpful (insert sarcasm here) outsourcing of American jobs."

And Pat of Denver, Colorado, "I'm surprised the Olympic committed hasn't found athletes from overseas to compete by now."

We love hearing from you. Email us, loudobbs@cnn.com Still ahead, the results of tonight's poll. First, a reminder to check our Web site for the complete list of more than 800 companies we've confirmed to be exporting America. CNN.com/lou.

(COMMERCIAL BREAK)

The results of our poll. 97 percent of you said the Supreme Court should have forced the White House to release papers tied to Vice President Cheney's secret energy taskforce.

Well, thanks for joining us tonight. Please join us tomorrow. Michael Weir of "Time" magazine will join us from Baghdad on the latest violence in Iraq as the hand-over of power approaches.

And three of the nation's leading journalists on Iraq, the election and the economy.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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