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LOU DOBBS TONIGHT

Concerns Rise Over Elections; Democrats Call for DeLay's Resignation as Majority Leader

Aired October 7, 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, two more American troops have died in Iraq. Insurgents today launched a dramatic attack against the so-called green zone, the most secure area of Baghdad. American troops strike back. We'll have a report.
And tonight, we continue our focus on Democracy at Risk. Rising concerns that elections in a number of states could be rigged. Tonight, you'll meet a state lawmaker fighting for fair elections on November 2.

(BEGIN VIDEO CLIP)

BONNIE GARCIA (R), CALIFORNIA ASSEMBLY: I think that we will get criticized by people saying, oh, they're just trying to scare people away from the polls. You're damn right. I'm going to try to scare away the crooks.

(END VIDEO CLIP)

DOBBS: And the director of a nonpartisan group trying to preserve the integrity of our national voting system is my guest.

An extraordinary ethics battle on Capitol Hill. House Majority Leader Tom DeLay admonished by the House Ethics Committee. Republicans say Congressman DeLay is the victim of a witch-hunt. Democrats say Congressman DeLay should resign as majority leader.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: This is a pattern of unethical behavior by a man determined to win at any cost.

(END VIDEO CLIP)

DOBBS: I'll talk with a congressman who brought charges against the majority leader.

And as President Bush and Senator Kerry prepare to face off in St. Louis tomorrow evening, I'm joined by former Bush-Cheney adviser Ron Christie and Kerry-Edwards adviser Richard Altman.

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, October 7. Here now for an hour of news, debate and opinion is Lou Dobbs.

Good evening. We begin tonight with news of three massive explosions in Egyptian resorts that are frequented by Israeli tourists. Police say at least 23 Israelis have been killed, dozens of people have been wounded. We have no official figures on casualties at this point. Those details still coming in here to CNN.

Israel says these explosions are the results of terrorist attacks. The first explosion in a hotel in the Egyptian resort of Taba on the Red Sea, just a few yards from the Israeli border.

Hundreds of Israelis are vacationing in the resort at the end of the Jewish holiday. Last month, the Israeli government warned Israelis not to travel to Egypt because of the heightened threat of a terrorist attack.

We will have much more on this breaking news story throughout the broadcast and throughout the evening here on CNN.

There was also a dramatic attack on a hotel in Baghdad today. Insurgents fired rockets at a hotel in the green zone, the heavily- guarded government district of Baghdad. American troops responded with a barrage of gunfire. The attack came just hours after American troops raised security levels in the green zone because of a bomb alert.

Also today, two more American soldiers were killed in combat.

Brent Sadler reports from Baghdad.

(BEGIN VIDEOTAPE)

BRENT SADLER, CNN BEIRUT BUREAU CHIEF (voice-over): Insurgents fired two powerful rockets at one of central Baghdad's best-known hotels, the Sheraton. A lower floor set ablaze. Two loud explosions were followed by terrifying machine gunfire.

It was a near immediate U.S. response to the attack. I saw tracer rounds pierce the night sky, as American troops poured fire at a 45-degree angle in the direction of the rocket launch site.

Reporters in the hotel say the first rocket exploded two floors up on the outside of the Sheraton scattering shrapnel and debris. Guests taking cover after the first blast were caught by the second as the rockets slammed into the building, detonating higher up. No serious casualties reported, but shock and confusion and smoke-filled areas of the hotel.

By Iraq's gruesome yardstick of terror, the impact of those rockets literally a stone's throw from here should barely register, but the targeting of journalists and private contractors fuels the angst here that the insurgency is far from under control.

Brent Sadler, CNN, Baghdad.

(END VIDEOTAPE) DOBBS: President Bush today insisted that he was right to order U.S. troops to invade Iraq. President Bush made his remarks one day after the CIA declared Saddam Hussein possess no weapons of mass destruction before the outbreak of war. President Bush said the world is a safer place without Saddam Hussein.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He retained the knowledge, the materials, the means and the intent to produce weapons of mass destruction, and he could have passed that knowledge on to our terrorist enemies.

(END VIDEO CLIP)

DOBBS: Senator Kerry, for his part, said the American people deserve more than spin about the war in Iraq.

(BEGIN VIDEO CLIP)

SEN. JOHN K. KERRY (D-MA), PRESIDENTIAL CANDIDATE: The president of the United States and the vice president of the United States may well be the last two people on the planet who won't face the truth about Iraq.

(END VIDEO CLIP)

DOBBS: The sharp exchange on Iraq comes a day before the second presidential presentations. Senator Kerry and President Bush will meet in St. Louis tomorrow evening.

America is, of course, one of the world's oldest and most successful democracies, but, remarkably, the U.S. State Department has invited inspectors from foreign countries to monitor our presidential election. Those inspectors are from a little known European organization that usually monitors elections in new democracies.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): The Europeans have arrived to monitor U.S. elections. The Vienna-based OSCE told the citizens of the leading democracy in the world they would monitor voting all across the country.

BARBARA HAERING, SPECIAL REPRESENTATIVE, OSCE: The election campaign, voter registration and voter identification. The Election Day as such.

PILGRIM: The group has observed 63 elections in 10 years, this year in places such as Serbia, Bosnia, Slovakia and Kyrgyzstan. The same week as the U.S. election, they will also monitor the Ukraine where the opposition candidate left the country for medical treatment claiming he had been poisoned. Of the electoral process in the United States, the organization writes, "The conduct of the elections in the U.S. has enjoyed a high level of confidence among most of its citizenry.

"However, weakness and vulnerabilities in the election process that were exposed in Florida and a few other states during the 2000 presidential elections have, to some extent, affected the level of public confidence in the integrity of the process."

The State Department swore last month inviting them had nothing to do with the 2000 election. Democracy experts are appalled.

JOSHUA MURAVCHIK, AMERICAN ENTERPRISE INSTITUTE: It certainly is a little bit insulting. We're the original democracy. All of the other democracies in the world, more or less, got that way either by being inspired by our model or by our own direct intervention to help them get there, and the fact is when there are problems in elections, which there are everywhere, then there are systems within that society to work these out, and I don't see the role for outsiders is.

PILGRIM: OSCE officials today freely admitted very little experience with electronic voting, as it is not used in Europe.

(END VIDEOTAPE)

PILGRIM: Now some of the concerns the organization cites are the very same ones expressed by U.S. election experts. However, for many, it's unclear why international monitors from a variety of countries would be allowed to pass judgment on U.S. elections -- Lou.

DOBBS: The expression being that we've crossed the penumbra into the absurd in this country perhaps.

Kitty Pilgrim.

Thank you very much.

In our special report tonight, Democracy at Risk, we are focusing on ways our election could, in fact, in a number of states be rigged. Tonight, there are rising concerns that many people in this country will vote without being United States citizens, without being residents of the states in which they do register and vote, and that some will register and vote at least twice.

Peter Viles has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): California Assemblywoman Bonnie Garcia is on a mission. She's fighting for a fair election.

GARCIA: I think that we will get criticized by people saying, oh, they're just trying to scare people away from the polls. You're damn right. I'm going to try to scare away the crooks.

VILES: Garcia says she's found almost 3,000 double registrations in her district.

Here's an example. Jeffrey Denean (ph) Jones, born June 18, 1973, registered in May, and Jeff Denean (ph) Jones, born the same day, registered in July. Both are eligible to vote.

Garcia sees a combination of fraud, incompetence and overzealous registration drives. She wants the state to step in and clean up that list of duplicates.

GARCIA: There are names on this list that are Anglo, there are names on this list that are African-American, there are names on this list that are Latino, there are names on this list that are Asian, and they go across the board.

VILES: Less than a month before Election Day, California Secretary of State Kevin Shelley is finally investigating. He declined our request for an interview.

Sloppy registration is a national issue. Ask New Mexico Senator Pete Domenici.

SEN. PETE DOMENICI (R), NEW MEXICO: We have had a 15-year-old and a 13-year-old that were registered. They were found out because their parents complained, not because we have any good system.

VILES: Garcia's district borders Arizona and Mexico and is six times the size of Rhode Island. She won two years ago by just 1,200 votes, and she knows that every vote counts, and that is the problem.

GARCIA: We need to trust that our vote matters, and the current process today is really Third World conditions.

VILES (on camera): Now a major problem here is that registering voters is now a business. It's been outsourced, and the vendors in this business are in it for the money. Their incentive is to register as many people as possible, even if some of those people are already registered to vote.

Peter Viles, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: In our Democracy at Risk special report, we will continue an examination of the elections system in this country state by state throughout, until, of course, November 2.

In Congress today, a dramatic escalation in the increasingly bitter ethics dispute over House Republican Leader Tom DeLay. House Minority Leader Nancy Pelosi called for the resignation of Congressman DeLay as majority leader. For his part, Congressman DeLay said the ethics charges he faced were frivolous.

Congressional Correspondent Ed Henry reports.

(BEGIN VIDEOTAPE) ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): An extraordinary rebuke of Tom DeLay less than a month before the election, and Democrats pounced.

PELOSI: The ethical cloud that the has been hanging over the Capitol has burst. The repeated abuses of power by the Republican majority leader have earned him three rebukes by the Ethics Committee in a single week, bringing dishonor to the House of Representatives.

HENRY: The number two Democrat in the House called on the Texas Republican to resign and said the GOP should be swept out of power in November.

UNIDENTIFIED MALE: I think he certainly ought to step aside as leader at this point in time.

REP. STENY HOYER (D), MINORITY WHIP: It is time for the American people to clean this house.

HENRY: DeLay laughed off the suggestion he resign and insisted the committee actually vindicated him.

REP. TOM DELAY (R-TX), MAJORITY LEADER: I'm very pleased that the Ethics Committee and these honorable people that serve on that Ethics Committee have dismissed the frivolous charges brought against me.

HENRY: And Republicans are blaming Democrats.

REP. ERIC CANTOR (R), VIRGINIA: There is an organized pattern of partisan witch-hunt here, and that's exactly what all of this is about.

HENRY: But that case may be hard to make because the ethics panel consists of five Republicans and five Democrats and reached its decisions unanimously.

The ethics panel found it objectionable that DeLay had a golf fund-raiser with energy company officials while Congress was working on energy legislation. It also found DeLay improperly used the FAA to track the movement of Texas Democrats who fled the state during a redistricting battle.

It put off action on a third charge that DeLay funneled illegal corporate contributions to Texas Republicans. Three people associated with DeLay's PAC were indicted last month on money-laundering charges.

This all follows last week's finding that DeLay had acted improperly during the Medicare vote by trying to get a colleague to switch his position in exchange for a political favor.

(END VIDEOTAPE)

HENRY: Aides say Congressman DeLay feeling exonerated because Democrats originally charged him with bribery and extortion, but he ultimately was admonished for much lesser charges and also the committee did not formally punished DeLay.

They could have expelled him from Congress or censured him, but Democrats say that no matter how Tom DeLay tries to spin this, this is the last issue Republicans wanted to deal with, especially so close to the election -- Lou.

DOBBS: Specifically, Ed, the two charges were not dismissed as a press release from Congressman DeLay's office suggests, and, in point of fact, a third charge, the Ethics Committee is awaiting the findings of a grand jury in Houston. Is that correct?

HENRY: That's right. You know, basically, the Ethics Committee punted on that third charge because there could be a more ominous development for DeLay down the road.

The Ethics Committee just did not want to get involved with a current open criminal case down in Texas, and the Texas prosecutor has said that it -- the door is open, that ultimately DeLay could be a target of all of that down there where some of his allies have been indicted.

But I stress that, clearly, DeLay so far has not been the target, but Democrats say this could -- this might not be over, and, in fact, the Ethics Committee last night in a very strongly worded letter pointed out to DeLay that the accumulation of all this could wind up landing him in trouble for so many offenses one after the other -- Lou.

DOBBS: I think when we say "could," we also have to say that he could also be exonerated, and I think it's incumbent upon us as well, Ed, to point out that the prosecutor in Houston is a Democrat.

HENRY: That's right, and he went after Republican Senator Kay Bailey Hutchison several years ago, and that case fell apart -- Lou.

DOBBS: Thank you very much, as we try to keep the record straight here.

Ed Henry reporting from Capitol Hill.

We thank you.

When we continue, Congressman Chris Bell filed the ethics complaint against Majority Leader DeLay. Congressman Bell will be my guest.

Then, a series of deadly attacks on a Egyptian resort town tonight. As many as two dozen people are known to be dead. It is feared that the death toll will rise and rise significantly. We will have the very latest for you. Developments continuing to pour in.

Also tonight, our very Democracy at Risk. Our voting system riddled with problems from state to state, vulnerable to manipulation. I'll be joined by the director of the nonpartisan group working to fix many of the problems facing us before November 2. Then, round two of the presidential presentations a day away. Former adviser to President Bush Ron Christie, economic adviser to the Kerry campaign Roger Altman will be here

Stay with us.

(COMMERCIAL BREAK)

DOBBS: As we have reported, the House Ethics Committee has again admonished Republican Majority Leader Congressman Tom DeLay of Texas. This most recent complaint against DeLay filed by Congressman Chris Bell, Democrat of Texas. Congressman Bell today called for Tom DeLay to, quote, "do the right thing for Americans, step down as majority leader."

Congressman Bell joins me tonight from Capitol Hill.

Congressman, thank you very much for being here. You have called upon the majority leader to step down, yet the majority leader says that the charges effectively were dismissed. What is your reaction?

REP. CHRIS BELL (D), TEXAS: Well, I'm a little bit shocked that the majority leader continues to misrepresent the findings of the Ethics Committee and continues to thumb his nose of the hard work that went into this decision.

Obviously, if you read the letter that was sent to Mr. DeLay by the Ethics Committee and also the opinion that was handed down by the Ethics Committee, they make it very clear that these charges are not being dismissed, that the allegations were not being dismissed, but rather Mr. DeLay was being publicly admonished for the third time in less than a week, and for him to continue to try to misrepresent the facts is rather shocking.

DOBBS: The third element, the House Ethics Committee decided to await judgment by prosecutors and a grand jury in Houston. The fact of the matter is those charges -- that grand jury assembled by the charges brought by -- in the case of the three indicted in the PAC associated with Congressman DeLay -- a Democrat, a Democrat with decidedly partisan energy, if I can put it that way. Is that playing a significant part in this entire action?

BELL: It could, Lou. But let's also point out a Democrat with a track record of also prosecuting a number of fellow Democrats, as the Travis County district attorney, and it's the most serious count, and that is still pending.

The Ethics Committee yesterday made it very clear that they were deferring judgment on count two of my complaint, and they would talk a wait-and-see approach to see what might develop in regard to that case, and I think it's quite clear that if Mr. DeLay ends up being indicted along with his associates, the Ethics Committee will move forward on that particular count.

DOBBS: I would like to read to you and also put forward for our viewers to read, and I will read along with them: "Mr. Bell displayed" -- this is the statement from Tom DeLay -- "displayed contempt for Congress by manipulating the ethics process in pursuit of his personal vendetta, and today's dismissal says more about Mr. Bell's conduct than it does about anything else." We wanted to give you an opportunity to respond to that charge.

BELL: Mr. DeLay has engaged in the strategy of shoot the messenger since the beginning of this matter back in June, and it's rather sad because if Mr. DeLay were to look in the mirror, he would see the person who's responsible for the problems that he faces today.

As the committee pointed out in its letter to Mr. DeLay yesterday in the opinion that it handed down, his conduct has been highly inappropriate. The House majority leader is called upon Lou to set a higher standard and especially when it comes to ethical conduct.

In the case of Mr. DeLay, he has the worst record in regard to ethics in the entire United States House of Representatives, and that's why it's come time for him to do the right thing by the American people and step down and stop trying to cast dispersions upon other individuals and blame other individuals and accept the fact that this was a bipartisan committee -- five Republicans, five Democrats -- who reached a unanimous decision questioning his unethical conduct.

DOBBS: Congressman Chris Bell, Democrat of Texas.

We thank you for being here.

BELL: Thank you, Lou.

DOBBS: On the subject of parties, Democrats and Republicans, we invited the Republicans on the House Ethics Committee, as well as any member of the Republican leadership, including, of course, the House majority leader, Congressman Tom DeLay, to join us here this evening. All either declined our invitation or they chose simply not to the return our phone calls inquiring about this story.

Still ahead here tonight, three explosions tonight at popular resorts near the Egyptian-Israeli border. Dozens of people have been killed. We'll have the very latest for you on this breaking story.

And Democracy at Risk, our special report. Paperless electronic voting machines just one of the many concerns now about our fast approaching presidential election. How ready are we to ensure the integrity of that election? I'll be talking with director of the group fighting for election reform, Election Online, next.

And then, the campaign's focus on foreign policies shifting in the so-called second debate. We'll talk with domestic policy advisers to both candidates, plus three of this country's very best political journalists about this campaign to date.

Stay with us.

(COMMERCIAL BREAK)

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

DOBBS: We have more now on the breaking news developments. Multiple explosions in tourist resorts in Egypt. Details still coming in, but Israel now says at least one of those explosions was caused by a car bomb.

Police say 30 Israelis were killed. Egyptian officials are saying at least 100 other people have been wounded in the explosions. The first explosion took place in a hotel in the Egyptian resort in Taba on the Red Sea, just a few yards from the Israeli border. Many of the wounded have been taken to hospitals in Israel for treatment.

Hundreds of Israelis have been vacationing in Egypt during the Jewish holiday. Last month, the Israeli government specifically warned all Israelis not to travel to Egypt because of the heightened concern and the threat of terrorist attacks.

We'll have more on this breaking news story later in the broadcast and throughout the evening, of course, here on CNN.

We've reported extensively here on the numerous concerns about the integrity of our voting system in the presidential election. Now, just 26 days away, the concerns include: the use of electronic voting machines that leave no paper record, the registration of non-citizen voters or non-resident voters, and many other issues.

My next guest is the director of a nonpartisan group tracking many of these issues, these problems and trying to fix them. Doug Chapin, director of electiononline.org joining me tonight from Washington.

Doug, the problems look serious and frankly troubling. How widespread do you believe the issues are across the country?

DOUG CHAPIN, ELECTIONONLINE.ORG: Well, certainly, there's a focus on election reform across the country and with a special intensity as we get closer to Election Day 2004.

People are concerned about technology, about registration procedures, about even procedural things like provisional voting and voter identification. All of these will be under the microscope on Election Day.

DOBBS: You've specifically said that Ohio is a greater concern to you right now than the State of Florida. Why?

CHAPIN: Because I think Ohio -- if it happened in election reform in the last four years, it happened in Ohio. There were tensions between the secretary of state and local election officials about voting technology, tensions between the secretary of state and the legislature about paper trails for electronic voting systems. There have been debates about provisional voting, confusion about voter identification and a dispute about the proper paper weight for voter registration applications.

DOBBS: To name just a few, I think, would be the appropriate follow-on.

CHAPIN: To name just a few.

DOBBS: The people in Ohio certainly aren't laughing. None of us will be laughing if any of those problems turn out to effect the vote. Do you believe enough is being done in Ohio to assure the integrity of that vote, a critical battleground state, a critical swing state in this election?

CHAPIN: I think so. My experience in talking to state and local election officials around the country is that they are working very hard to be ready for Election 2004, despite the passage of a new federal law and despite the lack of a lot of the funds they were promised to do that work.

That said, there is enough change and enough uncertainty about some of those changes that we could still have problems on Election Day.

DOBBS: Thank you very much. Even if you're not reassuring, we appreciate you being here, Doug. We appreciate you dealing with issues.

CHAPIN: Thank you.

DOBBS: Doug Chapin.

That brings us to the subject of our poll tonight. The question: How concerned are you about the integrity of our national voting system -- very, moderately, a little or not at all? Cast your vote, please, at cnn.com/lou. We'll have the results for you later, of course, the broadcast.

Coming right up, round two of the presidential presentations now just about 24 hours away. Ron Christie, former adviser to the president, and Roger Altman, economic adviser to the Kerry-Edwards campaign, join me.

And Protecting American Jobs. Why another plan to help American workers has been defeated. Senator Bob Graham of Florida will be joining us to talk about critical legislation moving through the U.S. Congress, legislation he says that should never, ever become law.

The next outsourcing boom town not Bangalore or Beijing. It's Buenos Aires. We'll have report.

And your e-mails, a great deal more still ahead here.

(COMMERCIAL BREAK)

DOBBS: Tomorrow night, the presidential candidates are expected to address a new range of issues in their second so-called debate. These issues include of course the economy, health care, and other domestic concerns. I'm joined now by two of the men who have advised the candidates on domestic issues, Ron Christie, former adviser to President Bush, joining us tonight from Washington, D.C., good to have you with us, Ron. And Roger Altman, a senior economic adviser to the Kerry campaign tonight in St. Louis where he is preparing Senator Kerry for tomorrow's debate. Roger, good to have you here.

Let's start with the presentations, as we style them here rather than debates because you guys have put together so many rules that constrain them in our judgment. Are we going to see a far more animated and free exchange of views and values between these two men? I'll start with you, Roger.

ROGER ALTMAN, SR. ADVISER TO SEN. KERRY: I don't know precisely how the format will look -- will work, Lou. But I think it's likely to be more free throwing and more free form. And I think it should allow the American people to see these two candidates in a pretty natural setting, being asked questions from average Americans, undecided voters. I'm looking forward to it. I think it's going to be a good evening. I think there's going to be an enormous audience and I think Senator Kerry will demonstrate again as he did last Thursday night that he's resolute, strong and ready to lead and he has plans to turn this economy around and to make us safer around the world.

DOBBS: Ron, in your judgment, the president who was -- in the judgment of most people was not sufficiently aggressive and perhaps too candid with facial expressions and that's putting it I think rather mildly, is he prepared to take on the issue of the economy which many people consider to be his greatest vulnerability?

RON CHRISTIE, FMR. ADVISER TO PRES. BUSH: Absolutely, Lou. One of the things I would say to your viewers is that this is an excellent format for President Bush. He's very comfortable in the town hall format and he has a strong record to run on. The economy is growing, after the recession that we had coming into office, after the attacks of 9/11 and the lack of stock market confidence. The economy's growing. It's grown significantly and it continues to expand because of the reduction of the tax cuts that the president implemented and many of the pro-growth policies that he's put in place.

So I think the president is very much looking in favor of running on his economic record and giving an honest discussion to the American people why the Bush administration need to be re-elected for the next four years.

DOBBS: Roger?

ALTMAN: Lou, can I respond to that?

DOBBS: Sure.

ALTMAN: Well, I hope he does talk about his economic record because that's a hard thing to do. They like to talk -- as this gentleman just did, -- about the difficulties they inherited and all of that, but if you look at the performance of the economy over the last three months, a period when none of the factors that that gentleman just mentioned, including 9/11, have anything to do with it. The percentage of Americans working in this country has gone down, not up. And family incomes have gone down and not up. Let me be very specific. The percentage of Americans working has gone down because the job growth rate has been anemic and slower than that necessary to keep pace with population. They say, wow, we have created 1.7 million new jobs. That's not enough to keep up with population growth. And in fact, the average job growth in the eight Clinton years on a monthly basis was 250,000. That's average over eight years. They have had two months that did that, and on incomes, it's very simple. Inflation is subdued but nevertheless it's running faster than wages. So on the two acid tests, jobs and income, the last three months those excuses they make don't pertain. They're both down.

DOBBS: Ron Christie. Please, you don't have to wait for me.

CHRISTIE: Yes, if I may respond to that. See it's more of the pessimism that we hear from the Democratic side. The truth of the matter is that the economy has grown by 4.8 percent over the past several months this year. We've had 107,000 new manufacturing jobs in the United States. The economy continues to recover and the president's tax policies are one strong step, as pointed out by Alan Greenspan, to take us in that right direction. Unfortunately, the Democrats don't have a strong economic record to run on. They don't have a strong economic plan. President Bush does have one in place. He continues to want to train American workers to make sure that we're competitive abroad but to make sure our manufacturing base here in the United States is sound and our economy continues to expand.

ALTMAN: Well, Lou, I am sure you would like this to be animated so let me in that spirit respond. The Democrats don't have a good economic record to run on? Hello, how about the Clinton years? 23.5 million new jobs, 11.5 in the first four years. Their record? 1.6 million down. Growth? Average Clinton years, 3.8 percent. Bush so far, 2.6. Anybody who says that the Bush years were better than the Clinton years is living on another planet. And I noticed he did not address my response on jobs and income during the last three months. Let me hear what he has to say on those two factors in the last three months, jobs and income.

CHRISTIE: Actually, I want to talk, Roger, what planet you are living on, because it look like the job economic growth plan under President Bush is the job creation will be higher in the first term in the Bush administration than the Clinton term. But again, the Democrats...

ALTMAN: I am sorry, sir!

CHRISTIE: Excuse me, I didn't interrupt you, so I would appreciate you don't do the same. The thing that the Democrats don't mention is the fact that we were hit. We had a recession coming into office. A former member of President Clinton's Council of Economic Advisers said the economy was stalling in 2000. President Bush came in. We had 9/11. His pro-growth policies have worked and the Democrats continue to demagogue the issue is...

DOBBS: Ron Christie, Roger, you had the first answer, so we will have to call this even at this point. I will leave it to our viewers of course as always....

UNIDENTIFIED MALE: I am very disappointed in that judgment.

DOBBS: I am talking about in terms of time. Others will make a qualitative substantive judgment. Thank you both for being here. Ron Christie, Roger Altman. Thank you, gentlemen.

Still ahead here tonight, how the collapse of one country's currency is simply too good an opportunity for companies looking to kill American jobs and shift them to cheap overseas labor markets. We'll have that special report for you next. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: In "Exporting America" tonight House and Senate negotiators have approved the American Jobs Creation Act of 2004, a sweeping corporate tax bill that is really a tax break bill. It would give corporations and farmers in swing states a total of $145 billion in tax cuts. Senator Bob Graham proposed an amendment to the legislation trying to block those tax cuts from companies sending American jobs to cheap overseas labor markets. His amendment was defeated. Senator Graham joins us now from Washington, D.C. Senator, good to have you here.

This is an effort to set right what is basically as much as a $50 billion problem that has now tripled in terms of the cost to the taxpayers. Is that right?

SEN. BOB GRAHAM (D), FLORIDA: That's absolutely right, Lou. As outrageous as it sounds, there are 14 additional incentives for companies to move jobs overseas in this legislation. It's going to cost you, the taxpayer, about $43 billion over the next ten years to have your job exported.

DOBBS: That is just simply outrageous. And let me just point out, Senator Tom Daschle of North Dakota (sic), he concedes he will vote to stop a filibuster in the Senate, if that is necessary, because the bill basically has too many favorable provisions. The leader of your own party in the Senate. How do you react to that?

GRAHAM: Well, what's happened in this bill, and I hate to say this, is that they've got placed in so many special interest pieces of legislation, many of which I would support as an individual matter. But they're using that to mask over a massive new program to encourage U.S. firms to move jobs overseas. If I could just give one example.

DOBBS: Surely.

GRAHAM: We're about to allow companies which have made the decision to go overseas, have developed foreign profits to bring those back in the United States not at the 35 percent tax rate that they would have paid had they done the jobs in the United States, but at 5.25 percent tax rate. This is supposed to be a temporary provision. Given the way Congress operates, I would be very suspicious if it didn't eventually become a permanent provision. DOBBS: Senator McCain's called the legislation simply a disgrace. The White House has basically indicated it will sign it. When your own leader is in support of it, how in the world is a viewer, a middle-class, working man and woman in this country, going to the polls on November 2, how do they look for any representation on the security of their employment, the foundation of the middle class in this country? Which party is preserving them?

GRAHAM: Well, you're absolutely right, Lou. The role of the lobbyists in this bill has just been overwhelming. Those who are representing narrow special interests have taken control over the great number of Americans who are concerned about their jobs being shifted overseas, as about 500 a day are now being outsourced.

DOBBS: Senator Bob Graham, just saying it straightforwardly, thanks for caring enough to act in the interests of the country and the interests of the working man and woman in this country.

GRAHAM: Thank you.

DOBBS: You're appreciated, and thanks for being here.

Tonight, another cheap overseas labor market has emerged as a destination for the outsourcing of American jobs. This country, in fact, has the lowest professional salaries in all the world. Cheaper even than India. Lucia Newman reports from Buenos Aires, Argentina.

(BEGIN VIDEOTAPE)

LUCIA NEWMAN, CNN CORRESPONDENT (voice-over): Think Argentina, think tango.

Think Argentina, think boundless beef. But now, think again.

Welcome to ideas factory, a state-of-the-art software programming lab in Buenos Aires, which opened two years ago.

UNIDENTIFIED MALE: This particular one is development, whole system for telecommunications company in the United States.

NEWMAN: Specifically for a small telephone company in Florida. Writing software outsourced from the United States is now a booming business, as Argentina's currency collapsed two years ago, making professional salaries the most competitive in the world right now, 15 percent cheaper than in India.

U.S. companies are opening shop and hiring the services of professionals, like Modiel (ph), for around $6,000 a year, as opposed to $40,000 they pay in the United States.

(on camera): American giants like IBM, Motorola and Oracle are hiring hundreds of software programmers here in Argentina. Yet, they've all declined to talk to us about their outsourcing programs here, saying privately that the subject is just too much of a political hot potato during an election year. (voice-over): For Argentina, which is plagued by high unemployment, being able to compete for a piece of the world's information technology market or IT is a godsend.

CARLOS PALOTTI, ARGENTINA TECH & INFO ASSOCIATION: The IT industry this year maybe is going to grow at 15 or 20 percent. And the exportation (ph) at 40 percent.

NEWMAN: Argentina's government is in fact in the process of passing a law to target and promote at least 50,000 new jobs in the IT industry, and that's just for starters.

For this country, software, not tango, is the way to seduce the foreign companies.

Lucia Newman, CNN, Buenos Aires.

(END VIDEOTAPE)

DOBBS: A big sell-off today on Wall Street. The Dow down 114 points. The Nasdaq down 23. The S&P 500 down almost 12.

Record high oil prices again, and they're beginning now to create real pain for American consumers. Joining me, Christine Romans -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: Lou, oil today closed near $53 a barrel, an all-time high. Heating oil, gasoline near historic highs as well. What does this all mean for all of us? It will cost twice as much to heat our homes this winter as three years ago, but high energy prices have already badly hurt Americans. They're paying part of the reason retail sales were slow last month. Gas prices are already up 25 percent over the past year, and many other commodity rallies have been far worse.

And now, shortages reported for some, like gasoline, cement, diesel fuel, ethanol, steel and other steel products.

Lou, but no shortage of layoffs. Bank of America today announced it will ax 4,500 jobs. AT&T will lay off another 7,000. And a survey of some of the biggest company CEOs found that a majority think our economy will be sluggish in the next year. That is not a good sign for hiring.

DOBBS: Christine, thank you very much. Christine Romans.

Still ahead here, the presidential candidates gearing up for their second presentation, this time in St. Louis. Three of the nation's top political journalists join me to assess the prospects of that so-called debate and this campaign to this point. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: A new poll shows Senator Kerry holding a slight lead in the presidential race just ahead of the second so-called presidential debate. The Associated Press/Ipsos poll shows 50 percent of likely voters favoring Senator Kerry; 46 percent favoring President Bush.

Joining me now, three of the country's very best political journalists. From Washington, Ron Brownstein, national political correspondent, "Los Angeles Times." Karen Tumulty is national political correspondent for "Time" magazine. And in St. Louis, grabbing the dateline, Roger Simon, political editor, "U.S. News & World Report." Good to have you all here.

We just heard Roger Altman and Ron Christie, representing their respective candidates, say that they're looking for basically a far more animated, engaged contest this time than the first. Your thought, Ron?

RON BROWNSTEIN, "LOS ANGELES TIMES": I thought the first one was pretty animated. I would take the so-called off of the appellation, Lou, but we'll discuss that another night. Look, I think that...

DOBBS: Everybody wants to edit me, for crying out loud!

BROWNSTEIN: All right, just a little jab there. The -- friendly jab. I think there's a difference between form and content here. I think the Democrats are worried, actually, many of them, that President Bush will come across more engaging in this somewhat informal environment. John Kerry has done a lot of town halls, but his biggest problem is that sometimes give $10 answer to 25 cent question and go on for a while.

On the other hand, the subject matter as it moves to domestic issues, there are going to be some tough questions for the president on areas like health care, the job creation record over the last 4 years, and of course the result of this Iraq survey group coming out just before this debate is likely to have a big reverberation through it.

DOBBS: Karen, Vice President Cheney, in point in fact, said that the Duelfer report, the CIA report on the absence of weapons of mass destruction in point of fact justified the president's decision to go to war. Your thoughts?

KAREN TUMULTY, "TIME" MAGAZINE: Well, this is something that the White House has been spending since before the report itself came out, because they did understand that this is absolutely devastating report for the administration. So they essentially are trying to focus on what was Saddam Hussein's frame of mind, his intent? And making the argument that you cannot trust a mad man.

But I think that the Democrats have been, and will continue to keep comparing those statements to the statements that the administration actually said at the time when they were justifying war. And certainly Colin Powell sitting there in front of the United Nations was not talking about Saddam Hussein's frame of mind, he was showing pictures.

DOBBS: Right. Roger, a number of developments, news developments obviously the attacks tonight on a number of resort towns in Egypt against Israelis. The attacks today within the Green Zone against the Sheraton Hotel, massive destruction in an area that's supposedly secure. Two Americans dead, energy prices at record highs, the question -- the very integrity of the voting system being questioned now from a number of quarters. Who, -- which of the two candidates does this most influence, and what does it represent in the way of an opportunity for either candidate candidate?

ROGER SIMON, U.S. NEWS & WORLD REPORT: Well, bad news always helps the challenger. Obviously, if times were good, George Bush would be doing better in the polls than he's doing now. The report that you just referenced and that Karen mentioned, exposes the bitter irony that at the time that the president of Iraq was telling the American people the truth, the president of the United States was not.

He said he didn't have weapons of mass destruction. We said turn them over, or we'll invade. And every time the American people ask themselves the question, what are we doing there in Iraq? Whether it's because of the reasons we invaded, or because of another attack on U.S. soldiers or on U.S. civilians, it is a bad question for the administration to deal with. The administration doesn't want Americans asking that question.

BROWNSTEIN: Lou can, I follow-up on what Roger said.

DOBBS: Sure.

BROWNSTEIN: Because I think he makes an important point. There really are two elements that come out of the Duelfer report. One, is this question whether the president misled the country before the fact in Iraq. By and large, the polls have shown consistently that most people do not feel the administration deliberately misled the country. Rather, the conclusion has been that they accurately presented inaccurate intelligence. And in fact, I think many people in the White House feel they can point to statements by Kerry that are similarly hawkish in the period before the war.

I think the bigger challenge for the president, is what he is say right now. Even today, he made comments that seemed to directly contravene the conclusions in the report, in terms of the capacity and the means of Iraq to develop weapons of mass destruction. And as a result, he may be giving an opening to Senator Kerry's larger argument that the president can't solve the problem in Iraq, because he won't acknowledge it.

And again, I think where we are in Iraq is probably more important than how he got there. And on that front, the recent events have been eroding of the president's handling of it.

DOBBS: Karen, taking everything that Ron said, accepting it, stipulating it, is Senator Kerry in point of fact being clear about what he would do differently? The president now saying basically the Kerry plan is an echo of a plan that he's heard somewhere before, it's called the Bush plan and the administration's policy in Iraq.

TUMULTY: Now, if anything, this is sort of John Kerry's faith- based initiative. His basic contention here is just by having a new president, by having a leader of this country that we would have more credibility with the allies. That he could force essentially a different dynamic.

But in terms of looking for precisely how he would do it differently, no. And, however, he does make the argument that he doesn't know precisely what he would be walking to on day one. He drew a parallel today. He said it could be another Lebanon.

So it is sort of -- on the one hand, voters have a right to expect a detailed plan for him. And on the other hand, he's right, it is impossible for him, at this point, to know precisely what it will look like in the middle of January in Iraq.

DOBBS: Roger, you being in St. Louis, what are you expecting to be the principle point of engagement between the two candidates?

SIMON: I think it will continue to be Iraq. The difficulty in predicting is the questions are coming from the audience members this time. And audience members probably have a lot more domestic concerns than foreign ones.

This is St. Louis. In a few weeks, it's going to be heating oil season here, and people are worried about the increased costs of fuel. There are a whole bunch of pocketbook issues, as you know Lou, that we have not yet dealt with this in debate.

DOBBS: Roger Simon in St. Louis. Karen, Ron, thank you both, hanging out in the nation's capital to preserve Roger's place to return. We thank all three of you.

BROWNSTEIN: Holding seat for him.

DOBBS: Still ahead here, the results of tonight's poll. We'll have a preview of what's ahead tomorrow, including a look ahead to the presidential presentations.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight, 86 percent of you say you are very concerned about the integrity of our voting system, 8 percent moderately concerned, 3 percent only a little and only 3 percent not at all.

Thanks for being with us here tonight. Please join us tomorrow. Congressman John Dingell among those fighting to stop the exporting of white collar American jobs. He's our guest.

And I'll be joined by the Republican National Committee Ed Gillespie. He'll join us ahead of the second presidential presentations from Washington University in St. Louis.

And the crisis facing our voting system nationwide, why some experts are warning Ohio could be the next Florida. Ohio secretary of state Kenneth Blackwell will be my guest. Please be with us.

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

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


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