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Lou Dobbs Tonight

U.S., Iraqi Troops Invade Falluja; A Look at the New Bush Agenda

Aired November 08, 2004 - 18:00   ET

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


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


(BEGIN VIDEOTAPE)
LOU DOBBS, HOST (voice-over): Tonight, thousands of American and Iraqi troops are storming Falluja. We'll have a report from our correspondent embedded with American troops in Falluja.

DONALD RUMSFELD, SECRETARY OF STATE: No government can allow terrorists and foreign fighters to use its soil to attack its people.

DOBBS: And the new Bush agenda. Tonight, we focus on the economy and the Supreme Court. I'll talk with former White House counsel C. Boyden Gray and House Minority Leader Nancy Pelosi.

The federal government is all but ignoring an invasion of three million illegal aliens into this country. Tonight we bring you the story of a local prosecutor taking a stand.

UNIDENTIFIED MALE: If the federal government was doing its job, we wouldn't have 13 million illegal aliens in America.

DOBBS: And a story tonight we don't usually cover here, the Scott Peterson murder trial. But tonight, after months of jury deliberation over evidence and testimony and millions of dollars in taxpayer money, the jury appears to be deadlocked.

What in the world is going on with our legal system? CNN legal analyst Jeffrey Toobin joins me.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, November 8. Here now for an hour of news, debate and opinion is Lou Dobbs.

(END VIDEOTAPE)

DOBBS: Good evening.

Tonight, U.S. and Iraqi troops are advancing into Falluja in a massive offensive, trying to wipe out insurgents and foreign terrorists.

As many as 15,000 American and Iraqi troops are engaged in the assault. They're supported by tanks, artillery and aircraft. The offensive is the largest in Iraq since U.S.-led troops over through Saddam Hussein.

We begin our coverage tonight with a report from Jane Arraf, who's embedded with American troops on the outskirts of Falluja.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN CORRESPONDENT: We're on the outskirts on the northeast side of the city. But other units of task force 22 from the Army's 1st Infantry Division had been moving further in, as far in as 800 meters into the city.

Out here in between, they have been blowing up railroad tracks to allow them to move further. They've also, for more than an hour, been decimating a series of booby traps.

This is what U.S. forces had expected and had feared as they began to move into the city, that there was a series of improvised explosive devices, homemade bombs, laid out in patterns to try to prevent them from moving in. The Army, the units that we're with, have been firing at these with tanks, causing huge explosions.

This is a sector of the city where there are very few civilians. In fact, officials have told us that they believe insurgents have prevented civilians from moving back into this area as they've been rigging up buildings, barriers and almost everything else with these homemade bombs.

They are continuing to detonate them, and they are now detonating -- the Army is blowing up railroad tracks to allow them to go further.

(END VIDEOTAPE)

DOBBS: That Jane Arraf reporting from the outskirts of Falluja, embedded with Task Force 22 of the Army's 1st Infantry Division. If that division slows down enough over the course of the next 45 minutes, and Jane has the opportunity, we'll, of course, be going live to her for the very latest on the -- on the progress of this offensive.

Defense Secretary Donald Rumsfeld today said the U.S. and Iraqi offensive comes at a critical time in the history of Iraq. Rumsfeld said no government can allow terrorists to attack its people and its government.

CNN Pentagon correspondent Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Let's go.

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): When the long- threatened offensive finally kicked off, U.S. troops were pumped.

UNIDENTIFIED MALE: We're going to smack the crap out of them. That would be nice.

MCINTYRE: With 10,000 U.S. Marines and soldiers, and more than 2,000 Iraqi troops moving on Falluja, the Pentagon is confident the estimated 3,000 insurgents can be routed. But Pentagon officials are downplaying any suggestion the battle for Falluja is a final showdown with the insurgents.

UNIDENTIFIED MALE: You've said...

RUMSFELD: I would not think of that way and I think it would be a mistake for anyone. Listen, these folks are determined. These are killers. They chop people's heads off.

GEN. RICHARD MYERS, CHAIRMAN OF JOINT CHIEFS: But if there were a silver bullet, we would have shot that a long time ago. There is not a silver bullet. This is very challenging work.

MCINTYRE: The U.S. is highlighting the Iraqi role in retaking Falluja, even dropping the Pentagon's name for the operation, Phantom Fury, for one picked by Iraq's prime minister, Operation Dawn.

(END VIDEOTAPE)

MCINTYRE: And while Iraqi commandos were given the job of storming the main hospital in Falluja, they were brought to the scene by U.S. Marines, who secured the perimeter. There was little resistance at the hospital.

They have also been some reports that Iraqi troops have deserted or not shown up for duty. The Pentagon insists those are isolated incidents that aren't affecting the operation.

The other big concern is whether the insurgents will melt away and regroup somewhere else. Today General Casey, the top U.S. commander in Iraq, said, "They may try that. But we're not going to let it happen" -- Lou.

DOBBS: Jamie, do we have any further progress reports on the advance of the Marines and the Army in Falluja?

MCINTYRE: We're not. We -- at this point, we have no reports of any casualties. But we also have no reports of how far the offensive have progressed. We'll probably get the best reports on that from our reporters who are there, including Jane Arraf, who you just talked to a short time ago.

DOBBS: All right. Jamie, thank you very much. Jane -- Jamie McIntyre. We thank you very much.

I'm joined now by our military analyst, retired U.S. Marine Corps General Terry Murray. General Murray served three decades in the Marine Corps, and he led Marines in the Persian Gulf.

General, good to have you with us.

GEN. TERRY MURRAY (RET.), U.S. MARINE CORPS: Thank you, Lou.

DOBBS: This is the worst sort of fighting for our military. At this point, what do you expect over the course of the next 24 hours? MURRAY: I think what we need to determine, Lou, is how serious are the insurgents about fighting? Is there will to fight strong? How many of them have remained in the city of Falluja? We've heard as few as 1,000 and up, perhaps, to 5,000. Those are big differences between the low end and the upper end.

Again, the related question is how strong is their will to fight? Will they contest us from the first moment that our forces enter Falluja?

We know that generally, they've got small arms, mortars, rocket- propelled grenades, lots and lots of mines. So regardless of how many stay to fight, I think we must anticipate the worst, which is lots of mines and -- and fairly severe opposition as we enter the city.

DOBBS: Does that also mean in your judgment, severe -- a severe number of casualties?

MURRAY: Again, Lou, this is -- it's hard to predict. You generally anticipate, when you operate in a built-up or urban area that your casualties will be greater.

Because what a built-up area presents you with is a very difficult environment. It removes virtually all the advantages of the more technologically superior foe. And it forces you into a close in battle. You go street-to-street, house-to-house, and block-to-block.

And ultimately, if you're in a building and there are insurgents there, sooner or later you close with them and you see who survives.

DOBBS: And with 10,000, at least 10,000 Marines and Army, is it your best judgment that this is a more than adequate force to bring to bear on an estimated 3,000 anti-Iraqi forces within the city?

MURRAY: Lou, the rule of thumb, when you're in the attack, is you'd like to have odds of about 3-to-1. It appears that we -- we're about there. But again, this is guesswork.

What we don't know is how this force is arrayed inside the city. We don't know whether they have strong command and communications capabilities. Or whether or not they will fight as independent pockets throughout the city.

And those hard-to-answer questions will determine what kind of opposition the troops actually face, and I think how well we fare.

At the end of the day, I think we're go through the city in a relatively short time. The larger question, I believe, as we look down the road: once we seize Falluja, how many troops do we need to leave in garrison in Falluja to keep it tame for a long period of time?

DOBBS: And before we get to that stage, General, the issue also, in talking about troop strength, would it be your assessment that -- that the commanders there, moving those 10,000 Americans into position and carrying out this offensive, have also cut off avenues of escape for those 3,000 insurgents and foreign terrorists that they believe to be in Falluja?

MURRAY: I expect, Lou, that they've tried to do this. You have to understand, this is a very large city.

DOBBS: Right.

MURRAY: Almost 300,000 people live in this city. So it covers a great amount of ground. And I cannot imagine that we've done too much more than cover the main avenues of approach going in and out of the city.

But if these insurgents are resourceful, I expect there's lots of ground for them to escape the city over time. So we're just going to have to wait and see.

DOBBS: General Terry Murray, thank you very much.

MURRAY: Thank you, Lou.

DOBBS: Turning now to another story that is critical to the future of the Middle East: the Palestinian-Israeli conflict and the rapidly deteriorating health of Yasser Arafat.

Tonight, Palestinian leaders arrive in Paris, there to visit Arafat in the hospital. One of the top issues likely to be Yasser Arafat's secret bank accounts, containing hundreds of millions of dollars and underlying much of the political maneuvering going on now.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): Experts claim Palestinian leader Yasser Arafat has siphoned off vast sums of money into personal account for decades from foreign aid, taxes and business ventures, money that was not used for the Palestinian people. An audit included in a recent IMF report says "a rough but conservative estimate of about $300 million in profits channeled outside the budget over this period. All in all, excise tax revenues and profits from commercial activities diverted away from the budget may have exceed $898 million." The purpose may not have been for personal lifestyle, but influence peddling and patronage.

Nathan Hardy has been following the Arafat money trail.

NATHAN HARDY, "FORBES" MAGAZINE: Arafat, no question about it, used money in order to stay in power. It was his political capital that he used to fund a vast patronage system in order to keep him in charge of the affairs of the Palestinians.

PILGRIM: A little more than two years ago, foreign aid donors demanded better bookkeeping from the Palestinian Authority. Finance Minister Salem Fayed is credited with putting the budget online and recapturing some of the off-budget accounts But many think a lot of money is still out there controlled by Arafat. One of the few people with intimate knowledge of the clandestine financial dealings is Arafat's financial adviser Muhammad Rashid. While Arafat has been living in the rubble of his Ramallah compound all these years, Yasser Arafat wife, Suha Arafat, has been living comfortably in Paris with an estimated stipend of $150,000 a month.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: There are many people, Arafat's wife included, who have been receiving generous stipends as long as he's been alive. I think all of them have to wonder whether or not those stipends are going to continue once he dies, and so they have a vested interest in seeing that they are taken into consideration now before he dies.

(END VIDEOTAPE)

PILGRIM: Arafat's regime was so corrupt, a few years back, crowds rallied to protest it. The IMF today told us some of the last money has been tracked down in the last two years, but the search is on to find the bank accounts that are still hidden or held in another name but controlled by Arafat -- Lou.

DOBBS: Kitty, thank you very much.

Kitty Pilgrim.

Well, coming up here, six million illegal aliens from Mexico now live and work in this country. Incredibly, the president of Mexico, Vicente Fox, wants those illegal aliens to have the very same rights as American citizens. We'll have that report for you next.

And a local prosecutor in the State of Pennsylvania is taking a stand against the invasion of illegal aliens, an invasion the federal government has all but ignored. We'll have that special report for you and explain why Secretary of State Colin Powell is in Mexico City. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Secretary of State Colin Powell and Homeland Security Secretary Tom Ridge today flew to Mexico for talks on immigration reform. The government of Mexican President Vicente Fox is demanding even more rights for Mexicans who are living in this country illegally.

Casey Wian has the report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexican President Vicente Fox's government didn't waste any time insisting that newly reelected President Bush legalize the estimated six million Mexican illegal aliens living in the United States.

VICENTE FOX, PRESIDENT OF MEXICO: We've been waiting for the U.S. election to go through. Now it's over. President Bush is in government for four year more, and I think that now is the big opportunity that we conclude with this issue.

WIAN: Top officials of both governments began meeting in Mexico City today, seeking to revive an immigration reform deal that was shelved after the September 11 terrorist attacks. Ten months ago, President Bush shocked border residents and law-enforcement officers by proposing a temporary guest worker program. It resulted in an immediate spike in the number of illegal aliens crossing the border. Still, the White House stands by the plan, which also calls for more money for border security.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: As far as the state of play on migration, this president has made a proposal, as you know, to the U.S. Congress. He remains committed to that proposal.

WIAN: Mexicans living in the United States send about $15 billion a year home to Mexico. Those remittances are now Mexico's second largest source of income after oil. So it's no wonder that Mexico continues trying to intervene in U.S. domestic politics. The Mexican government released a statement conveying its outright rejection of Arizona's Proposition 200 which seeks to stop illegal aliens from voting and collecting state welfare benefits.

(on camera): Mexico's interior minister also criticized California's recent rejection of a bill that would have allowed illegal aliens to apply for driver's licenses here, that despite the fact that Mexican states demand proof of legal residency before noncitizens can apply for licenses there.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: We've reported extensively here on the millions of illegal aliens invading this country, an estimated three million this year alone. Prosecuting illegal aliens for entering the country falls under the jurisdiction, of course, of the U.S. federal government. But one local official in Pennsylvania has decided to tackle the crisis on his own with mixed results.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): On an early October morning, 30 officers raided the Rapp Brothers Pallet Company in Easton, Pennsylvania, arresting 27 illegal aliens. The raid was not carried out by Immigration and Customs Enforcement, but by local and state police. North Hampton County District Attorney John Morganelli is sharply critical of the lack of federal law enforcement of illegal entry laws.

JOHN MORGANELLI, NORTH HAMPTON COUNTY, PENNSYLVANIA, DISTRICT ATTORNEY: If the federal government was doing its job, we wouldn't have 13 million illegal aliens in America.

TUCKER: Morganelli could not charge the 27 arrested with illegal entry into the United States, that's a federal crime, and he has no authority to enforce federal statutes. But he could pick them up on identity theft and document tampering charges.

MORGANELLI: In order to maintain their presence here, they have to violate state law on a daily basis. They have to utilize fraudulent documents. They have to utilize perhaps other people's Social Security numbers when they create these bogus cards. They utilize fraudulent resident alien cards and a whole array of other documents.

TUCKER (on camera): The North Hampton County D.A.'s willingness to prosecute illegal aliens is unusual for a local prosecutor. What happened in this courtroom was more typical. All 27 pled guilty and were released.

(voice-over): They were set free because the judge followed the state sentencing guidelines for first-time offenders. In his ruling, though, he showed some of the attitude D.A. Morganelli finds so frustrating. Judge Leonard Zito referred to the crimes as "technical in nature," appearing to dismiss them as not serious.

MORGANELLI: I'm not waiting around for them to commit "serious crimes." I have enough evidence that they're committing state crimes of identity theft.

TUCKER: In the past three years, Morganelli's office has arrested and charged more than 100 illegal aliens with document fraud, and all have been released. Yet every one of them now has something they didn't before, a prior arrest record, raising the stakes if they are arrested again.

As for the 27 in Easton, they had a report to immigration officials where they will be given a hearing date, but 87 percent of illegals never show up for that date.

Bill Tucker, CNN, Easton, Pennsylvania.

(END VIDEOTAPE)

DOBBS: Coming up next here tonight, the Bush agenda. How President Bush's decisive election victory will effect his plans for the next four years. Our special report coming up next.

And then, power shift. How the presidential election and Republican gains in Congress propose a new challenge for Democrats. House Minority Leader Nancy Pelosi will join me.

And former White House Counsel C. Boyden Gray and I will be talking about the U.S. Supreme Court next.

All of that and a great deal more still ahead here tonight.

(COMMERCIAL BREAK)

DOBBS: Tonight, we begin our series of special reports this week on the Bush agenda for the next four years. We've had in this country 28 consecutive years of trade deficits, a $4 trillion trade debt, and the dollar is plummeting. And now President Bush is preparing to expand his free trade agenda.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): He survived outsourcing, a huge trade deficit, weak job creation to win a victory so sweeping, the president's supporters see it as an economic vote of confidence.

MARTIN REGALIA, U.S. CHAMBER OF COMMERCE: I think on the issues of jobs, the economy and trade, the message is that the American public gets it. They see the data firsthand. And when you look at the economy, you see an economy that's really doing quite well.

VILES: The president's economic priorities improve the climate for job creation by simplifying what he calls an outdated tax code, making tax cuts permanent and limiting what he calls frivolous lawsuits. But the first real test of his economic mandate could be trade, specifically pushing the Central American Free Trade Agreement, or CAFTA, through Congress.

RICHARD MILLS, DEPUTY U.S. TRADE REPRESENTATIVE: The important thing we've always tried to stress is for Americans is that the Central American market is a good size market for us. Those countries already enjoy duty-free access for many of their products, and the CAFTA will actually expand our opportunities to sell our goods and services into those markets.

VILES: The president's opponents will argue his trade policies are squeezing the middle class and feeding a trade deficit that's a financial crisis in the making.

THEA LEE, AFL-CIO: The trade deficit's more than 5 percent of GDP right now. It's more than a million dollars a minute that we import more than we export, and that's something which is not really sustainable over the long run. We simply cannot continue to consume half a trillion more worth of goods and services than we produce every year.

VILES: Political pressure has not forced the administration to address the trade deficit, but market pressure might. The dollar has already fallen to nine-year lows.

(END VIDEOTAPE)

VILES: The president has a bold agenda on taxes and Social Security, but he's also got to deal with a couple of old headaches: the twin deficits, the budget deficit and that trade deficit, Lou, a million dollars a minute -- Lou.

DOBBS: An extraordinarily alarming number. The fact is with the dollar moving at this rate, dropping at this rate, Pete, in point in fact, the trade deficit could take precedence over the budget deficit and, indeed, the rest of the economic agenda, couldn't it?

VILES: It could be, and we saw the dollar fall on Friday, even though we had really strong job creation numbers, which shows just how worried investors around the world are about these deficits -- Lou.

DOBBS: Pete, thank you very much.

Peter Viles.

Still ahead here, Democrats. What do they do now? How will they perform in Congress? I'll be joined by House Minority Leader Nancy Pelosi.

And why the values debate may have cost the Democrats this election.

And we'll be talking about the makeup of the U.S. Supreme Court. I'll be talking with former White House Counsel C. Boyden Gray next.

Stay with us.

(COMMERCIAL BREAK)

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

DOBBS: In just a moment, House Democratic Leader Nancy Pelosi talks about the future of her party. But, first, let's take a look at some of the top stories now in the news.

An attorney for John Hinckley says his client is no longer mentally ill. The attorney asking the judge in Washington for longer unsupervised visits between Hinckley and his parents. Hinckley has been in a mental hospital since trying to assassinate President Reagan in 1981.

A new report says global warming will melt areas of the arctic by the end of this century. The report says temperatures in the arctic are rising twice as fast as the rest of the planet, threatening indigenous people and wildlife.

And scientists in Washington State planning to land a helicopter near the growing lava dome in the crater of Mount St. Helens. The dome began growing last month. That lobe is now the size of a 30- story building, and so hot it glows red at night.

President Bush won the popular vote by a margin of 3.5 million votes, and Republicans increased their majority in both the House and the Senate. I talked with House minority leader, Congresswoman Nancy Pelosi earlier, and she says in spite of that popular vote and the gains of Republicans in Congress, the president does not have a mandate.

(BEGIN VIDEOTAPE)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I believe that as soon as the president takes office again, and I congratulate him on his victory and reach out to him, to be willing to work with him and the Republican leadership. But I don't believe that this election was a mandate for the reckless economic policies of the president about...

DOBBS: To keep thing in context, if I may. President Clinton, with a 43 percent plurality, claimed a mandate. This president with 51 percent claiming one is hardly a stretch then.

PELOSI: I think all presidents claim a mandate, but what I'm saying is whatever the mandate is he claims, it's not a mandate for reckless economic policies, for more people losing access to health care, for leaving millions of children behind, rolling back 30 years of bipartisanship on the environment, and reckless deficit spending.

DOBBS: Will your minority in the House -- will the Democratic Party now work hard to articulate clearly its values and its message?

PELOSI: Yes, we will. We have three criteria in our proposals always -- clarity, credibility of what we are proposing, and consensus within our party.

As we go forward, it will be different, because the public now knows that, again, the Republicans control the White House, the House, and the Senate, so they are responsible. They can no longer blame it on someone else as they have done for the past four years. So it is up to us to...

DOBBS: They were in control before.

PELOSI: I know, but the public was not fully aware of that. Now that they are proclaiming their mandate, I think it will be clear to the public and easier for us. This presents an opportunity for Democrats, with our agenda, for a new partnership for America's future, for job creation, et cetera, that we go out there and make a clear distinction. This is our moment in the Congress without the presidential race and all of the eclipsing of the bread-and-butter issues that the administration successfully did with some of the so- called values issues.

And we have to define what values are. Values are, of course, being persons of faith and family and love of country. They also are about ministering to the needs, as it says in the Gospel of Matthew, of the least of our brethren.

So we have to grow the middle class and expand it. We have to protect the environment, which is God's creation. We have to meet the needs of the American people. We have to reach to a higher purpose, and I believe we have that opportunity now.

DOBBS: Minority Leader, I'm just -- I'm just a simple fellow, secular as I can be. Are we going to hear every politician now, because of exit polls, start couching every issue in moral or religious terms?

PELOSI: I believe that you will see more of that, but I quite agree with you, that we have to get to the issues that are the role of government. I think on the values side, the so-called religious issues side, we have to enlarge that issue, because what we're in danger now in our country is the blurring of the issue of church and state. But I as a devout Catholic was concerned when bishops -- some bishops, not all bishops said that it was a sin to vote for John Kerry. That's absolutely wrong. And that -- our own Constitution is at stake if they think that they can blur the issue of church and state.

So I think that, as President Kennedy said when he ran in 1960, imagine then, they didn't want religion to have a strong role. At that time, he said, "The issue is not what church I believe in, the issue is what America I believe in." And that's where we have to take this issue.

DOBBS: We thank you very much, Leader, for being with us.

PELOSI: Thank you. My pleasure. Thank you.

DOBBS: Congresswoman Nancy Pelosi.

(END VIDEOTAPE)

DOBBS: And that brings us to the subject of our poll tonight. The question -- do you believe there should be a greater emphasis on morality in public life? Yes or no? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Our next guest says the president's focus on values earned him votes in key demographics. C. Boyden Gray says the Democrats took what he calls a cavalier approach to values in this campaign and paid a price. C. Boyden Gray served as White House counsel to President George Herbert Walker Bush, and joins us here in New York. Good to have you with us.

C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL: Nice to be with you.

DOBBS: This issue of values, I talked with Nancy Pelosi about it briefly, with a number of people. Values, would you say that that was a critical component of this, or were there other, more determinate factors at work here?

GRAY: Oh, I think the terrorism issue was huge. I think that's partly where the president gets his big pick-up with married -- I mean, with women with children. But the values issue obviously is a very salient one. No question about it. The court decision in Massachusetts on gay marriage I think was a help. Not ironically coming out of Massachusetts, where Kerry's from. So I do think values is very, very important. And I think if you look at the pick-up in the Senate and the pick-up in the House, this vote runs very deep. Runs into the state legislatures. I think it's not a fluke that -- what President Bush did.

DOBBS: The idea that, as I looked at the exit polls, one the things that was most striking to me, was one is we talk about moral issues, which is really just morality, I would think. Religious affiliation -- in religious affiliation, 8 percent of the vote -- not hardly as high as the 22 percent in most exit polls -- but most telling was the 80 percent response in those exit polls that President Bush is a clear -- sent forth a clear message, great clarity in his message. Only 20 percent saying that of Senator Kerry. That seemed to me to be a very compelling difference.

GRAY: Certainly. A central component of values is the question of character and integrity, and I'm talking about intellectual integrity as well as moral integrity. And I think President Bush projects -- even if you disagree with him -- a core set of values that people can identify with, even if they don't always agree with him. But with Senator Kerry, hard to tell what he was for.

DOBBS: You know, I'm thinking as you are saying that, Boyd, and I listen to Nancy Pelosi. I keep thinking that campaign is over, but then I get the feeling that perhaps it isn't quite. We may see a bit of a restart here as justice -- Chief Justice Rehnquist's health continues to be in question. It looks very serious. And the president will have an opportunity to appoint not only a justice, but a chief justice. Which way do you think he will go there? There are rumors that he's looking at Clarence Thomas and others. What would be your guidance to this president?

GRAY: Well, he has potentially two appointments. One to the seat, the other to the post of chief justice, and he may bifurcate that. I have heard rumors too. He may do this on a temporary basis, pending Congress coming back. There have been recess appointments in the past for people who are later nominated for the full term, a full lifetime tenure. So we don't know yet, and we don't know when the chief is going to resign. So I think it's all speculation at this point.

DOBBS: Well, the speculation exacerbated I suppose by Arlen Specter, Senator Specter's comments about abortion. Now saying that he didn't make those comments. And now today telling Judy Woodruff on this network that what he really meant to say -- would it be your judgment that his appointment, his position as head of the Judiciary Committee in the Senate would be at some risk now?

GRAY: There is some risk, yes. I don't know all the facts. I will find out more -- we will all find out more in the next 96 hours. But you know, I would question whether he -- I think the question is whether he will fully support President Bush's nominees, without reservation, and equally importantly, will he support, if the president and the majority leader seek to go for it, a change in the filibuster rules that would permit an up or down vote for his nominees on the floor.

This is a very important issue. Senator Specter's defense of his statement at the press conference was his proposal to provide a vote certain, a date certain for hearings, and an up and down vote on the floor. But I'm not clear that he really will go for an up or down vote on the floor.

DOBBS: C. Boyden Gray, we thank you for being here. We appreciate it.

GRAY: My pleasure.

DOBBS: Come back soon.

Still ahead, the jury in the Scott Peterson murder trial appears to be deadlocked. After six months listening to evidence, listening to testimony. Raising the question, what in the world is wrong with our legal system? CNN's senior legal analyst Jeffrey Toobin will join me next.

And America's rising dependence on foreign nations, for everything from oil to shoes and to the clothes on our back. Is that a problem? We'll have a special report for you next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: There are concerns tonight that the Scott Peterson murder trial may end in a hung jury. The judge in that case today told the jurors not to hesitate to change their minds, if it helps them reach their verdict. Peterson is accused of course of murdering his pregnant wife Laci and dumping her body in San Francisco Bay.

Joining me now for more on this case, and what it may say about our legal system is our legal analyst Jeffrey Toobin.

Jeffrey, good to have you here.

JEFFREY TOOBIN, CNN LEGAL CORRESPONDENT: Hi, Lou.

DOBBS: Now, we don't have obviously at this point a deadlock jury -- well, we have a deadlocked jury, we don't have a hung jury.

What do you think this means, what does this portend at this stage of deliberation?

TOOBIN: Well, this -- what's peculiar about this is judges usually give this kind of charge, sometimes known as a dynamite charge to break the log jam. At a later stage in the deliberations, this was almost a six-month trial. It's only been three days of deliberations. It suggests what he -- what he has heard from the jury is that there is a serious deadlock there. Now, it may break, this deadlock. But this kind of charge, this early in the deliberations suggests there's a serious problem.

DOBBS: You know, we don't cover this trial on this broadcast because others do so far better than we could ever imagine doing. But the idea that you could ask a jury to sit, to empanel for almost six months now, isn't it, and to decide this case, it seems to me frankly to be the utmost of arrogance and inefficiency. It's just absurd to me.

TOOBIN: It is outrageous to me that this trial has taken this long. The prosecution has called 170 plus witnesses. I think that is irresponsible of the prosecution. The Enron cases, which are far more complicated, took a fraction of this time. This is a disease endemic to California. California, every case takes longer than it does in virtually any state in the union. I just think it is part of the culture out there, and it's a problem that the taxpayers of California have had to pay for for decades.

DOBBS: They're paying for it, and the fact is the legal -- the legal profession is making a lot of money, I guess. And is justice being served is the ultimate question?

TOOBIN: I think the old saying justice delayed is justice denied is a real thing. Whatever result comes out of this trial, the fact that it took so long does not bring credit on the legal system. But it takes strong judges and it takes gutsy prosecutors. And it appears there are neither in this case.

DOBBS: Jeffrey Toobin, as always. Do you want to make a prediction here tonight as to which way this trial goes, deadlocked at the end, or guilty or not guilty?

TOOBIN: Boldly, I will say I really have no idea.

DOBBS: Jeffrey Toobin, you never disappoint with your courage and your -- and your -- and your foresight. But thank you for your insight. Appreciate it.

Reminder now to vote in our poll. Do you believe there should be a greater emphasis on morality in public life, yes or no? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Taking a look now at some of "Your Thoughts."

Jane Ashley in Fort Smith, Arkansas, "Vicente Fox needs to be reminded he has no control over the policies of this country. If he were not such a dismal failure as president of Mexico, we wouldn't have 3,000,000 illegal aliens crossing our border every year. I congratulate the citizens of Arizona for taking action to protect their state."

Henry Wieler of Bethesda, Maryland "If we do not enact immigration reform within one year as is being demanded by Mexican President Vicente Fox what is going to do, invade us? Too late. Doesn't Fox realize that if we throw open the borders there won't be any people in Mexico for him to govern?"

Malcolm Oldroyd, of Simpsonville, South Carolina, "Vicente Fox's plan is clear, accelerate migration of his lower paid, lesser skilled and lesser educated citizens by pressuring the United States to provide undeserved benefits, employment and free medical care within our society to illegal immigrants. If successful he will be left with a skilled work force paying taxes, raising the general standard of living and the ability to attract U.S. outsourcers to further bolster his economy. Some of the consequences for the U.S. are falling living standards, the bankruptcy of Social Security System, erosion of the tax base, and the decimation of the middle class. When will our politicians and the president wake up and truly represent our citizenry?"

That is one of the best questions we've heard asked in a long time. We love hearing from you. Send us your thoughts at loudobbs@cnn.com.

And now, turning to Wall Street. Stocks barely moved today. Not much trading volume. Not much interest but things were happening of importance. The dollar hitting a record low before pulling back. World markets growing increasingly concerned about record and U.S. budget and trade deficits.

Christine Romans is here with the report -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, our dependence on foreign products is simply staggering. In oil, we know that everyone -- that we're dependent on foreign oil, and that condition is worsening. We now depend on foreign oil producers for more than 60 percent of our total consumption. Economists are quick to call us, though, a service-based technology economy. But in fact, so far this year, we have a $10 billion deficit in computers alone, and it, too, is worsening. We can't even make enough televisions and VCRs. We have a $17 billion deficit there. And we can't even clothe ourselves; we have to import 96 percent of our apparel. Eleven billion dollars so far this year for shoes and boots alone.

American children can't even play without foreign help. We have an $11 billion trade deficit in toys and sporting goods. And now for the first time in almost two decades, we're no longer the world's bread basket, we're importing more food than we sell abroad. And that hasn't happened, Lou, since 1986.

DOBBS: And 1986 was a tough year for farmers and the farm belt.

ROMANS: It was a terrible year for the farm belt in 1986.

DOBBS: Economists are scared to death. I'm sure those private economists, those Wall Street economists.

ROMANS: Lou, they're making the argument that this is a sign of strength for the U.S., not weakness.

DOBBS: And people think all of the spin comes out of Washington, D.C.

Christine, thanks. Christine Romans.

Still ahead here, U.S. and Iraqi forces begin an all-out assault on Fallujah. Next, what future of Iraq could mean for all of us. Three of the nation's top political journalists join me to assess that question and many others. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A new poll finds the presidential election gave Americans renewed confidence in our nation's electoral system.

The Associated Press poll finds 54 percent of Americans are now more confident in the fairness of the electoral system after this election. 39 percent however are less confident and joining me now to assess this and a number of other important poll results, Ron Brownstein of the "Los Angeles Times," Karen Tumulty, "TIME" magazine, Roger Simon of "U.S. News & World Report." Roger, does this means happy days are here again?

ROGER SIMON, "U.S. NEWS & WORLD REPORT": Absolutely, Lou. Well, I mean, you know, George Bush got 51 percent of the vote. He picked up about 3 percent of the people who are happy with that result. Probably Democrats are just glad that the whole thing is over. And I think people are genuinely relieved that this thing isn't going to the Supreme Court. It's not going to the House of Representatives. We have a clear popular vote winner. A clear electoral college winner and let's just get on with it. Even those who were disappointed in Kerry's loss.

DOBBS: Karen, talking with C. Boyden Gray, and Minority Leader Nancy Pelosi, still as they talked about congratulations to President Bush and we're going to work together, there's a lot of fire still and brittleness if you will, in both of those folks about partisan politics. What's going to happen?

KAREN TUMULTY, "TIME": Well, you know, yes, the country's still very deeply and bitterly divided but I think the president is going to find it a lot easier getting his program through this time. In the Senate, for instance, these Supreme Court nominations, which could be the first flash point, he's got more Republican senators. And while he is still five short of the 60 that he needs to break a filibuster, a number of these Democrats, three or four or five of them are up again in two years. They are coming from states that are not easy for Democrats to win anymore. There is going to be a lot of pressure on them to peel away from the Democratic caucus and vote with the president on these issues.

DOBBS: Ron, in the issue Supreme Court justices, do you think that's an area in which we will see some reconciliation between the Democrats and Republicans?

RON BROWNSTEIN, "LOS ANGELES TIMES": My guess is actually at the other end. It's probably going to be one that's going to be more contentious but I agree with Karen. The pressure point here, Lou, are the Democratic senators in particular from the states that Bush carried twice. 14 Democrats from those 29 states, five of them as Karen mentioned, actually four of them will be up in 2006. And they have tough decisions to make, about how aggressive they want to be and how relentless they want to be in opposing the president especially after what happened to Tom Daschle. I know you mentioned earlier today on a different show, and I agree that tax reform may be one where there may be some bipartisan cooperation, it's a less ideological issue. But on the Supreme Court, on Social Security reform, those are probably going to be pretty divisive and ideological in the way we've seen over the last few years.

DOBBS: Do you agree, Karen?

TUMULTY: I do, I do. Again, however, I think the three senators I think I'd might be watching most closely over the next six months or so are the Senators Nelson of Florida and Nebraska and Kent Conrad of North Dakota because all three of them are going to be getting a lot of pressure.

DOBBS: And that pressure, will it be brought to bear, Roger, in terms of the chief justice appointment rumors really not much more than that in Washington, that President Bush would consider Clarence Thomas being put forward as chief justice? What do you think?

SIMON: I don't think the country wants to relive Clarence Thomas' nomination process again. We're going to go back to coke cans and Arlen Specter. He's a very conservative justice. One of the most, if not the most conservative justice on the court. It would really be George Bush flexing his muscles to do an "in your face" appointment such as Clarence Thomas.

DOBBS: How about Scalia?

SIMON: Scalia would be more acceptable but again a very conservative justice, and on certain matters such as Roe v. Wade, Karen and -- are both right in talking about Democratic senators being under pressure. But on Roe v. Wade there is no wiggle room for Democrats. They can't suddenly become anti-choice to become re- elected. They will have given away their entire base and they'll stand for nothing anymore.

DOBBS: You mentioned Arlen Specter. Karen, does he become the chair of the judiciary committee?

TUMULTY: That is certainly going to be the subject of very intense discussion in the Republican caucus of the Senate. And you know, I think that probably he will -- he will get his chairmanship, but I think they're going to put him through a lot of pain getting there.

BROWNSTEIN: In fact, Lou, I think the conservatives feel they have won a victory already on this. Even if he does ascend to the chairmanship as expected, he is on a shorter leash. And I think there's a very clear sense -- look, there's no question about who brought who to this dance. The share of the electorate that was Republican increased from 2000 to 2004. That share that was conservative went up from 29 percent to 34 percent. There is no real issue about who elected George W. Bush. Certainly no question about who elected these six new senators from Bush states in 2004 and they have a very clear agenda, and I don't think they will allow any Republican to deviate too far from that without some consequences.

DOBBS: Ron Brownstein, Karen Tumulty, Roger Simon. As always, thank you very much. Look forward to talking to you tomorrow evening.

And that brings us to our thought tonight. "Whatever America hopes to bring to pass in the world must first come to pass in the heart of America." Those are the words from president Dwight D. Eisenhower.

Still ahead, the results of tonight's poll and a preview of what's ahead tomorrow.

(COMMERCIAL BREAK) DOBBS: Now let's take a look at the results of tonight's poll. 36 percent of you say that there should be a greater emphasis on morality in our public lives. 64 percent do not.

Thanks for being with us here tonight. Please join us tomorrow as continue our weeklong series, the Bush agenda for the next four years. And my guest is attorney and author Kevin Rink (ph). He joins us to talk about the makeup, the likely makeup of the U.S. Supreme Court and all of the issues involving the U.S. constitution including a ban on gay marriage.

Please be with us. For all of us here, thanks for watching. Good night from New York. "ANDERSON COOPER 360" is next.

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


Aired November 8, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, HOST (voice-over): Tonight, thousands of American and Iraqi troops are storming Falluja. We'll have a report from our correspondent embedded with American troops in Falluja.

DONALD RUMSFELD, SECRETARY OF STATE: No government can allow terrorists and foreign fighters to use its soil to attack its people.

DOBBS: And the new Bush agenda. Tonight, we focus on the economy and the Supreme Court. I'll talk with former White House counsel C. Boyden Gray and House Minority Leader Nancy Pelosi.

The federal government is all but ignoring an invasion of three million illegal aliens into this country. Tonight we bring you the story of a local prosecutor taking a stand.

UNIDENTIFIED MALE: If the federal government was doing its job, we wouldn't have 13 million illegal aliens in America.

DOBBS: And a story tonight we don't usually cover here, the Scott Peterson murder trial. But tonight, after months of jury deliberation over evidence and testimony and millions of dollars in taxpayer money, the jury appears to be deadlocked.

What in the world is going on with our legal system? CNN legal analyst Jeffrey Toobin joins me.

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, November 8. Here now for an hour of news, debate and opinion is Lou Dobbs.

(END VIDEOTAPE)

DOBBS: Good evening.

Tonight, U.S. and Iraqi troops are advancing into Falluja in a massive offensive, trying to wipe out insurgents and foreign terrorists.

As many as 15,000 American and Iraqi troops are engaged in the assault. They're supported by tanks, artillery and aircraft. The offensive is the largest in Iraq since U.S.-led troops over through Saddam Hussein.

We begin our coverage tonight with a report from Jane Arraf, who's embedded with American troops on the outskirts of Falluja.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN CORRESPONDENT: We're on the outskirts on the northeast side of the city. But other units of task force 22 from the Army's 1st Infantry Division had been moving further in, as far in as 800 meters into the city.

Out here in between, they have been blowing up railroad tracks to allow them to move further. They've also, for more than an hour, been decimating a series of booby traps.

This is what U.S. forces had expected and had feared as they began to move into the city, that there was a series of improvised explosive devices, homemade bombs, laid out in patterns to try to prevent them from moving in. The Army, the units that we're with, have been firing at these with tanks, causing huge explosions.

This is a sector of the city where there are very few civilians. In fact, officials have told us that they believe insurgents have prevented civilians from moving back into this area as they've been rigging up buildings, barriers and almost everything else with these homemade bombs.

They are continuing to detonate them, and they are now detonating -- the Army is blowing up railroad tracks to allow them to go further.

(END VIDEOTAPE)

DOBBS: That Jane Arraf reporting from the outskirts of Falluja, embedded with Task Force 22 of the Army's 1st Infantry Division. If that division slows down enough over the course of the next 45 minutes, and Jane has the opportunity, we'll, of course, be going live to her for the very latest on the -- on the progress of this offensive.

Defense Secretary Donald Rumsfeld today said the U.S. and Iraqi offensive comes at a critical time in the history of Iraq. Rumsfeld said no government can allow terrorists to attack its people and its government.

CNN Pentagon correspondent Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Let's go.

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): When the long- threatened offensive finally kicked off, U.S. troops were pumped.

UNIDENTIFIED MALE: We're going to smack the crap out of them. That would be nice.

MCINTYRE: With 10,000 U.S. Marines and soldiers, and more than 2,000 Iraqi troops moving on Falluja, the Pentagon is confident the estimated 3,000 insurgents can be routed. But Pentagon officials are downplaying any suggestion the battle for Falluja is a final showdown with the insurgents.

UNIDENTIFIED MALE: You've said...

RUMSFELD: I would not think of that way and I think it would be a mistake for anyone. Listen, these folks are determined. These are killers. They chop people's heads off.

GEN. RICHARD MYERS, CHAIRMAN OF JOINT CHIEFS: But if there were a silver bullet, we would have shot that a long time ago. There is not a silver bullet. This is very challenging work.

MCINTYRE: The U.S. is highlighting the Iraqi role in retaking Falluja, even dropping the Pentagon's name for the operation, Phantom Fury, for one picked by Iraq's prime minister, Operation Dawn.

(END VIDEOTAPE)

MCINTYRE: And while Iraqi commandos were given the job of storming the main hospital in Falluja, they were brought to the scene by U.S. Marines, who secured the perimeter. There was little resistance at the hospital.

They have also been some reports that Iraqi troops have deserted or not shown up for duty. The Pentagon insists those are isolated incidents that aren't affecting the operation.

The other big concern is whether the insurgents will melt away and regroup somewhere else. Today General Casey, the top U.S. commander in Iraq, said, "They may try that. But we're not going to let it happen" -- Lou.

DOBBS: Jamie, do we have any further progress reports on the advance of the Marines and the Army in Falluja?

MCINTYRE: We're not. We -- at this point, we have no reports of any casualties. But we also have no reports of how far the offensive have progressed. We'll probably get the best reports on that from our reporters who are there, including Jane Arraf, who you just talked to a short time ago.

DOBBS: All right. Jamie, thank you very much. Jane -- Jamie McIntyre. We thank you very much.

I'm joined now by our military analyst, retired U.S. Marine Corps General Terry Murray. General Murray served three decades in the Marine Corps, and he led Marines in the Persian Gulf.

General, good to have you with us.

GEN. TERRY MURRAY (RET.), U.S. MARINE CORPS: Thank you, Lou.

DOBBS: This is the worst sort of fighting for our military. At this point, what do you expect over the course of the next 24 hours? MURRAY: I think what we need to determine, Lou, is how serious are the insurgents about fighting? Is there will to fight strong? How many of them have remained in the city of Falluja? We've heard as few as 1,000 and up, perhaps, to 5,000. Those are big differences between the low end and the upper end.

Again, the related question is how strong is their will to fight? Will they contest us from the first moment that our forces enter Falluja?

We know that generally, they've got small arms, mortars, rocket- propelled grenades, lots and lots of mines. So regardless of how many stay to fight, I think we must anticipate the worst, which is lots of mines and -- and fairly severe opposition as we enter the city.

DOBBS: Does that also mean in your judgment, severe -- a severe number of casualties?

MURRAY: Again, Lou, this is -- it's hard to predict. You generally anticipate, when you operate in a built-up or urban area that your casualties will be greater.

Because what a built-up area presents you with is a very difficult environment. It removes virtually all the advantages of the more technologically superior foe. And it forces you into a close in battle. You go street-to-street, house-to-house, and block-to-block.

And ultimately, if you're in a building and there are insurgents there, sooner or later you close with them and you see who survives.

DOBBS: And with 10,000, at least 10,000 Marines and Army, is it your best judgment that this is a more than adequate force to bring to bear on an estimated 3,000 anti-Iraqi forces within the city?

MURRAY: Lou, the rule of thumb, when you're in the attack, is you'd like to have odds of about 3-to-1. It appears that we -- we're about there. But again, this is guesswork.

What we don't know is how this force is arrayed inside the city. We don't know whether they have strong command and communications capabilities. Or whether or not they will fight as independent pockets throughout the city.

And those hard-to-answer questions will determine what kind of opposition the troops actually face, and I think how well we fare.

At the end of the day, I think we're go through the city in a relatively short time. The larger question, I believe, as we look down the road: once we seize Falluja, how many troops do we need to leave in garrison in Falluja to keep it tame for a long period of time?

DOBBS: And before we get to that stage, General, the issue also, in talking about troop strength, would it be your assessment that -- that the commanders there, moving those 10,000 Americans into position and carrying out this offensive, have also cut off avenues of escape for those 3,000 insurgents and foreign terrorists that they believe to be in Falluja?

MURRAY: I expect, Lou, that they've tried to do this. You have to understand, this is a very large city.

DOBBS: Right.

MURRAY: Almost 300,000 people live in this city. So it covers a great amount of ground. And I cannot imagine that we've done too much more than cover the main avenues of approach going in and out of the city.

But if these insurgents are resourceful, I expect there's lots of ground for them to escape the city over time. So we're just going to have to wait and see.

DOBBS: General Terry Murray, thank you very much.

MURRAY: Thank you, Lou.

DOBBS: Turning now to another story that is critical to the future of the Middle East: the Palestinian-Israeli conflict and the rapidly deteriorating health of Yasser Arafat.

Tonight, Palestinian leaders arrive in Paris, there to visit Arafat in the hospital. One of the top issues likely to be Yasser Arafat's secret bank accounts, containing hundreds of millions of dollars and underlying much of the political maneuvering going on now.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): Experts claim Palestinian leader Yasser Arafat has siphoned off vast sums of money into personal account for decades from foreign aid, taxes and business ventures, money that was not used for the Palestinian people. An audit included in a recent IMF report says "a rough but conservative estimate of about $300 million in profits channeled outside the budget over this period. All in all, excise tax revenues and profits from commercial activities diverted away from the budget may have exceed $898 million." The purpose may not have been for personal lifestyle, but influence peddling and patronage.

Nathan Hardy has been following the Arafat money trail.

NATHAN HARDY, "FORBES" MAGAZINE: Arafat, no question about it, used money in order to stay in power. It was his political capital that he used to fund a vast patronage system in order to keep him in charge of the affairs of the Palestinians.

PILGRIM: A little more than two years ago, foreign aid donors demanded better bookkeeping from the Palestinian Authority. Finance Minister Salem Fayed is credited with putting the budget online and recapturing some of the off-budget accounts But many think a lot of money is still out there controlled by Arafat. One of the few people with intimate knowledge of the clandestine financial dealings is Arafat's financial adviser Muhammad Rashid. While Arafat has been living in the rubble of his Ramallah compound all these years, Yasser Arafat wife, Suha Arafat, has been living comfortably in Paris with an estimated stipend of $150,000 a month.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: There are many people, Arafat's wife included, who have been receiving generous stipends as long as he's been alive. I think all of them have to wonder whether or not those stipends are going to continue once he dies, and so they have a vested interest in seeing that they are taken into consideration now before he dies.

(END VIDEOTAPE)

PILGRIM: Arafat's regime was so corrupt, a few years back, crowds rallied to protest it. The IMF today told us some of the last money has been tracked down in the last two years, but the search is on to find the bank accounts that are still hidden or held in another name but controlled by Arafat -- Lou.

DOBBS: Kitty, thank you very much.

Kitty Pilgrim.

Well, coming up here, six million illegal aliens from Mexico now live and work in this country. Incredibly, the president of Mexico, Vicente Fox, wants those illegal aliens to have the very same rights as American citizens. We'll have that report for you next.

And a local prosecutor in the State of Pennsylvania is taking a stand against the invasion of illegal aliens, an invasion the federal government has all but ignored. We'll have that special report for you and explain why Secretary of State Colin Powell is in Mexico City. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Secretary of State Colin Powell and Homeland Security Secretary Tom Ridge today flew to Mexico for talks on immigration reform. The government of Mexican President Vicente Fox is demanding even more rights for Mexicans who are living in this country illegally.

Casey Wian has the report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexican President Vicente Fox's government didn't waste any time insisting that newly reelected President Bush legalize the estimated six million Mexican illegal aliens living in the United States.

VICENTE FOX, PRESIDENT OF MEXICO: We've been waiting for the U.S. election to go through. Now it's over. President Bush is in government for four year more, and I think that now is the big opportunity that we conclude with this issue.

WIAN: Top officials of both governments began meeting in Mexico City today, seeking to revive an immigration reform deal that was shelved after the September 11 terrorist attacks. Ten months ago, President Bush shocked border residents and law-enforcement officers by proposing a temporary guest worker program. It resulted in an immediate spike in the number of illegal aliens crossing the border. Still, the White House stands by the plan, which also calls for more money for border security.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: As far as the state of play on migration, this president has made a proposal, as you know, to the U.S. Congress. He remains committed to that proposal.

WIAN: Mexicans living in the United States send about $15 billion a year home to Mexico. Those remittances are now Mexico's second largest source of income after oil. So it's no wonder that Mexico continues trying to intervene in U.S. domestic politics. The Mexican government released a statement conveying its outright rejection of Arizona's Proposition 200 which seeks to stop illegal aliens from voting and collecting state welfare benefits.

(on camera): Mexico's interior minister also criticized California's recent rejection of a bill that would have allowed illegal aliens to apply for driver's licenses here, that despite the fact that Mexican states demand proof of legal residency before noncitizens can apply for licenses there.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: We've reported extensively here on the millions of illegal aliens invading this country, an estimated three million this year alone. Prosecuting illegal aliens for entering the country falls under the jurisdiction, of course, of the U.S. federal government. But one local official in Pennsylvania has decided to tackle the crisis on his own with mixed results.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): On an early October morning, 30 officers raided the Rapp Brothers Pallet Company in Easton, Pennsylvania, arresting 27 illegal aliens. The raid was not carried out by Immigration and Customs Enforcement, but by local and state police. North Hampton County District Attorney John Morganelli is sharply critical of the lack of federal law enforcement of illegal entry laws.

JOHN MORGANELLI, NORTH HAMPTON COUNTY, PENNSYLVANIA, DISTRICT ATTORNEY: If the federal government was doing its job, we wouldn't have 13 million illegal aliens in America.

TUCKER: Morganelli could not charge the 27 arrested with illegal entry into the United States, that's a federal crime, and he has no authority to enforce federal statutes. But he could pick them up on identity theft and document tampering charges.

MORGANELLI: In order to maintain their presence here, they have to violate state law on a daily basis. They have to utilize fraudulent documents. They have to utilize perhaps other people's Social Security numbers when they create these bogus cards. They utilize fraudulent resident alien cards and a whole array of other documents.

TUCKER (on camera): The North Hampton County D.A.'s willingness to prosecute illegal aliens is unusual for a local prosecutor. What happened in this courtroom was more typical. All 27 pled guilty and were released.

(voice-over): They were set free because the judge followed the state sentencing guidelines for first-time offenders. In his ruling, though, he showed some of the attitude D.A. Morganelli finds so frustrating. Judge Leonard Zito referred to the crimes as "technical in nature," appearing to dismiss them as not serious.

MORGANELLI: I'm not waiting around for them to commit "serious crimes." I have enough evidence that they're committing state crimes of identity theft.

TUCKER: In the past three years, Morganelli's office has arrested and charged more than 100 illegal aliens with document fraud, and all have been released. Yet every one of them now has something they didn't before, a prior arrest record, raising the stakes if they are arrested again.

As for the 27 in Easton, they had a report to immigration officials where they will be given a hearing date, but 87 percent of illegals never show up for that date.

Bill Tucker, CNN, Easton, Pennsylvania.

(END VIDEOTAPE)

DOBBS: Coming up next here tonight, the Bush agenda. How President Bush's decisive election victory will effect his plans for the next four years. Our special report coming up next.

And then, power shift. How the presidential election and Republican gains in Congress propose a new challenge for Democrats. House Minority Leader Nancy Pelosi will join me.

And former White House Counsel C. Boyden Gray and I will be talking about the U.S. Supreme Court next.

All of that and a great deal more still ahead here tonight.

(COMMERCIAL BREAK)

DOBBS: Tonight, we begin our series of special reports this week on the Bush agenda for the next four years. We've had in this country 28 consecutive years of trade deficits, a $4 trillion trade debt, and the dollar is plummeting. And now President Bush is preparing to expand his free trade agenda.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): He survived outsourcing, a huge trade deficit, weak job creation to win a victory so sweeping, the president's supporters see it as an economic vote of confidence.

MARTIN REGALIA, U.S. CHAMBER OF COMMERCE: I think on the issues of jobs, the economy and trade, the message is that the American public gets it. They see the data firsthand. And when you look at the economy, you see an economy that's really doing quite well.

VILES: The president's economic priorities improve the climate for job creation by simplifying what he calls an outdated tax code, making tax cuts permanent and limiting what he calls frivolous lawsuits. But the first real test of his economic mandate could be trade, specifically pushing the Central American Free Trade Agreement, or CAFTA, through Congress.

RICHARD MILLS, DEPUTY U.S. TRADE REPRESENTATIVE: The important thing we've always tried to stress is for Americans is that the Central American market is a good size market for us. Those countries already enjoy duty-free access for many of their products, and the CAFTA will actually expand our opportunities to sell our goods and services into those markets.

VILES: The president's opponents will argue his trade policies are squeezing the middle class and feeding a trade deficit that's a financial crisis in the making.

THEA LEE, AFL-CIO: The trade deficit's more than 5 percent of GDP right now. It's more than a million dollars a minute that we import more than we export, and that's something which is not really sustainable over the long run. We simply cannot continue to consume half a trillion more worth of goods and services than we produce every year.

VILES: Political pressure has not forced the administration to address the trade deficit, but market pressure might. The dollar has already fallen to nine-year lows.

(END VIDEOTAPE)

VILES: The president has a bold agenda on taxes and Social Security, but he's also got to deal with a couple of old headaches: the twin deficits, the budget deficit and that trade deficit, Lou, a million dollars a minute -- Lou.

DOBBS: An extraordinarily alarming number. The fact is with the dollar moving at this rate, dropping at this rate, Pete, in point in fact, the trade deficit could take precedence over the budget deficit and, indeed, the rest of the economic agenda, couldn't it?

VILES: It could be, and we saw the dollar fall on Friday, even though we had really strong job creation numbers, which shows just how worried investors around the world are about these deficits -- Lou.

DOBBS: Pete, thank you very much.

Peter Viles.

Still ahead here, Democrats. What do they do now? How will they perform in Congress? I'll be joined by House Minority Leader Nancy Pelosi.

And why the values debate may have cost the Democrats this election.

And we'll be talking about the makeup of the U.S. Supreme Court. I'll be talking with former White House Counsel C. Boyden Gray next.

Stay with us.

(COMMERCIAL BREAK)

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

DOBBS: In just a moment, House Democratic Leader Nancy Pelosi talks about the future of her party. But, first, let's take a look at some of the top stories now in the news.

An attorney for John Hinckley says his client is no longer mentally ill. The attorney asking the judge in Washington for longer unsupervised visits between Hinckley and his parents. Hinckley has been in a mental hospital since trying to assassinate President Reagan in 1981.

A new report says global warming will melt areas of the arctic by the end of this century. The report says temperatures in the arctic are rising twice as fast as the rest of the planet, threatening indigenous people and wildlife.

And scientists in Washington State planning to land a helicopter near the growing lava dome in the crater of Mount St. Helens. The dome began growing last month. That lobe is now the size of a 30- story building, and so hot it glows red at night.

President Bush won the popular vote by a margin of 3.5 million votes, and Republicans increased their majority in both the House and the Senate. I talked with House minority leader, Congresswoman Nancy Pelosi earlier, and she says in spite of that popular vote and the gains of Republicans in Congress, the president does not have a mandate.

(BEGIN VIDEOTAPE)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I believe that as soon as the president takes office again, and I congratulate him on his victory and reach out to him, to be willing to work with him and the Republican leadership. But I don't believe that this election was a mandate for the reckless economic policies of the president about...

DOBBS: To keep thing in context, if I may. President Clinton, with a 43 percent plurality, claimed a mandate. This president with 51 percent claiming one is hardly a stretch then.

PELOSI: I think all presidents claim a mandate, but what I'm saying is whatever the mandate is he claims, it's not a mandate for reckless economic policies, for more people losing access to health care, for leaving millions of children behind, rolling back 30 years of bipartisanship on the environment, and reckless deficit spending.

DOBBS: Will your minority in the House -- will the Democratic Party now work hard to articulate clearly its values and its message?

PELOSI: Yes, we will. We have three criteria in our proposals always -- clarity, credibility of what we are proposing, and consensus within our party.

As we go forward, it will be different, because the public now knows that, again, the Republicans control the White House, the House, and the Senate, so they are responsible. They can no longer blame it on someone else as they have done for the past four years. So it is up to us to...

DOBBS: They were in control before.

PELOSI: I know, but the public was not fully aware of that. Now that they are proclaiming their mandate, I think it will be clear to the public and easier for us. This presents an opportunity for Democrats, with our agenda, for a new partnership for America's future, for job creation, et cetera, that we go out there and make a clear distinction. This is our moment in the Congress without the presidential race and all of the eclipsing of the bread-and-butter issues that the administration successfully did with some of the so- called values issues.

And we have to define what values are. Values are, of course, being persons of faith and family and love of country. They also are about ministering to the needs, as it says in the Gospel of Matthew, of the least of our brethren.

So we have to grow the middle class and expand it. We have to protect the environment, which is God's creation. We have to meet the needs of the American people. We have to reach to a higher purpose, and I believe we have that opportunity now.

DOBBS: Minority Leader, I'm just -- I'm just a simple fellow, secular as I can be. Are we going to hear every politician now, because of exit polls, start couching every issue in moral or religious terms?

PELOSI: I believe that you will see more of that, but I quite agree with you, that we have to get to the issues that are the role of government. I think on the values side, the so-called religious issues side, we have to enlarge that issue, because what we're in danger now in our country is the blurring of the issue of church and state. But I as a devout Catholic was concerned when bishops -- some bishops, not all bishops said that it was a sin to vote for John Kerry. That's absolutely wrong. And that -- our own Constitution is at stake if they think that they can blur the issue of church and state.

So I think that, as President Kennedy said when he ran in 1960, imagine then, they didn't want religion to have a strong role. At that time, he said, "The issue is not what church I believe in, the issue is what America I believe in." And that's where we have to take this issue.

DOBBS: We thank you very much, Leader, for being with us.

PELOSI: Thank you. My pleasure. Thank you.

DOBBS: Congresswoman Nancy Pelosi.

(END VIDEOTAPE)

DOBBS: And that brings us to the subject of our poll tonight. The question -- do you believe there should be a greater emphasis on morality in public life? Yes or no? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Our next guest says the president's focus on values earned him votes in key demographics. C. Boyden Gray says the Democrats took what he calls a cavalier approach to values in this campaign and paid a price. C. Boyden Gray served as White House counsel to President George Herbert Walker Bush, and joins us here in New York. Good to have you with us.

C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL: Nice to be with you.

DOBBS: This issue of values, I talked with Nancy Pelosi about it briefly, with a number of people. Values, would you say that that was a critical component of this, or were there other, more determinate factors at work here?

GRAY: Oh, I think the terrorism issue was huge. I think that's partly where the president gets his big pick-up with married -- I mean, with women with children. But the values issue obviously is a very salient one. No question about it. The court decision in Massachusetts on gay marriage I think was a help. Not ironically coming out of Massachusetts, where Kerry's from. So I do think values is very, very important. And I think if you look at the pick-up in the Senate and the pick-up in the House, this vote runs very deep. Runs into the state legislatures. I think it's not a fluke that -- what President Bush did.

DOBBS: The idea that, as I looked at the exit polls, one the things that was most striking to me, was one is we talk about moral issues, which is really just morality, I would think. Religious affiliation -- in religious affiliation, 8 percent of the vote -- not hardly as high as the 22 percent in most exit polls -- but most telling was the 80 percent response in those exit polls that President Bush is a clear -- sent forth a clear message, great clarity in his message. Only 20 percent saying that of Senator Kerry. That seemed to me to be a very compelling difference.

GRAY: Certainly. A central component of values is the question of character and integrity, and I'm talking about intellectual integrity as well as moral integrity. And I think President Bush projects -- even if you disagree with him -- a core set of values that people can identify with, even if they don't always agree with him. But with Senator Kerry, hard to tell what he was for.

DOBBS: You know, I'm thinking as you are saying that, Boyd, and I listen to Nancy Pelosi. I keep thinking that campaign is over, but then I get the feeling that perhaps it isn't quite. We may see a bit of a restart here as justice -- Chief Justice Rehnquist's health continues to be in question. It looks very serious. And the president will have an opportunity to appoint not only a justice, but a chief justice. Which way do you think he will go there? There are rumors that he's looking at Clarence Thomas and others. What would be your guidance to this president?

GRAY: Well, he has potentially two appointments. One to the seat, the other to the post of chief justice, and he may bifurcate that. I have heard rumors too. He may do this on a temporary basis, pending Congress coming back. There have been recess appointments in the past for people who are later nominated for the full term, a full lifetime tenure. So we don't know yet, and we don't know when the chief is going to resign. So I think it's all speculation at this point.

DOBBS: Well, the speculation exacerbated I suppose by Arlen Specter, Senator Specter's comments about abortion. Now saying that he didn't make those comments. And now today telling Judy Woodruff on this network that what he really meant to say -- would it be your judgment that his appointment, his position as head of the Judiciary Committee in the Senate would be at some risk now?

GRAY: There is some risk, yes. I don't know all the facts. I will find out more -- we will all find out more in the next 96 hours. But you know, I would question whether he -- I think the question is whether he will fully support President Bush's nominees, without reservation, and equally importantly, will he support, if the president and the majority leader seek to go for it, a change in the filibuster rules that would permit an up or down vote for his nominees on the floor.

This is a very important issue. Senator Specter's defense of his statement at the press conference was his proposal to provide a vote certain, a date certain for hearings, and an up and down vote on the floor. But I'm not clear that he really will go for an up or down vote on the floor.

DOBBS: C. Boyden Gray, we thank you for being here. We appreciate it.

GRAY: My pleasure.

DOBBS: Come back soon.

Still ahead, the jury in the Scott Peterson murder trial appears to be deadlocked. After six months listening to evidence, listening to testimony. Raising the question, what in the world is wrong with our legal system? CNN's senior legal analyst Jeffrey Toobin will join me next.

And America's rising dependence on foreign nations, for everything from oil to shoes and to the clothes on our back. Is that a problem? We'll have a special report for you next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: There are concerns tonight that the Scott Peterson murder trial may end in a hung jury. The judge in that case today told the jurors not to hesitate to change their minds, if it helps them reach their verdict. Peterson is accused of course of murdering his pregnant wife Laci and dumping her body in San Francisco Bay.

Joining me now for more on this case, and what it may say about our legal system is our legal analyst Jeffrey Toobin.

Jeffrey, good to have you here.

JEFFREY TOOBIN, CNN LEGAL CORRESPONDENT: Hi, Lou.

DOBBS: Now, we don't have obviously at this point a deadlock jury -- well, we have a deadlocked jury, we don't have a hung jury.

What do you think this means, what does this portend at this stage of deliberation?

TOOBIN: Well, this -- what's peculiar about this is judges usually give this kind of charge, sometimes known as a dynamite charge to break the log jam. At a later stage in the deliberations, this was almost a six-month trial. It's only been three days of deliberations. It suggests what he -- what he has heard from the jury is that there is a serious deadlock there. Now, it may break, this deadlock. But this kind of charge, this early in the deliberations suggests there's a serious problem.

DOBBS: You know, we don't cover this trial on this broadcast because others do so far better than we could ever imagine doing. But the idea that you could ask a jury to sit, to empanel for almost six months now, isn't it, and to decide this case, it seems to me frankly to be the utmost of arrogance and inefficiency. It's just absurd to me.

TOOBIN: It is outrageous to me that this trial has taken this long. The prosecution has called 170 plus witnesses. I think that is irresponsible of the prosecution. The Enron cases, which are far more complicated, took a fraction of this time. This is a disease endemic to California. California, every case takes longer than it does in virtually any state in the union. I just think it is part of the culture out there, and it's a problem that the taxpayers of California have had to pay for for decades.

DOBBS: They're paying for it, and the fact is the legal -- the legal profession is making a lot of money, I guess. And is justice being served is the ultimate question?

TOOBIN: I think the old saying justice delayed is justice denied is a real thing. Whatever result comes out of this trial, the fact that it took so long does not bring credit on the legal system. But it takes strong judges and it takes gutsy prosecutors. And it appears there are neither in this case.

DOBBS: Jeffrey Toobin, as always. Do you want to make a prediction here tonight as to which way this trial goes, deadlocked at the end, or guilty or not guilty?

TOOBIN: Boldly, I will say I really have no idea.

DOBBS: Jeffrey Toobin, you never disappoint with your courage and your -- and your -- and your foresight. But thank you for your insight. Appreciate it.

Reminder now to vote in our poll. Do you believe there should be a greater emphasis on morality in public life, yes or no? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Taking a look now at some of "Your Thoughts."

Jane Ashley in Fort Smith, Arkansas, "Vicente Fox needs to be reminded he has no control over the policies of this country. If he were not such a dismal failure as president of Mexico, we wouldn't have 3,000,000 illegal aliens crossing our border every year. I congratulate the citizens of Arizona for taking action to protect their state."

Henry Wieler of Bethesda, Maryland "If we do not enact immigration reform within one year as is being demanded by Mexican President Vicente Fox what is going to do, invade us? Too late. Doesn't Fox realize that if we throw open the borders there won't be any people in Mexico for him to govern?"

Malcolm Oldroyd, of Simpsonville, South Carolina, "Vicente Fox's plan is clear, accelerate migration of his lower paid, lesser skilled and lesser educated citizens by pressuring the United States to provide undeserved benefits, employment and free medical care within our society to illegal immigrants. If successful he will be left with a skilled work force paying taxes, raising the general standard of living and the ability to attract U.S. outsourcers to further bolster his economy. Some of the consequences for the U.S. are falling living standards, the bankruptcy of Social Security System, erosion of the tax base, and the decimation of the middle class. When will our politicians and the president wake up and truly represent our citizenry?"

That is one of the best questions we've heard asked in a long time. We love hearing from you. Send us your thoughts at loudobbs@cnn.com.

And now, turning to Wall Street. Stocks barely moved today. Not much trading volume. Not much interest but things were happening of importance. The dollar hitting a record low before pulling back. World markets growing increasingly concerned about record and U.S. budget and trade deficits.

Christine Romans is here with the report -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, our dependence on foreign products is simply staggering. In oil, we know that everyone -- that we're dependent on foreign oil, and that condition is worsening. We now depend on foreign oil producers for more than 60 percent of our total consumption. Economists are quick to call us, though, a service-based technology economy. But in fact, so far this year, we have a $10 billion deficit in computers alone, and it, too, is worsening. We can't even make enough televisions and VCRs. We have a $17 billion deficit there. And we can't even clothe ourselves; we have to import 96 percent of our apparel. Eleven billion dollars so far this year for shoes and boots alone.

American children can't even play without foreign help. We have an $11 billion trade deficit in toys and sporting goods. And now for the first time in almost two decades, we're no longer the world's bread basket, we're importing more food than we sell abroad. And that hasn't happened, Lou, since 1986.

DOBBS: And 1986 was a tough year for farmers and the farm belt.

ROMANS: It was a terrible year for the farm belt in 1986.

DOBBS: Economists are scared to death. I'm sure those private economists, those Wall Street economists.

ROMANS: Lou, they're making the argument that this is a sign of strength for the U.S., not weakness.

DOBBS: And people think all of the spin comes out of Washington, D.C.

Christine, thanks. Christine Romans.

Still ahead here, U.S. and Iraqi forces begin an all-out assault on Fallujah. Next, what future of Iraq could mean for all of us. Three of the nation's top political journalists join me to assess that question and many others. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A new poll finds the presidential election gave Americans renewed confidence in our nation's electoral system.

The Associated Press poll finds 54 percent of Americans are now more confident in the fairness of the electoral system after this election. 39 percent however are less confident and joining me now to assess this and a number of other important poll results, Ron Brownstein of the "Los Angeles Times," Karen Tumulty, "TIME" magazine, Roger Simon of "U.S. News & World Report." Roger, does this means happy days are here again?

ROGER SIMON, "U.S. NEWS & WORLD REPORT": Absolutely, Lou. Well, I mean, you know, George Bush got 51 percent of the vote. He picked up about 3 percent of the people who are happy with that result. Probably Democrats are just glad that the whole thing is over. And I think people are genuinely relieved that this thing isn't going to the Supreme Court. It's not going to the House of Representatives. We have a clear popular vote winner. A clear electoral college winner and let's just get on with it. Even those who were disappointed in Kerry's loss.

DOBBS: Karen, talking with C. Boyden Gray, and Minority Leader Nancy Pelosi, still as they talked about congratulations to President Bush and we're going to work together, there's a lot of fire still and brittleness if you will, in both of those folks about partisan politics. What's going to happen?

KAREN TUMULTY, "TIME": Well, you know, yes, the country's still very deeply and bitterly divided but I think the president is going to find it a lot easier getting his program through this time. In the Senate, for instance, these Supreme Court nominations, which could be the first flash point, he's got more Republican senators. And while he is still five short of the 60 that he needs to break a filibuster, a number of these Democrats, three or four or five of them are up again in two years. They are coming from states that are not easy for Democrats to win anymore. There is going to be a lot of pressure on them to peel away from the Democratic caucus and vote with the president on these issues.

DOBBS: Ron, in the issue Supreme Court justices, do you think that's an area in which we will see some reconciliation between the Democrats and Republicans?

RON BROWNSTEIN, "LOS ANGELES TIMES": My guess is actually at the other end. It's probably going to be one that's going to be more contentious but I agree with Karen. The pressure point here, Lou, are the Democratic senators in particular from the states that Bush carried twice. 14 Democrats from those 29 states, five of them as Karen mentioned, actually four of them will be up in 2006. And they have tough decisions to make, about how aggressive they want to be and how relentless they want to be in opposing the president especially after what happened to Tom Daschle. I know you mentioned earlier today on a different show, and I agree that tax reform may be one where there may be some bipartisan cooperation, it's a less ideological issue. But on the Supreme Court, on Social Security reform, those are probably going to be pretty divisive and ideological in the way we've seen over the last few years.

DOBBS: Do you agree, Karen?

TUMULTY: I do, I do. Again, however, I think the three senators I think I'd might be watching most closely over the next six months or so are the Senators Nelson of Florida and Nebraska and Kent Conrad of North Dakota because all three of them are going to be getting a lot of pressure.

DOBBS: And that pressure, will it be brought to bear, Roger, in terms of the chief justice appointment rumors really not much more than that in Washington, that President Bush would consider Clarence Thomas being put forward as chief justice? What do you think?

SIMON: I don't think the country wants to relive Clarence Thomas' nomination process again. We're going to go back to coke cans and Arlen Specter. He's a very conservative justice. One of the most, if not the most conservative justice on the court. It would really be George Bush flexing his muscles to do an "in your face" appointment such as Clarence Thomas.

DOBBS: How about Scalia?

SIMON: Scalia would be more acceptable but again a very conservative justice, and on certain matters such as Roe v. Wade, Karen and -- are both right in talking about Democratic senators being under pressure. But on Roe v. Wade there is no wiggle room for Democrats. They can't suddenly become anti-choice to become re- elected. They will have given away their entire base and they'll stand for nothing anymore.

DOBBS: You mentioned Arlen Specter. Karen, does he become the chair of the judiciary committee?

TUMULTY: That is certainly going to be the subject of very intense discussion in the Republican caucus of the Senate. And you know, I think that probably he will -- he will get his chairmanship, but I think they're going to put him through a lot of pain getting there.

BROWNSTEIN: In fact, Lou, I think the conservatives feel they have won a victory already on this. Even if he does ascend to the chairmanship as expected, he is on a shorter leash. And I think there's a very clear sense -- look, there's no question about who brought who to this dance. The share of the electorate that was Republican increased from 2000 to 2004. That share that was conservative went up from 29 percent to 34 percent. There is no real issue about who elected George W. Bush. Certainly no question about who elected these six new senators from Bush states in 2004 and they have a very clear agenda, and I don't think they will allow any Republican to deviate too far from that without some consequences.

DOBBS: Ron Brownstein, Karen Tumulty, Roger Simon. As always, thank you very much. Look forward to talking to you tomorrow evening.

And that brings us to our thought tonight. "Whatever America hopes to bring to pass in the world must first come to pass in the heart of America." Those are the words from president Dwight D. Eisenhower.

Still ahead, the results of tonight's poll and a preview of what's ahead tomorrow.

(COMMERCIAL BREAK) DOBBS: Now let's take a look at the results of tonight's poll. 36 percent of you say that there should be a greater emphasis on morality in our public lives. 64 percent do not.

Thanks for being with us here tonight. Please join us tomorrow as continue our weeklong series, the Bush agenda for the next four years. And my guest is attorney and author Kevin Rink (ph). He joins us to talk about the makeup, the likely makeup of the U.S. Supreme Court and all of the issues involving the U.S. constitution including a ban on gay marriage.

Please be with us. For all of us here, thanks for watching. Good night from New York. "ANDERSON COOPER 360" is next.

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