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LOU DOBBS TONIGHT

Insurgents Massacre Dozens in Iraq; Bush, Kerry Meet Face to Face Tonight

Aired September 30, 2004 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Tonight, Carnage in Iraq. Insurgents massacred dozens of children. Two American soldiers have been killed. Defense Secretary Donald Rumsfeld now admits the insurgency is worsening.
Iraq is the central issue in tonight's face-to-face meeting between President Bush and Senator Kerry. The so-called debate begins in just three hours. I'm joined tonight by David Frum, former speechwriter for President Bush, and Michael Waldman, former speechwriter for President Clinton.

A dramatic victory for the powerful supporters of outsourcing American jobs to cheap foreign labor markets. Governor Schwarzenegger of California vetoes legislation that would have stopped the export of American jobs.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We need to continue to be integrated and involved in the global marketplace.

(END VIDEO CLIP)

DOBBS: California State Assembly Member Carol Liu says we ignore the export of American middle-class jobs at our peril. She's my guest.

And today, stunning news for millions of Americans who use one of this country's most popular prescription drugs. Merck recalls Vioxx because it's not safe.

(BEGIN VIDEO CLIP)

RAYMOND GILMARTIN, CHAIRMAN, PRESIDENT & CEO, MERCK: We saw the beginning of a trend in this trial for an increased risk of cardiovascular events.

(END VIDEO CLIP)

DOBBS: And Homeland Security has a new partner. That's right, Homeland Security has decided to allow Mexican government officials into this country to help track suspicious aircraft, the same Mexican government officials who will not police their own border with the United States. We'll have a special report.

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, September 30. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

Insurgents today launched a wave of deadly attacks across Iraq, just hours before President Bush and Senator Kerry face off on national security. Two American soldiers were killed in today's attacks. Fifty Iraqis were also killed. More than 30 of the dead are children.

Senior Pentagon Correspondent Jamie McIntyre has the report, but before we go to Jamie, I want to warn you that his report contains video that is shocking, it is brutal, and you may well want to avoid seeing the images contained in his report. Jamie McIntyre.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): It was a grisly punctuation mark to what has been a very grim month in Iraq. Dozens of Iraqi children who gathered to get free candy at the opening of a sewage plant were killed when a series of car bombs exploded.

More than 40 people died, with more than 140 wounded. The number of children killed by insurgents, at least 34, is the highest of any single incident, and it was just one of several attacks across Iraq which left Iraqis or Americans dead.

The latest attacks come as Defense Secretary Donald Rumsfeld, in a Tuesday radio interview and in recent public statements, is acknowledging the bloodshed is getting worse.

DONALD RUMSFELD, SECRETARY OF DEFENSE: We recognize that there's an increased level of violence, as we move towards these elections.

MCINTYRE: Pentagon estimates vary widely on the size of the insurgency, from just several thousand to almost 20,000. Also in dispute is whether the extremist movement is spreading.

But by any measure, September was a bad month, with an average of roughly 50 attacks per day against U.S. and Iraqi forces, according to the multinational forces in Iraq. While that's down slightly from last month's average, it includes a spike in mid-month when the average jumped briefly to about 90 attacks per day.

Iraq's interim leader continues to insist the insurgency will be brought under control in time for January elections.

IYAD ALLAWI, INTERIM IRAQI PRIME MINISTER: Those elections will signal the momentous changes brought by the coalition's's liberation of my country, and they will strike a huge blow to the insurgents and to the terrorists.

(END VIDEOTAPE)

MCINTYRE: And it appears tonight that one of those blows is beginning to be struck. It appears that one of the offensives against Samarra, one of the insurgent strongholds, has begun according to CNN's Jane Arraf. Sources here at the Pentagon say it's part of a plan to move gradually against smaller cities before moving in on the biggest problem, Fallujah -- Lou.

DOBBS: Thank you very much.

Jamie McIntyre.

As Jamie just reported, we're hearing word from Jane Arraf with the 1st Infantry Division near Samarra. We're going to go now to her. She's joining us now on the telephone.

Jane, can you tell us what is -- what you know about this new offensive?

JANE ARRAF, CNN CORRESPONDENT: Lou, yes. Troops have been moving through the streets. We've been moving with them in one of their Bradleys. Now we're stopped in town in Samarra in front of a mosque, which is being cleared by Iraqi National Guard.

What they're doing, fronted by the Iraqi National Guard, is moving sector to sector through the city to clear it of insurgents. Now this is the biggest offensive that they have launched in this city, and the soldiers we're with say it is a battle for the City of Samarra.

They estimate there may be up to 2,000 fighters that they're up against, up to 250 of them foreign fighters. This is a brigade-size operation, absolutely huge.

We've been hearing rocket-propelled grenades landing not far from us and quite a heavy exchange of gunfire in front of us, as the Iraqi National Guard and U.S. soldiers clear buildings and mosques. They are moving through the city to root out the insurgents.

Now they -- this city has been essentially off-limits to U.S. troops in an agreement after the transfer to sovereignty, but they came back in three weeks ago. This is the first time they have allowed journalists in for this major offensive -- Lou.

DOBBS: Jane, thank you very much.

Jane Arraf. She is embedded with the U.S. 1st Infantry Division. Obviously an offensive underway on Samarra, which had been one of the no-go cities and, as she indicated, had been one of the cities in which the United States has agreed not to move into after the cessation of major combat operations back on May 1st.

We'll keep you up to date on that story here throughout this broadcast and the evening here on CNN.

The escalating violence in Iraq will be the central issue in tonight's presidential presentations in Florida. Those presentations will begin in just under three hours.

For the first time, President Bush and Senator Kerry will appear at the same time on the same stage, but strict rules are in place and they will prevent virtually any interaction between the two candidates.

Senior White House Correspondent John King is covering President Bush and has the report -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, Lou, despite those rules, the Bush campaign certainly expects Senator Kerry to ask rhetorically perhaps, but hoping to get answers from the president tonight, pointed questions about his policy in Iraq.

Today's deadly violence, this deadly violence, again more vivid evidence to us, sad evidence, of the burden of incumbency that the president will carry into this hall tonight. Aides say he will repeatedly try to make the case that Senator Kerry is not fit to be commander in chief, that he has changed his positions on the war in Iraq, on what to spend on the war in Iraq.

Repeatedly, the president will make that case, but they also understand that he simply cannot tonight only criticize his rival, but in the first debate, with an estimated 50 million Americans watching at home, the president must explain and defend his policies in Iraq, especially after the past two weeks when Senator Kerry has turned so forceful and aggressive in criticizing them.

So the president will make the case, we are told, that he has given the generals every troop they have asked for and said they have needed in Iraq.

The president will say, yes, there have been setbacks, and, yes, there are hardships -- today, of course, another example -- but that in his view -- and he will be optimistic about this, we are told -- that there is a path toward progress in Iraq and that the American people should stay with him and stay the course in Iraq. Now foreign policy and Homeland Security, the focus tonight.

Mr. Bush also expects questions about his policies on Iran and North Korea and other issues, but, Lou, both campaigns concede Iraq is the major flashpoint in the debate. One key challenge for President Bush is not to lose his temper. Sometimes you see him get irritated at a question he doesn't like. Aides tell us today that in his mock debates, they have asked him scathing questions about his Iraq policy to test his ability to keep his temper in check -- Lou.

DOBBS: How did he do, John?

KING: We're told he did quite well, Lou. One of the challenges, of course, here is for the president to defend his policy and to be optimistic about it. They believe that optimism is one of his great attributes and one of the better contrasts that he can draw in this type of an appearance on national television with Senator Kerry.

So the president, we are told, has been warned by aides that some of the questions from moderator Jim Lehrer and some questions Senator Kerry poses in his own answers will be quite tough, and he needs to keep his temper in check, and they say, in those mock sessions, he did quite well. We'll see tonight.

DOBBS: John King, our senior White House correspondent in Miami.

Thank you.

And now turning to Senator Kerry's assets, Senator Kerry, of course, is hoping tonight's debate will allow him to clarify for voters his positions on Iraq and the global war on terror and to cut into President Bush's lead in the national opinion polls.

Senior Political Correspondent Candy Crowley is covering the Kerry campaign and joins us now from the University of Miami.

Candy, what are we expecting from the senator tonight?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, what the strategists around John Kerry say he has to do is look, sound and talk like a commander in chief, that he has to present himself as a viable alternative to George Bush.

They know it's very tough in times of war to convince voters that -- as John Kerry has been saying on the campaign trail, to switch horses in midstream, but they believe that this kind of chaos we're now seeing in Iraq certainly does give John Kerry the material that he needs to say, look, we need a new commander in chief, the current one we have got us into this mess, I'm the only one that can get us out of it.

Now what does he have to do in addition to looking at George Bush and portraying George Bush as a man who has made misjudgments and miscalculations all along the way in Iraq?

They also know in the Kerry campaign that John Kerry is going to have to say and I've got a plan and here's my plan. Now he's been trying to do that to sort of set the table for this debate in the last couple weeks of his campaign. He gave a speech at New York University on Iraq and on what he would do. He then gave a speech at temple in Philadelphia about the war on terror.

So they believe that they have begun to start this process of showing John Kerry as a man who does have a plan and a man who can step in and be commander in chief, and that is their number one goal for tonight, is to have John Kerry be seen in the eyes of the American people as someone who could walk into the White House and become a commander in chief -- Lou.

DOBBS: Are the members of his staff excited about his prospects? Do they feel he's doing well in preparation?

CROWLEY: You know, they obviously believe he is a good debater. They have dropped any attempt to spin it any other way and say, look, we expect him to do very well. The one thing that they are -- two things they're worried about.

Number one, they concede the point George Bush is a likable guy. George Bush is someone that people like to see on their television sets in their living room, but they say, look, this isn't about personality.

The other point that they are worried about is that too many stakes have been put into this debate by commentators. They say this is not now or never, that there are two other debates. John Kerry does not have to have a knockout punch -- Lou.

DOBBS: Candy, thank you.

Candy Crowley, covering the Kerry campaign tonight from the University of Miami.

Returning now to the dramatic news developments from Iraq tonight. As we've just reported, American troops have launched apparently a major offensive against the insurgents in the City of Samarra. That's north of Baghdad.

Joining me now is General David Grange.

General, let me first turn to you on the latest development, the idea that the United States has obviously, along with the Iraqi troops, decided that the no-go cities are now no longer off-limits. What do you make of it?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, that's going to happen all over Iraq, Lou. Samarra obviously was the first targets. They have a sufficient number of Iraqi soldiers trained to conduct the operation, along with the brigade of the 1st Infantry Division, to take it down, and I think you're going to see that elsewhere as we lead up to the elections in January.

DOBBS: And would you concur with the judgment that it needs to be done and needs to be done quickly?

GRANGE: Absolutely. It needs to be done when the time's right for the coalition of Iraqi forces to do so, regardless of election dates.

DOBBS: Secretary of Defense Rumsfeld today joining with Secretary of State Colin Powell in admitting that the insurgency in Iraq is worsening. What does the United States have to do first to start acknowledging quickly what is the reality and the obvious reality on the ground much sooner than they have in the past and, secondly, to deal effectively with it, if they can?

GRANGE: Well, they can't. I think it has been acknowledged today. Many have talked about it already, that the surge is on to disrupt elections in the U.S., Afghanistan, and Iraq. It's -- the time is perfect for the bad guys, they're going to continue to do this, but now's the time for the coalition to pick up the pressure on the enemy.

It's the only way. Negotiations for any peaceful settlement will not work with the people they're fighting right now. They need to take them down when the time's right all the way up through January.

DOBBS: The issue of manpower remains critical. Rumors talking about a draft if necessary to bring forward enough recruits to man an army of sufficient size to meet policy objectives.

We have seen, in terms of the call-up of the IRR, the ready reserve, about 600 have not shown up at the last count that I saw. We see a 12 percent decline in recruiting shortage of goals, and we're seeing a lot of concern about the adequacy of our National Guard and our Reserves in their preparation.

What are we going to do in the short term, General, to deal with these issues?

GRANGE: Well, I don't believe the draft is needed right now. I do believe that the active force needs to be increased in size. I believe you can do that through the volunteer army, which surpassed the goals for this year. But the Army does need to get bigger, that service for sure. But the draft's not needed right now.

But I fully believe that if a draft is need, members of Congress and the American people will say, by gosh, we've got to do it, and they'll do a draft. But, right now, it's not needed. National Guard training has improved. I just came from a conference today, as a matter of fact, that we hosted, referenced that same subject, and there have been some problems, but it's improving.

The problem is, in the National Guard, maintaining that force structure because of their other life, their other employee status, and how do you maintain that? That's the bigger challenge.

DOBBS: General David Grange.

Thank you.

GRANGE: My pleasure.

DOBBS: There was a sharp escalation in violence between Israelis and Palestinians today as well and greater tragedy. Israeli troops fought pitched battles with Palestinian gunmen in northern Gaza. The Israelis launched their offensive after a Palestinian rocket killed two children in an Israeli border town. Today's fighting killed 29 people. Twenty-six of them were identified as Palestinian; three, Israelis.

Still ahead here, a shocking prescription drug recall today. A health warning for millions of Americans who have taken the arthritis drug Vioxx. We'll have details on that coming right up.

Also tonight, the Department of Homeland Security sees nothing wrong with permitting Mexican government officials into U.S. tracking facilities despite the obvious refusal of the Mexican government to police its border with the United States. We'll have that special report.

And the first presidential presentation is now just hours away. David Frum, former speechwriter for President Bush, and Michael Waldman, former speechwriter for President Clinton, will join me.

(COMMERCIAL BREAK) DOBBS: Tonight, millions of people who take the arthritis drug Vioxx could be at risk of an even more dangerous medical condition. The drug's manufacturer, Merck, today pulled Vioxx off the market and told anyone who takes it to immediately contact their physician.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): How could it happen? Eighty-four million prescriptions since it was introduced in 1999. About 1.3 million Americans are using it right now. But, today, Merck pulled the drug. Recent clinical trials turned up a risk of stroke and heart attack in patients taking Vioxx for more than 18 months.

GILMARTIN: We basically went through an extensive analysis of the data, determined that the cardiovascular trend we were seeing was important and, therefore, quickly acted to make the decision to voluntarily withdraw the drug.

PILGRIM: Vioxx is mainly used to treat arthritis. The condition is common. Sixty million adults in the U.S. have arthritis or chronic joint problems. That's one in every three people. Arthritis is the leading cause of disability in adults in the country. Drugs like Vioxx were considered revolutionary when they were introduced.

DR. MARIE GRIFFIN, VANDERBILT UNIVERSITY: This new class of anti-inflammatories has sort of taken over the market, and, within that, Vioxx is a very big player.

PILGRIM: The FDA sent Merck a warning letter about the risks after a 2001 study, and Merck started putting a warning on the label in 2002. But a study this past August found doses of 25 milligrams or higher more than tripled the risk of heart attack.

Author Dr. John Abramson has been studying the drug for more than three years and says the drug was aggressively marketed to doctors, and the risks were buried in the marketing push.

DR. JOHN ABRAMSON, AUTHOR, "OVERDOSED AMERICA": The most frightening part of all this is that the cardiovascular risk of Vioxx has been public since 2001, available to anybody who wants to find it on the FDA Web site, and yet the intense marketing that was done for Vioxx and the marketing to the public, the marketing to the doctors overrode what that data really showed.

(END VIDEOTAPE)

PILGRIM: Now the very second the drug was recalled, 30 people in Oklahoma City filed a class-action suit against Merck for failing to warn the public of the risks, and experts say there will probably be more -- Lou.

DOBBS: Kitty, thank you very much. This is very troubling for all those millions of people who have been taking that drug. Thank you very much.

Kitty Pilgrim.

We will continue here in just one moment. Stay with us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.

DOBBS: British Prime Minister Tony Blair will undergo treatment tomorrow for an irregular heartbeat. The prime minister will have what he calls a routine procedure in a London hospital. Prime Minister Blair was treated for the same condition a year ago, but he says his doctors assure him that it's not a sign of a larger problem. Blair says he'll be back at work Monday.

The so-called presidential debate tonight is unlikely to be an impromptu exchange of ideas. In fact, if it were, it would be shocking. It's more likely to be a recitation of the candidates' stump speeches and campaign promises.

My guests tonight are experts at crafting the kind of presidential one-liners and catch phrases that we can expect to hear tonight. Theirs, of course, far more profound than anything you will hear from other writers. David Frum is former speechwriter for President Bush, joining us tonight from Washington, D.C.

Good to have you with us, David.

DAVID FRUM, FORMER BUSH SPEECHWRITER: Thank you.

DOBBS: Joining us here in New York, Michael Waldman, former speechwriter for President Clinton.

Good to be have you, Michael.

MICHAEL WALDMAN, FORMER CLINTON SPEECHWRITER: Good to be here.

DOBBS: Let's begin with you, David. This -- the president is ready to go. We're going to hear tonight foreign policy issues. Are we going to hear with great precision what the president plans to do from here?

FRUM: I don't think you will hear a highly specific plan, no. I think President Bush always indicates what he's going to do by doing it, and you're seeing with this extraordinary military campaign now under way in Iraq some indication of what's to come.

President Bush's job tonight is to avoid mistakes. He's got a big lead in this election. I think Senator Kerry has made enough mistakes along the way that, at this point, Senator Kerry can't really win the debate by himself. He needs the president to fail.

So, if the president doesn't fail, the president's done his job. Kerry has to hope for the president to stumble and give an opportunity to him.

Do you agree, Michael?

WALDMAN: Not really. I'm tempted to use the vernacular of the campaign and say that's a fantasy world of spin, but it was...

DOBBS: I'm proud of the way you resisted that.

WALDMAN: I resisted it. You won't hear that tonight either, I'm sure.

I think that President Bush can't have a huge catastrophic mistake, but the one thing to remember is that the challenger almost always benefits from standing toe to toe with the incumbent, who's better known, who is already presidential by dint of being president, and I think that, for Kerry, President Bush has been very successful, especially in his convention, at having a monologue, in effect, when he can go out there and proclaim his policies on his own, but he hasn't yet had to really face a questioner and a challenge in front of the public.

DOBBS: Well, let me ask you this: One of the complaints today coming from the Kerry campaign was that the lights and the buzzers that are going to flash and buzz if the candidate goes too far -- they were very excited about that. Senator Kerry, it doesn't seem to me, should be concerned about lights and buzzers because, if he isn't succinct and direct tonight, again, it seems to me, he's got a real problem.

WALDMAN: Well, that's right.

DOBBS: Would you agree?

WALDMAN: Absolutely. And it's a very tough thing to actually condense real thought into the kind of 30-second one-liners, memorable phrases that these debates have come down to. I think actually having the light right there would -- you know, would distract anybody, but remember George Bush's father had a visual image of looking at his watch, and I'm sure Kerry and President Bush, too, don't want to have something like that.

DOBBS: The idea, that image of President Bush's father looking at his watch has been shown quite a bit on network television today, David. The idea of the president being careful -- isn't there also a great pitfall awaiting him if he's too careful here tonight?

FRUM: Well, I don't know what that would be. I mean, the country -- this election has been going on for a long time. The country's had a long time, four years, to take a look at President Bush, but quite a number of months to look at Senator Kerry. He's introduced himself again and again and again.

I think Senator Kerry is looking to this debate to recapture the mistake he made at the Democratic Convention. He had this glorious moment when he really could show the American public who he was. He didn't use that time well. He's now going to try to use this debate to do again what he should have done in July. That's why he's in so much trouble.

DOBBS: Michael, the idea that Senator Kerry can stand up there tonight on podiums, these two men meeting. This is hardly a debate, as we all acknowledge, but the fact is -- does he have to come tonight -- on the issue of foreign policy in particular, it's not enough, is it, to simply criticize President Bush's policies? Doesn't he really have to say I have a plan and at least give an iteration of it, an early iteration of it?

WALDMAN: Yes, I absolutely think so. I think if he just comes in and is on the attack the whole time -- you know, he'll probably draw a bit of political blood, but he won't show people what he would do differently.

The difficult thing for him, what he, I'm sure, knows he has to do, is draw a sharp contrast, try to show in his mind in the way he would like voters to see it the failures of the president's foreign policy and lay out his own as an alternative, and, of course, there's a tension because you can't look too angry, you can't look too bitter. It's better to try to do it the way Reagan or Roosevelt did it, or Clinton, too, with a smile.

But, you know, both of these gentlemen are very strong debaters. Whether these are real debates or not, this is a format that they've both succeeded at, so I assume we'll see some good interaction.

DOBBS: Who, in your judgment, David -- and I'm going to ask you to be a nonpartisan here. Well, I'll be straightforward about it. It seems that President Bush to this point has the better speechwriters and the better crafting of language to this point. Is that accurate?

FRUM: Well, boy, would I like to believe the speechwriters made President Bush the man he is today. That...

DOBBS: No, I didn't quite say that, David. I didn't say that. We've got enough polarized partisanship in the world without you construing my statement.

FRUM: Look, here's...

DOBBS: I was talking about the preparation by his speechwriters.

FRUM: Yes, but the thing is -- I mean, the -- it's the president who is the candidate, the person who chooses these people. I mean, how...

DOBBS: David, you're not going to answer my question, are you?

FRUM: No, here -- here's what I'm saying. There are thousands of people who would love to write speeches for the president or for the nominee of the opposition party. They have to be chosen.

DOBBS: David...

FRUM: So President Bush has to...

DOBBS: David, we don't have buzzers here, we don't have lights, but I do insist upon my questions being answered.

FRUM: What was the question?

FRUM: What's the question?

DOBBS: The question was...

FRUM: Does he have good people working for him? Yes. But...

DOBBS: OK, let's turn...

(CROSSTALK)

DOBBS: Let's turn to Michael then. What do the people working for Senator Kerry -- and again, I would stipulate that Senator Kerry is a wonderful human being and a great personality, just for partisan reasons, to balance with David's characterization of President Bush -- he does not seem to have brought sharp focus to -- from his writers, from his speechwriters and advisers. Do you agree with that assessment?

WALDMAN: I think that if you look at the speeches he's given, especially in the last few weeks, he has really found his voice. And it reflects a political strategy and an issue determination, and rather than the words -- I think the words have been fine. I think -- I agree with David that he missed an opportunity at the convention in not laying out his own policy vision, but I think if you look at the speeches he's given on Iraq and the war on terror and finally making the argument that I'm sure David disagrees with, that the war in Iraq is a distraction from the war on terror, I think that it's pretty compelling. And so I'm hoping he has a rhetorical head of steam coming into this debate.

FRUM: See, whether I agree with that or not, that's not I think the most important mistake he's made. You know, Senator Kerry gave a speech at New York University. It was a beautifully written speech, actually, very logical and powerful, but he forgot to put in the most important part, which is to say, "I want to win." Now, he then had a photo op two days later where he said that, but he should have said it at the time. And in a way, you can't blame the writers or credit the writers for things like that. Ultimately, the writers work for somebody.

DOBBS: David Frum, thank you very much.

FRUM: Thank you.

DOBBS: Michael Waldman.

WALDMAN: My pleasure.

DOBBS: Thank you very much for being here. We'll watch what these gentlemen have to say this evening in their presentation.

We'll have much more on the presidential presentation this evening, ahead. Three of the country's top political journalists will be here. Also ahead here tonight, waiting for an eruption in the Northwest. New warnings tonight about the likelihood of an eruption at Mount St. Helens. And also ahead, Homeland Security Secretary Tom Ridge says he's committed to protecting our borders, and his agency is including Mexican government officials in their tracking stations, who don't enforce their own border with the United States. We'll have that special report.

And CNN will have complete live coverage from the University of Miami beginning tonight at 7:00 o'clock Eastern. Anderson Cooper kicks it all off. Stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush and Senator Kerry are now just over two hours away from the first presidential presentation, as we're calling it here. Joining me now from the side of tonight's so-called debate at the University of Miami, three of the country's leading political journalists -- Ron Brownstein, national political correspondent for "The L.A. Times"; Karen Tumulty, national political correspondent for "Time" magazine; and Roger Simon, political editor, "U.S. News & World Report."

We've just heard Michael Waldman and David Frum basically bare their partisan teeth here and suggest, as best I can figure, that they're not expecting much out of this debate. Are you, Roger?

ROGER SIMON, U.S. NEWS & WORLD REPORT: It has the capacity to be an event that shapes the campaign. It has the capacity, the potential to determine the outcome of the campaign. But that doesn't mean it will. It is the first of three debates. It's not an end-all or be- all, really, for either candidate, unless some huge mistake is made or some huge knockout punch is made, which is extremely unlikely.

DOBBS: Are we likely to hear sharp differences between these two men tonight, Karen?

KAREN TUMULTY, TIME MAGAZINE: Well, first of all, Lou, it sounds like your expectations are not terribly high for this debate, either.

DOBBS: Well, I'm still kind of chaffing at the idea that they can't ask one another questions, and offer rebuttal to one another's statement. I look for -- silly me, I think of a debate as a debate.

TUMULTY: Well, I must say, I have got some pretty high hopes for Jim Lehrer, the moderator here, because he, of course, is not bound by any of these rules, and there are openings for him to sort of force a little bit of actual engagement here.

So, you know, if we can't count on the candidates, maybe we can count on Jim Lehrer.

DOBBS: Ron, at this point, on foreign policy, is it your judgment that we're going to see any particular issue sharply discussed here tonight?

RON BROWNSTEIN, L.A. TIMES: Sure. I mean, you know, I guess I'm a little not in the frame of some of the others in the media who said there really is no difference, or the differences between the two candidates are exaggerated on foreign policy.

I think they do have fundamentally different perceptions of how America pursues its goals in the world. And now, in Iraq, the actual choices at this point are narrowed by the events on the ground and the history of the past year and a half, but I do think people will see a very different approach between President Bush, who puts the greatest emphasis on maintaining American freedom of action, even if that means some tension with traditional allies, and John Kerry, who does put a much higher priority on building international consensus, even if that means surrendering some freedom of action. I think you'll see that expressed in the way they talk about Iraq, and if we get on to other issues, I think you'll see it there as well.

DOBBS: Roger, the idea that John Kerry can criticize the Bush policies over the course of the past three years, but not forward a plan of his own to end what they're styling as the mess in Iraq, is it possible that he can perform tonight without at least discussing the outline, the framework of a plan?

SIMON: I don't think so. I think he really has to address that issue, Lou. I think you put your finger on one of the central problems that John Kerry has. He continues to criticize a war that he does not actually oppose. He opposes the way it's being conducted, he opposes going it alone, he opposes the U.S. troops bearing the brunt -- bearing the brunt of the casualties and not having enough funding from other countries, but if he were elected, he would still continue the war.

One wonders if the Democrats had actually come up with a candidate who said I think we should withdraw our troops from Iraq now, where that candidate would be in the polls.

DOBBS: As Jane Arraf has just reported, as we have reported on this broadcast, the offensive that's taking place now in Samarra, in the Sunni triangle, one of the no-go cities, now the 1st Infantry Division is obviously there, in at least brigade-size force, taking on the insurgents, the devastation, the killing, the murder, the massacre of three dozen, almost three dozen children there, along with other civilians, Iraqi civilians, and two American soldiers today, does that have an influence, do you believe, on the debate tonight, Karen?

TUMULTY: Well, I think it could have certainly an influence on how the debate is seen over the next few days, because that is in fact going to be the context of how everything that is said tonight is read, and it's important, however, to remember that, you know, to the degree the president wants to call the Iraq war part of the war on terrorism, he's got to show that he's serious about going after the terrorists who are in Iraq. Certainly this is something we have heard urged on him by a lot of members of his own party, who feel that he has just not shown the kind of resolve that they would like to see over there.

DOBBS: Ron, the idea that the Kerry campaign was so upset today about the buzzers, particularly on the podium -- apparently, there are sufficient lights and buzzers for anyone to understand when he has gone over the time limit, what do you make of that kind of bristling sensitivity?

BROWNSTEIN: Well, you know, we've had a lot of -- we have a 32- page agreement which reflects a lot of sensitivity going into the process. I think in the end, you know, the previous question negates the question you're asking me. People are dying in large numbers in Iraq, Americans and Iraqis. The American public is engaged in this campaign to a much higher degree, largely I would argue because of the fact that American soldiers are under fire and in the end I think they want answers on those questions. I still believe this race will turn on a referendum to the president's response to 9/11, broadly speaking, including the decision to invade Iraq and whether the people feel John Kerry offers a better alternative and keep America safe. And I do believe that in the end, more than lights and buzzers, people will be focused on judging these two men on those grounds.

DOBBS: It wasn't the public nor media focused on it, it was the Kerry campaign. And I go back to my question, Ron.

Why do you suppose they were so intent on that issue?

BROWNSTEIN: I think because they probably don't want the image of John Kerry plowing through the red light like Bill Clinton at the 1988 Democratic convention, when he gave the endless speech, and the red light was flashing for probably a about 15 minutes. The same kinds of things from all these negotiations.

Why do we have a fenced-off area where each candidate can't impose on the space of the other? I wonder how they're going to enforce that. You know, will Jim Lehrer get in there and separate them like those guys on "Jerry Springer." But you know, the whole process has been done in that way from both sides really to control the images the public sees.

DOBBS: Roger, the idea that in this time allotted tonight, will we be able to get to the critical issues as well of North Korea, of Iraq, global competitor or rival or simply an economic powerhouse, China?

How much -- how much of a canvas do you believe we'll see tonight in this discussion of foreign policy?

SIMON: I think you'll see more than just Iraq. I don't think Jim Lehrer will allow 90 minutes to go by and just allow this to be a discussion on one matter of foreign policy. As you listed, there are other serious matters. The extent to which U.S. troops are spread over the globe acting as either trip wires or protectors or active participants, is a serious matter of U.S. security, and I think Jim Lehrer is bright enough to move the discussion around in 90 minutes.

DOBBS: Of course, within that discussion is the road map that's been lost and attention has been lost in point of fact in efficacy and 31 people dies today in Gaza, so the Israeli/Palestinian conflict obviously preeminent as well.

Thank you very much, Ron, Karen, and Roger.

When we continue, Governor Schwarzenegger squanders a golden opportunity to fight back against the "Exporting of American" jobs to cheap foreign labor markets. He took sides. We'll have that story and a great deal more next.

(COMMERCIAL BREAK)

DOBBS: In "Exporting America" tonight California Governor Arnold Schwarzenegger had a chance to take a stand against the export of American jobs to cheap foreign labor markets. Instead, the governor chose to defend it. Governor Schwarzenegger has vetoed a series of bills that would have cracked down on outsourcing in the state of California. Peter Viles, reports from Los Angeles.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): The rising star of the Republican Party has finally taken a stand. Outsourcing is OK with him. Arnold Schwarzenegger vetoing Democratic attempts to limit outsourcing in California.

UNIDENTIFIED MALE: It's pretty shameful the governor sided with the California chamber of commerce and not with the people of California that elected him to office.

VILES: Analysts see a rookie governor bowing to the state's powerful high-tech lobby led by Hewlett-Packard.

He certainly has tried to strike the image of an independent freewheeling, more liberal on some social issue kind of governor, but on a hard business issue about people's livelihoods, but high-tech workers planning for the futures, he came down on the companies' side.

VILES: The governor's press secretary says it's about improving California's business climate.

He's been traveling around the country showing that California is open for business again. This is extremely important to highlight we're doing everything we can here in California to make it more business-friendly. Adding restrictions to how business operate is contrary to that bill.

VILES: One bill would have stopped outsourcing on projects related to homeland security, vetoed. In his vetoed statement, he says there's no guarantee work done in America will be any safer than work performed in another country. Another bill required patient's consent if their medical information is sent outside the United States, vetoed. Then the big one, work for the state must be done in America, vetoed. The governor arguing that would have a negative impact on the California economy, and it's unconstitutional anyway, because only the federal government can make trade policy.

(END VIDEOTAPE)

VILES: Trade lawyers that we have talked to, Lou, tell us that argument is deeply flawed and probably wrong. It's true that states can't have their own trade policy, their own quotas, their own tariffs. That's not the issue here, the issue is can they spend their own money the way they want to. On this issue, the law appears clear, states do have sovereignty over their own money, Lou.

DOBBS: These vetoes, extraordinary putting the governor, I suspect it will be suggested, on the girlie man side of the issue for some time.

Thank you very much, Peter Viles.

Joining me now is California state assembly member Carol Liu. She authored the bill that required California to keep state work in this country. Assembly member Liu joins me tonight from Los Angeles. Good to have you with us.

CAROL LIU (D), CALIFORNIA STATE ASSEMBLY: Thank you very much.

DOBBS: Were you surprised at the governor's veto?

LIU: No, but I was disappointed. Since the governor took office we've heard a lot about jobs, jobs, jobs and the importance of buying California products. If we're really trying to create jobs, then why is the state of California exporting jobs overseas?

DOBBS: The idea -- the governor suggests that the state of California contracts would not be right for them to be from -- exclusively from the U.S. on a constitutional basis. Peter Viles, has just reported that is basically at the very least flawed reasoning. What's your reaction to that?

LIU: I agree with peter. We have certainly tested this concept with our own legislative counsel, and it was declared that it was not unconstitutional.

DOBBS: The governor, Governor Schwarzenegger cited that a recent study by the Public Policy Institute of California, and in that study apparently found very few jobs in California had been outsourced. Can that be correct?

LIU: We -- first of all, the report from the Public Policy Institute is not finished. In fact, we look forward to some of their recommendations. So, we don't know the conclusion of their report. As to -- we don't -- and we don't -- when we get that report, when the legislative analyst's office is also auditing the state of California as to how many jobs are being outsourced, we will have some kind of numbers and reach some kind of conclusions as to where we need to go.

DOBBS: Well, obviously middle-class workers, at least in the state of California, didn't take a step forward today, thanks to those vetoes.

What are you -- what are your assembly member colleagues going to do, if anything, from here on?

LIU: Well as I said, we're going to look at the audit, we're going to take a look at the conclusions of this report that will be coming out sometime this fall, and hopefully meet with the governor's office to see where we go forward. This issue is not going to go away.

DOBBS: Assembly member Liu, we thank you very much for being here.

LIU: Thank you.

DOBBS: Coming up next, Mexican officials working side by side with American border patrol agents, purportedly to stop illegal aliens from crossing the very border that the Mexican force won't enforce: the border with the United States. That story is next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In Washington State tonight, seismic activity has again intensified on Mount St. Helens. Scientists now say the volcano has a 70 percent chance of erupting. Earthquakes, with magnitude as high as 3.3 have been rocking Mount St. Helens every few minutes today, and new measurements today show the lava dome in the volcano's crater has moved now 2 1/2 inches since Monday.

Yesterday, scientists issued what they call a volcano advisory, that is the highest warning before an eruption.

Turning now to the crisis along our nation's borders and the lack of a coherent national immigration policy, Homeland Security Department secretary Tom Ridge says his department is devoted to controlling illegal immigration into this country. Nonetheless, 3 million illegal aliens will likely move into this country this year. And incredibly, the Department of Homeland Security is relying on the Mexican government to help police our border. Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): After Homeland Security Secretary Tom Ridge toured his department's upgraded radar facility designed to prevent aircraft from sneaking across the border, he revealed an interesting detail. Alongside U.S. detection system specialists who track 80,000 flights a month, including those flown by the president of the United States, are representatives of the Mexican government. Here's one shaking hands with Ridge.

TOM RIDGE, HOMELAND SECURITY SECRETARY: One of the reasons the center has been so successful is because of the on-site presence of representatives from the Mexican government, who are in a position to assist us upon our call...

WIAN: We asked ridge if he saw any conflict on relying on Mexico to help catch aircraft carrying illegal aliens at a time when Mexican President Vicente Fox's government is pushing for more open borders.

RIDGE: There's been no conflict whatsoever within this operation. When we have called and identified the aircraft we were concerned about, the Mexican government has responded effectively and quickly. Open borders in my mind doesn't mean crossing indiscriminately when you want to.

WIAN: Yet minutes later, the man in charge of guarding the border for the Bush administration expressed sympathy for the millions of illegal aliens who cross each year.

RIDGE: These poor illegals, mostly of them are Mexican, and they are not coming into this country to do anything other than find a job. And the parasites that prey on these people, the human smugglers, are the ones we're going after.

WIAN: Ridge says during the past 18 months, his department has probably done more to prevent illegal immigration than was done in the previous ten years. As examples Ridge cited, a 70 percent increase in prosecutions of alien smugglers and the deployment of several hundred additional border patrol agents.

(END VIDEOTAPE)

WIAN: Ridge says as far as he's concerned, the border is closed to illegitimate travel and commerce. Of course, the reality is gaping holes remain and Ridge admits there's more to do to close them, Lou.

DOBBS: More to do to close them. I understand the politics of the matter, Casey, but with 3 million illegal aliens, Secretary Ridge can say that with a straight face?

WIAN: Absolutely. It's an example of the Bush administration's continuing mixed message on this issue. They talk about guest workers and amnesty, talk about controlling the border. The two don't seem to go along.

DOBBS: No. Nor would they be, of course, possibly compatible. Thank you very much, Casey Wian.

Taking a look now at some of your thoughts.

John Bush in Marshall Town, Iowa, "Why are we granting illegal aliens the right to break our laws and then rewarding them with free everything, including medical opportunities denied our own citizens?"

Greg may in Rockville, Maryland, "It's easily predictable that our next terrorist attack will be done by any number of the millions of people allowed to cross our borders illegally. For our government to suggest otherwise is simply wrong."

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

We'll be right back.

(COMMERCIAL BREAK) DOBBS: Thanks for being with us tonight. Stay with CNN tonight for complete coverage of the presidential presentations. Thanks for being with us.

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

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


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