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High Cost of Free Trade; CAFTA Survives; Energy Bill Passes; Reps. Kaptur and Brady Debate CAFTA

Aired July 28, 2005 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Good evening, everybody.
Tonight, political outrage and protests after the House of Representatives votes in the middle of the night in favor of a so- called free trade agreement with Central America, but by only the narrowest of margins. Two leading congressmen on opposite sides of the issue join us here tonight.

And China's energy assault. I'll be talking with a top senator and leading congressman about their joint effort to block China's aggressive attempt to take control of one of our most important energy assets.

Also, a mysterious disease carried by pigs in China has killed more than 30 people. And there are new fears about the spread of the deadly bird flu. We'll have the special report for you.

And the Shuttle Discovery has successfully docked with the International Space Station one day after NASA grounded the entire space shuttle fleet. We'll have that report as well.

We begin tonight with an extraordinary White House victory in its long fight to convince Congress to support a so-called free trade agreement with Central America. The House in the middle of the night voted by 217-215 in favor of the Central American Free Trade Agreement. The White House today praised Congress for its support of CAFTA, even if by the narrowest of margins. The White House declaring the trade agreement will help strengthen national security.

White House Correspondent Suzanne Malveaux has the report -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, the White House certainly sees this as a huge victory. This is something the president kept his schedule open for all week. And that is because he really expended a lot of personal political capital on CAFTA.

It was really an incredible scene yesterday. And just within the last 12 to 24 hours, the president on Capitol Hill, the vice president, as well two of secretaries of Commerce, Agriculture, a U.S. trade representative -- all of them trying to push the Republicans to support this, some that would even say arm twisting, if you will.

The focal point came when President Bush met behind closed doors for an hour or so with the Republican Conference, and he made the case this way. He said it was more than just expanding free trade in opening markets, but he said this was about U.S. security, national security, and that it was also about rewarding allies for their work in the war on terror.


SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: It helps to strengthen democracy in our own hemisphere. This goes right to our own national security.

This is an agreement that will help extend peace and prosperity throughout the western hemisphere. While we're working to advance freedom abroad, we also need to be looking in our own hemisphere and make sure that we're supporting the democratic efforts that continue to advance in our own hemisphere.


MALVEAUX: Now, Lou, this was a particularly tough battle for the president on two fronts. First, because it did not fall strictly along party lines, but rather there were regional pockets of Republicans who basically represented the sugar and the textile industries -- very much against it. Their bases saying that they would lose American jobs. They really had to push them and convince that group.

The first state to fold or actually to turn was North Carolina, then Ohio, as well as Pennsylvania. Went from no to yes, and all decided eventually to go with CAFTA.

The other part of this as well is that the Democrats were very much united, that this was a labor issue, but also that this was a party loyalty issue. The Republicans, as well as the White House, only able to get about 15 of the Democrats to vote. But ultimately, in the end, they won, just by one mere vote to break that tie.

A big victory for the White House. They needed this. But also, Lou, of course, this comes as we see possible other victories in the energy legislation, as well as the highway transportation bill -- Lou.

DOBBS: Of course, that highway transportation bill, Suzanne, important, because the arm-twisting, as you put it, and the aggressive posture taken by the White House, apparently a lot of pork flowing from that -- that highway transportation bill for the congressmen who went along with the White House on this.

Nearly every congressman we talked with, Republican or Democrat, said their constituents are absolutely concerned about jobs. And the working middle class in this country very upset about it. What is the White House saying in response?

MALVEAUX: Well, the White House is essentially saying that they don't believe American jobs are going to be lost out of this. But one thing that's really important to note, perhaps the political backdrop of all of this, is that one of the reasons the White House was so aggressive in getting CAFTA moving forward, not only just their broad free trade agenda, but also the fact that they needed a victory here. The centerpiece of the president's domestic agenda, Social Security reform, as you know, Lou, has faltered very little traction for that.

DOBBS: Absolutely. And that's putting it kindly. Little traction. Suzanne Malveaux. Thank you very much.

Democrats are blasting the White House tonight for its aggressive tactics used in passing CAFTA in the middle of the night. Last-minute bargaining in the midst of the night and a visit from President Bush and much of his cabinet helped the White House win a victory by a margin of what turned out to be two votes.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): When the gavel came down, the vote 217 yes, 215 no, but it was what happened in the hours before, the arm-twisting and the favor dropping that prompted the House Democratic leader to say Congress resembled the set of "Let's Make a Deal." She even went so far as to suggest laws may have been broken.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: I do know of reports that have been made to me about offers that were made to Democrats, and they came running in saying, "It didn't sound like it passed the legal muster to me."

SYLVESTER: Republicans were just happy they came up with a win.

ROB PORTMAN, U.S. TRADE REPRESENTATIVE: But there was a small group of undecided members. And the way we persuaded them to support this agreement was the agreement itself. It's a fundamentally sound agreement because it opens up the markets in Central America.

SYLVESTER: In the post-CAFTA roundup, three representatives stand out. Congressman Charles Taylor, his North Carolina district has been battered by job losses in the textile and furniture industries. But he was listed as abstaining from the vote. In a statement he said he voted no. "But due to an error, my 'no' vote did not record on the voting machine."

Then consider Republican Congresswoman Jo Ann Davis. Representative Davis went back to her Virginia district for the Boy Scout Jamboree to take part in an event with President Bush. She missed the vote by 20 minutes because of the weather. Her staff also claims she would have voted no.

And North Carolina Representative Robin Hayes, he changed his vote from a "no" to a "yes" after he reportedly had a side conversation with the speaker of the House.

Republicans also extended the voting for nearly an hour after the official clock ran out to try to rustle up more votes.

LORI WALLACH, PUBLIC CITIZEN: A total perversion and manipulation of democracy, so that in the end there was a brokered outcome of 217 votes for CAFTA suddenly, 215 against. And you know something? In the end, they still couldn't get a majority to vote for CAFTA. So they had two people who just didn't vote, they didn't show up.


SYLVESTER: Now, we did try to interview Representatives Taylor, Davis and Hayes, but they were not made available in time for the broadcast.

And one other note. It was Congressman Hayes who cast the deciding vote in another crucial trade debate back in December of 2001, giving the president fast track trade promotion authority -- Lou.

DOBBS: A remarkable precedent for Congressman Hayes.

Nancy Pelosi and the Democratic leadership also must be beside themselves, because this means their tactics didn't work very well at all in what was a critically close vote.

SYLVESTER: Well, one of the interesting things will be whether or not there was a violation. And you can bet that the Democrats are going to be going back and reviewing exactly how they were able to get all the votes, and to see if any laws were broken -- Lou.

DOBBS: Well, we know how they got the votes. Trade Representative Portman saying that it was a sound agreement, and they won on the basis of that agreement without any outside or external influence whatsoever. He said that with a straight face.

Did you notice that, Lisa?

SYLVESTER: Well, I did, indeed. And, you know, what we'll have to see is what exactly is in the transportation bill and the energy bill. And then I think we'll know the truth.

DOBBS: Well, for the benefit of all the viewers of this broadcast who are interested in nonpartisan truth, non-ideological truth, all of the votes of the congressmen and women who were in that midnight hour will find those results on our Web site, and we will keep them there and continue to explore just how these votes came down.

Lisa Sylvester. Thank you for helping us in that effort. Fascinating.

Well, we thought you might want to know what Congressman Robin Hayes, as Lisa Sylvester just reported, casting that vote, what he had said on July 14, two weeks before, of course, last night's vote. And it qualifies as our quote of the day.

The congressman said, "Every time I drive through Kannapolis and I see those empty plants, I know there is no way I could vote for CAFTA."

Reassuring, strong words. Congressman Hayes changed his mind, and last night -- or this morning, if you prefer -- voted yes on CAFTA.

Democracy is a wonderful thing to watch at times. We'd like to know your thoughts on this critical issue. Do you believe the officials you elected are representing your interest in Congress, yes or no? Please cast your vote at We'll have the results coming up here later.

A separate new poll finds many Americans are skeptical of international trade, as styled as free trade. The CNN/"USA TODAY"/Gallup poll finds nearly half of all Americans say foreign trade is now a threat to the United States. That compares to 41 percent two years ago, and just over a third in 2000.

Unlike CAFTA, the House of Representatives today passed by a wide margin a massive energy bill. Republicans hail this legislation as a major change in energy policy, while critics call it a giveaway to the oil industry.

Joe Johns has the report.


JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT (voice-over): First the bad news. Don't expect American motorists to see much relief from high prices at the gas pump anytime soon if Congress finally finishes up work on the energy bill this week.

UNIDENTIFIED MALE: I think they need to put the gas prices down a little bit. I think it's -- you know, it makes me mad, because it's expensive to get gas.

JOHNS: Opponents of the energy legislation are keying on consumer frustration and calling the bill, with its $14.5 billion in tax breaks and incentives, a gift to industry.

REP. ED MARKEY (D), MASSACHUSETTS: Tax breaks for big oil and gas companies, loan guarantees for the wealthiest energy companies in America, even as they are reporting the largest quarterly profits of any corporations in the history of the United States.

JOHNS: But in the long term, the hope is the energy bill will have an impact on the national economy by encouraging development of new energy ideas and increased uses of existing technologies.

REP. JOE BARTON (R), CHAIRMAN, ENERGY & COMMERCE COMMITTEE: There are provisions in this bill that says it's OK to use clean coal, it's OK to build a new nuclear power plant in this country if we do it the proper way, with the proper permits and the proper inspections.

JOHNS: The nuclear power industry is a big winner, getting new tax breaks and loan guarantees designed to rev up business. Hybrid cars will get a boost, too. There's a tax credit for people who buy them.

The bill also promises renewed efforts to boost the use of coal, and there are provisions to modernize the electricity grid to prevent future blackouts like the one that darkened the Northeast in 2003. The bill also expands Daylight Saving Time for one month, which proponents claim will save 100,000 barrels of oil a day. And the bill authorizes $3.5 billion for hydrogen and fuel cell research.


JOHNS: The vote on that bill in the House today was 275-156. And Lou, if your voters -- if your viewers are noticing a lot of activity here on Capitol Hill, they're certainly right. That's because there's a rush to try to get things done right now, members of Congress, before the August recess. They want to have something to take home to show people what they're doing.

This will also, of course, be a big win for the president if it gets through the Senate -- Lou.

DOBBS: As you say, they're taking something home to those constituents. It will be interesting to see the reception they get when they do arrive at home. Joe Johns. Thank you very much.

Still ahead here, more arrests in the widening global manhunt for radical Islamist terrorists responsible for the London bombings. We have a report live from London.

And a mysterious disease carried by pigs has killed more than 30 people in quick order in China, and there are new concerns tonight about the spread of the deadly bird flu as well. We'll have that special report for you.

And the Shuttle Discovery successfully docks with the International Space Station as NASA tries to solve problems that grounded the entire shuttle fleet. NASA making that announcement last night.

Stay with us.


DOBBS: A mysterious new disease has killed dozens of people in China. At the same time, there are rising concerns about the spread of the deadly bird flu in China and other Asian countries. Experts, health experts are now warning it could be only a matter of time before these new diseases spread to the United States.

Kitty Pilgrim has our report.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): One hundred thirty people in China sick from a mysterious pig-borne disease. The World Health Organization doesn't know quite what it is, and the death toll is now at 31.

BOB DIETZ, WHO SPOKESMAN: I think the first thing that pops into everyone's mind is avian influenza, and then comes SARS, and are we looking at that sort of situation. Very early in the stage to make any rash judgments, but at this point we don't see that kind of threat looming. But we are watching it very closely.

PILGRIM: The disease comes from eating or slaughtering sick pigs, which is commonly done in rural China. The problem with the new diseases suddenly affecting people around the world is that they are an airplane ride away from anywhere, as in the case of SARS, which infected thousands and killed 800 people globally.

They can turn up anywhere. For example, health officials don't know how three people in a family in Indonesia contracted avian flu and died. The CDC currently has 11 quarantine stations in U.S. airports, with seven more planned to be open this year to be able to screen people if necessary.

HENRY NIMAN, FOUNDER, RECOMBINOMICS: It actually is a flight away by a migratory bird or commercial airline. So it literally can arrive in a matter of days. So there's really no room for error -- that, once it starts to spread, it can move around the world quite quickly.

PILGRIM: The worry is so great in this country, Congress has had five hearings on the flu this year. Scientists think the bird flu virus could mutate, as all viruses do. And there is not nearly enough vaccine for the current strain.


PILGRIM: Now, many experts are convinced the next global pandemic could come from avian flu. It is highly deadly. Last year, 109 human cases caused 55 deaths in Asia. And with the new sudden unexplained deaths in Indonesia, the concern is very, very high right now -- Lou.

DOBBS: Kitty, thank you very much. Kitty Pilgrim.

The death toll is soaring in India after torrential rain and massive flooding. More than 750 people have been killed in western India in and around the city of Mumbai. Two days of monsoon storms have dumped as much as three feet of rain in some areas. It is India's highest ever recorded rainfall.

These rains are triggering massive landslides and building collapses. People have drowned in theirs cars. Tens of thousands of people are stranded tonight in buildings.

In this country, beaches are growing dirtier and more dangerous every year. A new report tonight shows water quality so bad that authorities are issuing a record number of health warnings and beach closures.

Nearly 20,000 beaches were shut down last year. That, according to the Natural Resources Defense Council -- most of those closings and advisories due to high levels of bacteria linked to sewage contamination and runoff from agriculture.

A 13-year-old girl is recovering in the hospital tonight after being attacked by a shark in Daytona Beach, Florida. The girl was wading near the shore last night when she was attacked. The shark bit her on the hand and wrist. Tonight she's listed in stable condition. This is the second confirmed shark attack on Florida's east coast in a week.

Still ahead here, more arrests in a worldwide manhunt for radical Islamist terrorists. We'll be bringing you a live report from London, the latest details.

And tragedy in Miami. One former city official reacted to a newspaper expose on charges against him, and tonight he is dead.

Amazing images tonight from space as NASA tries to solve the latest problem that has grounded the entire shuttle fleet.

Stay with us.


DOBBS: British police today arrested nine more terror suspects exactly three weeks after more than 50 people were killed in bombings in the London transit system. Twenty people have now been arrested since those bombings.

Robin Curnow reports from London.


ROBYN CURNOW, CNN CORRESPONDENT (voice-over): Police say it's the biggest manhunt since World War II. Three would-be bombers are still on the loose, and although a fourth is in custody, police warn the threat to the British public is still very real.

COMMISSIONER IAN BLAIR, LONDON METROPOLITAN POLICE: It does remain possible that those at large will strike again. And it does also remain possible that there are other cells who are capable and intent on striking again.

CURNOW: Police say Londoners should not be lulled by the fact that last Thursday's bombs failed to explode.

BLAIR: This is not the B-team. These weren't the amateurs. They made a mistake. They only made one mistake. And we are very, very lucky.

CURNOW: A chilling reminder of the threat. Pictures showing un- detonated bombs, some containing nails, that were found in a car rented by the July 7 suicide bombers -- images that underscored the urgency of the police investigation.

Nine men were arrested Thursday morning at two separate properties in south London. They are being questioned by police in a central London station.

Also, in Stockwell, London, three women arrested on suspicion of harboring offenders. Neighbors telling CNN that they believe the would-be Shepherd's Bush station bomber lived there. They recognized him from police photographs.

UNIDENTIFIED MALE: Yes, that's it. CURNOW (on-camera): The police relying on the public for help and information. So far, they say they've taken 1,800 witness statements and that they've received around 5,000 calls to the anti-terrorist hotline. And the police say they're also trawling through 15,000 security camera tapes. The authorities and the public all too aware of the urgency of this investigation.

Robyn Curnow, CNN, London.


DOBBS: A radical Islamist terrorist linked with the London bombings has been arrested in Zambia. Sources tell CNN the suspect could have been arrested a month before the first London attacks but Britain refused to allow his arrest because the suspect is a British citizen.

The suspect is Haroon Rashid Aswat. He has also been connected with a plan to establish a training camp for radical Islamist terrorists in Oregon six years ago.

A U.S. Muslim council representing more than 130 Islamic organizations in the country today strongly criticized radical Islamist terrorism and extremism. The council issued a fatwa, an Islamic religious ruling, declaring that Islam condemns extremism and the loss of innocent life. They organizations that signed the declaration are all members of the Council on American-Islamic Relations.

Relations between Israel and the Vatican have grown more tense this week. Monday, Israel accused Pope Benedict XVI of deliberately failing to mention Israel in a speech about recent terrorist attacks. The pope cited attacks in Egypt, Turkey, Iraq and Britain, but failed to mention Israel, where five people were killed in a suicide bombing on the 12th of July.

Today the exchange grew more heated when the Vatican issued this reply to the Israelis: "It is not always possible to immediately follow every attack against Israel with a public statement of condemnation." The Vatican said the attacks against Israel sometimes were followed by immediate Israeli reactions, not always compatible with the rules of international law.

Up next here, CAFTA survives. A late-night, razor-thin vote guarantees another so-called free trade agreement will become law. Two members of Congress who voted on the issue but voted differently are my guests here next.

And illegal aliens in the workplace caught, only to be released again. A special report on catch and release on a broad, shocking breakdown in law enforcement.

And then, stunning images from space. The Shuttle Discovery performs a back-flip well above the planet Earth. We'll tell you why next.


DOBBS: Tonight, in "Broken Borders," utter futility in the fight against illegal aliens in the workplace. As more illegal aliens find jobs in America, enforcement against the employers who hire them is failing altogether. And workplace raids are failing to get them off the streets as well.

Christine Romans reports.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Just this week, 119 illegal aliens in Arkansas hauled out of a poultry plant in handcuffs. In Florida, at Homestead Air Force Base, six Mexican nationals arrested. And early this month, 48 illegal aliens arrested in North Carolina at Seymour-Johnson Air Force Base. But no action against the employers or contractors who hired them.

Immigration authorities say employers who knowingly hire illegal aliens face penalties. But enforcement has fallen dramatically in recent years, even as illegal immigration has exploded.

Howard Foster is a lawyer using federal racketeering laws to sue companies because the government won't.

HOWARD FOSTER, JOHNSON & BELL: If the employer knows that the government is not going to enforce the law, he has a great incentive to use more and more illegal immigrants and to keep wages low.

ROMANS: He's leading class action suits against Tyson Foods and others, claiming Americans have been harmed by lower wages. Tyson Foods says it has a zero tolerance policy for hiring illegal labor.

But nailing employers is hard. Document mills turn out fraudulent Social Security cards, and as the documents get better, employers' burden of knowingly hiring illegals declines.

RICHARD STANA, GAO: Oftentimes, those documents are phony documents, or they've been stolen from someone who is authorized to work in the United States. So the employers do have the out of saying they weren't aware that they were hiring someone illegally. It's a difficult case to make.

ROMANS: At the bust here, those illegal aliens had actually stolen Americans' identities. And the president of that company insists he did nothing wrong and he'll hire the next 119 workers just like the last.


(on camera): Even if the government got tough on these employers, the fines are paltry. For a first offense of knowingly hiring an illegal alien, as little as $225. Repeatedly hire illegal aliens, up to $3,000 apiece. There is six years, no more -- I'm sorry, six months, no more than six months of jail time. But you can see that's a pretty paltry scale. DOBBS: It is. As much as we report on this issue and the plight of those primarily Mexican, but many Central American, illegal aliens who enter this country because of privation and corruption in their own countries, and as much as your heart goes out to them, to look at the issue, in terms of the incentives that work -- that employers in this country are providing, with the absolute wink and nod of the U.S. government, basically saying, the hell with the law, we're not going to enforce laws, we're going to leave the borders open, and the taxpayer at the local and state level will just pay for the benefit of these employers who are hiring them illegally.

ROMANS: When I talk to people in the government and all these different agencies and I say, come on, how can you with a straight face tell me that this is not going on? They say, Christine, we know it's exploitation, it's just the way it is.

DOBBS: It is just the way it is. And those are really sad words in a country that was built on determining how it is. And this country has always -- before, at least -- managed to rise to the occasion, whether it's a crisis, as it is in immigration, or whether it's -- for some reason people just simply aren't having the sense to look at our borders and say there's no security there at all in a time in which we are engaged in a war against radical Islamist terrorism.

ROMANS: It doesn't make this country look very strong or very powerful, does it, when we can't even keep our borders closed and we don't even know who our companies are hiring.

DOBBS: And those companies don't care.

ROMANS: Right.

DOBBS: Christine Romans, thank you.

In Miami tonight, shock at the suicide of a former city official. Arthur Teele killed himself in the lobby of the "Miami Herald" building. He was the target of a federal corruption investigation. He felt he had been unjustly targeted by the Miami press.

Brian Todd Reports.


BRIAN TODD, CNN CORRESPONDENT (voice over): Former colleagues on the Miami City Commission say Arthur Teele was a fighter, instinctively tough, a talented, brilliant politician. They are staggered, they say, that his life unraveled in such dramatic fashion.

JOE SANCHEZ, MIAMI COMMISSION CHAIRMAN: I think it's a sad day for the city of Miami. It's a sad day for his family.

TODD: Miami Police say the 59-year-old former city commissioner walked into the lobby of the "Miami Herald" newspaper Wednesday evening and spoke briefly with a security guard.

DELRISH MOSS, MIAMI POLICE SPOKESMAN: He removes a gun from a bag, a plastic bag, and he puts it to his head. That security guard then retreats and calls the police.

TODD: Arthur Teele was later pronounced dead of a self-inflicted gunshot wound. Earlier on Wednesday an expose about Teele in another newspaper, the "Miami New Times," had hit newsstands. In it, graphic details based on, the paper says, police interviews and surveillance of Teele's alleged participation in kickback schemes, charges that he had taken drugs, and been with a transvestite male prostitute.

The reporter tells CNN he had not spoken with Teele to get comment on the charges. We asked the reporter if he felt his article was the last straw for the former commissioner.

FRANCISCO ALVARADO, "MIAMI NEW TIMES": You know, I've been put in the middle of this just because, I mean, the mere coincidence of my story came out the day he decided to do this. But, you know, his problems were mounting way before this article ever came out. So, I mean, and you know, I don't even know if he got a chance to read or see the article.

TODD: Authorities had been closing in on Arthur Teele. He had faced multiple state and federal charges of fraud and money laundering, some of it relating to alleged contract schemes at Miami International Airport.

ARTHUR Teele: That's absolutely not true.

TODD: Teele pleaded not guilty at his federal arraignment last week. But earlier this year, Florida Governor Jeb Bush had removed Teele from his seat on the Miami City Commission after he was convicted of threatening a police officer.

Ninety minutes before his death in the Herald lobby, Teele called "Herald" columnist Jim Defede. Defede says Teele spoke mainly about the sexual allegations.

JIM DEFEDE, FMR. "MIAMI HERALD" COLUMNIST: He was very emotional and very distraught. And, you know, it's a -- he was just trying to reach out at that point.


TODD (on camera): In one last conversation before he shot himself, Teele called Jim Defede again and Defede said at that time Teele did not appear so upset.

Now late Wednesday evening, after Teele's death, that columnist, Jim Defede, was fired by the "Herald," after he admitted taping part of that phone conversation with Teele without Teele's knowledge.

As for why Teele chose the lobby of the "Herald" to take his own life, that newspaper had done several articles on Teele, and one city commissioner told me that maybe in Teele's mind that was payback -- Lou?

DOBBS: Brian, thank you very much. A sad, a tragic story.

TODD: Right.

DOBBS: Brian Todd.

Tonight, a dangerous fire in Ft. Worth, Texas, which started with a massive explosion at a chemical plant. At least three people have been taken to a hospital. Their injuries are unknown. This fire has sparked repeated explosions in the facility. Hundreds of gases are stored at this facility. And it sent, of course, a huge cloud of smoke over the area that can be seen as far as 30 miles away in Dallas.

The Ft. Worth facility is an industrial complex. Fire departments responding are warning anyone who lives within five miles of this plant to stay inside. And of course, we'll be following this fire here on CNN throughout the evening. We'll have the latest for you as developments warrant.

When we continue, we'll also have for you the latest on the Shuttle Discovery, and the future of the shuttle fleet.

And Congress on the attack against China's attempt to grab oil and energy assets. A bipartisan effort to defeat China's bid for Unocal, a key U.S. oil asset.

And Congress passes CAFTA in the middle of the night. Some say appropriate timing. A key political victory for President Bush by the narrowest of margins. Critics say a key loss for American workers and the American middle class. Two congressmen on opposing sides of the CAFTA issue are my guests here next.


DOBBS: The crew of the Shuttle Discovery welcomed aboard the International Space Station today after a flawless docking. It was a day of achievements amid great uncertainty over the future of the space shuttle program, and perhaps NASA itself.

Space correspondent Miles O'Brien is here with us tonight. What is the latest?

MILES O'BRIEN, CNN CORRESPONDENT/ANCHOR: Well as we first told you here, last night, the shuttle fleet is still grounded. And there's still many questions, Lou, about that piece of foam which fell off the external fuel tank two minutes and six seconds after launch.

Once again, we'll show you that picture and give you a sense of what we're talking about. That piece of foam, almost a pound in weight, is about the same size as the piece of foam which brought Columbia down two-and-a-half years ago. We're fortunate that it broke off 46 seconds after that piece which broke off two-and-a-half years ago, because it didn't go into the air flow.

Now, NASA has just released new images which indicate there was yet another piece which broke off right near -- I'll show you on the model what we're talking about. This is a -- there's a ramp here, an aerodynamic ramp, it's meant to smooth out this area where you have this liquid hydrogen pipe as well as some cable trays. It's a wedge shape, and that piece we just showed you a few moments ago came from a section right in here. There was another piece which broke free as well. And according to some radar telemetry which they've been analyzing, it seems very likely that it did strike the underside of Discovery's right wing. The indications we're getting right now is it did not cause any serious damage.

But once again, further buttressing this whole argument and concern that NASA really dodged a bullet in this case, because big pieces of foam were still falling off.

DOBBS: The issue with foam, that was of course, the critical issue in the return to flight in all of the improvements. And to still have this happen and the connections between the external fuel tank and the orbiter were heated in most places to avoid foam and icing, and the necessity to use foam. What happened here? Do you know?

O'BRIEN: Well, and this is one of the things that is perhaps most stunning. A lot of NASA insiders are talking about this area that you refer to. They call it the bipod ramp, because it's got two posts which attach the shuttle to the tank. There were big divots in that area.

Now, if there was any one area that they spent a lot of time on, it was the bipod ramp, by replacing a lot of foam with heaters. And yet there weren't -- they weren't as big a piece, because that was a very large piece, after all, which brought Columbia down, one and a half pounds or greater.

So for there to be a divot there really calls into question a lot of the redesign techniques. And I think there's going to be a lot of scratching of heads there.

DOBBS: Now the orbiter, as it approached alpha, the International Space Station, it exposed its underside to the station for photography and for inspection. How confident is NASA at this point, and are they sharing how confident they are that that inspection, at least to this point, reveals only minimal and certainly not dangerous damage?

O'BRIEN: Yes. That pirouette, which you saw, which was pretty much fancy flying on the part of Eileen Collins, because what you're doing is flying in blind to the International Space Station, both objects moving in excess of 17,000 miles an hour.

When that occurred, there were two cameras trained on -- you can see -- this maneuver. This is sped up five times just to give you a sense of what they were doing. A 400 millimeter camera, an 800 millimeter camera, held by the two space station occupants, Sergei Krikalev and John Phillips.

And what they were doing was being shuttle tile paparazzi, going through each little bit of tile there, getting as good an image as they could. I'm told, they're releasing as we speak some of these images. The detail is absolutely stunning.

And what I'm told by NASA engineers and insiders is that there is very little reason for concern here, that the dings that we saw, in particular there was one up near the nose gear, we talked about that last night, that particular piece of damage is not of great concern.

DOBBS: Good news. And we'll continue obviously to follow this very closely. And with your expert eye on it, we appreciate it, Miles.

Miles O'Brien.

O'BRIEN: You're welcome, Lou.

DOBBS: At the top of the hour here on CNN, ANDERSON COOPER 360. Joining us now from London to tell us what's ahead is Anderson Cooper -- Anderson.

COOPER: Hey Lou, thanks very much. Yeah. Special edition of 360 live from London tonight. More arrests made today in the terror investigation, plus an arrest in Africa. Why the suspect may have a connection to the London bombings and a planned terrorist camp in the United States.

I'll also talk to former British Prime Minister John Major about what he thinks the best way to combat radical Islamists really is -- Lou.

DOBBS: Anderson, thank you very much.

Coming up, the House narrowly approves CAFTA by the slimmest of margins. That's how narrow. I'll be joined by two congressmen on opposite sides of this issue.

And "Red Storm", China's power grab for a critical American energy assets. Two members of Congress join me next. They're trying to stop that deal. Stay with us.


DOBBS: More now on the passage of the Central American Free Trade Agreement in the middle of the night. My guests tonight on opposite sides of that debate, Democratic Congresswoman Marcy Kaptur of Ohio voted against it.

Republican Congressman Senator Kevin Brady of Texas enthusiastically voted for it. In fact, Congressman Brady said yesterday -- quote -- "this agreement will create American jobs, lower the trade deficit, help us win the textile war against China and provide security and stability in our hemisphere," end quote.

Congresswoman Kaptur, how in the world could you vote against what appears to be a panacea to nearly every trade and security issue?

REP. MARCY KAPTUR, (D) OHIO: Well, thanks for asking, Lou. The bill passed by the slimmest of margins -- two votes. And we know that CAFTA basically expands NAFTA which has cost us a million jobs in this country already. They promised it would create jobs. They promised it would create trade surpluses. It's actually created trade deficits.

And what's been happening is where they were talking about PNTR with China or NAFTA, these agreements never work out the way that the proponents claim. We have plenty of evidence of that. And last night, the clock was kept open last night for well over an hour. This did not pass out of conviction, this passed out of pure politics on the floor where people's chairmanships were threatened, where they were offered projects. We've seen this happen before. And it really wasn't a vote of principle by many.

DOBBS: Congressman Brady, I mean, Congresswoman Kaptur has described this -- leaves us rather skeptical here. Because U.S. Trade Representative Portman said that this was passed purely on the basis of it being a sound agreement which was taken to the bosom of our representatives in the House. Is that actually correct?

REP. KEVIN BRADY, (R) TEXAS: Well, yes, it is. And I'll tell you what, this was a very healthy debate. Trade is an important issue. We all come down on different sides of it. I respect Marcy. I disagree. And I think some accusations, you know, when you lose, you know, it's painful. But no one likes a sore loser. Not that Marcy is, but as far as the issue is.

The fact of the matter is, it has passed. We are going to stay engaged in Central America. We're going to build those bridges, not build walls. And now really the question is, can we work together as both parties to try to both move them forward and create more job opportunities for our workers. I think there's some common ground.

DOBBS: All right. Congressman Brady, I think that's a gracious way to put it.

Now, let me just ask you, if I may, because you have put down some rather bold markers here. National security. It's going to create American jobs. It's going to cut the trade deficit. Now, we haven't seen the trade deficit do anything but expand for some years -- each successive year, a new record.

Has anybody told you, Congressman -- I should tell you, at the outset, the Treasury secretary couldn't even begin to imagine what U.S. export would benefit from a lower dollar against the RNB. But I'm going to ask you, did anybody in the administration tell you just how much lower the trade deficit would be? Precisely how many American jobs net would be created? And assure you absolutely that no American jobs would be lost?

BRADY: One, I don't think any day of the year you can predict what jobs will be won or lost. What I know is that the Independent International Trade Commission reported that because Central America already sells into America, and has for 20 years, that we have great economic benefits. And that we'll create, well, from a trade deficit standpoint, will improve our position by about $700 million.

Now admittedly, that's not a lot. But that's in the right direction. And an important point is, about 80 percent of our trade deficit is with nations we don't have trade agreements with. When we have a level playing field, we sell more and more into those countries. That's what this was about.

DOBBS: Have we got a trade agreement with Europe? BRADY: No.

DOBBS: With China?


DOBBS: Well, can I ask you a question?

BRADY: Yes, sir.

DOBBS: Why wouldn't this administration start working on it with China, where we've got a $162 billion trade deficit last year, expected to go well over $170 billion this year, open up markets in Europe, or Japan. Why wouldn't that be the focus? This seems sort of a peculiar thing.

BRADY: No, actually, if you look at our strategy of opening new markets for American producers, we are doing both one-on-one, bilateral type arrangements. We're doing regional arrangements like this. And then at the World Trade Organization level, we're trying to create level playing fields around the globe.

It's hard work to do it, because a lot of countries like to sell into America, but they're reluctant to open their markets. That's what our goal is.

DOBBS: Congresswoman Kaptur, you're going to get the last word. What do you think will be the impact and what do you think will be the result?

KAPTUR: I think America will lose more jobs as a result of this agreement. Our trade deficit will continue to escalate, until we have two-way trade and a principle of free trade among free people.

None of these agreements do that. They basically advantage the very large multinational corporations. They don't take people into consideration. And so, the people of our country get disenfranchised, the middle class shrinks, and in these other countries, where liberty is just a distant dream, they don't have a chance of moving into the middle class, so we don't get the real development of an internal consumer market. They can't buy our goods to the extent that my dear colleague here, Mr. Brady, states.

So if you look at China, we have a trade deficit, Japan, Mexico, Canada, Latin America, and the ink just gets deeper, and America becomes less independent as a country.

DOBBS: Congressman Brady, Congressman Kaptur, we thank you very much, both of you, for being here.

BRADY: Thank you.

KAPTUR: Thank you.

DOBBS: A reminder now to vote in our poll tonight. Do you believe the officials you elected are representing your interests in Congress? Yes or no? Please cast your vote at We'll have the results coming up in just a few minutes.

Still ahead, the results of tonight's poll, a preview of what's ahead tomorrow, and a new congressional move to stop China's bid for Unocal. I'll be joined by the co-sponsors of a new bipartisan effort to keep a key energy asset in American hands.

Stay with us.


DOBBS: Tonight, a bipartisan congressional effort to block communist China's bid to take over Unocal, one of our most important energy assets. Senator Byron Dorgan and Congressman Richard Pombo, co- sponsors of the measure that demands a four-month study of China's bid. I asked them if they believe they can stop that bid altogether.


SEN. BYRON DORGAN (D), NORTH DAKOTA: Congressman Pombo and I worked in conference to put this language in. It's 120 days, plus 21 days. You know, the first step, of course, is to lengthen this, so that people think about it, understand it, study it. But, you know, our goal is -- my goal is to stop it. I don't -- I assume that's Congressman Pombo's goal. We couldn't in a million years buy a Chinese, government-owned oil company. I don't think they ought to buy our strategic assets.

DOBBS: Congressman Pombo, there's a -- it's part of the description of the environment there on Capitol Hill, strange ideas take hold and sometimes take on a life of their own. But people talking about free trade in connection with CNOOC's acquisition -- proposed acquisition of Unocal, why isn't there just a straightforward understanding that there is nothing bilateral, reciprocal or mutual between China and the United States when it comes to the acquisition of energy assets?

REP. RICHARD POMBO (R), CALIFORNIA: Yeah, I'm not sure why some of my colleagues don't seem to understand how important this really is. We're talking about a Chinese government-owned company taking over one of our major energy producers in this country.

And, you know, the senator and I have been working together to try to do this in both the House and the Senate side. We were successful in getting it into the energy bill, but I think this is a much bigger issue than just this one issue. China has aggressively gone throughout the world acquiring energy assets and their energy, that we need in this country as well. I think they get it, and we don't seem to get it yet.

DOBBS: And one of the things that's happened, gentlemen, that I think you deserve great credit for, people are actually taking note on Capitol Hill. I've heard a number of congressmen and senators actually refer to China as a communist nation. That word was taboo for several years here. It seems to, you know, people are starting to focus on realities. I find that inspiring, don't you? DORGAN: Well, it is a communist nation. And the theory has been, through engagement, trade and travel, we'll move them in the right direction. I bear no ill will towards China, but my hope is there are greater human rights in China in the future, and my hope is that our trade with China finally, it would be mutually beneficial. It is not now. We have a huge deficit, massive loss of jobs in this country. And that can't continue. That's one-way trade.

DOBBS: Do you concur, Congressman?

POMBO: The greatest outsourcing of jobs that we have today is in the energy field. It's sending hundreds of millions of dollars a year to foreign countries. And sending even more money to China, to communist China right now, I think would be a travesty.

DOBBS: And getting at the energy reform legislation, talking on this broadcast last night with Nobel Prize-winning economist Joseph Stiglitz. He said this bill, in effect, is really -- will actually increase our dependency. I know you both support this energy legislation. Why so, Senator Dorgan?

DORGAN: Well, it's not a bad bill, but a lot of the wind was taken out of the sails at the end, eliminating the renewable portfolio standard, the part that 10 percent of our electricity be produced from renewables -- the one million barrels per day savings that I offered.

But aside from all that, we have a hydrogen fuel cell title in here, which I'm very -- I helped write, I'm very supportive of, that is futuristic. We need to lean forward in energy policy, and in a number of areas, in renewables, and hydrogen, and other areas. This does lean forward in the right way. But will this end our relentless addiction to foreign oil? No. I wish we'd had a much more aggressive bill.

DOBBS: Congressman Pombo, Senator Dorgan, we thank you very much for being with us here.

DORGAN: Thank you.

POMBO: Thank you.


DOBBS: And now, the results of our poll tonight: 97 percent of you responded saying the officials you elected are not representing your interests in Congress; 3 percent say they are.

And finally tonight, "New York Times" journalist Judith Miller has now been in prison for 22 days. The Pulitzer Prize-winning reporter for the "Times," for refusing to reveal her confidential sources in the White House-CIA leak case.

Thanks for being with us here tonight. Please join us tomorrow. Communist China trying to fuel its explosive growth by building trade with some of the world's most dangerous countries. We'll have a special report. And I'll be talking with one congressman who wants to give more power to citizen volunteers trying to protect our broken borders.

And "Heroes," our weekly tribute to the men and women who serve this nation in uniform -- an American soldier who lost both legs in Iraq, now helping other severely wounded Americans. We'll have his story. Please join us.

Good night from New York. ANDERSON COOPER 360 starts right now -- Anderson.

COOPER: Lou, thanks very much.



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