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Lou Dobbs Tonight

Hurricane Ivan Barrels Across Caribbean; Bush Campaigns in Battleground States; NASA Scientists Have Hope For Genesis Capsule

Aired September 10, 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.


ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, September 10. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
KITTY PILGRIM, CNN ANCHOR: Good evening.

Tonight, Hurricane Ivan is barreling across the Caribbean at 140 miles an hour, with Florida firmly in its sights. Governor Jeb Bush tonight issued a new evacuation order for residents in the far southwest of the state.

Tonight, Jamaica is bracing for the full impact of the hurricane. Officials are warning of flash floods and mud slides, and the outer bands of Ivan are lashing Jamaica with torrential rain and huge waves. The hurricane is likely to hit the Florida Keys, however, by Monday afternoon.

Susan Candiotti joins us from Key Largo -- Susan.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Kitty.

As many of you may be aware, here in the Florida Keys, there is only one way in and one way out, and, so far, there has been an orderly evacuation that began at 7:00 this morning for those who live down here permanently. There are about 80,000 of those permanent residents. About 60,000, according to officials, are expected to heed the advice to head north.

Now, from a helicopter, you get a different view and perhaps a better appreciation of what the highway looks like down here. At times, you've got four lanes going in both directions; at times, only two lanes. So that can make things slow going.

Because we are at sea level here, when a hurricane comes through, there can be a very dangerous storm surge. So that's why officials warn that staying behind may not be too smart.

(BEGIN VIDEO CLIP)

CAPTAIN JENNY WELL-THOMSON, MONROE COUNTY SHERIFF'S OFFICE: Because we're islands, the other challenge we have is that there's nothing to break that storm up. Or, actually, we are what breaks that storm up. So, you know, we are dead in the path of a lot of hurricanes. We've been lucky to dodge them, but, you know, this is definitely a challenge.

(END VIDEO CLIP)

CANDIOTTI: Now residents and property owners, meantime, are boarding up, bracing for whatever Ivan plans to dish out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We've lived here over 22 years, I guess. This is our first time evacuating. So this is pretty serious.

UNIDENTIFIED MALE: Everyone's close and whatever each neighbor needs, we just help out.

(END VIDEO CLIP)

CANDIOTTI: Now what about those who are staying behind? Officials say they are pretty much going to be on their own because, of course, once the storm is seriously hitting the Keys down here, no one will be able to get out to help them.

And for those who are in hospitals way down in the lower Florida Keys, around Key West, those people will be airlifted by the National Guard out of North Carolina, and they'll be taken all the way, Kitty, to Alabama.

Back to you.

PILGRIM: Susan, there have been concerns about gas supplies for people evacuating the Keys. Now are those concerns justified?

CANDIOTTI: Well, throughout the day, there have been rumors that is there is not enough gas for those who want to buy it and rumors about gas being rationed. We do have some reports of that.

However, according to the governor, there is no shortage of gasoline, and they do expect those who need it will be able to buy it.

PILGRIM: All right. Thank you very much.

Susan Candiotti.

Now before Ivan strikes Florida, it will charge into Cuba, and, tonight, a hurricane watch is in force for all of Cuba. The government has ordered more than 100,000 people to leave their homes.

Just 100 miles to the south, Hurricane Ivan is already pounding Jamaica with heavy rain, massive waves. Much worse is to come. The Jamaican government ordered half a million people to leave coastal areas. But many Jamaicans have refused to leave their homes.

Hurricane Ivan has already devastated the tiny Caribbean island of Grenada where at least 17 people were killed. The hurricane destroyed or damaged 90 percent of Grenada's buildings. Residents are struggling to find fresh water and food and medical supplies. Looters are roaming the streets and other Caribbean countries have sent troops to help restore order.

We'll have much more on Hurricane Ivan later in the broadcast. I will talk with NASA storm tracker Marshall Shepherd.

Another storm brewing tonight. This one at CBS News. And we're not sure what category this storm is. Documents cited by "60 Minutes II" suggest President Bush shirked his National Guard duties. But now experts say the documents may be fake. They point out features on the documents that -- they suggest they were created by a modern-day computer and not a decades-old typewriter.

Dan Rather, who reported the story, says he stands by his reporting.

(BEGIN VIDEO CLIP)

DAN RATHER, CBS NEWS ANCHOR: I believe -- I know that this story is true. I believe that the witnesses and the documents are authentic. We wouldn't have gone to air if they had not been. There isn't going to be -- there's no -- what did you say, an apology?

UNIDENTIFIED MALE: Apology or any kind of retraction or...

RATHER: Not even discussed, nor should it be.

(END VIDEO CLIP)

PILGRIM: CBS has not disclosed how it obtained the documents in question. The network tonight denies a report that it launched an internal investigation into its report.

Well, we'd like to hear what you think about this, and our poll question tonight is: Should Dan Rather and CBS News reveal the source of the Bush memos? Yes or no. Cast your vote at cnn.com/lou. And we'll bring you the results later in the broadcast.

President Bush did not comment on the controversy today as he campaigned in two battleground states. Instead, Mr. Bush focused on domestic issues, and the president also had harsh new words for Senator John Kerry on the war in Iraq.

Dana Bash reports from Portsmouth, Ohio.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president's battleground buscade rolled through Appalachians' small towns with a traveling companion Republican Convention viewers may recognize.

SEN. ZELL MILLER (D), GEORGIA: I am honored to be here with you, and I am proud to be back on the trail with President Bush.

BASH: Zell Miller, the Georgian who infuriated fellow Democrats last week with his biting anti-John Kerry oratory. Team Bush says this son of Appalachia is still a crucial weapon here.

MILLER: All of you who might be hesitant to bring it up around the dinner table or say something at the union meeting, tell them that George W. Bush is a Republican we Democrats can proudly support.

BASH: Registered Democrats outnumber Republicans two to one in West Virginia, stop one on this Bush bus trip.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're going to win the election.

BASH: Clearly pumped from several polls showing his lead is widening, the president tried to keep momentum going with a formula he thinks is working.

SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: This war in Iraq...

BASH: Take what Kerry says on Iraq, find a contradiction, throw his credibility into question, and the campaign off message. This week, Kerry's been questioning the $200 billion price tag in Iraq when it's needed at home.

BUSH: The newest wrinkle is that Senator Kerry has now decided we are spending too much money in Iraq, even though he criticized us earlier for not spending enough. One thing about Senator Kerry's position is clear: If he had his way, Saddam Hussein would still be in power.

BASH: The Bush campaign then pointed to an interview the senator gave last year saying Iraq funding should actually be increased "by whatever number of billions of dollars it takes to win." Kerry aides responded Bush miscalculations in Iraq made the costs higher than necessary.

As the president bused into Southeast Ohio, he continued to steer clear of controversy both about his National Guard service and whether new documents that reignited the issue are authentic. He also steered clear of any reporters poised to ask him about it.

(END VIDEOTAPE)

BASH: And, privately, Bush aides are really relishing in questions about whether or not those potentially damaging documents are fake. They hope because there is doubt that this story won't stick to Mr. Bush -- Kitty.

PILGRIM: All right. Thanks very much.

Dana Bash.

Now Senator Kerry also avoided the National Guard controversy. Instead, he blasted President Bush on his health-care and gun-control policies at a campaign stop in another critical state.

Ed Henry reports from St. Louis, Missouri.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): At a town hall meeting in the battleground state of Missouri, John Kerry once again refused to comment on President Bush's National Guard service.

UNIDENTIFIED MALE: What right Bush has to attack a veteran, which I was of World War II, and he wasn't even in the service -- that's a lot of bull.

KERRY: Well, there's an unbiased question.

HENRY: But Kerry expanded his attack on the president's domestic agenda, slamming Mr. Bush for saying he supports the assault weapons ban but will let it expire Monday.

KERRY: Never pushed the Congress to pass it, never stood up, caves in to the NRA, gives in to the special interests, and America's streets will not be as safe because of the choice that George Bush is making.

HENRY: The senator charged that the Bush administration is scaring Americans about the war on terror, but will now make it easier for terrorists to get their hands on weapons.

KERRY: In the al Qaeda manual on terror, they were telling people to go out and buy assault weapons, to come to America and buy assault weapons, and you can't fight a war on terror and you can't make our streets safe, which every enforcement officer in this nation knows.

HENRY: Some Democrats think it's a mistake for Kerry to get involved in a debate about guns since the issue hurt Al Gore in swing states, but Kerry was in West Virginia this week touting the fact he's a hunter, and Kerry aides say the assault weapon ban is popular, especially with suburban women.

At the town hall meeting with seniors, Kerry also charged that the president's new Medicare law has helped HMOs and insurance companies, but left seniors with a 17 percent hike in premiums. The Bush camp is firing back with an ad entitled "Medicare Hypocrisy, charging Kerry has voted to increase premiums five times.

(on camera): The Bush campaign flatly rejected the charge that the president is helping terrorists get weapons. They say Kerry is lashing out wildly because he is way behind in the polls.

Kerry, meanwhile, plans to continue to hit the president on this issue at a rally Monday with law-enforcement officers.

Ed Henry, CNN, St. Louis, Missouri.

(END VIDEOTAPE)

PILGRIM: Still to come, the latest message from al Qaeda sparks new fears of a terror attack. We'll have that report.

And then violence in Iraq threatens to derail the first national election since the fall of Saddam Hussein. "TIME" magazine correspondent Vivienne Walt has just returned from a year and a half in Baghdad, and she will be my guest.

And than another -- bracing for yet another powerful deadly storm as Ivan barrels towards landfall once again. And we'll have the very latest on where Hurricane Ivan is likely to strike.

(COMMERCIAL BREAK)

PILGRIM: The State Department tonight renewed its warning about the possibility of more al Qaeda attacks three years after the September 11 attack. Now many radical Islamist leaders have been captured or killed, but Osama bin Laden is still at large, and, yesterday, there was a new videotape of his top deputy.

Justice Correspondent Kelli Arena has the report.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): U.S. officials say the new al Qaeda tape could serve as a trigger for another terrorist attack, but the level of concern was already very high before the tape was released.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: We continue to worry, as you know, about this election period, this window.

ARENA: Much of the concern is focused on the potential for an attack modeled after the train bombings in Madrid. Some suggest it altered the outcome of the Spanish election.

Counterterrorism officials say intelligence continues to suggest a plot against the United States is underway, but cite no specifics.

TOM RIDGE, SECRETARY OF HOMELAND SECURITY: There was a consistent, credible reporting stream that talked about disruption of our democratic process.

ARENA: Government officials say the concern about an al Qaeda attack is as great as it was in the days following September 11, despite an aggressive assault. The U.S. and its allies, particularly Pakistan, say they have taken into custody or killed three-quarters of al Qaeda's leadership and hundreds of operatives.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It's harder for them to travel between countries, it's harder for them to communicate with each other, it's harder for them to raise money, it's harder for them to do everything.

ARENA: Even so, U.S. officials say al Qaeda's central command is still functioning.

BRUCE HOFFMAN, RAND CORPORATION: So what we see, I believe, is that al Qaeda still retains some ability at least to plan, to order the surveillance and reconnaissance of potential targets.

ARENA: Intelligence officials say there is evidence Osama bin Laden is still involved in planning, but, beyond that, the new command structure is unclear.

For example, Pakistani officials are currently searching for Abu Faraj al Libbi, who is described as an operational planner. Some say he is among the most of the senior operatives. Others aren't so sure.

Even more complicated, untangling the web of affiliates.

JOHN MCLAUGHLIN, ACTING DIRECTOR, CIA: As we are in a tactical phase of terrorism, we are quite aware that we're taking down terrorist networks, but that new ones are popping up in their place.

(END VIDEOTAPE)

ARENA: Several U.S. counterterrorism officials have said that come October, as the election nears, they expect another broad push to secure the homeland with even more manpower on the street for both security and intelligence gathering -- Kitty.

PILGRIM: All right. Thanks very much.

Kelli Arena.

The Bush administration says Iraq is one of the key battlegrounds in the global war on terror, and, today, Defense Secretary Donald Rumsfeld said the elections for the Iraqi assembly will go ahead as planned in January. Critics say insurgents have made it unsafe for the Iraqi government to hold a nationwide election anytime soon.

Well, joining me now is "TIME" magazine correspondent Vivienne Walt. She's just returned from Baghdad.

And thanks very much for joining us.

VIVIENNE WALT, CORRESPONDENT, "TIME" MAGAZINE: You're welcome.

PILGRIM: You have spent considerable time in Iraq. You were there before Saddam fell. You were there after. You have unique perspective on how the Iraqi population is feeling about their newfound liberty. Tell us what it's like these days.

WALT: Well, I mean, it's almost, you know, mindboggling really to try to compare the before and after. Going there, going to Iraq before the war was really a terrifying experience, and there was almost not a moment of the waking day that you could not feel the sort of sense of fear. It really was a very, you know, menacing place.

Iraqis today are, obviously, in fear, but it's a different kind of fear. They fear violence. They fear, you know, the militarism of the country. It doesn't -- it's not quite as pervasive and it's not internal. So it's really a terribly different feeling. It's, obviously, also a much more violent place, and so it's a mixed specter. Extremely mixed.

PILGRIM: You've spent a lot of time there, and, in recent days, it appears to someone not there that it would be a violent place, and it's getting increasingly more violent. Do you think that that is the case?

WALT: Yes, it certainly is, Kitty. I mean, if you had asked me six months ago if I was optimistic, I would likely have said yes, much more readily than I am, you know, optimistic today. I mean, the violence has, certainly, spread to other parts of the country.

The U.S. is dealing with two -- really two war fronts that could join up. I mean, they're dealing with Shia insurgents who are most certainly inspired by al Qaeda, if not directly linked to them. They're also dealing with an entire guerrilla army that al Sadr has spawned.

So the fact they're fighting two wars that are essentially two separate wars at the same time, you know, 17 months after the war, nobody really thought that the U.S. would be engaged in such full-on combat at all.

PILGRIM: Exactly. What is your assessment of the interim government and the prospect of elections in January?

WALT: Well, you know, Rumsfeld's sort of confidence -- it's really essential on the ground. He's got to come out and say this is going to go ahead, you cannot derail this. It's a message as much to the Iraqi insurgents as it is to the Americans who are wondering how long we're going to be dug in there.

But, in reality, on the ground, it's really quite hard to see how campaigning is going to go on nationally. I know from my own experience you can barely get out of Baghdad these days. It's very difficult to travel around the country, the parts that are, you know, exceedingly unsafe for international observers.

The U.N. is not yet back there. They've got an extraordinary amount of work to do in just three months' time.

PILGRIM: One of the great worries in this country is the degree of radical extremism that's going on, Islamic extremism. Is it getting worse inside Iraq, or is it sort of moderated, do you believe?

WALT: I would say it is, in some ways, getting worse inside Iraq. I mean, Iraq before the war was a very secular country. I mean, I've traveled a lot around the region.

The one good thing about going to Iraq was I never had to wear a head scarf. You never felt for a moment that as a woman you were treated much differently than anybody else. That has certainly changed, and I do not leave the hotel these days without a head scarf on. That's a very sharp change just in regular people's lives. It's not just the fact that I'm a westerner. It's Iraqis themselves.

And that sense is really because the U.S. is such a huge presence in the country, and it's become everybody's, in a sense, common enemy. You didn't have that before. It's a very physical, obvious enemy, and, in a sense, it has created a whole new feeling of religious fervor.

PILGRIM: We certainly love hearing your viewpoint from having spent so much time in Iraq. Thanks for joining us.

WALT: You're welcome.

PILGRIM: Vivienne Walt.

In tonight's Heroes, a Marine who led his unit through two intense fire fights in the war in Iraq. Gunnery Sergeant Tim Haney won the Silver Star for his leadership and calm in the middle of the chaos of battle.

Bill Tucker has his story.

(BEGIN VIDEOTAPE)

SGT. TIM HANEY, U.S. MARINE CORPS: Receiving the Silver Star is a very prestigious award, and I am completely humbled by it. When I first heard that I was put in for the award, I didn't understand why or I didn't understand -- I didn't think that I had done anything spectacular.

BILL TUCKER, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): For Gunnery Sergeant Tim Haney now training to go back to Iraq, what happened last year during the fight for Nasiriyah was what he had spent half his life training for in the Marines. During two separate fire fights, he jumped from his vehicle and ran through intense machine gunfire to pinpoint Iraqi positions.

HANEY: Your first instinct is that, boy, these guys really mean business and that they are trying to hurt you.

TUCKER: After the second incident, an explosion riddled his body with 60 pieces of shrapnel.

HANEY: I have some shrapnel here on my side where it went through sides of my flak where the flak vest doesn't cover and from my waist on down.

TUCKER: He ignored his injuries and tended to the wounds of others and calmed down his young platoon.

HANEY: We had a lot of Marines that were -- had never been in a combat situation before and never been in an environment where they've shot at before. So a little apprehension, a little nervousness. I was just going around and making sure that Marines were taken care of and that there was a confidence level being bestowed into them, like, hey, Gunny Haney's still here, he got hurt, he's OK.

TUCKER: Haney left the Marines in 1988, went to college, got bored and rejoined, restarting at the bottom and worked his way back up.

HANEY: Growing up, I saw "The Sands of Iwo Jima" probably one too many times.

TUCKER: With 18 years in the Corps, he's not about to retire, especially after three combat award ribbons and that Silver Star. HANEY: I looked at it - -I think I said before -- as not myself receiving the award, but receiving the award for everyone in the battalion.

TUCKER: Gunny Haney's unit redeploys to Iraq this fall.

Bill Tucker, CNN.

(END VIDEOTAPE)

PILGRIM: Still to come, eBay economics. A lively exchange between the vice presidential candidates about the online auction house and its impact on our economy.

Plus, big corporations aren't the only ones shipping American jobs to cheap foreign labor markets. We'll report on the newest wave of companies Exporting America.

And then, an extraordinary new documentary about the impact of offshoring, outsourcing on our economy and society. We'll report on the premiere of "American Jobs." That's next.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate and opinion. Here now, Kitty Pilgrim.

PILGRIM: This just in to CNN. In the last few minutes, former President Bill Clinton left New York Presbyterian Hospital after his heart surgery. The 58-year-old former president is on his way home to Chappaqua, north of New York City. And this is video just in to CNN of the motorcade leaving the hospital in Manhattan tonight. Bill Clinton had quadruple bypass surgery last Monday. He went to the hospital after complaining of chest pains.

Turning back to the campaign trail, Vice President Dick Cheney is campaigning tonight in the battleground state of Wisconsin, but it is a comment the vice president made last night that has captured attention. Cheney apparently believes there is a little recognized area of growth in the economy. But you won't find any Labor Department statistics on this sector.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: The economy's changing, you know. It's -- somebody pointed out to me today that something like 400,000 people make some money trading on eBay, you know.

(CROSSTALK)

CHENEY: Well, I didn't say their whole living. I mean, they've got various businesses and so forth, and they come and spend part of their time on eBay and generate some income that way, and that's a source that didn't even exist 10 years ago.

(END VIDEO CLIP)

PILGRIM: Now Vice President Cheney's opponent in the race for the White House was quick to add his own ideas about the often overlooked areas of growth.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: Dick Cheney said, well, now wait a minute. The economy's actually doing better than most people in the country are aware of because there are a lot of people selling things on eBay. You know, I'm here to tell you if we include the lemonade stands and the bake sales, this economy's roaring.

(END VIDEO CLIP)

PILGRIM: Senator John Edwards speaking last night in Washington, D.C.

In Exporting America tonight, a disturbing trend is emerging for new software businesses. Startup companies now say outsourcing is a prerequisite for getting their businesses off the ground.

Casey Wian reports from Fremont, California.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN BUSINESS CORRESPONDENT (voice-over): Silicon Valley software developer Sierra Atlantic makes no apologies for the fact that most of its work is done by engineers in India. Much of its business involves helping startup software companies launch their products. Without India's cost savings, those companies wouldn't exist because venture capital firms now require startups to offshore before they'll invest.

MARC HEBERT, EXECUTIVE VICE PRESIDENT, SIERRA ATLANTIC: It is now a table stake for a software startup to do a pretty large percentage of their product development with an outsourcing and offshore model, and I would say the majority of that work is done in India today, with China starting to grow quickly and other areas as well, Eastern Europe, Latin America, other parts of South Asia.

WIAN: Sierra Atlantic's founders are Indian immigrants, as are most of its 70 U.S. employees. Its Hyderabad, India, software developers make about a quarter of what U.S. workers would. That translates to 50 percent overall cost savings for its clients. The CEO of software startup Commendo says he had no other option.

RENALDO GIL, CHAIRMAN & CEO, COMMENDO SOFTWARE: Not in Silicon Valley during one of the most -- the toughest economic periods in history because capital is very, very tight.

WIAN: Gil says the lower costs will also speed up Commendo's development cycle by at least a year.

(on camera): Sierra Atlantic's offshoring business is growing faster than it expected. The company plans to add a total of about a thousand jobs in India this year and next.

(voice-over): Sierra Atlantic says hiring in the United States will be proportional. So that's less than 100 jobs. Nationwide, information technology employment continues to struggle. At the end of the first quarter, it was 2 percent higher than last year, and that's expected to slow because tech companies plan to hire fewer than half the number of workers they did last year.

HEBERT: It's clear that there is a lot of creative destruction in the -- in capitalist societies and economies. And no where more so than in Silicon Valley. And the benefits of that sort of creative destruction at the bottom line are fundamentally economic growth and more jobs in the long run.

WIAN: In the near term, however, most of Sierra Atlantic's jobs will be created in India. Casey Wian, CNN, Fremont, California.

(END VIDEOTAPE)

PILGRIM: Joining us for more on the economy, the war on terror and the presidential race are tonight's "News Makers." Ron Brownstein, is the national political correspondent at the "Los Angeles Times." Roger Simon is the national political editor at "U.S. News and World Report." And Steve Shepard editor-in-chief of "Businessweek." And gentlemen, thanks for joining me.

Let's start with the whole brouhaha over the documents, the documents from the '70s that CBS came out with, the great debate over whether they're authentic or not. Dan Rather very much strenuously defending them. And let's actually listen to what Dan Rather had to say about it first.

(BEGIN VIDEO CLIP)

DAN RATHER, CBS NEWS ANCHOR: I know that this story is true. I believe the witnesses and the documents are authentic. We wouldn't have gone to air if they had not been. There isn't going to be -- there's no -- what did you say an apology?

UNIDENTIFIED MALE: An apology or any kind of retraction.

RATHER: Not even discussed, nor should it be.

Somebody may be shell-shocked, but it is not I. And it is not anybody at CBS News.

(END VIDEO CLIP)

PILGRIM: Ron, let's start with you. Certainly a new wrinkle in this campaign.

RON BROWNSTEIN, LA TIMES: Absolutely. A couple thoughts. First, the dispute about the documents, I think, does throw some dust up around the CBS report and raises questions that we're going to be debating probably for a long time about this. But I would say that the broader question of Bush's service in the guard and impact it has on the race extends beyond the "60 Minutes" report. There are a number of other things going on this week. A liberal group, sort of an equivalent to the Swift Boat Veterans for Truth has emerged on the left called Texans for Truth that is raising money to air ads criticizing the president. There have been other investigative reports by the Boston Globe and others.

This is probably around as a parallel to the questions about Kerry through the end of the campaign regardless of what happens on the "60 Minutes" report.

PILGRIM: Roger, it seems very vituperative to me at this point.

ROGER SIMON, "U.S. NEWS AND WORLD REPORT: It is very vituperative. And it's likely to get worse. Both campaigns are in the accusation and rapid response mode. Kerry got beat up over his Vietnam War record. So, I suppose it was inevitable that Bush was going to get beat up over his own record in the National Guard.

What is find intriguing about these allegation that the documents are false, is that the White House has not denied the contents of these documents, even though they may be false. I think they just want to stay away from the issue, which I don't think will impact President Bush as much as it impacted accusations against John Kerry impacted him. For one reason, George Bush has never made the Vietnam era the centerpiece of his campaign.

PILGRIM: I know we were looking at those things with a magnifying glass today. The whole debate over the type face, and could a decades old computer actually made that kind of type. We were really scrutinizing. Of course, we are not experts and I guess it would take a very big expert. Steve, what about it?

STEVE SHEPARD, "BUSINESSWEEK": Well, what strikes me is how much better the Republicans are at this kind of campaigning than the Democrats are. The swift boat charges seem to be wrong. I mean, Kerry was a genuine hero in Vietnam. Bush didn't serve. He was in the National Guard.

Something comes up about his National Guard service, and immediately the credibility of that is called into questions, whereas the credibility of what the swift boat opponents of Kerry really didn't reach the same degree of difficulty. I just think the Republicans are a lot better at this.

PILGRIM: Yeah.

Let's move on to something else, which I would really like to move on. Let's move on to Iraq. And we've had a little bit of a turning point this week. We seemed to have hit an impasse in some certain pockets, and now there's a fall assault on some other areas in Iraq. Let's assess where we stand and where it stands as a campaign issue -- Ron.

BROWNSTEIN: Well, a couple things about Iraq. First of all, the other milestone we hit this week, in addition to what you're talking about in terms of change of strategy, is 1,000 casualties. And yet, despite that, support for the war has been growing in recent weeks. In part because it has received less attention in the media.

But also because the president has had some success in reframing the debate, arguing that the invasion of Iraq and the building of a Democratic government there is a critical step in the long run democratization in the Mid East, which he has held out as the key to reducing the threat of terror over time.

The challenge for Kerry is always been to find a way to differentiate himself from Bush, without repudiating the various stands he's taken along the way. He has now settled on an argument that says Iraq is costing us too much, and diverting too many resources from needs at home, because the president did not build an international coalition.

I do think if that argument works -- but I do over time. But I do think it is one that he can probably stay with longer than he has earlier arguments on this issue, although there may be pressure in the Democratic Party for a more fundamental break with the president if he continues to trail.

PILGRIM: We're looking at picture of John Kerry campaigning live tonight in Pennsylvania.

Roger, in the Heartland, does this really have resonance?

SIMON: Well, in the heartland is where a lot of the casualties are coming from. When you look at the chart that some newspapers have done of where the dead and wounded among American troops in Iraq have come from.

I know we all, Ron and I, at least, have spent a lot of time in Iowa this winter for obvious reason, the Iowa caucuses. And almost every plane had men in combat, jungle camouflage gear on it. Because if -- they were returning troops from Iraq. They were spending leave at home and then going back. And it is smalltown America, which still sends most of the troops to our war zones.

And I think Ron is right about Iraq. But I think what John Kerry also has to do is layout what he would do differently in Iraq than George Bush is doing, not just point out what he would have done differently.

In his speech on the subject this week, Kerry devoted only two sentences to what he would do differently, including the claim that he would get our allies to send more troops and more money over there without any explanation of how he would do it.

How do you get France and Germany to send troops to Fallujah and spend $50 billion or so on this war? There are rumors John Kerry is going to explain that. And I think he may be forced to.

PILGRIM: The whole comment about offering more incentives. I think it would almost impossible to figure what it might be, what inducements have -- would work in this case.

I wanted to turn to you, Steve, ask about Alan Greenspan's comments this week on the recovering economy. How might that play out politically?

SHEPARD: Well I think it deprives Kerry, to some degree, of a strong issue that he's had. Because the economy, in Greenspan's phrase, gaining some traction after the soft patch of the second quarter. And, you know, indicators look a little better.

And he will continue raising interest rates gradually. And they're still very, very low. And to the degree the economy is getting better, which it seems to be, this hurts Kerry's chances in some of those swing states.

PILGRIM: Critical time coming up. September 30, the debates. We have to close this out quickly. But Ron, some thoughts on that?

BROWNSTEIN: Yes. It's probably the best opportunity for Senator Kerry to reverse the reversal of momentum that we have seen in August and September. President Bush was trailing in 2000 going into the debates. He effectively turned the race around.

I think Senator Kerry has to shift the debate from why not the change to the arguments for change. Issues like rising healthcare costs, poverty, number of Americans without insurance and so forth. The debates probably is his best opportunity to do it. And it will be critical juncture for him in this campaign.

PILGRIM: And with the polls the way they are, Roger, how do you see the debates playing?

SIMON: As being very, very important. It is the biggest political event of the political year. The TV audience for the debates is the biggest by far, far bigger than the conventions. And sometimes it challenges, or even beats the Super Bowl. Americans like to watch debates for the same reason, I suppose, they like to watch the Indy 500, to see who crashes and burns. But there is also some information to be gleaned from it.

The problem for Kerry, the challenge for Kerry is that we have seen candidate who think they are intellectually superior to George Bush, Al Gore, go up against George Bush and fail.

PILGRIM: It will be an interesting political season. Steve, I'm sorry, but we have to -- we've closed this here, so we'll give you the first word next time.

Thanks very much, gentlemen. Ron Brownstein, Roger Simon and Steve Shepard. Thank you.

A reminder now to vote in tonight's poll. "Should Dan Rather and CBS News reveal the source of the Bush memos? Yes or no." Cast your vote at CNN.com/lou. We'll bring the results a little bit later in the broadcast. Coming up next, Florida braces for the unthinkable: a third hurricane in less than a month. We'll have the latest on Hurricane Ivan, when, where, and where it might hit next.

And Marshal Shepherd from NASA is our guest.

And then the escalating war on radical Islamist terrorism and a possible change in how the Arab world views the violence. Middle East expert Fouad Ajami joins us.

Plus, solar surprise, the crash of the Genesis Space Capsule might not have been as devastating as first thought. That and a great deal more still ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Hurricane Ivan tonight is powerful and a deadly category IV hurricane. Ivan will hit Jamaica tonight and soon the already ravaged state of Florida. Florida Governor Jeb Bush today extended a mandatory evacuation in southwestern Florida. Now this eye of the hurricane moves 70 miles closer to Jamaica in just about three hours and that rapid movement is likely due to the formation of a new eye.

Joining me now to discuss Hurricane Ivan and the very latest storm tracking technology is Dr. Marshall Shepherd, deputy project scientist at NASA. Thanks very much for joining us.

MARSHALL SHEPHERD, DEP. PROJECT SCIENTIST, NASA: Thank you.

PILGRIM: This business about the new eye and old eye, it's confusing to me. Can you sort that out for us?

SHEPHERD: Well, certainly. In these intensifying or very strong storms you often see a cycle of eye regeneration where you'll a cycle where one eye will collapse and a new eye will develop. And that may be what we're seeing here with Ivan. One of our goals at NASA is to try to understand what really makes these storms tick, what's going on inside the storm. And that's typically what we utilize our new satellite technology and new models to investigate.

PILGRIM: Dr. Shepherd, when they regenerate like that, do they get stronger?

SHEPHERD: We often see an intensification phase when we see these regenerating eye walls, what we call concentric eye walls. Sometimes they weaken but in the case of Ivan, the waters are very warm in the Caribbean and Atlantic basin right now and that really is the fuel supply for these big -- what I like to call heat engines in these storms.

PILGRIM: Why are we seeing so many hurricanes in such rapid succession?

SHEPHERD: It is really an interesting time. We've seen a very active early part to the season here and one of the reasons is in fact the temperatures in the ocean are very warm right now. In fact, on average they're about one degree warmer than we've seen in the past. Now that may not sound like a lot but if you think about previous seasons, the hurricanes have been running on 87 octane fuel. This year they're running on 89 or 93 octane because that warm water is plentiful.

PILGRIM: This is not our imagination. This will be the first time in many decades that we'll have three so quickly together, correct?

SHEPHERD: It will be certainly unprecedented to see three major storms make landfall in Florida in such a short turnaround time. Back around 1995 we think we entered a new natural phase of more intense and more frequent activity of hurricanes. We've seen this in the past and we think we're seeing it again. Here is a satellite image from one of our NASA satellites actually showing that warm water in the Gulf of Mexico and it looks as if Hurricane Ivan will actually tap some of that warm, moist water.

PILGRIM: Fascinating technology but a disturbing conclusion. Thanks very much for joining us this evening. Dr. Marshall Shepherd.

SHEPHERD: Thank you.

PILGRIM: Coming up, a high level of concern tonight about an al Qaeda terrorist attack. Middle Eastern studies Professor Fouad Ajami says we are very much at war with al Qaeda. He will be my guest.

(COMMERCIAL BREAK)

PILGRIM: As we reported, the State Department tonight renewed its warning about the possibility of more al Qaeda attacks three years after the September 11 attacks. My next guest says recent terrorist attacks including the massacre of school children in Russia have stretched the moral limits of our world to the breaking point. Fouad Ajami is a professor of Middle Eastern studies at Johns Hopkins University. And he joins me now. Thanks for being here.

FOUAD AJAMI, JOHNS HOPKINS UNIVERSITY: Thank you, Kitty.

PILGRIM: First of all, this new al Qaeda tape. How do you assess it and is it as dire as it sounds?

AJAMI: Well, this is Ayman Zawahiri. He is really the brains of the -- the brilliant Egyptian physician who is absolutely merciless, he really is much more interesting and much more frightening than Osama bin Laden. Osama bin Laden is just the face of this organization. And it is the third anniversary, as we know of September 11. It is a reminder that they are still out there and it's a reminder for us that this is part of the same war and it's part, really, actually, if you will, it's al Qaeda speaking to their base, reminding them that they are still contending in Iraq and they're contending in Afghanistan and that the battle continues.

PILGRIM: You spend your life studying this. I feel free to ask you this question. Is it mere posturing or do you think that this is a clear warning of an imminent...

AJAMI: No. I think it is just simply the war continues. In fact, what they're saying is, look, you may think you are rid of us but we are still contending and we're still fighting in Afghanistan. We have boys of terror in Iraq as well. We have Abu Musab Zarqawi, the prince of darkness, again an affiliate of this al Qaeda and he's killing Iraqis, he's killing Americans, he's fighting in Iraq. And that we now have a front, a new front in this war on terror.

PILGRIM: One of the great horrors of this week has been watching the tapes coming out of Beslan and it is just disgusting. What is your assessment of the situation there and how this plays into the entire...

AJAMI: Well, I think Beslan was really a moment of truth even though it happened far away from the Arab world. It occasioned really a slum in the Arab world because I think it gave Arabs a chance to break with the culture of denial and to break with the pattern of denial. Because after September 11, 2001, many Arabs were just simply unable and unwilling to accept that these were Arabs who did these crimes.

So now three years after that with Russia in the background, with the children being killed and murdered in this way, a debate has opened in the Arab world about the Islamic sources of terror. And a desire has emerged to draw a line for these preacher whose have been inciting these young people to these deeds of terror.

PILGRIM: Do you think that this is there the way out of the (UNINTELLIGIBLE)?

AJAMI: I think it is the beginning of a way out of the morass. I think the war will continue. And it is a long, long journey. But I think if you now look at the Arab world and you look at the debate in the Arab world, people have begun to say, look, these radicals have ruined the life of this region and there is no salvation for this region until and unless Muslims themselves recover their faith from these terrorists who've hijacked the faith and bent it to their will.

PILGRIM: Fouad, we have just a second left. But you just came back from Iraq and I wanted to get your impressions.

AJAMI: Well, you know, Iraq is a thing and its opposite. It is both -- there is the heartbreak of Iraq and there are the accomplishments of Iraq. We know about the heartbreak. We saw it just recently in the "New York Times," the faces of these thousand young people, average age 26, we lost. We know that Iraq will test our souls and test our patience. But if you take a look at what's happening on the ground, the training of the Iraqi forces, the success of our mission there, trying to train the Iraqis to take control of their own destiny, the success of Lieutenant General Dave Petraeus and his people because they are trying to train 250,000 Iraqis, border guard, policemen, soldiers, to give them the burden of defending their own country. And if you take a look at the caliber of the Iraqi government, it is decent men and women trying to create a new Iraq under very, very heavy burdens. PILGRIM: So in your estimation it is going reasonably well?

AJAMI: It's going reasonably well but the price has been extraordinarily high. And we know that all too well.

PILGRIM: Very good. Thank you very much, Fouad Ajami.

AJAMI: Thank you.

PILGRIM: Up next, some of your thoughts on exporting American jobs and welcome news for NASA scientists tonight after the shocking crash of the Genesis space capsule. We'll have that story and more still ahead.

(COMMERCIAL BREAK)

PILGRIM: We look at a new documentary tonight which explores the impact of low wage foreign competition on American workers. And, as you will see, the exporting of American jobs has devastated millions of American workers, their families and their communities. Louise Schiavone reports.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The world premiere of "American Jobs" came home to its unintentional stars, the laid-off textile workers of Kannapolis, North Carolina.

UNIDENTIFIED FEMALE: We ran three machines, I did. Some of them ran two. I ran three. I loved it. It made perfect wash cloths.

They're making my wash cloths overseas and shipping them back over here, and they're not near the quality.

SCHIAVONE: In the string of 2003, 4,500 workers, 1,000 of them in Kannapolis alone found themselves suddenly jobless as textile maker Pillowtek shut down. A symbol of the outsourcing phenomenon that has ravaged American manufacturing and the service sector, the 158 acre complex stands empty now.

ELOISE MURCHINSON, FRM. PILLOWTEK EMPLOYEE: It is too big to be empty, just sitting here with nothing in it. And people need jobs.

SCHIAVONE (on camera): Exploring the social agony of outsourcing, filmmaker Greg Spotts came back to Kannapolis to premiere his movie and continue the conversation.

GREG SPOTTS, DIRECTOR, "AMERICAN JOBS": I'm finding that maybe as a country we were a little naive in thinking that other countries would only target our worst jobs, or our lowest skilled jobs. And in fact, countries like India and China are being very strategic in trying to pick off some of our better paying jobs, some of our higher skilled jobs.

SCHIAVONE (voice-over): Spotts opened a dialogue with the audience after the showing. On people's minds, what's next for them. Kannapolis mayor Ray Moss believes good things lie ahead. The town is now cultivating new areas for commercial and residential development.

MAY. RAY MOSS, KANNAPOLIS, N.C.: I'm very optimistic. I'm struck like a dope with a thing called hope. And you can't get it out of my mind. I believe Kannopolis sits on the very edge of a new day. And I know that's going to happen

SCHIAVONE: Rich in southern hospitality and sheer determination, residents hope that Spotts film will bring attention to their community. But what they real need are jobs. Louise Schiavone, CNN, Kannapolis, North Carolina.

(END VIDEOTAPE)

PILGRIM: All next week on this broadcast, we will feature this critically important film, highlighting the issue of exporting American jobs.

Taking a look now at some of your thoughts on "Exporting America."

Inez Reese of California writes, "I feel that neither party has the best interests of the people that keep this country moving, the ones that get up every morning and go to work. Now, corporate America is outsourcing the jobs that most people need to put food on the table. It has gotten to the point where profits are more important than their employees. Where is this country going."

James Chaffin of White Oak, Texas, "I don't understand how the government can say that the economy is doing well with so many jobs moving to other countries and leaving American's unemployed. If people aren't making money, how can they spend to boost the economy."

We love hearing from you. Send you are you thoughts at loudobbs@CNN.com. Please send us your name and address. Each of you whose e-mail is read on the broadcast receives a free copy of Lou's new book, "Exporting America."

NASA scientists today say they are encouraged after an initial inspection of the $264 million Genesis Capsule. The Genesis was carrying solar wind particles, which scientists hope will provide details on planet formation and the composition of the sun.

Now scientists began picking through the mangled wreckage yesterday and did recover several samples, but the exact number won't be known for some time.

The capsule crashed in the Utah desert on Wednesday at nearly 200 miles an hour when its parachutes failed to deploy. The Genesis has been moved to a clean room at the U.S. Army base in Utah.

Still ahead, the results of tonight's poll and a reminder to visit our Web site for the complete list of more than 1,000 companies we've confirmed to be exporting America. CNN.com/lou.

(COMMERCIAL BREAK) PILGRIM: Now, the results of tonight's poll. 41 percent of you say Dan Rather and CBS news should reveal the source of the Bush memos, and 59 percent do not.

Thanks for being with us tonight. Please join us Monday. Democratic Senator Dianne Feinstein and Republican Senator Larry Craig will debate the ban on assault weapons as it expires.

And for all of us here, have a wonderful and safe weekend. 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 September 10, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, September 10. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
KITTY PILGRIM, CNN ANCHOR: Good evening.

Tonight, Hurricane Ivan is barreling across the Caribbean at 140 miles an hour, with Florida firmly in its sights. Governor Jeb Bush tonight issued a new evacuation order for residents in the far southwest of the state.

Tonight, Jamaica is bracing for the full impact of the hurricane. Officials are warning of flash floods and mud slides, and the outer bands of Ivan are lashing Jamaica with torrential rain and huge waves. The hurricane is likely to hit the Florida Keys, however, by Monday afternoon.

Susan Candiotti joins us from Key Largo -- Susan.

SUSAN CANDIOTTI, CNN CORRESPONDENT: Hello, Kitty.

As many of you may be aware, here in the Florida Keys, there is only one way in and one way out, and, so far, there has been an orderly evacuation that began at 7:00 this morning for those who live down here permanently. There are about 80,000 of those permanent residents. About 60,000, according to officials, are expected to heed the advice to head north.

Now, from a helicopter, you get a different view and perhaps a better appreciation of what the highway looks like down here. At times, you've got four lanes going in both directions; at times, only two lanes. So that can make things slow going.

Because we are at sea level here, when a hurricane comes through, there can be a very dangerous storm surge. So that's why officials warn that staying behind may not be too smart.

(BEGIN VIDEO CLIP)

CAPTAIN JENNY WELL-THOMSON, MONROE COUNTY SHERIFF'S OFFICE: Because we're islands, the other challenge we have is that there's nothing to break that storm up. Or, actually, we are what breaks that storm up. So, you know, we are dead in the path of a lot of hurricanes. We've been lucky to dodge them, but, you know, this is definitely a challenge.

(END VIDEO CLIP)

CANDIOTTI: Now residents and property owners, meantime, are boarding up, bracing for whatever Ivan plans to dish out.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We've lived here over 22 years, I guess. This is our first time evacuating. So this is pretty serious.

UNIDENTIFIED MALE: Everyone's close and whatever each neighbor needs, we just help out.

(END VIDEO CLIP)

CANDIOTTI: Now what about those who are staying behind? Officials say they are pretty much going to be on their own because, of course, once the storm is seriously hitting the Keys down here, no one will be able to get out to help them.

And for those who are in hospitals way down in the lower Florida Keys, around Key West, those people will be airlifted by the National Guard out of North Carolina, and they'll be taken all the way, Kitty, to Alabama.

Back to you.

PILGRIM: Susan, there have been concerns about gas supplies for people evacuating the Keys. Now are those concerns justified?

CANDIOTTI: Well, throughout the day, there have been rumors that is there is not enough gas for those who want to buy it and rumors about gas being rationed. We do have some reports of that.

However, according to the governor, there is no shortage of gasoline, and they do expect those who need it will be able to buy it.

PILGRIM: All right. Thank you very much.

Susan Candiotti.

Now before Ivan strikes Florida, it will charge into Cuba, and, tonight, a hurricane watch is in force for all of Cuba. The government has ordered more than 100,000 people to leave their homes.

Just 100 miles to the south, Hurricane Ivan is already pounding Jamaica with heavy rain, massive waves. Much worse is to come. The Jamaican government ordered half a million people to leave coastal areas. But many Jamaicans have refused to leave their homes.

Hurricane Ivan has already devastated the tiny Caribbean island of Grenada where at least 17 people were killed. The hurricane destroyed or damaged 90 percent of Grenada's buildings. Residents are struggling to find fresh water and food and medical supplies. Looters are roaming the streets and other Caribbean countries have sent troops to help restore order.

We'll have much more on Hurricane Ivan later in the broadcast. I will talk with NASA storm tracker Marshall Shepherd.

Another storm brewing tonight. This one at CBS News. And we're not sure what category this storm is. Documents cited by "60 Minutes II" suggest President Bush shirked his National Guard duties. But now experts say the documents may be fake. They point out features on the documents that -- they suggest they were created by a modern-day computer and not a decades-old typewriter.

Dan Rather, who reported the story, says he stands by his reporting.

(BEGIN VIDEO CLIP)

DAN RATHER, CBS NEWS ANCHOR: I believe -- I know that this story is true. I believe that the witnesses and the documents are authentic. We wouldn't have gone to air if they had not been. There isn't going to be -- there's no -- what did you say, an apology?

UNIDENTIFIED MALE: Apology or any kind of retraction or...

RATHER: Not even discussed, nor should it be.

(END VIDEO CLIP)

PILGRIM: CBS has not disclosed how it obtained the documents in question. The network tonight denies a report that it launched an internal investigation into its report.

Well, we'd like to hear what you think about this, and our poll question tonight is: Should Dan Rather and CBS News reveal the source of the Bush memos? Yes or no. Cast your vote at cnn.com/lou. And we'll bring you the results later in the broadcast.

President Bush did not comment on the controversy today as he campaigned in two battleground states. Instead, Mr. Bush focused on domestic issues, and the president also had harsh new words for Senator John Kerry on the war in Iraq.

Dana Bash reports from Portsmouth, Ohio.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president's battleground buscade rolled through Appalachians' small towns with a traveling companion Republican Convention viewers may recognize.

SEN. ZELL MILLER (D), GEORGIA: I am honored to be here with you, and I am proud to be back on the trail with President Bush.

BASH: Zell Miller, the Georgian who infuriated fellow Democrats last week with his biting anti-John Kerry oratory. Team Bush says this son of Appalachia is still a crucial weapon here.

MILLER: All of you who might be hesitant to bring it up around the dinner table or say something at the union meeting, tell them that George W. Bush is a Republican we Democrats can proudly support.

BASH: Registered Democrats outnumber Republicans two to one in West Virginia, stop one on this Bush bus trip.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're going to win the election.

BASH: Clearly pumped from several polls showing his lead is widening, the president tried to keep momentum going with a formula he thinks is working.

SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: This war in Iraq...

BASH: Take what Kerry says on Iraq, find a contradiction, throw his credibility into question, and the campaign off message. This week, Kerry's been questioning the $200 billion price tag in Iraq when it's needed at home.

BUSH: The newest wrinkle is that Senator Kerry has now decided we are spending too much money in Iraq, even though he criticized us earlier for not spending enough. One thing about Senator Kerry's position is clear: If he had his way, Saddam Hussein would still be in power.

BASH: The Bush campaign then pointed to an interview the senator gave last year saying Iraq funding should actually be increased "by whatever number of billions of dollars it takes to win." Kerry aides responded Bush miscalculations in Iraq made the costs higher than necessary.

As the president bused into Southeast Ohio, he continued to steer clear of controversy both about his National Guard service and whether new documents that reignited the issue are authentic. He also steered clear of any reporters poised to ask him about it.

(END VIDEOTAPE)

BASH: And, privately, Bush aides are really relishing in questions about whether or not those potentially damaging documents are fake. They hope because there is doubt that this story won't stick to Mr. Bush -- Kitty.

PILGRIM: All right. Thanks very much.

Dana Bash.

Now Senator Kerry also avoided the National Guard controversy. Instead, he blasted President Bush on his health-care and gun-control policies at a campaign stop in another critical state.

Ed Henry reports from St. Louis, Missouri.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): At a town hall meeting in the battleground state of Missouri, John Kerry once again refused to comment on President Bush's National Guard service.

UNIDENTIFIED MALE: What right Bush has to attack a veteran, which I was of World War II, and he wasn't even in the service -- that's a lot of bull.

KERRY: Well, there's an unbiased question.

HENRY: But Kerry expanded his attack on the president's domestic agenda, slamming Mr. Bush for saying he supports the assault weapons ban but will let it expire Monday.

KERRY: Never pushed the Congress to pass it, never stood up, caves in to the NRA, gives in to the special interests, and America's streets will not be as safe because of the choice that George Bush is making.

HENRY: The senator charged that the Bush administration is scaring Americans about the war on terror, but will now make it easier for terrorists to get their hands on weapons.

KERRY: In the al Qaeda manual on terror, they were telling people to go out and buy assault weapons, to come to America and buy assault weapons, and you can't fight a war on terror and you can't make our streets safe, which every enforcement officer in this nation knows.

HENRY: Some Democrats think it's a mistake for Kerry to get involved in a debate about guns since the issue hurt Al Gore in swing states, but Kerry was in West Virginia this week touting the fact he's a hunter, and Kerry aides say the assault weapon ban is popular, especially with suburban women.

At the town hall meeting with seniors, Kerry also charged that the president's new Medicare law has helped HMOs and insurance companies, but left seniors with a 17 percent hike in premiums. The Bush camp is firing back with an ad entitled "Medicare Hypocrisy, charging Kerry has voted to increase premiums five times.

(on camera): The Bush campaign flatly rejected the charge that the president is helping terrorists get weapons. They say Kerry is lashing out wildly because he is way behind in the polls.

Kerry, meanwhile, plans to continue to hit the president on this issue at a rally Monday with law-enforcement officers.

Ed Henry, CNN, St. Louis, Missouri.

(END VIDEOTAPE)

PILGRIM: Still to come, the latest message from al Qaeda sparks new fears of a terror attack. We'll have that report.

And then violence in Iraq threatens to derail the first national election since the fall of Saddam Hussein. "TIME" magazine correspondent Vivienne Walt has just returned from a year and a half in Baghdad, and she will be my guest.

And than another -- bracing for yet another powerful deadly storm as Ivan barrels towards landfall once again. And we'll have the very latest on where Hurricane Ivan is likely to strike.

(COMMERCIAL BREAK)

PILGRIM: The State Department tonight renewed its warning about the possibility of more al Qaeda attacks three years after the September 11 attack. Now many radical Islamist leaders have been captured or killed, but Osama bin Laden is still at large, and, yesterday, there was a new videotape of his top deputy.

Justice Correspondent Kelli Arena has the report.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): U.S. officials say the new al Qaeda tape could serve as a trigger for another terrorist attack, but the level of concern was already very high before the tape was released.

CONDOLEEZZA RICE, NATIONAL SECURITY ADVISER: We continue to worry, as you know, about this election period, this window.

ARENA: Much of the concern is focused on the potential for an attack modeled after the train bombings in Madrid. Some suggest it altered the outcome of the Spanish election.

Counterterrorism officials say intelligence continues to suggest a plot against the United States is underway, but cite no specifics.

TOM RIDGE, SECRETARY OF HOMELAND SECURITY: There was a consistent, credible reporting stream that talked about disruption of our democratic process.

ARENA: Government officials say the concern about an al Qaeda attack is as great as it was in the days following September 11, despite an aggressive assault. The U.S. and its allies, particularly Pakistan, say they have taken into custody or killed three-quarters of al Qaeda's leadership and hundreds of operatives.

DONALD RUMSFELD, SECRETARY OF DEFENSE: It's harder for them to travel between countries, it's harder for them to communicate with each other, it's harder for them to raise money, it's harder for them to do everything.

ARENA: Even so, U.S. officials say al Qaeda's central command is still functioning.

BRUCE HOFFMAN, RAND CORPORATION: So what we see, I believe, is that al Qaeda still retains some ability at least to plan, to order the surveillance and reconnaissance of potential targets.

ARENA: Intelligence officials say there is evidence Osama bin Laden is still involved in planning, but, beyond that, the new command structure is unclear.

For example, Pakistani officials are currently searching for Abu Faraj al Libbi, who is described as an operational planner. Some say he is among the most of the senior operatives. Others aren't so sure.

Even more complicated, untangling the web of affiliates.

JOHN MCLAUGHLIN, ACTING DIRECTOR, CIA: As we are in a tactical phase of terrorism, we are quite aware that we're taking down terrorist networks, but that new ones are popping up in their place.

(END VIDEOTAPE)

ARENA: Several U.S. counterterrorism officials have said that come October, as the election nears, they expect another broad push to secure the homeland with even more manpower on the street for both security and intelligence gathering -- Kitty.

PILGRIM: All right. Thanks very much.

Kelli Arena.

The Bush administration says Iraq is one of the key battlegrounds in the global war on terror, and, today, Defense Secretary Donald Rumsfeld said the elections for the Iraqi assembly will go ahead as planned in January. Critics say insurgents have made it unsafe for the Iraqi government to hold a nationwide election anytime soon.

Well, joining me now is "TIME" magazine correspondent Vivienne Walt. She's just returned from Baghdad.

And thanks very much for joining us.

VIVIENNE WALT, CORRESPONDENT, "TIME" MAGAZINE: You're welcome.

PILGRIM: You have spent considerable time in Iraq. You were there before Saddam fell. You were there after. You have unique perspective on how the Iraqi population is feeling about their newfound liberty. Tell us what it's like these days.

WALT: Well, I mean, it's almost, you know, mindboggling really to try to compare the before and after. Going there, going to Iraq before the war was really a terrifying experience, and there was almost not a moment of the waking day that you could not feel the sort of sense of fear. It really was a very, you know, menacing place.

Iraqis today are, obviously, in fear, but it's a different kind of fear. They fear violence. They fear, you know, the militarism of the country. It doesn't -- it's not quite as pervasive and it's not internal. So it's really a terribly different feeling. It's, obviously, also a much more violent place, and so it's a mixed specter. Extremely mixed.

PILGRIM: You've spent a lot of time there, and, in recent days, it appears to someone not there that it would be a violent place, and it's getting increasingly more violent. Do you think that that is the case?

WALT: Yes, it certainly is, Kitty. I mean, if you had asked me six months ago if I was optimistic, I would likely have said yes, much more readily than I am, you know, optimistic today. I mean, the violence has, certainly, spread to other parts of the country.

The U.S. is dealing with two -- really two war fronts that could join up. I mean, they're dealing with Shia insurgents who are most certainly inspired by al Qaeda, if not directly linked to them. They're also dealing with an entire guerrilla army that al Sadr has spawned.

So the fact they're fighting two wars that are essentially two separate wars at the same time, you know, 17 months after the war, nobody really thought that the U.S. would be engaged in such full-on combat at all.

PILGRIM: Exactly. What is your assessment of the interim government and the prospect of elections in January?

WALT: Well, you know, Rumsfeld's sort of confidence -- it's really essential on the ground. He's got to come out and say this is going to go ahead, you cannot derail this. It's a message as much to the Iraqi insurgents as it is to the Americans who are wondering how long we're going to be dug in there.

But, in reality, on the ground, it's really quite hard to see how campaigning is going to go on nationally. I know from my own experience you can barely get out of Baghdad these days. It's very difficult to travel around the country, the parts that are, you know, exceedingly unsafe for international observers.

The U.N. is not yet back there. They've got an extraordinary amount of work to do in just three months' time.

PILGRIM: One of the great worries in this country is the degree of radical extremism that's going on, Islamic extremism. Is it getting worse inside Iraq, or is it sort of moderated, do you believe?

WALT: I would say it is, in some ways, getting worse inside Iraq. I mean, Iraq before the war was a very secular country. I mean, I've traveled a lot around the region.

The one good thing about going to Iraq was I never had to wear a head scarf. You never felt for a moment that as a woman you were treated much differently than anybody else. That has certainly changed, and I do not leave the hotel these days without a head scarf on. That's a very sharp change just in regular people's lives. It's not just the fact that I'm a westerner. It's Iraqis themselves.

And that sense is really because the U.S. is such a huge presence in the country, and it's become everybody's, in a sense, common enemy. You didn't have that before. It's a very physical, obvious enemy, and, in a sense, it has created a whole new feeling of religious fervor.

PILGRIM: We certainly love hearing your viewpoint from having spent so much time in Iraq. Thanks for joining us.

WALT: You're welcome.

PILGRIM: Vivienne Walt.

In tonight's Heroes, a Marine who led his unit through two intense fire fights in the war in Iraq. Gunnery Sergeant Tim Haney won the Silver Star for his leadership and calm in the middle of the chaos of battle.

Bill Tucker has his story.

(BEGIN VIDEOTAPE)

SGT. TIM HANEY, U.S. MARINE CORPS: Receiving the Silver Star is a very prestigious award, and I am completely humbled by it. When I first heard that I was put in for the award, I didn't understand why or I didn't understand -- I didn't think that I had done anything spectacular.

BILL TUCKER, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): For Gunnery Sergeant Tim Haney now training to go back to Iraq, what happened last year during the fight for Nasiriyah was what he had spent half his life training for in the Marines. During two separate fire fights, he jumped from his vehicle and ran through intense machine gunfire to pinpoint Iraqi positions.

HANEY: Your first instinct is that, boy, these guys really mean business and that they are trying to hurt you.

TUCKER: After the second incident, an explosion riddled his body with 60 pieces of shrapnel.

HANEY: I have some shrapnel here on my side where it went through sides of my flak where the flak vest doesn't cover and from my waist on down.

TUCKER: He ignored his injuries and tended to the wounds of others and calmed down his young platoon.

HANEY: We had a lot of Marines that were -- had never been in a combat situation before and never been in an environment where they've shot at before. So a little apprehension, a little nervousness. I was just going around and making sure that Marines were taken care of and that there was a confidence level being bestowed into them, like, hey, Gunny Haney's still here, he got hurt, he's OK.

TUCKER: Haney left the Marines in 1988, went to college, got bored and rejoined, restarting at the bottom and worked his way back up.

HANEY: Growing up, I saw "The Sands of Iwo Jima" probably one too many times.

TUCKER: With 18 years in the Corps, he's not about to retire, especially after three combat award ribbons and that Silver Star. HANEY: I looked at it - -I think I said before -- as not myself receiving the award, but receiving the award for everyone in the battalion.

TUCKER: Gunny Haney's unit redeploys to Iraq this fall.

Bill Tucker, CNN.

(END VIDEOTAPE)

PILGRIM: Still to come, eBay economics. A lively exchange between the vice presidential candidates about the online auction house and its impact on our economy.

Plus, big corporations aren't the only ones shipping American jobs to cheap foreign labor markets. We'll report on the newest wave of companies Exporting America.

And then, an extraordinary new documentary about the impact of offshoring, outsourcing on our economy and society. We'll report on the premiere of "American Jobs." That's next.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate and opinion. Here now, Kitty Pilgrim.

PILGRIM: This just in to CNN. In the last few minutes, former President Bill Clinton left New York Presbyterian Hospital after his heart surgery. The 58-year-old former president is on his way home to Chappaqua, north of New York City. And this is video just in to CNN of the motorcade leaving the hospital in Manhattan tonight. Bill Clinton had quadruple bypass surgery last Monday. He went to the hospital after complaining of chest pains.

Turning back to the campaign trail, Vice President Dick Cheney is campaigning tonight in the battleground state of Wisconsin, but it is a comment the vice president made last night that has captured attention. Cheney apparently believes there is a little recognized area of growth in the economy. But you won't find any Labor Department statistics on this sector.

(BEGIN VIDEO CLIP)

RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: The economy's changing, you know. It's -- somebody pointed out to me today that something like 400,000 people make some money trading on eBay, you know.

(CROSSTALK)

CHENEY: Well, I didn't say their whole living. I mean, they've got various businesses and so forth, and they come and spend part of their time on eBay and generate some income that way, and that's a source that didn't even exist 10 years ago.

(END VIDEO CLIP)

PILGRIM: Now Vice President Cheney's opponent in the race for the White House was quick to add his own ideas about the often overlooked areas of growth.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: Dick Cheney said, well, now wait a minute. The economy's actually doing better than most people in the country are aware of because there are a lot of people selling things on eBay. You know, I'm here to tell you if we include the lemonade stands and the bake sales, this economy's roaring.

(END VIDEO CLIP)

PILGRIM: Senator John Edwards speaking last night in Washington, D.C.

In Exporting America tonight, a disturbing trend is emerging for new software businesses. Startup companies now say outsourcing is a prerequisite for getting their businesses off the ground.

Casey Wian reports from Fremont, California.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN BUSINESS CORRESPONDENT (voice-over): Silicon Valley software developer Sierra Atlantic makes no apologies for the fact that most of its work is done by engineers in India. Much of its business involves helping startup software companies launch their products. Without India's cost savings, those companies wouldn't exist because venture capital firms now require startups to offshore before they'll invest.

MARC HEBERT, EXECUTIVE VICE PRESIDENT, SIERRA ATLANTIC: It is now a table stake for a software startup to do a pretty large percentage of their product development with an outsourcing and offshore model, and I would say the majority of that work is done in India today, with China starting to grow quickly and other areas as well, Eastern Europe, Latin America, other parts of South Asia.

WIAN: Sierra Atlantic's founders are Indian immigrants, as are most of its 70 U.S. employees. Its Hyderabad, India, software developers make about a quarter of what U.S. workers would. That translates to 50 percent overall cost savings for its clients. The CEO of software startup Commendo says he had no other option.

RENALDO GIL, CHAIRMAN & CEO, COMMENDO SOFTWARE: Not in Silicon Valley during one of the most -- the toughest economic periods in history because capital is very, very tight.

WIAN: Gil says the lower costs will also speed up Commendo's development cycle by at least a year.

(on camera): Sierra Atlantic's offshoring business is growing faster than it expected. The company plans to add a total of about a thousand jobs in India this year and next.

(voice-over): Sierra Atlantic says hiring in the United States will be proportional. So that's less than 100 jobs. Nationwide, information technology employment continues to struggle. At the end of the first quarter, it was 2 percent higher than last year, and that's expected to slow because tech companies plan to hire fewer than half the number of workers they did last year.

HEBERT: It's clear that there is a lot of creative destruction in the -- in capitalist societies and economies. And no where more so than in Silicon Valley. And the benefits of that sort of creative destruction at the bottom line are fundamentally economic growth and more jobs in the long run.

WIAN: In the near term, however, most of Sierra Atlantic's jobs will be created in India. Casey Wian, CNN, Fremont, California.

(END VIDEOTAPE)

PILGRIM: Joining us for more on the economy, the war on terror and the presidential race are tonight's "News Makers." Ron Brownstein, is the national political correspondent at the "Los Angeles Times." Roger Simon is the national political editor at "U.S. News and World Report." And Steve Shepard editor-in-chief of "Businessweek." And gentlemen, thanks for joining me.

Let's start with the whole brouhaha over the documents, the documents from the '70s that CBS came out with, the great debate over whether they're authentic or not. Dan Rather very much strenuously defending them. And let's actually listen to what Dan Rather had to say about it first.

(BEGIN VIDEO CLIP)

DAN RATHER, CBS NEWS ANCHOR: I know that this story is true. I believe the witnesses and the documents are authentic. We wouldn't have gone to air if they had not been. There isn't going to be -- there's no -- what did you say an apology?

UNIDENTIFIED MALE: An apology or any kind of retraction.

RATHER: Not even discussed, nor should it be.

Somebody may be shell-shocked, but it is not I. And it is not anybody at CBS News.

(END VIDEO CLIP)

PILGRIM: Ron, let's start with you. Certainly a new wrinkle in this campaign.

RON BROWNSTEIN, LA TIMES: Absolutely. A couple thoughts. First, the dispute about the documents, I think, does throw some dust up around the CBS report and raises questions that we're going to be debating probably for a long time about this. But I would say that the broader question of Bush's service in the guard and impact it has on the race extends beyond the "60 Minutes" report. There are a number of other things going on this week. A liberal group, sort of an equivalent to the Swift Boat Veterans for Truth has emerged on the left called Texans for Truth that is raising money to air ads criticizing the president. There have been other investigative reports by the Boston Globe and others.

This is probably around as a parallel to the questions about Kerry through the end of the campaign regardless of what happens on the "60 Minutes" report.

PILGRIM: Roger, it seems very vituperative to me at this point.

ROGER SIMON, "U.S. NEWS AND WORLD REPORT: It is very vituperative. And it's likely to get worse. Both campaigns are in the accusation and rapid response mode. Kerry got beat up over his Vietnam War record. So, I suppose it was inevitable that Bush was going to get beat up over his own record in the National Guard.

What is find intriguing about these allegation that the documents are false, is that the White House has not denied the contents of these documents, even though they may be false. I think they just want to stay away from the issue, which I don't think will impact President Bush as much as it impacted accusations against John Kerry impacted him. For one reason, George Bush has never made the Vietnam era the centerpiece of his campaign.

PILGRIM: I know we were looking at those things with a magnifying glass today. The whole debate over the type face, and could a decades old computer actually made that kind of type. We were really scrutinizing. Of course, we are not experts and I guess it would take a very big expert. Steve, what about it?

STEVE SHEPARD, "BUSINESSWEEK": Well, what strikes me is how much better the Republicans are at this kind of campaigning than the Democrats are. The swift boat charges seem to be wrong. I mean, Kerry was a genuine hero in Vietnam. Bush didn't serve. He was in the National Guard.

Something comes up about his National Guard service, and immediately the credibility of that is called into questions, whereas the credibility of what the swift boat opponents of Kerry really didn't reach the same degree of difficulty. I just think the Republicans are a lot better at this.

PILGRIM: Yeah.

Let's move on to something else, which I would really like to move on. Let's move on to Iraq. And we've had a little bit of a turning point this week. We seemed to have hit an impasse in some certain pockets, and now there's a fall assault on some other areas in Iraq. Let's assess where we stand and where it stands as a campaign issue -- Ron.

BROWNSTEIN: Well, a couple things about Iraq. First of all, the other milestone we hit this week, in addition to what you're talking about in terms of change of strategy, is 1,000 casualties. And yet, despite that, support for the war has been growing in recent weeks. In part because it has received less attention in the media.

But also because the president has had some success in reframing the debate, arguing that the invasion of Iraq and the building of a Democratic government there is a critical step in the long run democratization in the Mid East, which he has held out as the key to reducing the threat of terror over time.

The challenge for Kerry is always been to find a way to differentiate himself from Bush, without repudiating the various stands he's taken along the way. He has now settled on an argument that says Iraq is costing us too much, and diverting too many resources from needs at home, because the president did not build an international coalition.

I do think if that argument works -- but I do over time. But I do think it is one that he can probably stay with longer than he has earlier arguments on this issue, although there may be pressure in the Democratic Party for a more fundamental break with the president if he continues to trail.

PILGRIM: We're looking at picture of John Kerry campaigning live tonight in Pennsylvania.

Roger, in the Heartland, does this really have resonance?

SIMON: Well, in the heartland is where a lot of the casualties are coming from. When you look at the chart that some newspapers have done of where the dead and wounded among American troops in Iraq have come from.

I know we all, Ron and I, at least, have spent a lot of time in Iowa this winter for obvious reason, the Iowa caucuses. And almost every plane had men in combat, jungle camouflage gear on it. Because if -- they were returning troops from Iraq. They were spending leave at home and then going back. And it is smalltown America, which still sends most of the troops to our war zones.

And I think Ron is right about Iraq. But I think what John Kerry also has to do is layout what he would do differently in Iraq than George Bush is doing, not just point out what he would have done differently.

In his speech on the subject this week, Kerry devoted only two sentences to what he would do differently, including the claim that he would get our allies to send more troops and more money over there without any explanation of how he would do it.

How do you get France and Germany to send troops to Fallujah and spend $50 billion or so on this war? There are rumors John Kerry is going to explain that. And I think he may be forced to.

PILGRIM: The whole comment about offering more incentives. I think it would almost impossible to figure what it might be, what inducements have -- would work in this case.

I wanted to turn to you, Steve, ask about Alan Greenspan's comments this week on the recovering economy. How might that play out politically?

SHEPARD: Well I think it deprives Kerry, to some degree, of a strong issue that he's had. Because the economy, in Greenspan's phrase, gaining some traction after the soft patch of the second quarter. And, you know, indicators look a little better.

And he will continue raising interest rates gradually. And they're still very, very low. And to the degree the economy is getting better, which it seems to be, this hurts Kerry's chances in some of those swing states.

PILGRIM: Critical time coming up. September 30, the debates. We have to close this out quickly. But Ron, some thoughts on that?

BROWNSTEIN: Yes. It's probably the best opportunity for Senator Kerry to reverse the reversal of momentum that we have seen in August and September. President Bush was trailing in 2000 going into the debates. He effectively turned the race around.

I think Senator Kerry has to shift the debate from why not the change to the arguments for change. Issues like rising healthcare costs, poverty, number of Americans without insurance and so forth. The debates probably is his best opportunity to do it. And it will be critical juncture for him in this campaign.

PILGRIM: And with the polls the way they are, Roger, how do you see the debates playing?

SIMON: As being very, very important. It is the biggest political event of the political year. The TV audience for the debates is the biggest by far, far bigger than the conventions. And sometimes it challenges, or even beats the Super Bowl. Americans like to watch debates for the same reason, I suppose, they like to watch the Indy 500, to see who crashes and burns. But there is also some information to be gleaned from it.

The problem for Kerry, the challenge for Kerry is that we have seen candidate who think they are intellectually superior to George Bush, Al Gore, go up against George Bush and fail.

PILGRIM: It will be an interesting political season. Steve, I'm sorry, but we have to -- we've closed this here, so we'll give you the first word next time.

Thanks very much, gentlemen. Ron Brownstein, Roger Simon and Steve Shepard. Thank you.

A reminder now to vote in tonight's poll. "Should Dan Rather and CBS News reveal the source of the Bush memos? Yes or no." Cast your vote at CNN.com/lou. We'll bring the results a little bit later in the broadcast. Coming up next, Florida braces for the unthinkable: a third hurricane in less than a month. We'll have the latest on Hurricane Ivan, when, where, and where it might hit next.

And Marshal Shepherd from NASA is our guest.

And then the escalating war on radical Islamist terrorism and a possible change in how the Arab world views the violence. Middle East expert Fouad Ajami joins us.

Plus, solar surprise, the crash of the Genesis Space Capsule might not have been as devastating as first thought. That and a great deal more still ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Hurricane Ivan tonight is powerful and a deadly category IV hurricane. Ivan will hit Jamaica tonight and soon the already ravaged state of Florida. Florida Governor Jeb Bush today extended a mandatory evacuation in southwestern Florida. Now this eye of the hurricane moves 70 miles closer to Jamaica in just about three hours and that rapid movement is likely due to the formation of a new eye.

Joining me now to discuss Hurricane Ivan and the very latest storm tracking technology is Dr. Marshall Shepherd, deputy project scientist at NASA. Thanks very much for joining us.

MARSHALL SHEPHERD, DEP. PROJECT SCIENTIST, NASA: Thank you.

PILGRIM: This business about the new eye and old eye, it's confusing to me. Can you sort that out for us?

SHEPHERD: Well, certainly. In these intensifying or very strong storms you often see a cycle of eye regeneration where you'll a cycle where one eye will collapse and a new eye will develop. And that may be what we're seeing here with Ivan. One of our goals at NASA is to try to understand what really makes these storms tick, what's going on inside the storm. And that's typically what we utilize our new satellite technology and new models to investigate.

PILGRIM: Dr. Shepherd, when they regenerate like that, do they get stronger?

SHEPHERD: We often see an intensification phase when we see these regenerating eye walls, what we call concentric eye walls. Sometimes they weaken but in the case of Ivan, the waters are very warm in the Caribbean and Atlantic basin right now and that really is the fuel supply for these big -- what I like to call heat engines in these storms.

PILGRIM: Why are we seeing so many hurricanes in such rapid succession?

SHEPHERD: It is really an interesting time. We've seen a very active early part to the season here and one of the reasons is in fact the temperatures in the ocean are very warm right now. In fact, on average they're about one degree warmer than we've seen in the past. Now that may not sound like a lot but if you think about previous seasons, the hurricanes have been running on 87 octane fuel. This year they're running on 89 or 93 octane because that warm water is plentiful.

PILGRIM: This is not our imagination. This will be the first time in many decades that we'll have three so quickly together, correct?

SHEPHERD: It will be certainly unprecedented to see three major storms make landfall in Florida in such a short turnaround time. Back around 1995 we think we entered a new natural phase of more intense and more frequent activity of hurricanes. We've seen this in the past and we think we're seeing it again. Here is a satellite image from one of our NASA satellites actually showing that warm water in the Gulf of Mexico and it looks as if Hurricane Ivan will actually tap some of that warm, moist water.

PILGRIM: Fascinating technology but a disturbing conclusion. Thanks very much for joining us this evening. Dr. Marshall Shepherd.

SHEPHERD: Thank you.

PILGRIM: Coming up, a high level of concern tonight about an al Qaeda terrorist attack. Middle Eastern studies Professor Fouad Ajami says we are very much at war with al Qaeda. He will be my guest.

(COMMERCIAL BREAK)

PILGRIM: As we reported, the State Department tonight renewed its warning about the possibility of more al Qaeda attacks three years after the September 11 attacks. My next guest says recent terrorist attacks including the massacre of school children in Russia have stretched the moral limits of our world to the breaking point. Fouad Ajami is a professor of Middle Eastern studies at Johns Hopkins University. And he joins me now. Thanks for being here.

FOUAD AJAMI, JOHNS HOPKINS UNIVERSITY: Thank you, Kitty.

PILGRIM: First of all, this new al Qaeda tape. How do you assess it and is it as dire as it sounds?

AJAMI: Well, this is Ayman Zawahiri. He is really the brains of the -- the brilliant Egyptian physician who is absolutely merciless, he really is much more interesting and much more frightening than Osama bin Laden. Osama bin Laden is just the face of this organization. And it is the third anniversary, as we know of September 11. It is a reminder that they are still out there and it's a reminder for us that this is part of the same war and it's part, really, actually, if you will, it's al Qaeda speaking to their base, reminding them that they are still contending in Iraq and they're contending in Afghanistan and that the battle continues.

PILGRIM: You spend your life studying this. I feel free to ask you this question. Is it mere posturing or do you think that this is a clear warning of an imminent...

AJAMI: No. I think it is just simply the war continues. In fact, what they're saying is, look, you may think you are rid of us but we are still contending and we're still fighting in Afghanistan. We have boys of terror in Iraq as well. We have Abu Musab Zarqawi, the prince of darkness, again an affiliate of this al Qaeda and he's killing Iraqis, he's killing Americans, he's fighting in Iraq. And that we now have a front, a new front in this war on terror.

PILGRIM: One of the great horrors of this week has been watching the tapes coming out of Beslan and it is just disgusting. What is your assessment of the situation there and how this plays into the entire...

AJAMI: Well, I think Beslan was really a moment of truth even though it happened far away from the Arab world. It occasioned really a slum in the Arab world because I think it gave Arabs a chance to break with the culture of denial and to break with the pattern of denial. Because after September 11, 2001, many Arabs were just simply unable and unwilling to accept that these were Arabs who did these crimes.

So now three years after that with Russia in the background, with the children being killed and murdered in this way, a debate has opened in the Arab world about the Islamic sources of terror. And a desire has emerged to draw a line for these preacher whose have been inciting these young people to these deeds of terror.

PILGRIM: Do you think that this is there the way out of the (UNINTELLIGIBLE)?

AJAMI: I think it is the beginning of a way out of the morass. I think the war will continue. And it is a long, long journey. But I think if you now look at the Arab world and you look at the debate in the Arab world, people have begun to say, look, these radicals have ruined the life of this region and there is no salvation for this region until and unless Muslims themselves recover their faith from these terrorists who've hijacked the faith and bent it to their will.

PILGRIM: Fouad, we have just a second left. But you just came back from Iraq and I wanted to get your impressions.

AJAMI: Well, you know, Iraq is a thing and its opposite. It is both -- there is the heartbreak of Iraq and there are the accomplishments of Iraq. We know about the heartbreak. We saw it just recently in the "New York Times," the faces of these thousand young people, average age 26, we lost. We know that Iraq will test our souls and test our patience. But if you take a look at what's happening on the ground, the training of the Iraqi forces, the success of our mission there, trying to train the Iraqis to take control of their own destiny, the success of Lieutenant General Dave Petraeus and his people because they are trying to train 250,000 Iraqis, border guard, policemen, soldiers, to give them the burden of defending their own country. And if you take a look at the caliber of the Iraqi government, it is decent men and women trying to create a new Iraq under very, very heavy burdens. PILGRIM: So in your estimation it is going reasonably well?

AJAMI: It's going reasonably well but the price has been extraordinarily high. And we know that all too well.

PILGRIM: Very good. Thank you very much, Fouad Ajami.

AJAMI: Thank you.

PILGRIM: Up next, some of your thoughts on exporting American jobs and welcome news for NASA scientists tonight after the shocking crash of the Genesis space capsule. We'll have that story and more still ahead.

(COMMERCIAL BREAK)

PILGRIM: We look at a new documentary tonight which explores the impact of low wage foreign competition on American workers. And, as you will see, the exporting of American jobs has devastated millions of American workers, their families and their communities. Louise Schiavone reports.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The world premiere of "American Jobs" came home to its unintentional stars, the laid-off textile workers of Kannapolis, North Carolina.

UNIDENTIFIED FEMALE: We ran three machines, I did. Some of them ran two. I ran three. I loved it. It made perfect wash cloths.

They're making my wash cloths overseas and shipping them back over here, and they're not near the quality.

SCHIAVONE: In the string of 2003, 4,500 workers, 1,000 of them in Kannapolis alone found themselves suddenly jobless as textile maker Pillowtek shut down. A symbol of the outsourcing phenomenon that has ravaged American manufacturing and the service sector, the 158 acre complex stands empty now.

ELOISE MURCHINSON, FRM. PILLOWTEK EMPLOYEE: It is too big to be empty, just sitting here with nothing in it. And people need jobs.

SCHIAVONE (on camera): Exploring the social agony of outsourcing, filmmaker Greg Spotts came back to Kannapolis to premiere his movie and continue the conversation.

GREG SPOTTS, DIRECTOR, "AMERICAN JOBS": I'm finding that maybe as a country we were a little naive in thinking that other countries would only target our worst jobs, or our lowest skilled jobs. And in fact, countries like India and China are being very strategic in trying to pick off some of our better paying jobs, some of our higher skilled jobs.

SCHIAVONE (voice-over): Spotts opened a dialogue with the audience after the showing. On people's minds, what's next for them. Kannapolis mayor Ray Moss believes good things lie ahead. The town is now cultivating new areas for commercial and residential development.

MAY. RAY MOSS, KANNAPOLIS, N.C.: I'm very optimistic. I'm struck like a dope with a thing called hope. And you can't get it out of my mind. I believe Kannopolis sits on the very edge of a new day. And I know that's going to happen

SCHIAVONE: Rich in southern hospitality and sheer determination, residents hope that Spotts film will bring attention to their community. But what they real need are jobs. Louise Schiavone, CNN, Kannapolis, North Carolina.

(END VIDEOTAPE)

PILGRIM: All next week on this broadcast, we will feature this critically important film, highlighting the issue of exporting American jobs.

Taking a look now at some of your thoughts on "Exporting America."

Inez Reese of California writes, "I feel that neither party has the best interests of the people that keep this country moving, the ones that get up every morning and go to work. Now, corporate America is outsourcing the jobs that most people need to put food on the table. It has gotten to the point where profits are more important than their employees. Where is this country going."

James Chaffin of White Oak, Texas, "I don't understand how the government can say that the economy is doing well with so many jobs moving to other countries and leaving American's unemployed. If people aren't making money, how can they spend to boost the economy."

We love hearing from you. Send you are you thoughts at loudobbs@CNN.com. Please send us your name and address. Each of you whose e-mail is read on the broadcast receives a free copy of Lou's new book, "Exporting America."

NASA scientists today say they are encouraged after an initial inspection of the $264 million Genesis Capsule. The Genesis was carrying solar wind particles, which scientists hope will provide details on planet formation and the composition of the sun.

Now scientists began picking through the mangled wreckage yesterday and did recover several samples, but the exact number won't be known for some time.

The capsule crashed in the Utah desert on Wednesday at nearly 200 miles an hour when its parachutes failed to deploy. The Genesis has been moved to a clean room at the U.S. Army base in Utah.

Still ahead, the results of tonight's poll and a reminder to visit our Web site for the complete list of more than 1,000 companies we've confirmed to be exporting America. CNN.com/lou.

(COMMERCIAL BREAK) PILGRIM: Now, the results of tonight's poll. 41 percent of you say Dan Rather and CBS news should reveal the source of the Bush memos, and 59 percent do not.

Thanks for being with us tonight. Please join us Monday. Democratic Senator Dianne Feinstein and Republican Senator Larry Craig will debate the ban on assault weapons as it expires.

And for all of us here, have a wonderful and safe weekend. Good night from New York. "ANDERSON COOPER 360" is next.

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