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LOU DOBBS TONIGHT

Key West Escapes Serious Harm from Rita; New Orleans Prepares for Hurricane

Aired September 20, 2005 - 18:00   ET

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


LOU DOBBS, HOST: Good evening, everybody.
Tonight Hurricane Rita, storming across the Florida Keys. Millions of people in Florida are being lashed by powerful winds tonight, some areas facing tornadoes. We'll have the latest for you from Florida and a live update from the National Hurricane Center.

Hurricane Rita is gaining speed and power as it charges toward the Louisiana and Texas coast. New Orleans is making urgent preparations for the possibility of another highly destructive hurricane. We'll have a live report from New Orleans.

And the federal government is creating more victims in the wake of Hurricane Katrina. Bush administration officials are rolling back more rules to protect American workers in what's quickly becoming a massive setback for American labor. We'll have that special report.

ANNOUNCER: This is LOU DOBBS, for news, debate and opinion, tonight.

DOBBS: Good evening. Tonight, Rita has strengthened to a Category 2 hurricane with sustained winds of more than 100 miles an hour. The National Hurricane Center upgraded the storm shortly after 1 p.m. this afternoon.

The hurricane is lashing the Florida Keys with torrential rain and storm surges now. Governor Jeb Bush of Florida told residents who remain in the Keys that it is too late to evacuate and to stay where they are for their own safety.

John Zarrella in Key West will report on Hurricane Rita's charge across the Keys. Mary Snow in New Orleans will report on that city's preparations for what could be the onset of a major new hurricane.

We begin with John Zarrella in Key West -- John.

JOHN ZARRELLA, CNN CORRESPONDENT: Lou, I guess the saving grace here has been that the storm remained to our south about 50 to 60 miles off shore, keeping the core of those 100 mile an hour winds to the south of us. And the other saving grace, that it did not intensify, as earlier -- as quickly as they had expected.

So right now down here into Key West. This is Duval Street, Lou. You can see behind me pretty much deserted down here on Duval Street. Some cars going up and down. We've seen that all day. People out looking around. But for the most part, 50 percent of the city of Key West, about 13,000 people, did evacuate, and that's a good percentage. Usually it's about 20, 25 percent.

One of the things you can notice that, again, a lot of the businesses all boarded up here. That took place yesterday. But still a lot of wind and rain coming down. We've been getting this for about six to eight hours.

The big concern, Lou, the Overseas Highway. From about mile marker 11, 11 miles north of us, up to about mile-marker 110, there are spots all along there where the road has been overwashed by debris, seaweed, sand overwashing the road. So portions of it are closed. Authorities have closed it down, telling people do not try to drive on the Overseas Highway. It is too dangerous.

They will have officials out there, the emergency management teams out there surveying to make sure that the road has not been undermined before they will reopen it for traffic to come in and out of the Keys.

But again, Lou, the good news here tonight, city officials and residents saying they really, really did make out very well in this storm, far less than they thought the damage would be -- Lou.

DOBBS: John, thank you very much. John Zarrella from Key West.

When this storm does cross the Keys, Hurricane Rita is expected to pick up speed and power. The National Hurricane Center says Rita could become a Category 4 hurricane as early as 2 p.m. Eastern tomorrow.

Rita is expected to reach the middle of the Gulf of Mexico Thursday. The current projection suggests Rita will make landfall by this Saturday. Rita could strike anywhere from western Louisiana to Texas, to northern Mexico. But the outer rings of the hurricane are likely to bring heavy winds and heavy rain to the entire region.

We'll have the latest for you on Rita's direction from the National Hurricane Center later here in the broadcast.

The mayor of New Orleans, Ray Nagin, today declared that anything above nine inches of rain from Hurricane Rita could cause significant new flooding and damage in the city. Mayor Nagin has ordered mandatory evacuations for residents. He's taking no chances this time after his failure to evacuate tens of thousands of people from New Orleans before Hurricane Katrina.

Mary Snow reports now from New Orleans -- Mary.

MARY SNOW, CNN CORRESPONDENT: Lou, New Orleans is nervous. Mayor Ray Nagin just a short time ago saying also that federal officials are repositioning and that they'll either be fighting Katrina or fleeing Rita.

As for the people of New Orleans, he is telling them that there will be a staging area at the convention center where they can be taken away by busses. He said two busloads of people arrived there today.

That convention center, of course, such a symbol of misery during the aftermath of Hurricane Katrina, the mayor saying that people will not be going inside. It's still being cleaned up, and the military plans to use it.

In other parts of New Orleans, such as the French Quarter, had been preparing to reopen soon, but now the mayor is telling people not so fast.

(BEGIN VIDEO CLIP)

MAYOR RAY NAGIN, NEW ORLEANS: I know there are lots of people who are very anxious about coming home, and I know some of you are prepared to come back to New Orleans. You know, just hold on for a little longer. As soon as we get comfortable that Rita is clear of landfall in Louisiana, where we won't have any major impact, we will get back to our re-entry program as outlined. It may be a little more spaced, but we fully intend to follow through on some of the things we talked of.

(END VIDEO CLIP)

SNOW: Meantime, the governor of Louisiana, Kathleen Blanco, is telling residents who are evacuating to head north and not to Texas, which has already taken in tens of thousands of people from Louisiana who went there after Katrina -- Lou.

DOBBS: Mary, thank you very much. Mary Snow from New Orleans.

President Bush today spent much of the day on the Gulf Coast. His fifth visit, in fact, since Hurricane Katrina struck. President Bush visited Gulfport, Mississippi, and again New Orleans, where he warned about the possible impact of Hurricane Rita.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've been briefed on the planning for what we pray is not a devastating storm. But there's one coming. I appreciate the mayor recognizing that. And he made a wise decision to say to people, be cautious about returning here because a flood -- a rain of any amount could cause these levees to break again.

(END VIDEO CLIP)

DOBBS: President Bush is now on his way back to the White House.

Some in the Bush administration appear to believe that paying prevailing wages, maintaining nondiscrimination standards and documenting workers' identities are examples of what they term bureaucratic inefficiency or red tape.

The Labor Department has now lifted a requirement for new government contractors on the Gulf Coast to file affirmative action plans. Critics say this adds to the victimization of workers who have already suffered as a result of Hurricane Katrina.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The Department of Labor says it just wants to cut down on paperwork, so contractors can quickly rebuild the Gulf Coast. Critics say the administration is using the hurricane to dial back worker rights.

ROSS EISENBREY, ECONOMIC POLICY INSTITUTE: Affirmative action programs are the way you make sure that people take the requirements seriously, that they think about them and that they reach out into the minority community to hire people who they otherwise would overlook.

So they can say that that's paperwork. It's what makes the law real.

ROMANS: For at least the next three months, new contractors will not have to file an affirmative action plan, normally required for businesses with more than 50 employees. The Leadership Conference on Civil Rights called that, quote, "particularly disturbing in the face of the dramatic inequities exposed by Hurricane Katrina."

And the NAACP says the president could end up hurting the people he pledged to help.

HILARY SHELTON, NAACP: The same people we saw held up in the Superdome, the same people we saw holding onto their roof tops and even treetops to prevent themselves from being washed away by flood waters, these are the people that are going to be victimized by this awful move on behalf of our federal government.

ROMANS: But employment attorney Scott Silverman doubts it will have any impact at all.

SCOTT SILVERMAN, EMPLOYMENT ATTORNEY: It's just too short term and narrowly focused to be considered a major inroads on the affirmative action obligation, and I just don't see this lasting very long.

ROMANS: The affirmative action memo was written the day after the president suspended a 74-year-old law that requires contractors who win federal projects pay their workers the prevailing local wage, a wage in New Orleans that is already below the national average.

And the Department of Homeland Security suspended document requirements for employers, paving the way for illegal aliens to win jobs over American citizens.

(END VIDEOTAPE)

ROMANS: With the billions of dollars of hurricane relief, many wonder why contractors and companies need incentives at all to get that business in the Gulf Coast.

And New York Mayor Mike Bloomberg today pointed out that New York City rebuilt from 9/11 without cutting back from worker protection. He says the best way to get quality work, Lou, is to pay for the labor and to make sure that employers have to follow every law on the books.

DOBBS: It is, it seems, good counsel for a president or a mayor to follow the law of the land, ratter than waive it for any reason, particularly when it's easily argued that it's against the interest of those that it's intended to help.

ROMANS: And in a late statement the Department of Labor wants to make clear that this is just relieving employers from having to write a written plan. Affirmative action still is in effect.

DOBBS: We should point out that many of these firms who will be doing the hiring are receiving very lucrative, no-bid contracts. The concern seems to be split as between companies and the people they employ.

Christine Romans, thank you.

Still ahead here, as millions of people in Texas and Louisiana are bracing for the arrival of Hurricane Rita, we'll be going live to the National Hurricane Center for the very latest on the direction and the force of this storm.

And, lessons learned or not learned? A new controversy tonight about the appointment of inexperienced officials to top government jobs. A key law enforcement agency is at the center of this latest outrage. We'll have the special report next.

(COMMERCIAL BREAK)

DOBBS: Following the government's slow response to Hurricane Katrina, controversy exploded over the credentials of now former FEMA director Michael Brown. That criticism led to Brown's resignation.

Tonight, a new controversy over the nomination of another high- ranking government official. Lawmakers are questioning the credentials of the woman chosen by the Bush administration to head the Bureau of Immigration and Customs Enforcement, the second largest investigative agency in the federal government.

Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Thirty-six-year- old Julie Myers has worked for the Treasury Department investigating financial crimes, the Commerce Department enforcing expert control laws, as an associate of Kenneth Starr and served as an assistant U.S. attorney in New York.

But critics say she has virtually no experience on immigration issues and is not qualified to run the Bureau of Immigration and Customs Enforcement, the country's second largest investigative agency.

SEN. DICK DURBIN (D), ILLINOIS: Ms. Myers appears to be an extraordinarily talented person, as a lawyer, but she is being asked to -- we're being asked to give her permission to head an agency with 20,000 employees and a $4 billion budget.

SYLVESTER: Rank and file immigration agents say morale is already low.

Perception is that Myers was nominated to the post in part because of her close political ties. Her uncle is General Richard Myers, chairman of the giant chiefs of staff.

Her nomination may have flown under the radar if it weren't for former FEMA director, Michael Brown, another Bush appointee, who was roundly criticized for handling Hurricane Katrina relief.

CHARLES SHOWALTER, NATIONAL HOMELAND SECURITY COUNCIL: Those are issues that have clearly demonstrated that people who do not have the concept of what needs to be done are put into a position and the job doesn't get done effectively.

CHARLES GREENBERGER, CENTER FOR HEALTH AND HOMELAND SECURITY: Look, she's going to be in charge of, for example, an office of intelligence, is within her shop. And the intelligence office is supposed to predict bad people who are going to come into the United States. We've already seen on 9/11 how bad people coming into the United States can be a disaster for us.

SYLVESTER: Myers is on her honeymoon, unreachable. But she does have her supporters.

CHUCK CANTERBURY, FRATERNAL ORDER OF POLICE: As an administrator, her job is to locate the people within the agency that have the expertises that she needs, the career individuals that have worked in those areas. I think her management skills is what sets Julie aside and ahead of a lot of other candidates for that job.

SYLVESTER: Some senators say they were underwhelmed during her confirmation hearing.

SEN. FRANK LAUTENBERG (D), NEW JERSEY: Her answers didn't give us any confidence that she had either the experience or knowledge to take on this kind of an assignment.

(END VIDEOTAPE)

SYLVESTER: Senators have not scheduled a vote on her confirmation. A White House spokeswoman told CNN, "She's well-known and respected throughout the law enforcement community and she has a proven track record as an effective manager," end quote.

But Senator Lautenberg points out that while she ran a department with 170 people with a budget of $25 million, she is now being asked to run a department with 22,000 people and $4 billion budget -- Lou.

DOBBS: And one has to question how much experience she could have. How long was she in charge of any part of homeland security?

SYLVESTER: Well, what she has done is sort of jumped from job to job. She worked at the Treasury Department, the Commerce Department. Now, there is a requirement that you have to have five years of law enforcement background. But as one source put it to me today, she essentially cobbled her position, taking 18 months from here, 15 months from here, to come up with that five years -- Lou.

DOBBS: Remarkable, particularly in the wake of all that we've learned from the Hurricane Katrina disaster and the importance of having exceptional leadership, experienced leadership at the top of agencies.

It looks like this is going to be a partisan battle. That seems to be unfortunate. Senator Voinovich, well-known Republican, questioned her credentials but has since apparently indicated he is going to be supportive. Is that correct?

SYLVESTER: That is correct. Over the weekend he said he had a chance to speak to her and that she was able to convince him and essentially win her vote. But I think you're dead right on this, that this is going to come down to Democrats versus Republicans on this one. She has a lot of friends in high places.

DOBBS: One would hope that on an important post such as this, that it would not have to be a partisan battle. But if that be the only way in which there can be oversight, so be it. Lisa Sylvester, thank you.

A stunning new report on our nation's illegal immigration crisis says that Mexican children are increasingly trying to enter the United States alone. UNICEF says some children, in fact, are trying to reunite with families, but many children will be exploited by smugglers and other criminals in trying to do so. Others, among those children, are already hardened criminals.

Casey Wian has the report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): About 40,000 Mexican children were caught illegally crossing the U.S. border last year, about 11,000 of them making the trip alone.

Through the first half of 2005, 14,000 unaccompanied minors were caught and returned to Mexico, already more than all of last year.

Those are the findings of the study by UNICEF and the Mexican government, which also found many of the children are exploited by drug smugglers, child pornographers, even human organ traffickers.

AGUSTIN CASO, INSTITO DE MIGRACION MEXICO (through translator): The immigrant population is growing. The problems that children who immigrate by themselves are very vulnerable. They do emigrate in groups of some kind, but not accompanied by family members or parents. WIAN: In most cases, the border patrol returns unaccompanied Mexican minors to their home country immediately. But the way minors from other nations are treated has changed in recent years. And some say that's created a loophole for criminals.

In 2002, Congress removed control of unaccompanied minor illegal aliens from immigration officers, in an effort to improve their treatment. Now they're under the jurisdiction of the Health and Human Services Department's Office of Refugee Resettlement. Since then the number of non-Mexican illegal alien children in ORR custody has tripled.

MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: Smugglers know that if they bring in kids that either are or claimed to be unaccompanied by an adult, they go into this relatively easy social service bureaucracy that they have little trouble getting out of. They'll be handed over to relatives.

WIAN: According to a recent Center for Immigration Studies report, the policy has led to minors with head to toe MS-13 gang tattoos handed over to ORR for eventual release to individuals who are also illegally in this country.

An ORR official doesn't deny that may have happened but says all of the minors in its custody have been checked for criminal backgrounds by the Department of Homeland Security.

(END VIDEOTAPE)

WIAN: Most unaccompanied minors apprehended by the border patrol are trying to join illegal alien relatives who have already settled in the United States. In the process, many are easy prey for criminals and others get caught up in drug and alien smuggling themselves, all of this a consequence of the federal government's failure to secure our borders -- Lou.

DOBBS: A failure of the U.S. government, but in the case of Mexican children, the failure of the Mexican government to do anything at all to police its border.

WIAN: Absolutely. And UNICEF pointed that out in their report, that both the U.S. and Mexican governments are not doing enough to safeguard the well-being of these children who have been caught up in this smuggling -- Lou.

DOBBS: It is amazing what simply putting forward an effort at securing our borders would do to the benefit of all concerned.

WIAN: Right.

DOBBS: Casey, thank you very much. An alarming report. Casey Wian.

There are calls tonight from within the Republican Party to secure our borders. A confidential immigration memo from Republican Congressman Lamar Smith of Texas to White House deputy chief of staff Karl Rove recently landed on the desk of an unidentified Democratic congressman.

In that memo, obtained by the web site RawStory.com, Congressman Smith urged Karl Rove and the White House to immediately secure our borders. He said the majority of Americans, including Democrats and Hispanics, feel illegal immigration is a serious problem and, by a 2-1 majority, oppose a guest worker program that would allow illegal aliens to stay in this country.

Smith also said, quote, "Enforcement of immigration laws current and new should come first to satisfy the increasing demand for border security."

Still ahead here, North Korea is proving once again that nothing it says can be trusted and those diplomats who do trust the North Koreans are fools. A special report on North Korea's latest lies.

And Hurricane Rita slams into Key West and into the Gulf of Mexico. We'll have a live report for you from the National Hurricane Center on what increasingly looks like a dangerous storm.

(COMMERCIAL BREAK)

DOBBS: Just one day after North Korea agreed to suspend its nuclear program, much to the applause of various columnists, pundits and gurus, North Korea has gone back on its promise.

North Korea's complete about face, however, should come as no surprise. The world community has heard a litany of lies from this dangerous totalitarian regime for years.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Yesterday, handshakes and congratulations. Today, North Korea reneged on its promise to abandon its nuclear programs, saying it still wants a civilian nuclear reactor.

One former negotiator said it's typical North Korean tactics.

KURT CAMPBELL, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: This is one of the most dangerous countries left on the planet, and I think, you know, they have proven in their diplomacy and their actions there's very little that they will not do. And so, would I take North Korea at its word? Absolutely not.

PILGRIM: What is shocking is the U.S. negotiator, Christopher Hill, had said all along the issue of a civilian nuclear program was out of the question, recently saying he had run out of different ways to say no. So North Korea knew full well it was still a sticking point, even as it was signing the joint statement.

BRUCE KLINGNER, EURASIA GROUP: I think the joint statement is such that it's purposely vague so that the diplomats could reach agreement on the joint statement, and that way it allowed all of the countries to retain their own negotiating position and claim victory.

PILGRIM: But today, U.S. Secretary of State Condoleezza Rice refused to let North Korea derail the process.

CONDOLEEZZA RICE, SECRETARY OF STATE: I think we'll just stick with the text of the Beijing agreement to which the North Koreans signed on.

PILGRIM: In 1994 North Korea made similar promises but developed secret nuclear weapons anyway. The State Department spokesman said North Korea first had to dismantle its weapons before there could be any thought of a discussion about other issues.

ADAM ERELI, STATE DEPARTMENT SPOKESMAN: If there's going to be a discussion, not presuming what that discussion will entail, but a discussion, if there's going to be a discussion, it will only take place after North Korea has done all these things.

(END VIDEOTAPE)

PILGRIM: The State Department said diplomatic contacts at various levels would continue until the next round of six-party talks. That's scheduled to resume in November. But many experts say it will be hard to restart a discussion because of North Korea's demands -- Lou.

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

Still ahead here, Hurricane Rita is on track to make a direct hit on the Gulf Coast. We'll have a live update for you from the National Hurricane Center.

President Bush says we won't -- he won't be raising taxes to pay for rebuilding in the wake of Katrina. Tom DeLay says we have the most efficient government possible. So where does the money come from? That's where you may come in. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Thousands of residents in the Florida Keys left their homes as Hurricane Rita, now a Category 2 hurricane, barreled toward the Gulf Coast. The storm is passing 50 miles south of Key West, moving into the southeastern Gulf of Mexico, winds sustained up to 100 miles an hour.

Dan Lothian reports now from Key Largo, Florida.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN CORRESPONDENT (voice-over): When you mix a powerful storm surge and a high tide, this is what can happen.

GARY MANNING, KEY LARGO RESIDENT: Once it came over the sea wall, I'd say in 15 minutes it started making one, two foot.

LOTHIAN: An oceanside mobile home park in Islamorada, just off Highway 1 by Key Largo, pounded by Hurricane Rita...

MANNING: Yes. Everything is flooded.

LOTHIAN: ... is swamped by the rising waters.

John and Jackie Hanna returned to their home to survey the damage after evacuating on Monday.

JOHN HANNA, KEY LARGO RESIDENT: We were staying up in a condo up the road. We got out to get some place a little bit higher.

JACKIE HANNA, KEY LARGO RESIDENT: About 10:30, I guess, our friends called us.

LOTHIAN: Fire fighters waded through the park going door to door, searching for anyone who might be stranded. Most here had apparently heeded the mandatory evacuation order.

But not Gary Manning. He had decided to ride out the storm. When the water started rising, Manning attached his boat, started up his RV, and did what the owners of these fixed mobile homes could not do: he drove to higher ground.

MANNING: And I brought everything out front.

LOTHIAN: Further south on Highway 1, more water flows into a motel and nearby cottages. Hurricane Rita intensifying, leaving plenty of water damage in its wake.

DOBBS: And damage expected as it advances across the Gulf. Dan Lothian reporting from Key Largo.

Air Force One with President Bush aboard has just landed at Andrews Air Force Base outside Washington, D.C.

President Bush spent the entire day on the Gulf Coast, surveying hurricane recovery efforts in Gulfport, Mississippi. He stopped there, as well as New Orleans. This his fifth trip to the Gulf Coast since Hurricane Katrina hit, as you watch Air Force One taxi up.

Earlier in the day President Bush tapped his homeland security adviser Frances Townsend to head up an internal inquiry into the federal disaster response. Democrats in Congress are demanding an independent investigation.

In Texas the mayor of Galveston is already making emergency preparations for Hurricane Rita, Rita expected to strike somewhere along that Texas coast line on Saturday. The mayor has ordered the voluntary evacuation of all residents in Galveston and the governor of Texas has put National Guard troops on standby. One hundred and five years ago this month, Galveston was destroyed by a hurricane that killed 8,000 people. That hurricane, the deadliest disaster in U.S. history.

For more now on this powerful storm, I'm joined by Ed Rappaport. He's the deputy director of the National Hurricane Center in Miami. Ed, this storm is building strength rather quickly. You're expecting it to go to a Category 4 by tomorrow afternoon?

ED RAPPAPORT, DEPUTY DIR., NATIONAL HURRICANE CTR.: That's right. About 24 hours ago we were looking at a tropical storm that we were forecasting to become Category 2. It, indeed, did that. Unfortunately the center passed far enough south of the lower Keys that worst of the weather remained offshore.

We do think there will be further strengthening. Conditions in the atmosphere and ocean are right for intensification. We expect this to become a major hurricane, means at least Category 3 and perhaps Category 4, by tomorrow.

DOBBS: Now, I -- we all know how terrifically accurate you at the National Hurricane Center are in projecting the paths of hurricanes. This one, you're looking towards somewhere along the Texas coast. Give us your best sense of where this hurricane will strike land.

RAPPAPORT: OK. I also want to caution, though, that the forecast three and four days out are often associated with some errors. While we're forecasting the hurricane to move to the west and then turn to the northwest towards the upper or middle Texas coast, there is quite a range of possibility still.

It doesn't look like it's going to come as far east as the New Orleans area, but there is a risk still from southwestern Louisiana all the way across through Texas and maybe even into northeastern Mexico. The highest risk at this point, though, is the middle and upper Texas coast.

DOBBS: And that being the case, let's -- because New Orleans, as much suffering as that entire area has taken along with, of course, Mississippi, parts of Alabama -- New Orleans simply can't take much more. What is the likelihood that this hurricane could shift and at least at the margin strike bring with it its winds and rain to that -- to New Orleans.

RAPPAPORT: We have some experimental products now available and they suggest that when we have the center forecast to go here, the chances of landfall actually occurring and bringing hurricane force winds to the New Orleans area is now less than about five percent.

We do have some concern though, even if this forecast track is right, that there will be some rainfall off to the east, perhaps one to three inches or so in south eastern Louisiana. If the track goes more to the right or the center or the storm becomes a little bit bigger there could be even more rainfall than that.

DOBBS: Ed Rappaport, as always, we thank you for your guidance.

RAPPAPORT: Thank you.

DOBBS: Tonight there are fears that our nation's seniors will be forced to sacrifice key benefits to pay for Hurricane Katrina's reconstruction. A new congressional proposal would delay Medicare's prescription drug plan at a time when seniors on fixed incomes are already finding it difficult at best to afford basic necessities. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER (voice-over): Fiscal conservatives in Congress looking for way to fund Katrina relief say anything is fair game including the new Medicare prescription drug benefit program. They may want to think twice about that.

ERIC KLINENBERG, NEW YORK UNIVERSITY: To argue for a cut in prescription drug benefits for the elderly just after the elderly show up as the most vulnerable members of society during a disaster, is to prove yourself to be somewhat out of touch with what ordinary Americans are experiencing.

TUCKER: Margaret and Bob Kolenc are retirees. They have no current prescription drug coverage. The idea of any delay in prescription drug benefits doesn't go over well in their house.

MARGARET KOLENC, RETIREE: I'd be furious. I'd be furious. I do not think that Congress has a right to take away a plan that we seniors have waited for for years and years.

TUCKER: Margaret and Bob figure the plan will save them about $200 a month, money they plan to put towards paying their rising energy costs. The Kolencs do think Congress should review the budget and they think there's plenty of money to be saved.

ROBERT KOLENC, RETIREE: We've got a lot of earmarked projects, we've got pork barrel spending. If the big boys would try to run the show as they would their own home, they might be able to do more than they think they can. And that's how I feel about it.

TUCKER: Citizens Against Government Waste agrees. It's identified nearly $40 billion in special pet projects that Congress has slipped into various bills. The biggest and most immediate money can be found in the highway transportation bill.

TOM SCHATZ, CITIZENS AGAINST GOV. WASTE: Most of that money has not yet been spent, including the beginnings of the two large bridges in Alaska, each about $230 million that certainly could be delayed or even scrapped altogether.

TUCKER: But politicians are loathed to give up their carefully crafted pork.

(on camera): There's a planned news conference tomorrow morning on Capitol Hill to release the details on spending cuts expected to include, Lou, this delay in Medicare drug benefit programs.

(END VIDEOTAPE)

DOBBS: This is a remarkable shuffling, I guess, some on Capitol Hill would say of priorities, others might say of responsibilities. Bill Tucker, thank you very much.

Republican senator Tom Coburn of Oklahoma said the federal government must find ways to cut back on spending in order to offset the costs of rebuilding. And Senator Coburn says a delay in the Medicare drug program must be considered. He joins us tonight from Washington, D.C. Senator, good to have you here.

SEN. TOM COBURN (R), OKLAHOMA: Good to be with you, Lou.

DOBBS: You propose a one year delay in the drug plan. Why?

COBURN: Well, I think first of all to answer some of the things that have been put up there, the people who are most needing won't be delayed at all. They have a drug card that's available to those that are at the most and the greatest need.

As a physician, I know that, I see that every day. Remember, Medicare Part D is not means tested, so Lou, you would had quality for Medicare Part D when you reach that age, regardless of what your income is.

DOBBS: That's crazy.

COBURN: That's right.

DOBBS: I mean, why would you -- why would you do that?

COBURN: Well, I wasn't here and I lobbied a lot of members to vote against that portion of it. So there's no means testing in it whatsoever. So what we're proposing is a means testing for those people who don't need the benefit that we shouldn't be paying for that now. And if we have to delay it. But that's the last area we should go to in terms of spending cuts. There's tons of waste and wasteful spending ...

DOBBS: Wait a minute. Senator, you can't say that. Congressman Tom DeLay says that this is the most efficient government he can imagine, that there's no fat in this government.

COBURN: Well, I talked with him today about that quote and that was not his quote. And you know ...

DOBBS: Whose was it? Whose was it, Senator?

COBURN: I'm worried -- I'm very -- well, I think -- it might have been manufactured. I'm not sure. The fact is, is we -- I know of $100 billion in cuts that we could make tomorrow that nobody would feel. Nobody would feel. And ...

DOBBS: I hope the White House is on the phone with you.

COBURN: Well, we've been trying to talk to the White House through Josh Bolton and Josh has been receptive to some of our ideas. The president needs to lead on this and I'm hopeful that he will. He did make some great statements Thursday evening about paying for it.

The fact is, as some of your pre and earlier coverage on this shows that we do have a problem and the leaders of this country need to stand up and start making the tough choices, just like your gentleman said earlier. If we would run this government like we run our own affairs we would be in better shape. And we need to start making those hard choices.

DOBBS: Senator, you and Senator Barack Obama have proposed a chief financial officer for this reconstruction and the relief effort.

COBURN: That's right.

DOBBS: But my gosh, don't we have a CFO already? Isn't the Congress supposed to be able to provide oversight? Isn't OMB supposed to provide oversight? isn't the White House, the president of the United States, supposed to be in charge of making intelligent decisions here? It's almost as if we need a minder for what has been an irresponsible government.

COBURN: Well, I -- I wouldn't take issue with any of your criticisms that you just leveled. We're talking about at least $100 billion that's going to go out of the door very, very fast and the history is, is that too often that helps those helping the people who have needs rather than helping those that truly have needs.

And the idea behind this is to give somebody the power to do it ahead of time, before the money is spent. There's no question Congress will do the oversight on it. But we did the oversight on the last hurricane and we found tremendous waste.

And so what needs to happen is we need an experienced executive working for the president that these agencies have to get clearance for before they spend major dollars of the taxpayer's money that's very limited supply now before we waste the first penny. And remember, all this money we're talking about right now isn't our money. It's our grandkids' money.

DOBBS: Yes, and it's a lot of folks need a lot of help along the Gulf coast. Let me just ask you one question. You're a leading conservative in your party. The Republican Party used to stand for prudence in government, and you talked about responsibility. Why in the world not raise taxes to meet the responsibility? It's our responsibility as Americans to take care of our fellow Americans along that Gulf Coast. Don't you think we should be sharing the burden and sacrificing some ourselves?

COBURN: I definitely agree we should be sharing the burden and sacrificing some ourselves. But it's like your child asking you for a raise, when they've wasted their allowance that week as a spend thrift, and say why should I give you a raise, you didn't spend the money wisely. So I will support tax increases, after the federal government trims down its waste. And there's tremendous amounts, and it is wrong to raise taxes on anybody in this country, until we're running this government efficiently.

DOBBS: Senator Tom Coburn, thank you very much.

COBURN: Lou, pleasure to be with you.

DOBBS: We would like to know how you feel about all of this. Do you believe the government should raise taxes to pay for rebuilding the Gulf coast? Yes or no. Cast your vote please at LouDobbs.com. We'll have the results here later in the broadcast.

In the wake of Hurricane Katrina, there were calls for the Federal Reserve not to raise interest rates at today's meeting, but the Fed chose to raise interest rates by a quarter-of-a-percentage point to 3 and-three-quarters percent. That is the highest level in just about four years. The Fed defend its decision, it's 11th straight increase, saying the storm will not hurt the economic growth in the long term.

Meanwhile, Treasury Secretary John Snow says Hurricane Katrina may push some parts of the president's domestic agenda to the back burner, including efforts to make the administration's tax cuts permanent.

When we continue, will Hurricane Rita alter plans to reopen the port of New Orleans? I'll talk with the man who will have to make that decision.

And protecting the borders. It's not just a problem in this country. I'll be joined by former Marine captain, who says it is crucial to seal the borders of Iraq, and to eliminate the false choices that surround the debate about our Iraq policy. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My guest tonight runs the port of New Orleans. It's one of the toughest jobs around now. Of course, the port suffered extensive damage in the hurricane, and this gentleman hopes to have that port up and running within the next six months, but right now he's facing the threat of another hurricane.

Joining me now from New Orleans, Gary LaGrange, he's president and CEO of the port of New Orleans. Gary, you have bean through a lot, but what are you expecting now from Hurricane Rita?

GARY LAGRANGE, PRES. & CEO, PORT OF New Orleans: Well, Lou, we had a lot of momentum going. You know, we received our first commercial vessel the Likes Flier (ph) just last week, and was able to demonstrate to the world that we're open for business, all of our customers around the world. We've got actually 12 to 14 ships lined up, before October 1st with steel, granite, container vessels coming from all the far reaches of the world, and we're told now, tomorrow that there's a -- probably a mandatory evacuation of the city.

So I don't know what we're going to do with these ships. I don't know if we're going to be able to get them in or not. We're not wishing ill will on our neighbors, but we'd just like to see Rita go away to somewhere to -- to some place where nobody lives or resides.

DOBBS: And, you know, obviously that would be the best outcome. It does look like, right now, just talking with Ed Rappaport at the National Hurricane Center, he's telling us it looks like there's only a 5 percent chance of New Orleans being affected by Rita, so we'll keep our fingers crossed there. Give people some idea of what you're going through there at the port. It's critically important to this nation's commerce, it's international commerce. You've got port workers living on ships. Where are you living right now?

LAGRANGE: I'm living on a maritime administration vessel, thanks to John Jamian of the Maritime Administration and Secretary Mineta, who's been really great to all of us. They've made these ships available, so that we could bring our work force back in. People who have actually lost everything, lost their homes, were able to come back and go to work, thanks to housing aboard the maritime vessels in port, some six or seven strong.

DOBBS: And Gary, the -- you're about 20 percent capacity, as I understand it. How about trucking. It's obviously critically important that trucks roll in there with their goods, rail. Where do we stand there?

LAGRANGE: Well we have no word on rail. I'm speculating from everything I hear, that maybe a month, maybe six weeks. You know, 40 percent of all the cargo that goes out of the port of New Orleans, which by the way serves 62 percent of the consumer spending public of America, goes out by rail. The other 60 percent is truck. We're having a hard time finding the truck drivers, and getting them to come back in. It's really difficult, but be that as it may, we are able to get by with the first ship last week, and hopefully we can get that cargo out of the transit sheds and off the docks and to the market.

DOBBS: Well you've got a tough job, and we salute you for doing it, and we wish you all the very best. Gary LaGrange and everyone there at the port of New Orleans.

LAGRANGE: Thank you, Lou.

DOBBS: A reminder now to vote in our poll. Do you believe the federal government should raise taxes to help pay for rebuilding the Gulf Coast? Yes or no. Cast your vote, please, at LouDobbs.com. We'll have the results coming up here in just a few minutes.

Still ahead tonight, my next guest says it amazes him that men, money and weapons are still pouring across the border from Iraq into -- from Syria into Iraq. The former Marine captain, who served in Iraq and Afghanistan, joins me next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Nine Americans have been killed in Iraq over the past two days. Four soldiers attached to the 2nd Marine Division were killed in two insurgent attacks in Ramadi. Another soldier was killed in a bomb attack 75 miles north of Baghdad. And in the northern city of Mosul, a State Department employee, three American security contractors, all four were killed in a suicide bomb attack on their convoy. Two other people in the convoy were wounded.

My next guest says a top priority for U.S. troops in Iraq must be to seal that country's borders. Nathaniel Fick is a former captain in the U.S. Marine Corps. He led infantry platoons in both Iraq and Afghanistan. He's the author of "One Bullet Away: The Making of a Marine Officer." Nathaniel, good to have you here.

NATHANIEL FICK, FORMER CAPTAIN, U.S. MARINE CORPS: Thanks for having me here.

DOBBS: Your book, although it won't be out for just a little more than another week...

FICK: That's right.

DOBBS: ... is already getting great reviews. It's a terrific statement of some of the difficult choices that are facing the grunts on the ground, as well as the national command leadership. And you put it in great terms: The argument in this country is, as you point out, mercifully, not about supporting our troops. That's 100 percent. But argument is to cut and run, or stay the course.

FICK: I think that's what we're given, and I think it's a false choice. Cutting and running is not a strategy, and it appalls me to see it put forward as the humanitarian option, when it's not in our national interest, it's not in the interest of the other states in the region, and it's not in the interest of the Iraqi people. But...

DOBBS: Why so?

FICK: Because Iraq -- the U.S. involvement in the Middle East is a vital national interest. We need access to energy. We have made a commitment to the Iraqi people, and American credibility will suffer if we don't honor it to our very best ability.

DOBBS: Daniel, you're being honest in that statement, as you are throughout your book. The honesty about the role of oil in our strategic national interest is often -- a veil is put over it or it's ignored altogether.

I think most people would agree about the strategic interests. The idea of staying the course is appalling to some who, when we look at those numbers, representing the lives of our fellow Americans, serving the nation in uniform, going over 2,000 in Iraq and Afghanistan now, that's a tough policy option as well.

FICK: I agree with you. The historian James Chase said staying the course makes as much sense as a sailor having been blown off course, continuing to blunder aimlessly across the ocean. So I think we need to really reassess what we're doing in Iraq.

Counterinsurgency has been fought for 2,500 years, and there's a lesson, many lessons, to be learned, and we're not fighting according to those lessons.

DOBBS: You have a first reaction to what is going on in terms of the borders with Iran and with Syria.

FICK: I was in Iraq during the invasion and shortly after. My platoon was involved in firefights with Syrian insurgents. And it bothers me to talk to friends of mine, who are Marines there now, who are still battling Syrians in Iraq. DOBBS: What would you have us do?

FICK: I think we have a desert border. It's open, highly visible, and it's not a question of philosophy. People aren't debating whether or not we should seal the border. It's just the fact that it hasn't been done. We need to shift resources to the west, and seal it.

Insurgency has three ingredients: Men, weapons and money. And all three are pouring in from Syria and from Iran.

DOBBS: And why do you think that this is continuing and being permitted to continue by our policymakers, by our national leadership, whether military or civilian?

FICK: I think we're focused on the false metric right now of killing insurgents, and it's predicated on the false premise that they're finite in number. If we shift our resources to helping the Iraqi people, we can create positive momentum in -- as opposed to negative momentum.

DOBBS: Nathaniel Fick, we thank you very much. The book is "One Bullet Away: The Making of a Marine Corps Officer." Your identifying the false choices that are being identified is a national service. We thank you and we wish all the best with the book.

FICK: Lou, it's a pleasure. Thank you.

DOBBS: Thank you.

Now, the results of our poll: 66 percent of you think the government -- excuse me, 56 percent of you say the government should raise taxes to pay for rebuilding the Gulf Coast. Forty-four percent -- the numbers have just changed. It's 58 percent of you who do support the idea of raising taxes; 42 percent do not.

I'll be back here in just a moment with a preview of what's coming up tomorrow. Stay with us.

(COMMERCIAL BREAK)

DOBBS: This just in to CNN. The city of Galveston, Texas has just announced a state of emergency in preparation for the arrival of Hurricane Rita. All normal operations in the city of Galveston have been suspended. The mayor has ordered voluntary evacuations. Rita is now a Category 2 hurricane. It is expected to strengthen to a Category 4 storm by tomorrow afternoon. Storm projections show the storm hitting the Galveston area by this weekend. Again, the city of Galveston, Texas, has just announced a state of emergency in preparation for Hurricane Rita.

As of tonight, Judith Miller, the Pulitzer Prize-winning "New York Times" reporter has been in prison for 76 days for protecting her confidential sources in the White House CIA leak case. That investigation by the special counsel continues, and an investigation which has now lasted longer than that of Watergate. We thank you for being with us tonight. Please join us here tomorrow. We'll be joined by the Reverend Jesse Jackson, who says the government's suspension of labor laws in the Gulf Coast is a hurricane for the poor, a windfall for the rich.

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

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