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Lou Dobbs Tonight

A New Low; Out of Touch; The Smoking Gun?; California Quakes

Aired June 17, 2005 - 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.


LOU DOBBS, CNN ANCHOR: Good evening, everybody. Tonight, an alarming new link between thousands of stolen cars in this country and radical Islamist terrorism. Law enforcement officials now concerned those stolen cars are funding terrorist operations all around the world. We'll have the special report.
Also tonight, no fewer than four earthquakes strike California in five days. What does it mean for seismic activity along one of our nation's most volatile fault lines? We'll be talking with a leading seismologist at the U.S. Geological Survey.

And in "Heroes," tonight, the story of an American Marine credited with saving the lives of no fewer than 60 of his comrades in a mortar attack in Iraq. He says he was simply doing his job.

First tonight, President Bush and Congress losing the support of the American people. A new poll finds only 42 percent of Americans approve of the way President Bush is doing his job. That is the lowest level of his presidency. The approval rating for Congress is even lower, now down to 33 percent.

We have two reports tonight on a public losing faith in its elected officials. Dana Bash at the White House, Bill Schneider in Washington.

We begin with Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, here, the White House blames those numbers on what they call Washington talking about things that Americans are simply not concerned about. But they also know a key factor is the state of the president's agenda.

(BEGIN VIDEOTAPE)

BASH (voice-over): In the heartland to rally support...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Medicare, we've strengthened the system. We've modernized the system.

BASH: Medicare reform? That's already law. The White House is still trying to get credit for last year's successes while this year's agenda languishes.

Bush aides are well aware public confidence in his leadership is waning. Only a 42 percent approval rating in this latest poll. Even after 35 Social Security events, his top domestic priority is on the thinnest of ice. And just six months into his second term, some fellow Republicans quietly say the president's agenda is misdirected. Some are openly critical.

SEN. OLYMPIA SNOWE, (R) MAINE: If you carve out the personal savings account, that does erode a defined guaranteed benefit as we know it under Social Security.

BASH: On Iraq, some GOP lawmakers are calling the rosy picture the White House paints unrealistic, even harmful.

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: And the idea that this war has gone on this long with this many casualties surprises people.

BASH: Others say enough is enough, bring troops home before our next election.

REP. WALTER JONES, (R) NORTH CAROLINA: After 1,700 deaths, over 12,000 wounded, and $200 billion spent, we believe it is time to have this debate and this discussion on this resolution.

BASH: So the Bush communication shop is shifting to damage control mode. Message: we get it...

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president recognizes that this is a concern that's on the minds of the American people.

BASH: ... announcing a series of speeches with a sharper focus on Iraq over the next two weeks to try to calm anxieties. And it's not just Iraq. Americans are most concerned about the economy, sky- high gas prices, major layoffs at companies like GM. Republicans want that to be the president's focus.

DAVID WINSTON, GOP POLLSTER: If you're in a leadership position in terms of the government, and you're not addressing the number one issue, you're just inviting a problem.

BASH: White House aides now concede that they haven't done enough to tout good economic news and promise to try harder.

(END VIDEOTAPE)

BASH: Bush aides admit they are retooling their communications strategy, but insist it's a public relations change and not a policy change on any front, either on Iraq or when it comes to the president's domestic agenda -- Lou.

DOBBS: Dana Bash from the White House. Thank you.

President Bush's approval rating may seem high compared to that of Congress. Only one in three Americans approves of the way members of Congress are doing their jobs.

Bill Schneider has the report.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Question, do you think Congress has the same priorities for the country as you have? "The New York Times"-CBS News poll just put that question to the American people. Not even one in five Americans believes Congress shares their priorities. Yikes!

The public is concerned about the can economy, Iraq, health care. What are Congress' priorities?

AMY WALTER, COOK POLITICAL REPORT: Voters have had a steady diet of issues like the Terri Schiavo case, filibusters, the Bolton nomination.

SCHNEIDER: President Bush's response? Blame the Democrats.

BUSH: On issue after issue, they stand for nothing except obstruction. And this is not leadership. It is the philosophy of the stop sign, the agenda of the roadblock.

SCHNEIDER: Except for one thing. The Democrats are the opposition party. When voters say Congress does not share their priorities, they are thinking about the whole Congress, the Republican Congress. It's that Congress that will be on the ballot next year, not President Bush.

WALTER: These members are very worried about their own reelection prospects. And so on issues ranging from stem cell research to the war in Iraq to the Patriot Act, we're seeing Republican members go against the president. This is something we just haven't seen since President Bush was elected.

SCHNEIDER: This week, 38 House Republicans voted to defy the White House and modify the Patriot Act. Last week, 13 Republicans on the House International Affairs Committee voted with the Democrats to call on President Bush to come up with an exit strategy in Iraq.

(END VIDEOTAPE)

SCHNEIDER: Some Republicans are even talking about finding an exit strategy on another issue, Social Security -- Lou.

DOBBS: Bill Schneider, thank you very much.

In Iraq, U.S. and Iraqi forces launched a major air and ground assault on insurgents near the Syrian border. One thousand U.S. Marines and Iraqi soldiers are taking part in "Operation Spear," focused in the chaotic Anbar province in western Iraq.

U.S. fighter jets dropping 2,000-pound bombs overnight on suspected insurgents hideouts. So far the military operation has resulted in the death of 30 insurgents.

Also today, fierce fighting in Ramadi, just west of Baghdad. Two Marines were killed during the fighting when their vehicle hid a roadside bomb. So far this month, 50 U.S. troops have been killed in Iraq.

In Baghdad, a suicide car bomber crashed into a loaded fuel tanker outside a Shiite mosque after Friday prayers. One person was killed, eight others wounded.

More than two years after the beginning of the war, the debate over how it began is more intense than ever. This week, Democratic Congressman John Conyers held a forum on a high-level classified British intelligence report known as the Downing Street Memo. Critics of the Iraq war charge that that memo is the smoking gun in their claims that President Bush misled Congress, the American people and the world about the war.

John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. NATIONAL CORRESPONDENT (voice-over): The new energy in the antiwar protest comes from a three-year-old British government memo with language right out of a James Bond movie. "Secret and Strictly Personal, U.K. Eyes Only" is the headline on the once classified and now very public document.

UNIDENTIFIED FEMALE: And now we have the smoking gun, and the smoking gun is the Downing Street Memo.

KING: It is dated July 23, 2002, summarizing a session British Prime Minister Tony Blair held with his national security team to discuss new talks with the Bush White House about Iraq policy. "Military action was now seen as inevitable" was how the memo characterized White House thinking. Then in the line war critics have seized on most, the memo said, "The intelligence and facts were being fixed around the policy."

To a war critic like Democratic Congressman John Conyers, fixed means doctored. And this letter, signed by more than 100 members of the House, demands the White House answer questions about the Downing Street Memo. Did Mr. Bush deliberately alter U.S. intelligence is one question, and did he settle on war months before telling the American people and seeking congressional approval is another.

REP. JOHN CONYERS, (D) MICHIGAN: Did he deceive us into a war? Were we tricked into a war?

KING: Mr. Bush says he did no such thing, and the White House notes the war did not start until eight months after the memo was written. But it will not answer the letter from Conyers and his colleagues.

MCCLELLAN: This is an individual who voted against the war in the first place and is simply trying to rehash old debates that have already been addressed.

KING: The continuing insurgency in Iraq has war critics seizing on another point in the memo. There was little discussion in Washington of the aftermath of military action.

Some see the debate over the Downing Street Memo more as proof of a weakened president than any dramatic new revelation. RICHARD GEPHARDT, FMR. HOUSE DEMOCRATIC LEADER: It's fine to revisit it again, but there's not a lot new here. Again, we need to figure out, given that history, where we go from here.

KING: Public uncertainty about the military mission is clearly taking a toll on the president. A new "New York Times"-CBS News poll found just 37 percent of Americans approve of how Mr. Bush is handling Iraq.

KEN DUBERSTEIN, FMR. REAGAN CHIEF OF STAFF: I think it is tough inside the beltway, but I'm not sure it has anywhere near reached Des Moines or Omaha. It may have reached the left coast, but not, you know, the heartland of America.

(END VIDEOTAPE)

KING: But make no mistake about it, Lou, the White House acknowledges this rising anxiety and says the president will dedicate more time to explaining his Iraq policy beginning with two big speeches next week -- Lou.

DOBBS: Two big speeches. Ken Duberstein, accomplished as he is on political matters, is he suggesting that the administration is taking the middle red states for granted in all of this?

KING: No. I think, Lou, he's coming to the aid of a White House in which he has many friends at a time when they are down. Ken Duberstein trying to minimize what is clearly a political problem for the president right now. You cannot have 37 percent of the American people, only 37 percent, supporting your policy and having those doubts not have reached the heartland. Mr. Duberstein being a good political ally.

DOBBS: John King. Thank you.

On Capitol Hill today, the House of Representatives easily passed legislation that the White House urged it to reject. The measure is designed to force the United Nations to reform itself. It would block half of the hundreds of millions of dollars in dues that the United States pays the United Nations until those reforms are completed.

The Bush administration has said the bill is not, in its word, constructive. The sponsor of the bill, Congressman Henry Hyde, says it is obvious that the United Nations is in desperate need of reform.

In Iran today, unexpectedly high turnout for the presidential election there, forcing officials to extend the voting twice today. One official estimated turnout at 60 percent. Seven candidates are running to replace Iran's president who is banned from running for a third term. Today's election is widely expected to end in a runoff between the top two candidates, including, the former president, Ayatollah Hashemi Rafsanjani.

President Bush recently blasted the Iranian election, saying the vote is designed to keep Iran's leaders in power. One of Osama bin Laden's top lieutenants today urged radical Islamist terrorists to continue their jihad against the United States. Ayman al-Zawahiri appeared in a videotape aired on Al-Jazeera network. Zawahiri called on radical Islamists to keep fighting to push Jews and westerners out of what he called the land of Islam. This is his first message in five months.

Coming up next here, millions of dollars in terror funding, thousands of stolen cars in this country. Law enforcement officials are urgently investigating the links between the two. Our special report coming right up.

And then, a new arrest in the case of the Alabama teenager missing in Aruba. That story, a great deal more ahead here tonight.

(COMMERCIAL BREAK)

DOBBS: A huge victory tonight for prosecutors fighting corporate crime. A New York jury today found two former Tyco CEO and chief financial officer guilty of stealing $100 million from the company. Former Tyco CEO Dennis Kozlowski, former CFO Mark Swartz, were found guilty on 12 counts of first-degree larceny.

The pair also found guilty of conspiracy, fraud and falsifying business records. The government has requested mandatory jail time of 15 to 30 years in state prison. Their sentencing is now set for August 2.

In another high-profile case of corporate crime, a jury in Birmingham, Alabama, is still deliberating the fate of former HealthSouth CEO Richard Scrushy. He is accused of leading a $2.7 billion accounting scam.

And in Aruba tonight, a fourth suspect is under arrest in the Natalee Holloway case. CNN has learned that the suspect is 26-year- old Steve Croes. Police picked him up at his home in Aruba today. CNN has also learned that Croes is a disk jockey on a party boat called The Tattoo.

Police will not say why he is a suspect in this case. Aruba police are still searching the island for clues into what happened to Natalee Holloway. Natalee's mother said today she is fed up with the Aruba investigation.

(BEGIN VIDEO CLIP)

BETH HOLLOWAY TWITTY, NATALEE HOLLOWAY'S MOTHER: The frustration it unimaginable. It's unimaginable.

And I have waited and I have waited and I have waited. And I have listened and I have heard lie after lie after lie unfold. And I have to have some answers, and I better get them soon.

(END VIDEO CLIP)

DOBBS: None of the suspects in the Natalee Holloway case has yet been charged with a crime. Natalee Holloway has now been missing in Aruba for almost three weeks.

Turning now to the global war against radical Islamist terror, a crime that happens every day in this country is helping fuel deadly terrorism overseas. Officials are releasing disturbing details tonight about how stolen cars in this country are funding radical Islamist terrorists around the world.

Karen Schaler reports.

(BEGIN VIDEOTAPE)

KAREN SCHALER, CNN CORRESPONDENT (voice-over): More than a million times a year this is happening around the country. A vehicle is stolen, just like what you are seeing in this undercover police video.

The FBI says these thefts are costing $8.6 billion annually. The National Insurance Crime Bureau estimates close to 200,000 stolen vehicles are shipped to foreign countries, including the Middle East, where they're sold for a huge profit. The possibility that terrorists are cashing in on some of these profits have law enforcement officials around the country concerned.

MIKEL LONGMAN, ARIZONA CHIEF OF CRIMINAL INVESTIGATIONS: Sources such as Interpol and others are suggesting that vehicle theft and crimes involving vehicles, insurance fraud, et cetera, are being used by organized crime groups and terrorist organizations to fund their activities.

SCHALER: Right now Arizona has the highest number of auto thefts per capita in this country. The Arizona Automobile Theft Authority says more than 56,000 vehicles are stolen each year in the state, averaging about one vehicle every nine minutes.

LONGMAN: It's really quite evident that, you know, organized crime groups and terrorist groups are using car theft to generate enormous sums of money. And that should concern all of us.

SCHALER: To deal with growing concerns about exporting stolen vehicles, a group of state and federal officials from the United States and Canada, including representatives from the FBI and Customs and Border Protection, formed the North American Export Committee 10 years ago. The director of NEAC, a police lieutenant leading the Miami-Dade Auto Theft Taskforce, says, "Stolen vehicles are a means for financing terrorist activities worldwide. This is one of the new areas we've identified that terrorists are turning to to fund their activities."

In Washington, Congressman Howard Coble chairs the Subcommittee on Crime, Terrorism and Homeland Security, and says recognizing new terrorist funding trends is critical to crippling terrorist activities.

REP. HOWARD COBLE, (R) NORTH CAROLINA: If we could clamp down on this source, that would clearly get their attention, I think, and they would have to maybe alter their -- their strategy and seek other avenues.

SCHALER: The ultimate goal, to keep funds out of the hands of terrorists, no matter what the source, draining revenues for expensive training camps, recruitment and other resources.

(END VIDEOTAPE)

SCHALER: And special law enforcement conferences are being held around the world, specifically dealing with the growing auto theft problem and its potential link to funding terrorism. The last conference was held in Arizona just a few weeks ago and included a half-dozen different countries.

Now, Interpol estimates the illegal trafficking of vehicles is a form of organized crime that generates an estimated $19 billion -- Lou.

DOBBS: Karen, thank you very much. Karen Schaler from Washington.

The House Appropriations Committee approved a bill that could cut $100 million in funding from the Corporation for Public Broadcasting. The Corporation for Public Broadcasting funds the nonprofit organization PBS. PBS is well-known for programs, of course, like "Sesame Street."

The cut is part of a $143 billion spending bill for health, education and labor programs. It must still be passed by the full House and Senate.

Coming up next here, the federal government failing our nation's hospitals as they struggle to make up the cost of caring for illegal aliens. We'll have that special report.

And fear on fault lines. West Coast residents wondering what's next after this week's string of four earthquakes. I will be talking with an expert from the U.S. Geological Survey about what happens after four.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The invasion of illegal aliens into this country has put a tremendous strain on our nation's hospitals. States demanded that the federal government help pay for the care of those aliens. And $1 billion made available by Congress to hospitals that can prove they are treating illegal aliens, and that means they have to ask questions about a patient's legal status, something that they don't really like to do.

Christine Romans has the report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): For New Mexico hospitals, there's $5 million federal to help pay for free emergency room care to illegal aliens. First they must verify they are treating illegal aliens, but no one wants to directly ask a patient's status.

JEFF DYE, NEW MEXICO HOSPITAL ASSOCIATION: There is a bit of a dance. We're trying to be cautious about not discriminating, not scaring away patients that need care, and yet getting care and getting funding to the hospitals.

ROMANS: So hospitals ask round-about questions, like does the patient have a foreign birth certificate, a Mexican border crossing card, an expired visa or an invalid Social Security number? For some states, these questions mean millions.

California hospitals are eligible for $70 million a year to pay for hospital care for illegals. Texas, $46 million, Arizona $45 million.

But the government has instructed hospitals not to directly ask if a patient is a legal citizen, and hospital associations and immigrant groups strongly lobbied against it, saying sick and injured illegals would be afraid to seek care because of the fear of deportation.

JANET MORGUIA, NATIONAL COUNCIL OF LA RAZA: The fact is, is that when you target a specific population in our society that causes them to be deterred from using our hospital systems or our public health systems, you're really putting all Americans at risk.

ROMANS: And, she says, asking any questions about legal status turns emergency room personnel into immigration officials.

(END VIDEOTAPE)

ROMANS: Now, for some states, it hardly makes any sense to ask these questions and apply for the federal money. In Nevada, for example, the cost of setting up the reporting system is almost as much as the $2 million the state is eligible for, and they would have to ask every patient the same questions.

The accusations of profiling if they don't, all the red tape. Some hospitals say it's just not even worth it. Pennies on the dollar, anyway.

DOBBS: Pennies on the dollar, but $1 billion against what is estimated to be somewhere between $15 and $20 billion lost in healthcare to providing care for illegal aliens, it's quite a conundrum. Perhaps someone should consider the possibility of simply enforcing the immigration laws and providing border security.

ROMANS: That would be a start. That would make hospital personnel not have to be immigration personnel. And you wouldn't have the problem in the first place.

DOBBS: It would be helpful, I think. Maybe someone in Washington might consider that. Christine, thanks. Christine Romans.

ROMANS: You're welcome.

DOBBS: That brings us to the subject of our poll tonight. Do you believe asking about a patient's legal status as a resident citizen or illegal alien is discrimination, yes or no? Cast your vote at LouDobbs.com. We'll have the story -- the results later here. It should be quite a story.

Today's "Quote of the Day" comes from the foreign minister of the government of Mexico, Louis Ernesto Derbez. He says the United States should stop criticizing Mexico's conduct in the war on drugs.

Earlier this week on Capitol Hill, a senior U.S. drug enforcement official had the temerity to blast what he called the corrupt and inefficient Mexican officials. He said they're destroying U.S. anti- drug efforts.

Foreign Minister Derbez responded this way: "It is worthwhile making it clear that we are not worried nor interested about his opinion, which is wrong. And what we have to do is be clear that this gentleman has no reason to be talking this nonsense."

Mr. Derbez, this broadcast begs to differ, and differ mightly, in point of fact. The United states has every right to criticize Mexico's progress on the war of drugs, or its lack of progress on the war on drugs.

More than 500 of your citizens, including your police and law enforcement, have been killed in drug-related deaths in Mexico this year. Mexico has also lost control of its border with the United States. Of course, the United States has also lost control of the border with Mexico.

Drugs, illegal aliens, possibly even terrorists, flowing across the border at will. And what has Mexico done? Well, the government of Mexico certainly hasn't found a solution. Unfortunately, neither has the government of the United States.

There's no city in the United States more concerned about Mexican lawlessness and violence on that border than Laredo, Texas. Just across the Rio Grande from Laredo sits Nuevo Laredo, Mexico, a town gripped by drug-fueled violence and chaos. Police worry violence there will spread to American streets. Mexican troops are now pouring into Nuevo Laredo as part of a massive security crackdown, and today U.S. and Mexican officials are meeting to find ways in which they could fight the crime wave together.

But a huge concern is corruption within the Nuevo Laredo Police Department. The entire Nuevo Laredo police force has been pulled from the streets. That after a gun battle between local police and federal soldiers. Officials say local police are corrupt and in the pockets of two powerful drug games, battling it out for their turf.

In Laredo, Texas, local police there are now on a high state of alert for violence that would spill over from Nuevo Laredo. The Texas governor's office has pledged more crime-fighting aid, but the major of Laredo says she needs federal help and lots of it. The mayor of Laredo, Texas, is our guest here next week.

Coming up next, four West Coast earthquakes in less than a week. I will be talking with an earthquake expert about tense times in southern California and what happens after four earthquakes.

It has happened again in New York City, twice. I'll have the very latest on yet another helicopter crash in the waters off Manhattan.

And in tonight's "Heroes," the story of a U.S. Marine who put his life on the line to save his comrades. Tonight, Sergeant Jonathan Ayersman. Because of him, a lot of his friends are alive today.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: For the second time in less than a week, a helicopter has crashed into New York's East River. A police spokesman said the helicopter went into the river just south of the United Nations.

These are live pictures right now coming from the scene. Rescuers say eight people were aboard, including two pilots. Four people were treated at the scene, two others have been taken to Bellevue Hospital Center.

Tuesday, another helicopter crashed into the East River after it took off from a Wall Street heliport. All seven people aboard that helicopter were rescued as well.

California tops the list of the most beautiful and most dangerous places to live. Four earthquakes have rocked the state this week alone. The most recent coming late last night, a 6.7 magnitude quake in Northern California.

Joining me now is Lucy Jones, she's seismologist for the U.S. Geological Survey. And she has been particularly busy this week. Good to have you here.

A lot of people are talking about -- they were talking yesterday, Lucy, about three, now we are talking about four earthquakes, is this part of a pattern? Are these earthquakes in your judgment, related?

LUCY JONES, USGS: Some, yes, some probably not. The 6.7 this morning is very clearly an aftershock to the 7.2 that we had on Tuesday night. And is completely normal within the range of what we expect to have.

The two five...

DOBBS; Was that on the -- as I understand it, that was San Andreas fault and the other to were on the San Jacinto?

JONES: No. The one up in Northern California -- the two in Northern California were in what's known as the Gorda Plate. It's one of the most active areas in California. It's north -- it's beyond the San Andreas system.

The two here in Southern California, one was on the San Andreas and the San Jacinto, which are related faults. There's a possibility that there was triggering, that the first one could have triggered the second one.

Every earthquake makes another quake more likely. So for awhile and for the next few days, we will have an increased chance of activity.

But also, on the long run...

DOBBS: So, what you're saying is that -- I'm sorry. Go ahead.

JONES: Just on the long run, California has a lot of earthquakes. And actually the last ten years has been quiet. And maybe we are getting back to normal.

DOBBS: Getting back to normal. Normal in this case, how many earthquakes have you had there in Southern California have you had there in Southern California this week?

JONES: Oh, something like 800 or 900. Those included all the aftershocks to those two fives.

DOBBS: Southern California is not for the timid and the weak, is it?

JONES: Well, not if you are scared of earthquakes. But you are far more likely to be murdered here than die of an earthquake. So we need keep our risks in perspective.

DOBBS: Well, I'm sure that a lot of your fellow Southern Californians there are feeling a lot better right now.

But looking ahead to this -- the fact that this was significant magnitude this morning, you had four in a row. You say it does raise the possibility of another occurring. Give us some sense about the probabilities that you are talking about here and what you are looking for.

JONES: OK. They're still very low. We don't see the Northern and Southern California activity as being particularly related. And the Northern California activity, although the magnitudes are large, they are very far offshore. And the aftershocks will probably continue to be very far offshore. So, again, the risk to people is not very high.

Here in Southern California, they are on land around people. But they aren't that big. They's only magnitude five. So maybe we have a one, two percent chance that we'll have another 5 in the next week.

That's true of every earthquake that happens. It makes others more likely. And then probability dies off very rapidly with time.

DOBBS: You know, I don't know what happens at the U.S. Geological Survey, but I can tell you in news rooms, one of the things that starts happening is there starts to be people connecting dots, talking about the Mexican volcano of fire beginning to smoke and to send up ash. And at the same time, talking about the fact that other earthquakes are taking place in South America. Is there any relationship to this Pacific Rim activity?

JONES: Not over those distance scales. When we've looked for global patterns, we find that they are random.

But one of the issues is, is that human beings really dislike random patterns. We like to form patterns out of random behavior. We don't like it to be random.

And so -- and actually, the whole field of statistics was invented to help keep us from fooling ourselves when we try to make patterns when they weren't really there. And when we use statistics on the global scale, we don't find a relationship.

If we look within 100 miles, the sort of range on which the earthquakes are happening themselves, then we do see some triggering. And that's why we have a slightly increased risk for the next week or two.

DOBBS: For the next week or two. Lucy Jones, we thank you for being here. We will take that as your forecast. I know you don't mean it that way, but I thought I would do...

JONES: Well, actually...

DOBBS: Go ahead.

JONES: We do have a -- we are actually trying to put all this information together. And we do have from our networks on the web a forecast for the next 24 hours. And you will see about a 1 percent chance of having another earthquake.

DOBBS: And I think that since you brought that up, I should give your Web site a boost there, it's -- I believe it's usgs.gov, correct.

JONES: Right. Earthquake.usgs.gov. You can find all of the information that we put out on earthquakes.

DOBBS: Lucy Jones, thank you very much for being here to guide us through this. We will be watching your forecast carefully.

JONES: Thank you.

DOBBS: Not as carefully, I'm sure, as Southern Californians, but very carefully indeed. Thank you.

JONES: OK. Thank you.

DOBBS: Still ahead, my next guest says the American economy is on life support. The author of a new book explaining why he says we are losing money, power to the east. And the American future is in doubt. "Heroes," tonight how one Marine's bravery during an insurgent attack saved the lives of his countrymen. His story is next here. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My guest tonight says the American economy is like the Titanic headed toward an iceberg. He says we are losing our wealth and our power to Asia, and that could lead to the demise of America and a global economic crisis. In his new book, "Three Billion New Capitalists," Clyde Prestowitz addresses the causes and offers a few solutions to this issue. The causes are all -- the viewers of this program are very familiar with. Joining me now from Washington, Clyde Prestowitz. Clyde, good to have you here.

CLYDE PRESTOWITZ, AUTHOR: Nice to be here, Lou, how are you.

DOBBS: I'm great. And despite the forecast of your book, one of the first things that has happened is some critics have said that you are now a protectionist, because you say that we should not simply be effectively idiots, and continue this spiral.

PRESTOWITZ: Well, you know, that's a cheap shot, because I've been a strong supporter of free trade and the WTO...

DOBBS: Absolutely.

PRESTOWITZ: ... for a very long time. But what's wrong here, Lou, is that there are two different games being played, as you very well know. The U.S. is playing a game of free trade and consumerism, and much of the rest of the world and many countries in Asia are playing a game of strategic trade, in which they specifically focus on export-led growth, and in which they specifically focus on trying to accumulate trade surpluses, and accumulate large dollar reserve holding. And they do this in a number of ways, but particularly by managing the dollar, either by linking -- pegging to the dollar or by intervening in currency markets, to be sure that the dollar is strong, versus their own currencies.

And for some reason, Lou, for some reason, neither Democratic nor Republican leaders of the United States over the past 50 years have seen fit to recognize that this double game is disadvantageous to the United States.

DOBBS: Well, I wish I could give you the answers to that one, Clyde. I was frankly hoping you would offer the answer. I can't figure out what these people -- we have got -- we are going on our 30th year of consecutive trade deficits. Today, reported current account deficit rose 195 billion, a new record; 6.5 of our GDP tied up in the current account deficit. It's unsustainable.

PRESTOWITZ: It's unsustainable. We have got to be -- we are consuming about $700 billion a year more than we produce, which means that we have to borrow $700 billion a year from the rest of the world. And the interesting thing is, you know, Secretary Rumsfeld was in Singapore recently at a security conference, and he sharply criticized the Chinese for their military build-up and warned them against it, but at the same time, every day the United States needs $2 billion from the Central Bank of China to keep our economy perking along. You know, is this schizophrenic or what?

DOBBS: There's another word I would use, but we will stay with schizophrenic, you being more diplomatic of the two of us, Clyde. Clyde Prestowitz, we thank you for being here. The book is "Three Billion New Capitalists." Let's take a look at that. "The Great Shift of Wealth and Power to the East." Clyde Prestowitz, thanks for being here.

PRESTOWITZ: Thank you.

DOBBS: We appreciate it. Terrific book.

PRESTOWITZ: Good to see you. Thanks.

DOBBS: And now "Heroes," our weekly salute and tribute to the men and women who serve this nation in uniform. Tonight's hero is Sergeant Jonathan Ayersman. He saved the lives of dozens of his fellow Marines during a battle with insurgents in Iraq. Casey Wian has his story from 29 Palms, California.

(BEGIN VIDEOTAPE)

SGT. JONATHAN AYERSMAN, U.S. MARINE CORPS: We had set it for security, and we were keeping an eye out on what was going on in the city to my front.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Sergeant Jonathan Ayersman describes what happened the day he saved the lives of 60 Marines last November in Iraq. On patrol, two light armored vehicles became stuck in mud. While a nearby mosque broadcast messages instructing insurgents to attack, Ayersman moved a vehicle similar to this one into a defensive position.

AYERSMAN: That's when the first mortars, RPGs, small arms started going on. And I actually had to shove my driver, because he was popped up, you know, we were talking real quick, and I actually had to push him down in the driver's compartment and close the hatch and swing my machine gun around when I noticed the insurgents.

WIAN: Ayersman fired. As he did, mortars rained down. One hit the vehicle, showering him with shrapnel.

AYERSMAN: It knocked my goggles off my helmet, and knocked me back into my hatch right here. I thought I was actually wounded, but I checked myself out real quick, and I was fine, and shook it off, and grabbed my machine gun again, and continued to engage.

WIAN: The attack continued, but he needed more firepower -- a missile.

AYERSMAN: Corporal Adams (ph) already had the turret erected, so I was able to talk him on, get him on target where I wanted him to fire the missile, and exactly how I wanted him to fire it. And that's when the TOW system went down, and he had to repair it real quick, he had to splice some wires together.

WIAN: The missile was fixed and fired.

AYERSMAN: The whole top of the wall that they were behind, and all the shrapnel and everything, the explosion just took out the insurgents that were shooting the mortars at us. And after that, everything stopped. It was completely over with after that, and we recovered the vehicles and went back to base.

WIAN: No Marines were killed or injured. For his leadership, Sergeant Ayersman was awarded a Bronze Star with a distinguishing device for heroic achievement.

AYERSMAN: I never imagined -- would imagine that I would have that prestigious of an award actually awarded to me, especially for just doing -- basically doing my job as a Marine.

WIAN: Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: And Sergeant Ayersman just wants to continue doing his job as a Marine. He hopes to join the Marine Corps special security forces in Spain later this year.

Coming up at the top of the hour here on CNN, "ANDERSON COOPER 360." Heidi Collins is here to tell us what's ahead -- Heidi.

HEIDI COLLINS, GUEST HOST, "ANDERSON COOPER 360": Hi, Lou. Nice to see you. Coming up next on "360," another arrest in the case of the girl missing in Aruba, Natalee Holloway. Police have in custody a 26-year-old man who worked as a deejay on a popular party boat. It's unclear what, if any, contact Natalee Holloway had with the young man, but his home was searched today, and tonight he's behind bars.

We are going to have a live report from the island on the latest arrest. We will have an exclusive, live interview with Natalee Holloway's mother. She is still in Aruba, still searching for her daughter. She said all along there will be more arrests, and we're going to talk to her about today's events.

Also tonight, "Choose to Lose." A "360" look at the newest diet and weight loss strategies that are having profound effects on people's lives. All that and a whole lot more -- Lou.

DOBBS: Well, there can't be much more, Heidi. Thanks very much, Heidi Collins.

Coming up next, approval ratings are plummeting in Washington. What does this mean for president and the Congress? An exit strategy for Social Security. Will there be an exit strategy for Iraq? I'll be talking with three of the country's top political journalists next. Stay with us.

(COMMERCIAL BREAK) DOBBS: Joining me in tonight's "News Makers:" From Washington, "Time" magazine National Political Correspondent, Karen Tumulty; Ron Brownstein, the national political correspondent for the "Los Angeles Times;" here in the studio, Jim Ellis, chief of correspondence at "Business Week."

Good to have you with us.

KAREN TUMULTY, "TIME" MAGAZINE: Hi, Lou.

DOBBS: Let's begin, Karen, with 42 percent for the president, 33 percent for the Congress. The American people aren't too thrilled with our elected officials, are they?

TUMULTY: That's right.

These are about as low as we have seen these numbers for this president and the Congress' numbers are beginning to look about how they looked in 1994, which is the -- when voters decided to just essentially throw the bums out; the bums then being Democrats.

DOBBS: Are we near what one could call: The belly-full level? The American people are tired of no representation and you know, frankly, tepid leadership from both parties?

TUMULTY: I think that and I also think the fact that people out there have real concerns. People are worried about their jobs, they're worried about their healthcare, they're worried about their gasoline prices, and they...

DOBBS: They're worried about their country, Karen, let's be honest.

TUMULTY: But what they see is that both the Congress and the president -- I mean, the president -- Social Security -- he's got a Social Security plan that people don't seem to be particularly favorable on.

DOBBS: They hate it, Karen.

TUMULTY: And Congress has been, you know, working on issues, like the Terri Schiavo case, which, once again, we dealt with this week.

DOBBS: Well, Ron, let me ask you -- I mean we've got Republican leaders going over to the White House from Capitol Hill saying: Let's get an exit strategy for Social Security because this is killing us and meanwhile, we don't hear anything about an exit strategy from Iraq. What's going on.

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, the one thing that I -- picking up on what Karen said, I think the one thing that both parties agree on now is that part of the reason the president and Congress are in so much trouble is because the public perceives them as not focusing on the issues that matter across the kitchen table to the American public. Part of that poll you mentioned asked: To what degree do you believe Congress shares your priorities? It's down to 19 percent. I mean, that's an extraordinarily low number and you are seeing, I think, Lou, a direct effect of this. As you said, you're seeing Republican leaders urging more focus on direct economic issues, rather than the long-term goal of Social Security, which is not a generator of popular support and you're also seeing the beginnings of stirrings of Democratic questioning of Iraq which has been almost entirely muted since President Bush's reelection last November.

DOBBS: Point of fact: You're seeing a bipartisan group move forward with a resolution to get us out by the end of 2006...

BROWNSTEIN: Yes.

DOBBS: ... At least to begin the process.

BROWNSTEIN: An idea that I think is still on the fringe of the political debate here and doesn't have broad support. In fact, most are pretty are still pretty cautious about where to go.

But if you look at the numbers on Iraq, I think the clear message to the White House is that even if there is political progress: the writing of a constitution, the creation of a interim government, has another election later this year -- they are not going to restore public support without a reduction in the violence. And as long as public support remains low, the temptation will be high for more politicians, in both parties, to begin to pressure him for an alternative approach.

DOBBS: An alternative approach: There's one approach that we haven't seen or found an alternative for, at least in terms of policy, that's the trade deficit.

What happened to free, in free trade, Jim? Where are all those free-traders talking about how good it is to outsource and to just give away the economy, we've got a current account deficit of at 195 billion, six-and-a-half percent of our GDP -- unprecedented, unsustainable.

JIM ELLIS, "BUSINESSWEEK" MAGAZINE: Well, it is unsustainable, that we can agree on. I think that, you know, the fed's been saying that for quite some time and sooner or later it's going to catch up with the president here, that something has to happen. Either we have to get the deficit in line and therefore make sure that foreign investors will continue to basically bankroll us, or we're going to take -- make some tough choices here. I mean a lot of the things that we love to buy...

DOBBS: God forbid we have...

ELLIS: Yes. Tough choices are tough, you know? But sooner or later we are going to have to figure out that we can not continually count on foreigners to, basically, finance the profligate lifestyle of the United States. I mean, that's scary. I love that profligate lifestyle, but it's not going to go on. DOBBS: Right. And it certainly isn't going to go on like this.

ELLIS: No, It can't.

I mean we just don't -- we can not afford to have run up deficits like this. This is amazing, I mean, the only reason we are able to do this is because a lot of our major trading partners are in worse shape than us.

DOBBS: They're in worse shape than we are, but our society, right now, is the throw-away society, the disposable society, the consume-at-all-society and oh, by the way: We don't want to work too hard either.

ELLIS: Well, we're not quite France, yet.

DOBBS: Yes. If we get down to 35 hours a week, we'll be close though, right?

Karen, let me ask you this: Senator Dick Durbin, with his comments read into the record this week, in which he referred to the gulag in Guantanamo Bay, without noting that, that was in a communist nation. A fire storm has erupted, hasn't it?

TUMULTY: Absolutely.

And I think that these were some of the very unfortunate comments on the part of Senator Durbin. He has not apologized for them.

DOBBS: He says he won't.

TUMULTY: Well, certainly there's some legitimate issues being raised about the treatment of prisoners at Guantanamo, but basically Senator Durbin got on the Senate floor and compared them to Polpot. He invoked Hitler. He invoked genocide, not interrogation techniques and this is, once again, an example of how the Democrats tend to, sort of, not have a volume knob on issues that really could play in their favor.

DOBBS: Well, one of the things I just don't understand: Why Republicans and Democrats alike -- just lose the Hitler references, and when you are talking about American military men and women, just -- if you can't say something nice, just shut-up, because these people are actually doing the nation's work, which we can't always say of our representatives and elected officials on Capitol Hill, can we?

TUMULTY: Well, and again, I just think that on the one hand the question -- there are legitimate questions about interrogation techniques, but to throw -- suddenly throw genocide into the debate is very ill-advised on the part of anyone.

DOBBS: Ron, you get the last word in your council to Senator Durbin, tonight.

BROWNSTEIN: Well, look, there is an overall assessment going on now, from the Patriot Act to Guantanamo to Iraq, of the responses we've made post 9/11. We're further away from horrible events, there's kind of a, I think, across a broad range of issues, people looking and saying: OK, what is the right balance, did we go too far?

But your first part of your advice, about avoiding references to Hitler in the context of American politics, is probably a good one. These debates aren't over and I -- if anything, I think they are going to intensify in the coming months, but lowering the temperature isn't a bad thing.

DOBBS: Jim Ellis, are we going to see the temperature lowered?

ELLIS: I doubt it.

DOBBS: Jim Ellis, thank you, very much.

Karen Tumulty, thank you, very much.

Ron Brownstein, as always, thanks for being here.

Still ahead, we'll have the results of our poll and a preview of what's coming up Monday.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll: 88 percent of you don't believe asking about a patient's legal status as citizen or not is discrimination. Twelve percent of you, however, maintain it is.

Thanks for being with us tonight. Please join us here Monday. One of the country's most respected journalists and commentators will be here -- Bill Moyers, my guest. Please be with us.

For all of us here, have a great weekend. Good night from New York. ANDERSON COOPER 360 starts right now, Heidi Collins sitting in for Anderson.

Heidi?

END

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 June 17, 2005 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Good evening, everybody. Tonight, an alarming new link between thousands of stolen cars in this country and radical Islamist terrorism. Law enforcement officials now concerned those stolen cars are funding terrorist operations all around the world. We'll have the special report.
Also tonight, no fewer than four earthquakes strike California in five days. What does it mean for seismic activity along one of our nation's most volatile fault lines? We'll be talking with a leading seismologist at the U.S. Geological Survey.

And in "Heroes," tonight, the story of an American Marine credited with saving the lives of no fewer than 60 of his comrades in a mortar attack in Iraq. He says he was simply doing his job.

First tonight, President Bush and Congress losing the support of the American people. A new poll finds only 42 percent of Americans approve of the way President Bush is doing his job. That is the lowest level of his presidency. The approval rating for Congress is even lower, now down to 33 percent.

We have two reports tonight on a public losing faith in its elected officials. Dana Bash at the White House, Bill Schneider in Washington.

We begin with Dana Bash -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, here, the White House blames those numbers on what they call Washington talking about things that Americans are simply not concerned about. But they also know a key factor is the state of the president's agenda.

(BEGIN VIDEOTAPE)

BASH (voice-over): In the heartland to rally support...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Medicare, we've strengthened the system. We've modernized the system.

BASH: Medicare reform? That's already law. The White House is still trying to get credit for last year's successes while this year's agenda languishes.

Bush aides are well aware public confidence in his leadership is waning. Only a 42 percent approval rating in this latest poll. Even after 35 Social Security events, his top domestic priority is on the thinnest of ice. And just six months into his second term, some fellow Republicans quietly say the president's agenda is misdirected. Some are openly critical.

SEN. OLYMPIA SNOWE, (R) MAINE: If you carve out the personal savings account, that does erode a defined guaranteed benefit as we know it under Social Security.

BASH: On Iraq, some GOP lawmakers are calling the rosy picture the White House paints unrealistic, even harmful.

SEN. LINDSEY GRAHAM, (R) SOUTH CAROLINA: And the idea that this war has gone on this long with this many casualties surprises people.

BASH: Others say enough is enough, bring troops home before our next election.

REP. WALTER JONES, (R) NORTH CAROLINA: After 1,700 deaths, over 12,000 wounded, and $200 billion spent, we believe it is time to have this debate and this discussion on this resolution.

BASH: So the Bush communication shop is shifting to damage control mode. Message: we get it...

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president recognizes that this is a concern that's on the minds of the American people.

BASH: ... announcing a series of speeches with a sharper focus on Iraq over the next two weeks to try to calm anxieties. And it's not just Iraq. Americans are most concerned about the economy, sky- high gas prices, major layoffs at companies like GM. Republicans want that to be the president's focus.

DAVID WINSTON, GOP POLLSTER: If you're in a leadership position in terms of the government, and you're not addressing the number one issue, you're just inviting a problem.

BASH: White House aides now concede that they haven't done enough to tout good economic news and promise to try harder.

(END VIDEOTAPE)

BASH: Bush aides admit they are retooling their communications strategy, but insist it's a public relations change and not a policy change on any front, either on Iraq or when it comes to the president's domestic agenda -- Lou.

DOBBS: Dana Bash from the White House. Thank you.

President Bush's approval rating may seem high compared to that of Congress. Only one in three Americans approves of the way members of Congress are doing their jobs.

Bill Schneider has the report.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Question, do you think Congress has the same priorities for the country as you have? "The New York Times"-CBS News poll just put that question to the American people. Not even one in five Americans believes Congress shares their priorities. Yikes!

The public is concerned about the can economy, Iraq, health care. What are Congress' priorities?

AMY WALTER, COOK POLITICAL REPORT: Voters have had a steady diet of issues like the Terri Schiavo case, filibusters, the Bolton nomination.

SCHNEIDER: President Bush's response? Blame the Democrats.

BUSH: On issue after issue, they stand for nothing except obstruction. And this is not leadership. It is the philosophy of the stop sign, the agenda of the roadblock.

SCHNEIDER: Except for one thing. The Democrats are the opposition party. When voters say Congress does not share their priorities, they are thinking about the whole Congress, the Republican Congress. It's that Congress that will be on the ballot next year, not President Bush.

WALTER: These members are very worried about their own reelection prospects. And so on issues ranging from stem cell research to the war in Iraq to the Patriot Act, we're seeing Republican members go against the president. This is something we just haven't seen since President Bush was elected.

SCHNEIDER: This week, 38 House Republicans voted to defy the White House and modify the Patriot Act. Last week, 13 Republicans on the House International Affairs Committee voted with the Democrats to call on President Bush to come up with an exit strategy in Iraq.

(END VIDEOTAPE)

SCHNEIDER: Some Republicans are even talking about finding an exit strategy on another issue, Social Security -- Lou.

DOBBS: Bill Schneider, thank you very much.

In Iraq, U.S. and Iraqi forces launched a major air and ground assault on insurgents near the Syrian border. One thousand U.S. Marines and Iraqi soldiers are taking part in "Operation Spear," focused in the chaotic Anbar province in western Iraq.

U.S. fighter jets dropping 2,000-pound bombs overnight on suspected insurgents hideouts. So far the military operation has resulted in the death of 30 insurgents.

Also today, fierce fighting in Ramadi, just west of Baghdad. Two Marines were killed during the fighting when their vehicle hid a roadside bomb. So far this month, 50 U.S. troops have been killed in Iraq.

In Baghdad, a suicide car bomber crashed into a loaded fuel tanker outside a Shiite mosque after Friday prayers. One person was killed, eight others wounded.

More than two years after the beginning of the war, the debate over how it began is more intense than ever. This week, Democratic Congressman John Conyers held a forum on a high-level classified British intelligence report known as the Downing Street Memo. Critics of the Iraq war charge that that memo is the smoking gun in their claims that President Bush misled Congress, the American people and the world about the war.

John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN SR. NATIONAL CORRESPONDENT (voice-over): The new energy in the antiwar protest comes from a three-year-old British government memo with language right out of a James Bond movie. "Secret and Strictly Personal, U.K. Eyes Only" is the headline on the once classified and now very public document.

UNIDENTIFIED FEMALE: And now we have the smoking gun, and the smoking gun is the Downing Street Memo.

KING: It is dated July 23, 2002, summarizing a session British Prime Minister Tony Blair held with his national security team to discuss new talks with the Bush White House about Iraq policy. "Military action was now seen as inevitable" was how the memo characterized White House thinking. Then in the line war critics have seized on most, the memo said, "The intelligence and facts were being fixed around the policy."

To a war critic like Democratic Congressman John Conyers, fixed means doctored. And this letter, signed by more than 100 members of the House, demands the White House answer questions about the Downing Street Memo. Did Mr. Bush deliberately alter U.S. intelligence is one question, and did he settle on war months before telling the American people and seeking congressional approval is another.

REP. JOHN CONYERS, (D) MICHIGAN: Did he deceive us into a war? Were we tricked into a war?

KING: Mr. Bush says he did no such thing, and the White House notes the war did not start until eight months after the memo was written. But it will not answer the letter from Conyers and his colleagues.

MCCLELLAN: This is an individual who voted against the war in the first place and is simply trying to rehash old debates that have already been addressed.

KING: The continuing insurgency in Iraq has war critics seizing on another point in the memo. There was little discussion in Washington of the aftermath of military action.

Some see the debate over the Downing Street Memo more as proof of a weakened president than any dramatic new revelation. RICHARD GEPHARDT, FMR. HOUSE DEMOCRATIC LEADER: It's fine to revisit it again, but there's not a lot new here. Again, we need to figure out, given that history, where we go from here.

KING: Public uncertainty about the military mission is clearly taking a toll on the president. A new "New York Times"-CBS News poll found just 37 percent of Americans approve of how Mr. Bush is handling Iraq.

KEN DUBERSTEIN, FMR. REAGAN CHIEF OF STAFF: I think it is tough inside the beltway, but I'm not sure it has anywhere near reached Des Moines or Omaha. It may have reached the left coast, but not, you know, the heartland of America.

(END VIDEOTAPE)

KING: But make no mistake about it, Lou, the White House acknowledges this rising anxiety and says the president will dedicate more time to explaining his Iraq policy beginning with two big speeches next week -- Lou.

DOBBS: Two big speeches. Ken Duberstein, accomplished as he is on political matters, is he suggesting that the administration is taking the middle red states for granted in all of this?

KING: No. I think, Lou, he's coming to the aid of a White House in which he has many friends at a time when they are down. Ken Duberstein trying to minimize what is clearly a political problem for the president right now. You cannot have 37 percent of the American people, only 37 percent, supporting your policy and having those doubts not have reached the heartland. Mr. Duberstein being a good political ally.

DOBBS: John King. Thank you.

On Capitol Hill today, the House of Representatives easily passed legislation that the White House urged it to reject. The measure is designed to force the United Nations to reform itself. It would block half of the hundreds of millions of dollars in dues that the United States pays the United Nations until those reforms are completed.

The Bush administration has said the bill is not, in its word, constructive. The sponsor of the bill, Congressman Henry Hyde, says it is obvious that the United Nations is in desperate need of reform.

In Iran today, unexpectedly high turnout for the presidential election there, forcing officials to extend the voting twice today. One official estimated turnout at 60 percent. Seven candidates are running to replace Iran's president who is banned from running for a third term. Today's election is widely expected to end in a runoff between the top two candidates, including, the former president, Ayatollah Hashemi Rafsanjani.

President Bush recently blasted the Iranian election, saying the vote is designed to keep Iran's leaders in power. One of Osama bin Laden's top lieutenants today urged radical Islamist terrorists to continue their jihad against the United States. Ayman al-Zawahiri appeared in a videotape aired on Al-Jazeera network. Zawahiri called on radical Islamists to keep fighting to push Jews and westerners out of what he called the land of Islam. This is his first message in five months.

Coming up next here, millions of dollars in terror funding, thousands of stolen cars in this country. Law enforcement officials are urgently investigating the links between the two. Our special report coming right up.

And then, a new arrest in the case of the Alabama teenager missing in Aruba. That story, a great deal more ahead here tonight.

(COMMERCIAL BREAK)

DOBBS: A huge victory tonight for prosecutors fighting corporate crime. A New York jury today found two former Tyco CEO and chief financial officer guilty of stealing $100 million from the company. Former Tyco CEO Dennis Kozlowski, former CFO Mark Swartz, were found guilty on 12 counts of first-degree larceny.

The pair also found guilty of conspiracy, fraud and falsifying business records. The government has requested mandatory jail time of 15 to 30 years in state prison. Their sentencing is now set for August 2.

In another high-profile case of corporate crime, a jury in Birmingham, Alabama, is still deliberating the fate of former HealthSouth CEO Richard Scrushy. He is accused of leading a $2.7 billion accounting scam.

And in Aruba tonight, a fourth suspect is under arrest in the Natalee Holloway case. CNN has learned that the suspect is 26-year- old Steve Croes. Police picked him up at his home in Aruba today. CNN has also learned that Croes is a disk jockey on a party boat called The Tattoo.

Police will not say why he is a suspect in this case. Aruba police are still searching the island for clues into what happened to Natalee Holloway. Natalee's mother said today she is fed up with the Aruba investigation.

(BEGIN VIDEO CLIP)

BETH HOLLOWAY TWITTY, NATALEE HOLLOWAY'S MOTHER: The frustration it unimaginable. It's unimaginable.

And I have waited and I have waited and I have waited. And I have listened and I have heard lie after lie after lie unfold. And I have to have some answers, and I better get them soon.

(END VIDEO CLIP)

DOBBS: None of the suspects in the Natalee Holloway case has yet been charged with a crime. Natalee Holloway has now been missing in Aruba for almost three weeks.

Turning now to the global war against radical Islamist terror, a crime that happens every day in this country is helping fuel deadly terrorism overseas. Officials are releasing disturbing details tonight about how stolen cars in this country are funding radical Islamist terrorists around the world.

Karen Schaler reports.

(BEGIN VIDEOTAPE)

KAREN SCHALER, CNN CORRESPONDENT (voice-over): More than a million times a year this is happening around the country. A vehicle is stolen, just like what you are seeing in this undercover police video.

The FBI says these thefts are costing $8.6 billion annually. The National Insurance Crime Bureau estimates close to 200,000 stolen vehicles are shipped to foreign countries, including the Middle East, where they're sold for a huge profit. The possibility that terrorists are cashing in on some of these profits have law enforcement officials around the country concerned.

MIKEL LONGMAN, ARIZONA CHIEF OF CRIMINAL INVESTIGATIONS: Sources such as Interpol and others are suggesting that vehicle theft and crimes involving vehicles, insurance fraud, et cetera, are being used by organized crime groups and terrorist organizations to fund their activities.

SCHALER: Right now Arizona has the highest number of auto thefts per capita in this country. The Arizona Automobile Theft Authority says more than 56,000 vehicles are stolen each year in the state, averaging about one vehicle every nine minutes.

LONGMAN: It's really quite evident that, you know, organized crime groups and terrorist groups are using car theft to generate enormous sums of money. And that should concern all of us.

SCHALER: To deal with growing concerns about exporting stolen vehicles, a group of state and federal officials from the United States and Canada, including representatives from the FBI and Customs and Border Protection, formed the North American Export Committee 10 years ago. The director of NEAC, a police lieutenant leading the Miami-Dade Auto Theft Taskforce, says, "Stolen vehicles are a means for financing terrorist activities worldwide. This is one of the new areas we've identified that terrorists are turning to to fund their activities."

In Washington, Congressman Howard Coble chairs the Subcommittee on Crime, Terrorism and Homeland Security, and says recognizing new terrorist funding trends is critical to crippling terrorist activities.

REP. HOWARD COBLE, (R) NORTH CAROLINA: If we could clamp down on this source, that would clearly get their attention, I think, and they would have to maybe alter their -- their strategy and seek other avenues.

SCHALER: The ultimate goal, to keep funds out of the hands of terrorists, no matter what the source, draining revenues for expensive training camps, recruitment and other resources.

(END VIDEOTAPE)

SCHALER: And special law enforcement conferences are being held around the world, specifically dealing with the growing auto theft problem and its potential link to funding terrorism. The last conference was held in Arizona just a few weeks ago and included a half-dozen different countries.

Now, Interpol estimates the illegal trafficking of vehicles is a form of organized crime that generates an estimated $19 billion -- Lou.

DOBBS: Karen, thank you very much. Karen Schaler from Washington.

The House Appropriations Committee approved a bill that could cut $100 million in funding from the Corporation for Public Broadcasting. The Corporation for Public Broadcasting funds the nonprofit organization PBS. PBS is well-known for programs, of course, like "Sesame Street."

The cut is part of a $143 billion spending bill for health, education and labor programs. It must still be passed by the full House and Senate.

Coming up next here, the federal government failing our nation's hospitals as they struggle to make up the cost of caring for illegal aliens. We'll have that special report.

And fear on fault lines. West Coast residents wondering what's next after this week's string of four earthquakes. I will be talking with an expert from the U.S. Geological Survey about what happens after four.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The invasion of illegal aliens into this country has put a tremendous strain on our nation's hospitals. States demanded that the federal government help pay for the care of those aliens. And $1 billion made available by Congress to hospitals that can prove they are treating illegal aliens, and that means they have to ask questions about a patient's legal status, something that they don't really like to do.

Christine Romans has the report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): For New Mexico hospitals, there's $5 million federal to help pay for free emergency room care to illegal aliens. First they must verify they are treating illegal aliens, but no one wants to directly ask a patient's status.

JEFF DYE, NEW MEXICO HOSPITAL ASSOCIATION: There is a bit of a dance. We're trying to be cautious about not discriminating, not scaring away patients that need care, and yet getting care and getting funding to the hospitals.

ROMANS: So hospitals ask round-about questions, like does the patient have a foreign birth certificate, a Mexican border crossing card, an expired visa or an invalid Social Security number? For some states, these questions mean millions.

California hospitals are eligible for $70 million a year to pay for hospital care for illegals. Texas, $46 million, Arizona $45 million.

But the government has instructed hospitals not to directly ask if a patient is a legal citizen, and hospital associations and immigrant groups strongly lobbied against it, saying sick and injured illegals would be afraid to seek care because of the fear of deportation.

JANET MORGUIA, NATIONAL COUNCIL OF LA RAZA: The fact is, is that when you target a specific population in our society that causes them to be deterred from using our hospital systems or our public health systems, you're really putting all Americans at risk.

ROMANS: And, she says, asking any questions about legal status turns emergency room personnel into immigration officials.

(END VIDEOTAPE)

ROMANS: Now, for some states, it hardly makes any sense to ask these questions and apply for the federal money. In Nevada, for example, the cost of setting up the reporting system is almost as much as the $2 million the state is eligible for, and they would have to ask every patient the same questions.

The accusations of profiling if they don't, all the red tape. Some hospitals say it's just not even worth it. Pennies on the dollar, anyway.

DOBBS: Pennies on the dollar, but $1 billion against what is estimated to be somewhere between $15 and $20 billion lost in healthcare to providing care for illegal aliens, it's quite a conundrum. Perhaps someone should consider the possibility of simply enforcing the immigration laws and providing border security.

ROMANS: That would be a start. That would make hospital personnel not have to be immigration personnel. And you wouldn't have the problem in the first place.

DOBBS: It would be helpful, I think. Maybe someone in Washington might consider that. Christine, thanks. Christine Romans.

ROMANS: You're welcome.

DOBBS: That brings us to the subject of our poll tonight. Do you believe asking about a patient's legal status as a resident citizen or illegal alien is discrimination, yes or no? Cast your vote at LouDobbs.com. We'll have the story -- the results later here. It should be quite a story.

Today's "Quote of the Day" comes from the foreign minister of the government of Mexico, Louis Ernesto Derbez. He says the United States should stop criticizing Mexico's conduct in the war on drugs.

Earlier this week on Capitol Hill, a senior U.S. drug enforcement official had the temerity to blast what he called the corrupt and inefficient Mexican officials. He said they're destroying U.S. anti- drug efforts.

Foreign Minister Derbez responded this way: "It is worthwhile making it clear that we are not worried nor interested about his opinion, which is wrong. And what we have to do is be clear that this gentleman has no reason to be talking this nonsense."

Mr. Derbez, this broadcast begs to differ, and differ mightly, in point of fact. The United states has every right to criticize Mexico's progress on the war of drugs, or its lack of progress on the war on drugs.

More than 500 of your citizens, including your police and law enforcement, have been killed in drug-related deaths in Mexico this year. Mexico has also lost control of its border with the United States. Of course, the United States has also lost control of the border with Mexico.

Drugs, illegal aliens, possibly even terrorists, flowing across the border at will. And what has Mexico done? Well, the government of Mexico certainly hasn't found a solution. Unfortunately, neither has the government of the United States.

There's no city in the United States more concerned about Mexican lawlessness and violence on that border than Laredo, Texas. Just across the Rio Grande from Laredo sits Nuevo Laredo, Mexico, a town gripped by drug-fueled violence and chaos. Police worry violence there will spread to American streets. Mexican troops are now pouring into Nuevo Laredo as part of a massive security crackdown, and today U.S. and Mexican officials are meeting to find ways in which they could fight the crime wave together.

But a huge concern is corruption within the Nuevo Laredo Police Department. The entire Nuevo Laredo police force has been pulled from the streets. That after a gun battle between local police and federal soldiers. Officials say local police are corrupt and in the pockets of two powerful drug games, battling it out for their turf.

In Laredo, Texas, local police there are now on a high state of alert for violence that would spill over from Nuevo Laredo. The Texas governor's office has pledged more crime-fighting aid, but the major of Laredo says she needs federal help and lots of it. The mayor of Laredo, Texas, is our guest here next week.

Coming up next, four West Coast earthquakes in less than a week. I will be talking with an earthquake expert about tense times in southern California and what happens after four earthquakes.

It has happened again in New York City, twice. I'll have the very latest on yet another helicopter crash in the waters off Manhattan.

And in tonight's "Heroes," the story of a U.S. Marine who put his life on the line to save his comrades. Tonight, Sergeant Jonathan Ayersman. Because of him, a lot of his friends are alive today.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: For the second time in less than a week, a helicopter has crashed into New York's East River. A police spokesman said the helicopter went into the river just south of the United Nations.

These are live pictures right now coming from the scene. Rescuers say eight people were aboard, including two pilots. Four people were treated at the scene, two others have been taken to Bellevue Hospital Center.

Tuesday, another helicopter crashed into the East River after it took off from a Wall Street heliport. All seven people aboard that helicopter were rescued as well.

California tops the list of the most beautiful and most dangerous places to live. Four earthquakes have rocked the state this week alone. The most recent coming late last night, a 6.7 magnitude quake in Northern California.

Joining me now is Lucy Jones, she's seismologist for the U.S. Geological Survey. And she has been particularly busy this week. Good to have you here.

A lot of people are talking about -- they were talking yesterday, Lucy, about three, now we are talking about four earthquakes, is this part of a pattern? Are these earthquakes in your judgment, related?

LUCY JONES, USGS: Some, yes, some probably not. The 6.7 this morning is very clearly an aftershock to the 7.2 that we had on Tuesday night. And is completely normal within the range of what we expect to have.

The two five...

DOBBS; Was that on the -- as I understand it, that was San Andreas fault and the other to were on the San Jacinto?

JONES: No. The one up in Northern California -- the two in Northern California were in what's known as the Gorda Plate. It's one of the most active areas in California. It's north -- it's beyond the San Andreas system.

The two here in Southern California, one was on the San Andreas and the San Jacinto, which are related faults. There's a possibility that there was triggering, that the first one could have triggered the second one.

Every earthquake makes another quake more likely. So for awhile and for the next few days, we will have an increased chance of activity.

But also, on the long run...

DOBBS: So, what you're saying is that -- I'm sorry. Go ahead.

JONES: Just on the long run, California has a lot of earthquakes. And actually the last ten years has been quiet. And maybe we are getting back to normal.

DOBBS: Getting back to normal. Normal in this case, how many earthquakes have you had there in Southern California have you had there in Southern California this week?

JONES: Oh, something like 800 or 900. Those included all the aftershocks to those two fives.

DOBBS: Southern California is not for the timid and the weak, is it?

JONES: Well, not if you are scared of earthquakes. But you are far more likely to be murdered here than die of an earthquake. So we need keep our risks in perspective.

DOBBS: Well, I'm sure that a lot of your fellow Southern Californians there are feeling a lot better right now.

But looking ahead to this -- the fact that this was significant magnitude this morning, you had four in a row. You say it does raise the possibility of another occurring. Give us some sense about the probabilities that you are talking about here and what you are looking for.

JONES: OK. They're still very low. We don't see the Northern and Southern California activity as being particularly related. And the Northern California activity, although the magnitudes are large, they are very far offshore. And the aftershocks will probably continue to be very far offshore. So, again, the risk to people is not very high.

Here in Southern California, they are on land around people. But they aren't that big. They's only magnitude five. So maybe we have a one, two percent chance that we'll have another 5 in the next week.

That's true of every earthquake that happens. It makes others more likely. And then probability dies off very rapidly with time.

DOBBS: You know, I don't know what happens at the U.S. Geological Survey, but I can tell you in news rooms, one of the things that starts happening is there starts to be people connecting dots, talking about the Mexican volcano of fire beginning to smoke and to send up ash. And at the same time, talking about the fact that other earthquakes are taking place in South America. Is there any relationship to this Pacific Rim activity?

JONES: Not over those distance scales. When we've looked for global patterns, we find that they are random.

But one of the issues is, is that human beings really dislike random patterns. We like to form patterns out of random behavior. We don't like it to be random.

And so -- and actually, the whole field of statistics was invented to help keep us from fooling ourselves when we try to make patterns when they weren't really there. And when we use statistics on the global scale, we don't find a relationship.

If we look within 100 miles, the sort of range on which the earthquakes are happening themselves, then we do see some triggering. And that's why we have a slightly increased risk for the next week or two.

DOBBS: For the next week or two. Lucy Jones, we thank you for being here. We will take that as your forecast. I know you don't mean it that way, but I thought I would do...

JONES: Well, actually...

DOBBS: Go ahead.

JONES: We do have a -- we are actually trying to put all this information together. And we do have from our networks on the web a forecast for the next 24 hours. And you will see about a 1 percent chance of having another earthquake.

DOBBS: And I think that since you brought that up, I should give your Web site a boost there, it's -- I believe it's usgs.gov, correct.

JONES: Right. Earthquake.usgs.gov. You can find all of the information that we put out on earthquakes.

DOBBS: Lucy Jones, thank you very much for being here to guide us through this. We will be watching your forecast carefully.

JONES: Thank you.

DOBBS: Not as carefully, I'm sure, as Southern Californians, but very carefully indeed. Thank you.

JONES: OK. Thank you.

DOBBS: Still ahead, my next guest says the American economy is on life support. The author of a new book explaining why he says we are losing money, power to the east. And the American future is in doubt. "Heroes," tonight how one Marine's bravery during an insurgent attack saved the lives of his countrymen. His story is next here. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My guest tonight says the American economy is like the Titanic headed toward an iceberg. He says we are losing our wealth and our power to Asia, and that could lead to the demise of America and a global economic crisis. In his new book, "Three Billion New Capitalists," Clyde Prestowitz addresses the causes and offers a few solutions to this issue. The causes are all -- the viewers of this program are very familiar with. Joining me now from Washington, Clyde Prestowitz. Clyde, good to have you here.

CLYDE PRESTOWITZ, AUTHOR: Nice to be here, Lou, how are you.

DOBBS: I'm great. And despite the forecast of your book, one of the first things that has happened is some critics have said that you are now a protectionist, because you say that we should not simply be effectively idiots, and continue this spiral.

PRESTOWITZ: Well, you know, that's a cheap shot, because I've been a strong supporter of free trade and the WTO...

DOBBS: Absolutely.

PRESTOWITZ: ... for a very long time. But what's wrong here, Lou, is that there are two different games being played, as you very well know. The U.S. is playing a game of free trade and consumerism, and much of the rest of the world and many countries in Asia are playing a game of strategic trade, in which they specifically focus on export-led growth, and in which they specifically focus on trying to accumulate trade surpluses, and accumulate large dollar reserve holding. And they do this in a number of ways, but particularly by managing the dollar, either by linking -- pegging to the dollar or by intervening in currency markets, to be sure that the dollar is strong, versus their own currencies.

And for some reason, Lou, for some reason, neither Democratic nor Republican leaders of the United States over the past 50 years have seen fit to recognize that this double game is disadvantageous to the United States.

DOBBS: Well, I wish I could give you the answers to that one, Clyde. I was frankly hoping you would offer the answer. I can't figure out what these people -- we have got -- we are going on our 30th year of consecutive trade deficits. Today, reported current account deficit rose 195 billion, a new record; 6.5 of our GDP tied up in the current account deficit. It's unsustainable.

PRESTOWITZ: It's unsustainable. We have got to be -- we are consuming about $700 billion a year more than we produce, which means that we have to borrow $700 billion a year from the rest of the world. And the interesting thing is, you know, Secretary Rumsfeld was in Singapore recently at a security conference, and he sharply criticized the Chinese for their military build-up and warned them against it, but at the same time, every day the United States needs $2 billion from the Central Bank of China to keep our economy perking along. You know, is this schizophrenic or what?

DOBBS: There's another word I would use, but we will stay with schizophrenic, you being more diplomatic of the two of us, Clyde. Clyde Prestowitz, we thank you for being here. The book is "Three Billion New Capitalists." Let's take a look at that. "The Great Shift of Wealth and Power to the East." Clyde Prestowitz, thanks for being here.

PRESTOWITZ: Thank you.

DOBBS: We appreciate it. Terrific book.

PRESTOWITZ: Good to see you. Thanks.

DOBBS: And now "Heroes," our weekly salute and tribute to the men and women who serve this nation in uniform. Tonight's hero is Sergeant Jonathan Ayersman. He saved the lives of dozens of his fellow Marines during a battle with insurgents in Iraq. Casey Wian has his story from 29 Palms, California.

(BEGIN VIDEOTAPE)

SGT. JONATHAN AYERSMAN, U.S. MARINE CORPS: We had set it for security, and we were keeping an eye out on what was going on in the city to my front.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Sergeant Jonathan Ayersman describes what happened the day he saved the lives of 60 Marines last November in Iraq. On patrol, two light armored vehicles became stuck in mud. While a nearby mosque broadcast messages instructing insurgents to attack, Ayersman moved a vehicle similar to this one into a defensive position.

AYERSMAN: That's when the first mortars, RPGs, small arms started going on. And I actually had to shove my driver, because he was popped up, you know, we were talking real quick, and I actually had to push him down in the driver's compartment and close the hatch and swing my machine gun around when I noticed the insurgents.

WIAN: Ayersman fired. As he did, mortars rained down. One hit the vehicle, showering him with shrapnel.

AYERSMAN: It knocked my goggles off my helmet, and knocked me back into my hatch right here. I thought I was actually wounded, but I checked myself out real quick, and I was fine, and shook it off, and grabbed my machine gun again, and continued to engage.

WIAN: The attack continued, but he needed more firepower -- a missile.

AYERSMAN: Corporal Adams (ph) already had the turret erected, so I was able to talk him on, get him on target where I wanted him to fire the missile, and exactly how I wanted him to fire it. And that's when the TOW system went down, and he had to repair it real quick, he had to splice some wires together.

WIAN: The missile was fixed and fired.

AYERSMAN: The whole top of the wall that they were behind, and all the shrapnel and everything, the explosion just took out the insurgents that were shooting the mortars at us. And after that, everything stopped. It was completely over with after that, and we recovered the vehicles and went back to base.

WIAN: No Marines were killed or injured. For his leadership, Sergeant Ayersman was awarded a Bronze Star with a distinguishing device for heroic achievement.

AYERSMAN: I never imagined -- would imagine that I would have that prestigious of an award actually awarded to me, especially for just doing -- basically doing my job as a Marine.

WIAN: Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: And Sergeant Ayersman just wants to continue doing his job as a Marine. He hopes to join the Marine Corps special security forces in Spain later this year.

Coming up at the top of the hour here on CNN, "ANDERSON COOPER 360." Heidi Collins is here to tell us what's ahead -- Heidi.

HEIDI COLLINS, GUEST HOST, "ANDERSON COOPER 360": Hi, Lou. Nice to see you. Coming up next on "360," another arrest in the case of the girl missing in Aruba, Natalee Holloway. Police have in custody a 26-year-old man who worked as a deejay on a popular party boat. It's unclear what, if any, contact Natalee Holloway had with the young man, but his home was searched today, and tonight he's behind bars.

We are going to have a live report from the island on the latest arrest. We will have an exclusive, live interview with Natalee Holloway's mother. She is still in Aruba, still searching for her daughter. She said all along there will be more arrests, and we're going to talk to her about today's events.

Also tonight, "Choose to Lose." A "360" look at the newest diet and weight loss strategies that are having profound effects on people's lives. All that and a whole lot more -- Lou.

DOBBS: Well, there can't be much more, Heidi. Thanks very much, Heidi Collins.

Coming up next, approval ratings are plummeting in Washington. What does this mean for president and the Congress? An exit strategy for Social Security. Will there be an exit strategy for Iraq? I'll be talking with three of the country's top political journalists next. Stay with us.

(COMMERCIAL BREAK) DOBBS: Joining me in tonight's "News Makers:" From Washington, "Time" magazine National Political Correspondent, Karen Tumulty; Ron Brownstein, the national political correspondent for the "Los Angeles Times;" here in the studio, Jim Ellis, chief of correspondence at "Business Week."

Good to have you with us.

KAREN TUMULTY, "TIME" MAGAZINE: Hi, Lou.

DOBBS: Let's begin, Karen, with 42 percent for the president, 33 percent for the Congress. The American people aren't too thrilled with our elected officials, are they?

TUMULTY: That's right.

These are about as low as we have seen these numbers for this president and the Congress' numbers are beginning to look about how they looked in 1994, which is the -- when voters decided to just essentially throw the bums out; the bums then being Democrats.

DOBBS: Are we near what one could call: The belly-full level? The American people are tired of no representation and you know, frankly, tepid leadership from both parties?

TUMULTY: I think that and I also think the fact that people out there have real concerns. People are worried about their jobs, they're worried about their healthcare, they're worried about their gasoline prices, and they...

DOBBS: They're worried about their country, Karen, let's be honest.

TUMULTY: But what they see is that both the Congress and the president -- I mean, the president -- Social Security -- he's got a Social Security plan that people don't seem to be particularly favorable on.

DOBBS: They hate it, Karen.

TUMULTY: And Congress has been, you know, working on issues, like the Terri Schiavo case, which, once again, we dealt with this week.

DOBBS: Well, Ron, let me ask you -- I mean we've got Republican leaders going over to the White House from Capitol Hill saying: Let's get an exit strategy for Social Security because this is killing us and meanwhile, we don't hear anything about an exit strategy from Iraq. What's going on.

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, the one thing that I -- picking up on what Karen said, I think the one thing that both parties agree on now is that part of the reason the president and Congress are in so much trouble is because the public perceives them as not focusing on the issues that matter across the kitchen table to the American public. Part of that poll you mentioned asked: To what degree do you believe Congress shares your priorities? It's down to 19 percent. I mean, that's an extraordinarily low number and you are seeing, I think, Lou, a direct effect of this. As you said, you're seeing Republican leaders urging more focus on direct economic issues, rather than the long-term goal of Social Security, which is not a generator of popular support and you're also seeing the beginnings of stirrings of Democratic questioning of Iraq which has been almost entirely muted since President Bush's reelection last November.

DOBBS: Point of fact: You're seeing a bipartisan group move forward with a resolution to get us out by the end of 2006...

BROWNSTEIN: Yes.

DOBBS: ... At least to begin the process.

BROWNSTEIN: An idea that I think is still on the fringe of the political debate here and doesn't have broad support. In fact, most are pretty are still pretty cautious about where to go.

But if you look at the numbers on Iraq, I think the clear message to the White House is that even if there is political progress: the writing of a constitution, the creation of a interim government, has another election later this year -- they are not going to restore public support without a reduction in the violence. And as long as public support remains low, the temptation will be high for more politicians, in both parties, to begin to pressure him for an alternative approach.

DOBBS: An alternative approach: There's one approach that we haven't seen or found an alternative for, at least in terms of policy, that's the trade deficit.

What happened to free, in free trade, Jim? Where are all those free-traders talking about how good it is to outsource and to just give away the economy, we've got a current account deficit of at 195 billion, six-and-a-half percent of our GDP -- unprecedented, unsustainable.

JIM ELLIS, "BUSINESSWEEK" MAGAZINE: Well, it is unsustainable, that we can agree on. I think that, you know, the fed's been saying that for quite some time and sooner or later it's going to catch up with the president here, that something has to happen. Either we have to get the deficit in line and therefore make sure that foreign investors will continue to basically bankroll us, or we're going to take -- make some tough choices here. I mean a lot of the things that we love to buy...

DOBBS: God forbid we have...

ELLIS: Yes. Tough choices are tough, you know? But sooner or later we are going to have to figure out that we can not continually count on foreigners to, basically, finance the profligate lifestyle of the United States. I mean, that's scary. I love that profligate lifestyle, but it's not going to go on. DOBBS: Right. And it certainly isn't going to go on like this.

ELLIS: No, It can't.

I mean we just don't -- we can not afford to have run up deficits like this. This is amazing, I mean, the only reason we are able to do this is because a lot of our major trading partners are in worse shape than us.

DOBBS: They're in worse shape than we are, but our society, right now, is the throw-away society, the disposable society, the consume-at-all-society and oh, by the way: We don't want to work too hard either.

ELLIS: Well, we're not quite France, yet.

DOBBS: Yes. If we get down to 35 hours a week, we'll be close though, right?

Karen, let me ask you this: Senator Dick Durbin, with his comments read into the record this week, in which he referred to the gulag in Guantanamo Bay, without noting that, that was in a communist nation. A fire storm has erupted, hasn't it?

TUMULTY: Absolutely.

And I think that these were some of the very unfortunate comments on the part of Senator Durbin. He has not apologized for them.

DOBBS: He says he won't.

TUMULTY: Well, certainly there's some legitimate issues being raised about the treatment of prisoners at Guantanamo, but basically Senator Durbin got on the Senate floor and compared them to Polpot. He invoked Hitler. He invoked genocide, not interrogation techniques and this is, once again, an example of how the Democrats tend to, sort of, not have a volume knob on issues that really could play in their favor.

DOBBS: Well, one of the things I just don't understand: Why Republicans and Democrats alike -- just lose the Hitler references, and when you are talking about American military men and women, just -- if you can't say something nice, just shut-up, because these people are actually doing the nation's work, which we can't always say of our representatives and elected officials on Capitol Hill, can we?

TUMULTY: Well, and again, I just think that on the one hand the question -- there are legitimate questions about interrogation techniques, but to throw -- suddenly throw genocide into the debate is very ill-advised on the part of anyone.

DOBBS: Ron, you get the last word in your council to Senator Durbin, tonight.

BROWNSTEIN: Well, look, there is an overall assessment going on now, from the Patriot Act to Guantanamo to Iraq, of the responses we've made post 9/11. We're further away from horrible events, there's kind of a, I think, across a broad range of issues, people looking and saying: OK, what is the right balance, did we go too far?

But your first part of your advice, about avoiding references to Hitler in the context of American politics, is probably a good one. These debates aren't over and I -- if anything, I think they are going to intensify in the coming months, but lowering the temperature isn't a bad thing.

DOBBS: Jim Ellis, are we going to see the temperature lowered?

ELLIS: I doubt it.

DOBBS: Jim Ellis, thank you, very much.

Karen Tumulty, thank you, very much.

Ron Brownstein, as always, thanks for being here.

Still ahead, we'll have the results of our poll and a preview of what's coming up Monday.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll: 88 percent of you don't believe asking about a patient's legal status as citizen or not is discrimination. Twelve percent of you, however, maintain it is.

Thanks for being with us tonight. Please join us here Monday. One of the country's most respected journalists and commentators will be here -- Bill Moyers, my guest. Please be with us.

For all of us here, have a great weekend. Good night from New York. ANDERSON COOPER 360 starts right now, Heidi Collins sitting in for Anderson.

Heidi?

END

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