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LOU DOBBS TONIGHT

Rumsfeld Agrees to Serve Second Term; Bush Taps Kerik for Homeland Security; Tommy Thompson Resigns

Aired December 3, 2004 - 18:00   ET

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


ANNOUNCER: This is LOU DOBBS TONIGHT for Friday, December 3. Here now for an hour of news, debate and opinion is Lou Dobbs.
LOU DOBBS, HOST: Good night.

Tonight one of the most high profile members of the president's cabinet is staying for a second term.

A White House officials says President Bush has asked Defense Secretary Donald Rumsfeld to remain in his position. Donald Rumsfeld agreed. President Bush also nominated the newest member of his second-term cabinet.

Suzanne Malveaux is at the White House with the report -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, as a matter of fact, we're told from a senior administration official that the president asked Rumsfeld to stay. This was in a Monday meeting that they actually had, the two meeting together.

Of course, this is a normal weekly meeting, but it was an unusual meeting between the two of them. This official saying he asked Rumsfeld to stay because he felt like this is a country that's in the middle of a war, that he has proven himself, and that he is the right man for the job.

And Lou, this was just one of many announcements that was made today.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): President Bush nominated New York City's former police commissioner, Bernard Kerik, as his new secretary of homeland security. A former military man, praised for helping New York recover following the September 11 attacks.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Bernie Kerik understands the duties that came to America on September the 11th. The resolve he felt that morning will guide him every day on his job.

MALVEAUX: Kerik served as a military police officer in Korea, a jail warden in New Jersey, and more importantly, as a primary U.S. official responsible for helping train Iraqi police.

BERNARD KERIK, HOMELAND SECURITY SECRETARY NOMINEE: Mr. President, I understand, as you do, the tremendous challenge that faces America in securing our nation and its citizens from the threat of terrorism. And I know what is at stake.

MALVEAUX: Just hours after Kerik's announcement, another cabinet shift. Secretary of health and human services, Tommy Thompson, resigned.

TOMMY THOMPSON, SECRETARY OF HEALTH AND HUMAN SERVICES: I do not tender my resignation easily. While these years have been challenging, they've also been greatly rewarding.

MALVEAUX: Thompson is best known for pushing through the controversial landmark Medicare legislation, which now covers prescription drugs. Under his watch, he also tackled anthrax, AIDS, and the flu vaccine shortage.

Officials say Mark McClellan, the U.S.'s Medicare chief and former FDA commissioner, is Thompson's likely replacement.

More than half of the president's 15 cabinet members have resigned. But the White House brushed off suggestions that it was facing a stampede.

(END VIDEOTAPE)

MALVEAUX: Now, that number of turnovers sounds high, but it really is in line with previous two-term presidencies. Both Clinton and Reagan had seven turnovers apiece, Nixon, nine. And what this means, of course, there are six positions that still remain in question -- Lou.

DOBBS: Six in question, Suzanne, and with Secretary Rumsfeld saying that he is staying, are we to infer that those cabinet secretaries who have not said absolutely that they will be remaining, that they may not?

MALVEAUX: Well, there's still some questions about the remaining six. There are always rumors and speculation surrounding a couple of those members. But it is really hard to say.

At this point, those six, we expect to hear news, perhaps, next week and the following week. President Bush very eager to wrap all of this up, this kind of dribs and drabs, not very comfortable for this White House. We do expect that we'll get news on those in the days to come.

DOBBS: Suzanne, thank you very much. Suzanne Malveaux from the White House.

Secretary Thompson today said he is leaving with two major concerns about threats to our nation's health and well being. One of his concerns is pandemic flu, which Secretary Thompson warns could kill as many to -- as 30 to 70 million people around the world.

Secretary Thompson also expressed his concern about a threat to our nation's food supply. (BEGIN VIDEO CLIP)

THOMPSON: I, for the life of me, cannot understand why the terrorists have not, you know, attacked our food supply, because it is -- it's so easy to do. And we're importing a lot of food from the Middle East.

(END VIDEO CLIP)

DOBBS: Secretary Thompson says new technology is needed to better inspect food that is being imported into this country. We'll have much more ahead here tonight on concerns about that imported food and the rising number of prescription drugs being imported into the country, as well.

Tonight, a new wave of violence sweeping across Iraq. Two American soldiers were killed today in separate roadside bombings in Kirkuk and Baghdad. At least 29 people were killed in a series of coordinated bombings in Baghdad as well.

Iraqi officials say insurgents and terrorists are stepping up their campaign to disrupt Iraq's first election, now less than two months away.

Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice-over): It was just after dawn, the first prayers of the day at this Shiite mosque in north Baghdad. Police say four suicide bombers rammed a minibus laden with explosives into the building.

Prayer goers blood in a pool on the street, charred remains of the bomb and its target.

UNIDENTIFIED MALE (through translator): The car bomb exploded at 6 or 5:45 a.m., burning this car and the house. When the people gathered to put out the fire, the car exploded again, and the bodies of the victims covered the street.

PENHAUL: The bombers and at least 14 worshipers died. Some 20 others wounded. A district police chief accused Sunni insurgents of trying to stoke sectarian strife.

On an Islamic web site, affiliates of the al Qaeda-linked Abu Musab al-Zarqawi network claimed responsibility for the strikes. There was no independent confirmation.

(on camera) Interior ministry officials say they believe that growing numbers of insurgents from different factions are filtering in from outlying areas to fight a joint campaign.

UNIDENTIFIED MALE (through translator): They want this government to fail and for this election not to take place. PENHAUL (voice-over): There's still almost two months to go before the elections. It seems clear there's still plenty of fighting to be done if the ballots are to be held in peace.

Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

DOBBS: And in Ukraine, a stunning defeat tonight for Russian President Vladimir Putin in that country's election crisis. Ukraine's Supreme Court today ruled that Putin's favored candidate did not win the country's disputed presidential election.

That ruling is a severe blow to Putin's efforts to maintain centuries of Russian influence over the former Soviet republic.

Jill Dougherty reports from Kiev.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): After 12 days in the streets, 12 days in the snow and cold, supporters of opposition candidate Viktor Yushchenko were ecstatic.

Ukraine's Supreme Court finally agreed with what they maintained all along: the runoff election in which Yushchenko was defeated was marred by massive and systemic fraud.

ANATOLY YAREMA, HEAD OF UKRAINIAN SUPREME COURT (through translator): We thereby oblige the Central Electoral Commission to organize a new round of presidential elections in Ukraine within the time defined by Article One, Bill Number 85, the Ukrainian electoral law.

DOUGHERTY: In the street outside, people exploded in cheers, some even crying with happiness.

UNIDENTIFIED FEMALE (through translator): It's very good. We are very glad. We didn't stay here in vain. The eventual victory will be ours, and I can say that we have won already.

DOUGHERTY: Back on Kiev's Independence Square once more, Viktor Yushchenko told his supporters it was their victory.

VIKTOR YUSHCHENKO, OPPOSITION CANDIDATE (through translator): Freedom and truth is returning to Ukraine, owing to today's decision, and this is thanks to you.

DOUGHERTY: The repeat election will take place December 26, and polls already indicate Yushchenko has a significant lead.

His opponent, Prime Minister Viktor Yanukovych, doesn't have a political leg left to stand on. Parliament passed a no-confidence vote in this week. Viktor Yushchenko is demanding the president move swiftly to fire him. (on camera) This victory in Ukraine's Supreme Court promises to have wide repercussions not only here but throughout the former Soviet Union. A peaceful resolution that took on entrenched political interests and won.

Jill Dougherty, CNN, Kiev, Ukraine.

(END VIDEOTAPE)

DOBBS: On the same day of the critical defeat for president Putin in Ukraine, the Russian leader blasted the United States. Putin accused the United States of pursuing what he called a dictatorial foreign policy.

Joining me now, our senior political analyst, Bill Schneider, who has reported extensively on Russia and the former Soviet republics.

Bill, first let's turn to the question of how does the Ukraine decision today affect President Putin's influence in that region?

BILL SCHNEIDER, CNN POLITICAL ANALYST: I think that it's an embarrassment. Some would call it a humiliation for President Putin. Because just yesterday, he met with President Kuchma of Ukraine and said that he thought it would be a waste of time. He dismissed the notions that the runoff should be held and repeated with the same candidates.

And the very next day, within hours, the Ukrainian Supreme Court said the runoff would, indeed, be repeated.

DOBBS: Even with the understanding that Russia's had significant influence for just about three centuries over the Ukraine, the idea that Putin would say and intercede directly in the Ukrainian elections is somewhat astonishing, is it not?

SCHNEIDER: Well, it is astonishing. You know, just 20, 25 years ago, there would have been tanks in Kiev. None of this would have happened if there was still a Cold War and if there was still a Soviet Union.

But it just shows the weakness of the Soviet Union, of Russia today since the Soviet Union collapsed.

And it also shows that, you know, that there still is some tension there. A lot of people, Russian nationalists in Putin's circle, are resentful of the west, the European Union, the United States. They believe they are behind this -- this opposition movement in Ukraine, that they're -- they see this as a threat, an encroachment on Russia's traditional interests in Ukraine, which you're right, they ruled for almost the entire last 350 years.

And a lot of Russians, they have a little bit of paranoia there, but a lot of Russians feel -- are beginning to feel encircled and clearly resentful.

DOBBS: And lost in some of this is the expectation that Ukraine will enter NATO in the course of the next six years. The representation of all of the countries of NATO in the election process as observers and potential partners, political and economic, going forward -- how big a role is that playing in all of this, Bill?

SCHNEIDER: Well, I think that there is clearly a split in Ukraine.

There's a lot of the population in the western part of the Ukraine that supports the opposition candidate that would like to be part of Europe. They would welcome any kind of invitation to join or be in partnership with the European Union, and, if possible, NATO, because they are resentful of Russian influence.

In the eastern part of the Ukraine, they speak Russian. That's Odessa, historically a Russian city. And they feel that they want to cast their lot with Russia.

So Ukraine is a country divided, and Russia wants to exploit its traditional influence there and sees the United States as a threat.

DOBBS: Bill Schneider.

Thank you very much.

SCHNEIDER: Sure.

DOBBS: Still ahead here, incoming Senate minority leader, Senator Harry Reid, will join me to talk about the many challenges facing the Democrats and the Bush agenda.

And then, two of baseball's biggest sluggers admit they cheated -- one knowingly, one unknowingly. How will the steroid scandal effect baseball, its fans and the outrageous salaries paid to players? Will there be any change, any reform? We'll have that special report for you.

And then, a devastating decision for American avocado farmers. Why the Agriculture Department decided to allow more foreign avocados to be imported into this country.

We'll have those stories and a great deal more here tonight. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: We first reported here nearly two years ago that a dangerous chemical used in rocket fuel was found in the water supply in 22 states. Now that same chemical called perchlorate has turned up in the food supply as well.

An FDA study found traces of perchlorate in milk, lettuce and bottled water in states all across the country. The FDA and the Environmental Protection Agency are now studying the toxicity of that chemical.

So far, officials say there is no need for alarm. Another potential threat to our food supply tonight and a devastating blow to American farmers, the Department of Agriculture this week decided to accept more imports of avocados from Mexico. These imports pose a threat to American avocado farmers and could bring pests into the country according to critics of this decision, all of which would threaten our food supply.

Casey Wian reports from Fillmore, California.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): It's a bitter defeat for American avocado growers. The U.S. Department of Agriculture responding to pressure from the Mexican government will begin allowing more Mexican avocado imports into the United States. That despite the fact that, except for two border cities, Mexico doesn't allow U.S. avocados into its market.

UNIDENTIFIED MALE: I think our growers were extremely disappointed that this day ever arrived. California growers have been seeking access to Mexico since 1998. The USDA, the U.S. Department of Agriculture, has done everything possible to facilitate trade in the opposite direction.

WIAN: Americans could soon enjoy lower avocado prices, but that will hurt American growers who have much higher costs.

Growers here also say they face the threat of imported pests. That danger kept the Mexican avocados out of the U.S. market for eight decades until 1997 when the U.S. allowed imports to 31 non-avocado- growing states during winter months to keep pests from spreading.

This week's ruling will allow Mexican avocados year round in every state, except California, Florida and Hawaii, and those barriers will be lifted in 2007. The USDA admits some pests are likely to be imported along with Mexican avocados, but says there's little scientific likelihood they'll infect U.S. groves.

The issue has been discussed at the highest levels of both governments, including between President Bush and Mexican President Vicente Fox.

JON HUENEMANN, FORMER ASSISTANT U.S. TRADE REPRESENTATIVE: I think it's very important for the United States to hold the Mexican government's feet to the fire, for them to address this issue equally on a science-based premise and, therefore, allow for the significant volume of two-way trade that could occur.

WIAN: The USDA would not agree to an on-camera interview for this report, citing ongoing litigation.

(on camera): That lawsuit was filed by the California Avocado Commission in 2001. It seeks more scientific proof that Mexican avocados won't harm U.S. crops. A decision could come at any time.

Casey Wian, CNN, Fillmore, California. (END VIDEOTAPE)

DOBBS: And in Major League Baseball, more stunning admissions tonight in the growing steroid scandal. San Francisco Giants star Barry Bonds reportedly admitting using steroids. This report coming just a day after news that Yankee player Jason Giambi also admitted to using steroids.

CNN Sports Correspondent Larry Smith joins us now.

Larry, let me ask you first is this going to have any impact and change perhaps on Major League Baseball?

LARRY SMITH, CNN SPORTS CORRESPONDENT: Well, I think the impact certainly is there because when you consider that this is Barry Bonds, he is the home run single-season champion, maybe eventually the career champion, but both these reports, Lou, coming from "The San Francisco Chronicle," which is not revealing how they got a peek at the grand jury testimony of both players from last December, testimony that was supposed to be sealed.

In the "Chronicle"'s report, Bonds told a federal grand jury that last year he used the nutritional supplement flaxseed oil and a rubbing balm for arthritis, describing substances that are similar to the clear and the cream, names for steroids provided by Balco.

At 40 years old, Bonds put together one of his best seasons, 45 home runs while setting records for walks, intentional walks and on- base percentage to win his fourth straight Most Valuable Player Award and seventh of his career, just 11 shy of Babe Ruth for second on the all-time home run list.

His attorney spoke a short time ago, calling this a smear campaign.

(BEGIN VIDEO CLIP)

MIKE RAINS, ATTORNEY FOR BARRY BONDS: He doesn't know that they were steroids. My client is hardly a chemist. My client was told to take flaxseed oil. This is a clear substance. And he had no reason to disbelieve his best friend. So, no, I don't acknowledge my client took steroids. I won't. He won't.

(END VIDEO CLIP)

SMITH: Now, in their probe of Balco, prosecutors presented documents detailing Bonds' steroid use dating back to 2001, the year he hit a single season record, 73 home runs.

And this report comes a day after a similar report that Yankees slugger Jason Giambi admitted to taking steroids. The former American League Most Valuable Player has been settled with health problems the past two seasons which experts say could be linked to steroid use -- Lou.

DOBBS: Well, in point of fact, Giambi says that he did take them, doesn't he?

SMITH: Yes. Yes, he does. He said human growth hormone and other things.

DOBBS: And with that -- and if one takes a look at Barry Bonds before 2001, any picture you want, and Barry Bonds the next year or a year after, he looks like an entirely different fellow, doesn't he?

SMITH: Well, he really does, and that's the thing, Lou, is that at 40 years old, at a time when many athletes are either retired or playing with diminished skills, he's just getting better at this point. So, certainly, there's something there.

DOBBS: Bud Selig, the commissioner, says he's going to do something about it. This won't stand. We've heard that before. How long is this going to be tolerated by baseball and everyone else, especially the fans?

SMITH: Right, and that's -- well, that's the one question we're all going to wait now and see between now and opening day. Will they do something?

Baseball has implemented some steroid testing, but it's so weak, Lou, that a player can only be tested once per year, and it takes five failed tests or five years to draw a one-year suspension.

Baseball has to do something right now to protect the integrity of its game and, for Bonds, Babe Ruth, Hank Aaron and the future generation, integrity of its records as well.

DOBBS: Yes. It certainly casts a great deal of doubt about recent records. Any chance that they would be invalidated simply because people were breaking the rules?

SMITH: You know, I don't think so. No asterisks to these records so far because there's no way to go back and determine what Barry Bonds took, when he took it, when the effect actually began to pay off dividends for him. So I don't -- I think it would be very hard really right now to go past before 2005 and say this record is tainted for whatever reason.

DOBBS: But 2001 was a year full of dividends. Of what we don't know, apparently.

SMITH: Right, right.

DOBBS: Larry Smith.

Thank you.

That brings us to the subject of our poll tonight: Do you believe athletes who use illegal drugs, including steroids, should have their records thrown out? Yes or no? Please cast your vote at loudobbs.com. We'll have the results for you later here in the broadcast. Coming up next, working Americans working harder than ever and more than ever just to make ends meet. We'll have the latest report on this squeeze on our middle class.

And our "Overmedicated Nation." Americans desperate for affordable prescription drugs being forced to look outside the United States. Tonight, why one major source of pharmaceuticals and medicine may be cut off. That special report is coming up here next.

(COMMERCIAL BREAK)

DOBBS: The employment report for November was released today. In that report, an unexpectedly low number of new jobs created, but that report also reveals Americans are working harder than ever. Millions of people desperately trying to hold on to their middle-class status. They're being squeezed, forced to work at more than one job just to make ends meet.

Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): More and more Americans these days are working a double, picking up another job to make ends meet, 7.6 million Americans, more than 5 percent of the workforce.

MARK MATHER, RURAL FAMILIES DATA CENTER: There are people with less education who might be taking multiple jobs because they're not earning enough money in their primary job to make ends meet.

PILGRIM: But experts also say many of these hardworking families are not on the brink of poverty, they are middle class. Some are straining to maintain that middle-class existence. With the loss of pensions and health-care coverage, people are unwilling to leave their future security to chance.

RON BLACKWELL, AFL-CIO: This is not luxuries we're talking about. This is like providing health care for your family, an education for your children, and being able to, you know, feed and clothe people and be able to live a dignified life.

PILGRIM: Some of the places people are finding second jobs are in education, health services, hotels and restaurants and, of course, retail. In fact, that is the pick-up second job of choice for many women. But in the new jobs report, signs that that may be less of an option.

KIM GANDY, PRESIDENT, NATIONAL ORGANIZATION FOR WOMEN: In the retail sector, we are seeing, just in this month, a 16-point drop at a time when jobs are normally rising in the retail industry before the holidays, and, because women are a big chunk of those employees, especially the seasonal ones, that's going to have a huge impact around the holidays.

(END VIDEOTAPE) PILGRIM: Now you can also see the new work ethic in statistics on married couples. Now more than half of couples have both partners working full-time jobs, about 90 hours a week combined -- Lou.

DOBBS: And nationally, against that backdrop, 200 hours more being worked a year today by the average worker than just 30 years ago.

PILGRIM: We are working harder.

DOBBS: Kitty Pilgrim.

Thank you for your hard work.

Coming up next here, the Democrats' new leader. How Senator Harry Reid is planning to take direct aim at the Republican agenda. Incoming Senate Minority Leader Harry Reid our guest next.

And dangerous drugs still on the market? Senate Finance Committee Chairman Charles Grassley says the Food and Drug Administration is in desperate need of reform. He's our guest coming right up.

(COMMERCIAL BREAK)

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

DOBBS: A major development in the debate over the deadlocked intelligence reform legislation. The chairman of the Senate Armed Services Committee, Senator John Warner, tonight is voicing his concerns about that bill.

Joe Johns is on Capitol Hill and has the latest for us -- Joe.

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Lou, this is a potential new wrinkle in the developing story of the intelligence reform bill. Up until now, the House of Representatives has been deemed the whole problem in getting that bill to the president's desk.

Now, tonight, there are indications that the president and the supporters of the bill may also have a problem in the Senate. Senator John Warner, the powerful chairman of the Senate Armed Services Committee, tonight issuing a statement that he supports guarantees essentially that the Pentagon maintain control over its military intelligence, issuing a statement through his spokesman saying, "Chairman Warner is concerned about those issues that may impact the time-tested chain of command and is working with several conferees, other concerned senators and the administration to resolve these issues with absolute clarity before the conference report becomes law.

Of course, the president and others have been trying to persuade Congressman Duncan Hunter, the chairman of the House Armed Services Committee, to go along with them on language relating to chain of command. And clearly, there is frustration with time running out. The president appearing at an event at the White House this morning was overheard by one person in the room saying, I can't believe one man is holding up this bill.

On the other side of the coin, on the issue of Senator Warner, some here on Capitol Hill who support the intelligence reform bill as written before the Senate and passed by the Senate are downplaying the significance of the involvement of Warner, saying simply he is upset because he's been left out of the negotiations -- Lou.

DOBBS: Joe, that sounds like unfortunate spin from an altogether too frequent source, that is Capitol Hill. The fact is that the chairman -- the Senate chairman of the Armed Services Committee joining with the House chairman of the Armed Services committee, that is a powerful problem for the administration and the leadership to overcome, is it not?

JOHNS: It is certainly a powerful problem for this administration to overcome, because they certainly do know that the chairman of the Joints Chief has written a letter saying that in his view, there were some change of command issues.

Now, he has been reported as saying later that he believes those issues are resolved, but privately, some here on Capitol Hill say they do not believe the chain of command issues have been resolved -- Lou.

DOBBS: And Joe, the president may have been overheard saying that one man is holding up this legislation. In fact, it's far more than that. Not only Congressman Duncan Hunter and now potentially Senator John Warner, the highly respected chairman of the Armed Services Committee in the Senate, but also Senator Jim -- I mean Congressman Jim Sensenbrenner, and as many as, perhaps more 100 Republicans in the House who are very concerned about the failure of this legislation to deal with border security, immigration reform, focusing in particular on driver's licenses, and now who's going to control the budget for intelligence?

This looks like a lot to -- for the White House to ask Dennis Hastert, the Speaker of the House, to overcome, isn't it?

JOHNS: Certainly. Those two chairmen, you mentioned, in the House of Representatives, bring with them a powerful coalition of Republican members of Congress, many of whom said they were very concerned about some of the language in this bill and were not prepared necessarily to vote for it unless Sensenbrenner and Duncan Hunter signed off.

Now, of course, there are questions as to whether they'll be able to take out the immigration issues that Sensenbrenner was concerned about. But that still leaves us with that Armed Services issue that Duncan Hunter is raising.

And the question is whether the Speaker of the House can get enough members of his party to go along with him that he feels comfortable about putting that bill on the floor. Some suggestions also that the speaker may just want to go around them and try to put it out there anyway. But it has severe potential political consequences, Lou.

DOBBS: Joe, thank you. Joe Johns reporting. We thank you for keeping us up to date on this developing story, breaking news. Joe Johns from Capitol Hill.

For more now on this developing story, I'm joined by the new Senate minority leader, Senator Harry Reid of Nevada. Senator, good to have you with us.

SEN. HARRY REID (D-NV), MINORITY LEADER: Thank you very much, Lou.

DOBBS: I suspect we can start -- stop calling you the new minority leader relatively soon, maybe give it another week. Senator Reid, you've just heard Joe Johns' report. It sounds like this intelligence reform legislation is in real trouble. Is that the way you read it?

REID: I hope not. I spoke to Senator Frist just a few minutes ago. And we're both confident that it will pass. As far as I feel, the leader of the Democrats, we should not leave Washington until this most important legislation passes. It's been signed off on by the 9/11 Commission. We have all the survivors there. And it may not be perfect in the minds of the Chairman Hunter, and it may not be perfect in the minds of Chairman Sensenbrenner, but it is very, very important, good legislation, and I would hope that they wouldn't kill this.

DOBBS: Senator, you have worked with Senator John Warner for a very long time, the chairman of the Senate Armed Services Committee. His alliance now with Duncan Hunter, both men coming at this with a very pragmatic and direct view on budgetary control for intelligence. If they join up, as it now appears is the case, in their concerns, it makes it very unlikely that they could be steamrolled by the White House or the Senate leadership, and certainly not the House leadership.

REID: Well, Lou, I believe that if we would get away from what the speaker said, we want a majority -- the majority of the vote for anything before we let it pass, I think that's senseless. We have the majority of the members of the House of Representatives and the majority of the senators, Democrats and Republicans, on both sides, who want to pass this. That's what we should do.

And the fact that a couple of chairmen are losing a little bit of jurisdiction shouldn't stand in the way of this legislation passing.

DOBBS: Is it your judgment that it will, in fact, pass?

REID: Yes, I think the chances now -- I don't bet, even though I'm from Las Vegas, I think the chances are far better than 50/50 that we will have something that the president can sign within the next week.

DOBBS: Let me ask you this, Senator. This administration is coming with a very strong agenda, very important issues. Have they reached out to you to start embracing these issues and to start working on those areas in which you can readily agree? For example, tax reform, Social Security, just to name two?

REID: Well, the president called me the day after the election. We were both very tired. It was Wednesday. But it was a gracious call. And I appreciate it very, very much.

I've spoken to him. We've had breakfast together at the White House a week or so ago. The president's saying all the right things, as he did when he started his first term. I take the president at his word, that this term is going to be a little different than the last term. He's going to be a uniter, not a divider, and we are here with open arms.

The president controls the White House, of course, the House and the Senate. The burden is upon him to get legislation that we can agree with. We have a constitutional duty. We represent millions of people out there that need things done for them. And we want to go -- we'll go more than halfway to get things done. But at least we want the president to go a little bit of the way, and we hope that will happen.

DOBBS: In that spirit, then, Senator Reid, what are the things you want to get done? The Bush administration has been very clear about what it wants in the way of an agenda. What are your top three goals?

REID: Well, I think we have to do something to take care of the medical problems facing this country. Health care from a doctor's perspective and a patient's perspective is in deep trouble. Public education, Leave no Child Left Behind Act has been funded properly. And Nevada's no different than any other state in the union. This program is really hurting public education.

And, of course, the staggering deficits. We must do something about these deficits that are ruining our trade balance now and is really hurting the country, generally. And, of course, the Iraq situation. Those are the top four as far as I'm concerned.

DOBBS: Let me ask you, since you brought up the issue of trade. Is the United States Congress, the House and the Senate, prepared to take on their -- actually, their Constitutional as well as historic duties and reinvolve themselves in trade policies and treaties rather than simply give a rubber stamp to fast-track authority and have a -- turn that over to the administration? Is it time for a little bit of a change in view on the part of Congress?

REID: Not a little bit of a change, a big change. I have opposed every one of those fast-track, nontreaties. I call them nontreaties, because I think our Constitutional duties were taken away from us. We have the right, constitutionally, to amend and deal with those very important legislative packages that come before us. They haven't let us do that. And look what's happened to the country. It's been wrong.

So I would hope that we would get heavily engaged in trade policy. We need to. Look what's happening with China. They're taking us literally to the cleaners. And we're doing nothing to retort. It's wrong.

DOBBS: Senator Harry Reid, we thank you for being here. We wish you a lot of luck, as you move ahead shoulder to shoulder and in bipartisan spirit with the White House, and we'll be watching very carefully to watch the longevity of that relationship.

REID: You watch me and I'll watch you. I enjoy your show very much.

DOBBS: You're very kind, minority leader. Thank you, Senator Harry Reid.

Still ahead here, the biggest stories of the week. Three of the best political journalists to analyze and assess with their perspectives on the news.

Also tonight, is the FDA leaving dangerous prescription drugs on the market? Senate Finance Committee chairman Chuck Grassley says yes. He's our guest next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tensions are now building between the United States and Canada over the need for affordable prescription drugs. Americans are turning to Canadian pharmacies in huge numbers for medications, pharmaceuticals at much lower prices. Some Canadians now are saying enough is enough. Peter Viles reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: This is Tamoxifen for breast cancer, and I'm almost finished with this.

PETER VILES, CNN CORRESPONDENT (voice-over): At her home near Chicago, you can't blame cancer survivor Carol Applebaugh for buying drugs from Canada.

CAROL APPLEBAUGH, CANCER SURVIVOR: I pay $300 a month for my medications from Canada. I would pay $900 for the exact same medication here at Walgreens or Wal-Mart or Costco.

VILES: You can't blame governors in ten states who have set up Web sites to make it easier to buy drugs from Canada.

UNIDENTIFIED MALE: You're calling us from Georgia today?

VILES: And you certainly can't blame Canadian Internet pharmacies that fill the orders.

DAVID ROBERTSON, TOTAL CARE PHARMACY: What we can do, is we can help the people who are coming to us right now, looking for solutions. That volume of customers is not in excess of what Canada can handle.

VILES: But Canadian officials are saying enough is enough. This was Canada's health minister last month at Harvard University.

UJJAL DOSANJH, CANADIAN HEALTH MINISTER: Canada cannot be the drugstore for the United States of America.

VILES: The problem is obvious. There are 295 million Americans, only 32 million Canadians. Big drug companies are now limiting shipments to Canada because they know the drugs are being diverted back to the United States. And rural pharmacists in Canada are complaining they can't get the drugs that they need.

DR. JEFF POSTON, CANADIAN PHARMACISTS ASSN.: I believe that the Canadian population has sympathy for the plight of the U.S. citizen. But the solution to that isn't to simply come north and raid our medicines cabinet. The solution is to get a decent medicines cabinet for yourself in the U.S.

VILES: The health minister now says it is possible that Canada will simply shut down these cross-border pharmacies. That would close off $1 billion a year pipeline that's used by hundreds of thousands of Americans. Peter Viles, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: I talked with Food & Drug Administration whistle-blower Dr. David Graham here last night. He defended his claims that the FDA is not protecting our health and safety. My guest now, one of Dr. Graham's strongest supporters, and I talked with Senator Chuck Grassley about what must be done to reform the FDA.

(BEGIN VIDEOTAPE)

SEN. CHUCK GRASSLEY (R), IOWA: I don't think any action's been taken by the FDA. It ought to be taken to assure that those drugs are fully safe for the American people. I think that when you have those sorts of announcements, the FDA, even if they thought that Dr. Graham was right, would -- would not want to admit right now by taking some action, because it would make them look bad.

Now, you and I think that that's ridiculous when the safety of the public's at stake, but it's still characteristic of agencies not to immediately admit something's wrong.

DOBBS: Senator Grassley, Dr. Graham made it clear, he did not think this was simply an issue with the Bush administration but that it preceded them as well and has become, as he said, part of the culture of the FDA and a significant problem.

Can you, can others fix the FDA?

GRASSLEY: Well, I'm going to introduce legislation that would make clinical trials that are done by companies, make them public and have more transparency so that both the positive and the negative aspects of a testing of a drug are fully known to the public.

But I think the most important reform that we can do is to introduce legislation to make sure that the Office of Drug Safety is entirely separate. And -- and -- from the Office of New Drugs.

But this may sound a little far out, but I think until a president of the United States -- and I don't mean just President Bush, because I've said this to three or four presidents I've served under -- until they recognize whistle-blowers in a Rose Garden ceremony as patriotic Americans, which they are, there's never going to be a clear signal from the top of the administration down to the bottom of the bureaucracy that -- that when whistle-blowers bring something to the attention to an agency head, it ought to be handled at that level, not by their having to come before a congressional committee and having a U.S. senator protect them.

DOBBS: Can we -- can we expect Dr. David Graham to appear with President Bush in the Rose Garden any time soon?

GRASSLEY: I don't think so. President Bush has no different attitude, I believe, than other presidents have had. I think that they are afraid if they were to have such a ceremony honoring people like Dr. Graham, it would cause too -- too many whistle-blowers to come out of the woodwork and a lot of people that maybe don't have a good cause that just have an axe to grind.

But I think we have to encourage whistle-blowing. I couldn't do my job of -- my constitutional job of oversight if I didn't get information from whistle-blowers. Because I don't know where the skeletons are in the closet. I don't know where the bodies are buried. Whistle-blowers know what's wrong. They come and tell us.

They shouldn't have to tell us. They should have an agency head...

DOBBS: Right.

GRASSLEY: ... that is so committed to doing what's right, doing what the law says, expanding taxpayers' dollars according to congressional intent that it will be taken care of at the agency level, not at the level of a whistle-blower coming to Congress.

DOBBS: Well, Senator Chuck Grassley, we appreciate your being here, and -- and we compliment you and we thank you, as does Dr. David Graham, for providing support to him and assuring that he, at least, will not have to be afraid as a result of having the courage to step forward and speak in the public interest and to save countless lives. Senator Chuck Grassley, thanks for being here.

GRASSLEY: Thank you.

(END VIDEOTAPE)

DOBBS: Coming up next, the very latest developments that may forestall passage of the intelligence reform bill. I'll be joined by three of the country's very best journalists. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Joining me now from Washington, D.C., Ron Brownstein, "Los Angeles Times," Roger Simon "U.S. News and World Report." And joining me here in New York, Steve Shepard, executive editor of "Businessweek."

Gentlemen, good to have you with us. Ron, let's start with Bernie Kerik coming in. Donald Rumsfeld not going anywhere. Tommy Thompson saying good-bye. What do you make of the level of this shuffle?

RON BROWNSTEIN, LOS ANGELES TIMES: Eight is enough? I don't know.

DOBBS: That's a good line.

BROWNSTEIN: We're looking at a big level of change in this cabinet. Probably reflects a couple things, Lou. One, this has been a White House-centered administration. The key decisions have been closely held. I think some of the people in the cabinet have felt they have been on the margins of policy affecting even their own areas.

Second, there really wasn't a breakout star in the first term. I was talking to a Republican tonight was saying there really wasn't anybody who approached the level of a Rumsfeld or a Powell on the domestic side. And I think there is a desire for fresh blood.

Bernie Kerik could be that star. He has a great background in security. This may be a job for a manager, though, and that will be a challenge for him, welding together this many departments and agencies.

DOBBS: But he is the tough New York cop who could handle it, if anybody could.

Roger, your thoughts about the Tommy Thompson as well, Bernie Kerik coming in, Donald Rumsfeld staying. I find it interesting, at least, and I'd like to get your thoughts. Rumsfeld says he's staying, the White House says he's staying, but we've still got six other cabinet secretaries about whom nothing has been said. What do you make of that?

ROGER SIMON, U.S. NEWS & WORLD REPORT: I think Rumsfeld is staying for now. I wouldn't bet the house or bet the mortgage on the fact that Rumsfeld will stay for the entire second term. Those people who thought he would leave also thought that he would allow Colin Powell to depart first, just so he could say he stayed longer than Colin Powell.

I thought Bernie Kerik's choice is a good one, not just because he's a cop, but because it removes a political issue from New York Democrats. Senator Clinton and Senator Schumer and Senator Corzine of New Jersey have long argued that New York has not gotten its fair share of Homeland Security funds, because the funds are being distributed to a lot of red states out west that are not targets, while New York and New Jersey are targets. And appointing a man who was the top cop in New York certainly seems that it will satisfy those complaints. DOBBS: You agree, Steve?

STEVE SHEPARD, BUSINESSWEEK: Yes. I think it's dangerous to talk about how this is good for New York, because a lot of the people in Congress hear that they might react badly. I think the interesting thing about the shake-up is what we haven't heard is about the Treasury. Because there's a lot of talk about John Snow stepping down sooner rather than later, which will be very interesting to watch.

DOBBS: And this comes -- at the same time you bring up John Snow, who has been generally thought, at least, that he would stay. Now it's pretty much, I think, an open question. But with the dollar plummeting, with all of the instability in the currency markets right now, trade exacerbating, budget deficits.

UNIDENTIFIED MALE: Absolutely.

DOBBS: The unemployment rate today, 5.4 percent, but only 112,000 jobs created. There's some real big issues here. They need to come to terms with whatever that team's going to be don't you think?

SHEPARD: Exactly right. The conservatives are said to be pushing for Phil Graham, who was former Senator from Texas.

DOBBS: And an economist.

SHEPARD: And an economist, PH.D.

And if they did that, it would signal that they want somebody that can deal with Congress effectively on Social Security reform, tax reform and so on.

More traditionally, they go to somebody from the financial markets. Snow wasn't the traditional fit either. Because there are a lot of concerns about budget deficit, dollar, trade gap, so on. So it will be interesting to see what he does.

DOBBS: And a lot of concern about just how well somebody can manage the dollar, the fiscal policy as well.

SHEPARD: Well, we can't unless we've got an arrangement with the Chinese about their currency. Because it's pegged to the dollar, and we won't fix the deficit if that peg stays at that level.

BROWNSTEIN: You know, one of the choices here, Lou -- I mean, the fundamental choice on Treasury, is do they want a policy maker or a salesman? By and large, this has been an administration in which policy has been driven much more by the White House than the agencies looking for people who can sell these policies.

They thought they were getting that in Secretary Snow. I think they were somewhat disappointed in that, that remarkable quote in the Washington Post earlier this week when one of the White House officials said he can stay long he wants, as long as it's not very long probably tells you where this is going. DOBBS: Roger, let me turn to one journalism question for all of you. As you know, the Washington Post reporting that the Pentagon used a number of -- well, sources, if you will, for misinformation campaigns, including this network. What is your sense as to what should be both the reaction of the media, to being used by -- for psyops operations by the Pentagon and what should be the reaction of the American people?

SIMON: I think it's wrong. If the Pentagon claims that's not Pentagon policy. But I don't know a reporter in this town who doesn't think he is not lied to at one time or another. Or I don't know most reporters who don't feel that way.

And I think it undermines an important institution of democracy, which is a free press. And if the public can't believe what they watch on a free press, when the Pentagon is selling one message, they won't believe it when the Pentagon is selling another message. And truth is the antidote to that problem.

BROWNSTEIN: Let's face it, credibility abroad is one of our central problems now in terms of our diplomacy. Obviously, everyone believes that we are engaged in a long-term war of ideas in the Middle East and in the Arab world more broadly. We need to have people believe what our government says when it says it.

DOBBS: Ron Brownstein, Roger Simon, Steve Shepherd. Thank you, gentlemen.

Still ahead here, we'll have the results of our poll. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Results now of our poll. 86 percent of you say athletes who use illegal drugs, including steroids, should have their records thrown out. Thanks for being with us here tonight. For all of us here, we wish you a very pleasant weekend.

Good night from New York. "ANDERSON COOPER 360" is next.

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