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LOU DOBBS TONIGHT

Widening Scandal on Capitol Hill; Helicopter Crash Kills 2 American Soldiers in Iraq

Aired January 16, 2006 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: And good evening, everybody.
Tonight, corruption on Capitol Hill. A widening scandal as the Abramoff controversy spreads. We'll have the story for you.

And then, the third American helicopter crash in Iraq in 10 days. Two Americans killed. Insurgents in Iraq may have new deadly weapons posing further danger to our military aircraft. We'll be live at the Pentagon with a report.

And this war began with bad intelligence on weapons of mass destruction. Now it's being conducted with bad estimates about the true costs. After more than 2,200 American lives have been lost, we're now learning of the crushing economic cost of this war.

The government of Mexico says its citizens have the right to illegally cross our borders wherever and whenever they please. Just where did this sense of entitlement on the part of the Mexican government come from?

We'll have a special report.

And Fidel Castro finally acknowledges the United States is not communist Cuba's greatest threat. We'll have a special report from Havana.

Those stories and much more coming up here.

We begin with the widening scandal on Capitol Hill. The Republican leadership forcing Congressman Bob Ney to give up his chairmanship of the House Administration Committee. That's the committee in charge of lobbying reform. Congressman Ney is just one of several members of Congress and their staff who are now under investigation in the lobbying scandal.

Ed Henry reports from Washington -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Lou, Bob Ney is at the center of this corruption investigation. He allegedly took several gifts from Jack Abramoff -- that disgraced lobbyists -- including a lavish golf trip to Scotland in exchange for various official acts.

Bob Ney says he is only stepping aside temporarily from that chairmanship because he believes he will eventually be exonerated. But I can tell you that officials familiar with the probe have told CNN that Ney is one of a half-dozen lawmakers and congressional staffers who could face criminal charges in this probe.

This is a clear sign that Republican leaders are nervous. They're starting this -- to basically clean house.

If you think back to two weeks ago, Tom DeLay basically announced he would not be trying to come back as majority leader. Now late Sunday night, Bob Ney announces he's stepping aside as the House Administration chairman.

Part three of that clean-house strategy, say Republicans, is they want to come up with a get tough piece of legislation. In fact, as early as tomorrow, we may hear Speaker of the House Dennis Hastert introduce a lobbying reform legislation. We've been hearing various pieces of this floated around, but he may finally come out with it tomorrow.

As you mentioned, the final nail in all of this for Bob Ney in terms of his chairmanship was the fact that Republicans realized he would be overseeing the hearings, he would be helping to craft any lobbying reform legislation that the speaker introduces tomorrow. That would obviously have been a political problem for Republicans on the Hill.

We're hearing a lot from other Republican lawmakers running for majority leader to replace Tom DeLay about lobbying reform, but the problem is, if there are more shoes to drop in this investigation, this reform legislation may look like a Band-Aid. It may look like too little, too late, so they're scurrying to get something pulled together -- Lou.

DOBBS: Ed, thank you.

Ed Henry from Washington.

As Republicans are now caught in the culture of the corruption of their own making, Democrats seemingly are caught in a web of political incompetence, leaving it to Al Gore try to try to assert himself in a leadership vacuum.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice over): Who speaks for Democrats these days? Nancy Pelosi and Harry Reid are minority leaders. Party chair Howard Dean's job is to represent the broad range of Democratic views. Hillary Clinton, John Kerry and John Edwards may run for president; they are pretty cautious. So is Bill Clinton, who has invested in his wife's political future.

Enter Al Gore, giving full-throated voice to the outrage many Democrats feel over the administration's wiretapping of American citizens.

GORE: ... what many believe are serious violations of law by the president. SCHNEIDER: Violations of law? Exactly.

GORE: ... into these serious allegations of criminal behavior on the part of the president.

SCHNEIDER: That may be grounds for impeachment. Gore never used the "I" word, but he did call for...

GORE: ... the appointment of the special counsel to pursue the criminal issues raised by the warrantless wiretapping of Americans by the president.

SCHNEIDER: A special counsel would have to be appointed by the attorney general, who works for President Bush. And how realistic is it to think about impeachment when Congress is controlled by Republicans?

Gore's answer?

GORE: It should be a political issue in any race, regardless of party, section of the country, house of Congress, for anyone who opposes the appointment of a special counsel.

SCHNEIDER: Gore is telling Democrats, let's make this our issue.

Go ahead and try, say Republicans.

KEN MEHLMAN, REPUBLICAN NATIONAL COMMITTEE CHAIRMAN: This is authority the president does have. It's authority that is consistent with protecting our Constitution and our civil liberties. And it's authority that's critical of learning the lessons of 9/11.

(END VIDEOTAPE)

SCHNEIDER: Some Republicans share the concern, like conservative former congressman Bob Barr, who was scheduled to share the platform with Gore, and Arlen Specter, the Republican chairman of the Senate Judiciary Committee, who has scheduled hearings on the president's wiretapping. "Just because we're of the same party," Specter said, "does not mean we're not going to look at this closely" -- Lou.

DOBBS: Bill Schneider. Thank you.

The Senate Judiciary Committee will not vote on Judge Samuel Alito's nomination to the Supreme Court now until the 24th of this month. The committee ended confirmation hearings for Judge Alito last week. Democrats immediately pressed for a one-week delay in the Senate vote.

The delaying tactic, however, is not expected to prevent Judge Alito's confirmation by the full Senate. It now appears all but certain.

A new threat from Iran tonight in its growing nuclear confrontation with the West. Tehran today warned that world oil prices could rise sharply if the U.N. imposes sanctions against it. That warning just the latest in a series of threats from Iran as it restarts its nuclear program.

In London today, the United States and five other countries met to discuss Iran's escalating nuclear threats in London and appropriate responses. Britain, France and Germany declared they will call for an emergency meeting of the International Atomic Energy Agency. The United States and Europe want the United Nations to consider imposing sanctions against Iran.

Two Americans were killed in a helicopter crash in Iraq, the third in 10 days. The United States military now believes the insurgents may have found a new and highly effective weapon against American helicopters.

Jamie McIntyre reports from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): A video posted on an Islamist Web site claimed to show the U.S. helicopter gun ship blasted out of the sky by a shoulder-fired missile. But the U.S. military dismissed the video as likely insurgent propaganda, saying it appeared to be shot at the wrong time of day and was also inconsistent with other known facts about the crash. A Pentagon official said at least one witness thought a rocket-propelled grenade, not a missile, hit the helicopter.

The U.S. military is confirming that the two-person Apache attack helicopter went down in a swamp while patrolling an area north of Baghdad known for terrorist activity and that both pilots from the Army's Task Force Ironhorse were killed. It's the third-deadly crash in 10 days, which is about half the total number of Army helicopters lost in an average year in Iraq.

But experts say considering Army helicopters have logged nearly a million flight hours in grueling combat conditions, it's a wonder more haven't crashed or been shot down.

JOHN PIKE, GLOBALSECURITY.ORG: If you think about the bad weather that they're flying in, if you think about how many shoulder- fired missiles that may be over there, you'd say overall over the last several years the record's been really quite good.

MCINTYRE: Since the war began, at least 18 U.S. military helicopters have gone down either by accident or hostile fire in Iraq. Friday, a Kiowa warrior reconnaissance helicopter was shot down near Mosul, killing the two Army pilots.

And the industry publication "Defense News" reports U.S. commanders are worried about a new anti-helicopter tactic, a new version of the improved explosive device that pops into the air and detonates when a helicopter passes overhead.

UNIDENTIFIED MALE: The Iraqis know a great deal about radio fuse proximity anti-aircraft shells. And using a proximity fuse shell against a low-flying helicopter as opposed to high-flying airplane is just the sort of adaptability that you'd be worried about. (END VIDEOTAPE)

MCINTYRE: U.S. commanders are continually reassessing their standard operating procedures as the insurgents become more adaptive and creative. But often, the best defense, Lou, is not to have a standard operating procedure, to vary the tactics continually so that U.S. helicopters are flying at different times and in a different manner so the enemy doesn't know how they operate.

DOBBS: Jamie, thank you very much.

Jamie McIntyre from the Pentagon.

Coming up here next, shocking honesty tonight from one member of the United States government on our border security crisis. We'll have that story for you.

Also ahead, the Mexican government's sense of entrenched entitlement is growing, if you can imagine that, while the Mexican government and many of its citizens feel they have a right it cross our border illegally, whenever they choose.

And success at NASA. Why scientists may soon have new clues to the origin of our universe.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, the Bush administration finally uttering a forceful defense of our nation's right to protect our own borders. U.S. ambassador to Mexico Tony Garza says Mexican criticism of this country's plan border crackdown is way out of line, and it has to end.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice over): U.S. ambassador to Mexico Tony Garza has finally had enough of Mexico's outrageous claims that the United States embraces the ideals of Adolph Hitler, is responsible for the deaths of thousands of illegal aliens attempting to sneak into the country, and is building the equivalent of a Berlin wall along our southern border.

VICENTE FOX, MEXICAN PRESIDENT (through translator): It's a very bad sign which does not speak well of a country that is proud of being democratic.

WIAN: In a news letter dated Friday, Garza strikes back. On the deaths of border-crossing illegal aliens, he writes, "They're tragic," but adds, "Perhaps a greater effort by other governments to discourage their citizens from illegal crossings would help. And more robust efforts by the Mexican government to create well-paying jobs for its citizens would dissuade many from making the dangerous and illegal crossing." Until now, the Bush administration's response to Mexico has been limited through remarks such as these.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We are going to enforce the borders as best as we possibly can. It's our duty.

WIAN: On the proposal to fence about a third of the southern border, Garza writes, "Comparing that to the Berlin Wall is disingenuous, intellectually dishonest and personally offensive. The Berlin Wall was built to keep people trapped inside... does anyone honestly remember waves of people climbing over the Berlin Wall heading east?"

The ambassador calls allegations of racism by the United States Mexico's most pernicious claim, writing, "There is no human right to enter another country in violation of its laws."

Garza points out that the U.S. issued 940,000 visas to Mexicans last year, including 80,000 work visas and 36,000 immigrant visas.

Garza urges the Mexican government to help resolve difference and perception of illegal immigration issues, writing that "Avoiding the excessive, often irresponsible and almost always inaccurate statements made in recent weeks would be a good place to start."

(END VIDEOTAPE)

WIAN: Though Ambassador Garza's words are refreshingly blunt, they were issued in a newsletter that's not even posted clearly on the embassy's Web site. And it was dated the Friday before a holiday weekend. So it has received very little attention. Our calls to the embassy about the stealth, tough talk were not returned -- Lou.

DOBBS: It's a remarkable statement by Ambassador Garza, and one that's well overdue because President Vicente Fox's government is corrupt, it's incompetent, and he is leaving office with only the shadow of any respect on the part of the Mexican citizens.

Why did it take so long even in this veiled and diffused form for our ambassador to Mexico to react?

WIAN: It's hard to say, because a lot of border security activists have been calling for a tough reaction from the Bush administration for months and months. These statements by Vicente Fox's government, by the Catholic Church's representatives in Mexico, they're regard as outrageous and in need of a direct and clear response from the U.S. government. And that's what we got from Ambassador Garza -- Lou.

DOBBS: And the fact of the matter is, Ambassador Garza may have just run the risk of being recalled to Washington because everything he said is an absolute opposition to this administration and its failure to protect our borders and to do anything about the massive illegal immigration across our border.

WIAN: Well, and you make a good point, because we've seen that happen before with Robert Bonner when he was making some statements about border security policy that were going against what the Bush administration wanted. They went back on that really quickly.

DOBBS: And to hear, as you reported, that remark by President Bush, "It's our duty to protect our borders," it is a remarkable piece of irony to hear those words even fall from his lips.

WIAN: Absolutely.

DOBBS: Casey Wian, thank you very much, reporting from Los Angeles.

Mexico's political elite have ignored Ambassador Garza's comments before, and they will most likely ignore them again. Mexican government officials continue to express their outrage over the United States attempts to secure and protect our own border. They say that Mexicans have every right to enter the United States illegally.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Mexico apparently believes the border is there to be crossed by its citizens, not enforced by the United States. This warning from the speaker of Mexico's lower house of congress: "The immigration won't stop. Far from it."

No surprise really from the government that published a border handbook to help people enter the country illegally and recently hired a top P.R. firm to sell Americans on porous borders, lumping illegal immigrants with those who play by the rules.

ROB ALLYN, ALLYN & COMPANY, INC.: These folks are pioneers who are coming in search of a better life. And the idea is to put the Statue of Liberty out there welcoming those workers.

ROMANS: Border security advocates call it an affront to American sovereignty.

BOB GOLDSBOROUGH, AMERICANS FOR IMMIGRATION CONTROL: The government, the federal police, all the way up to the president, they have an attitude that they could break our laws and encourage their citizens to break our laws with impunity.

ROMANS: He says Mexico's political elites feel entitled to the $20 billion a year in remittances, and Mexican citizens apparently feel it's their right to work illegally in the United States.

He points to a 2002 Zogby poll showing 57 percent of Mexican citizens think Mexicans do have the right to enter the U.S. without U.S. permission. Many say the United States government has enabled this thinking for years by not enforcing our laws, essentially telling Mexico...

FRANK GAFFNEY, WARFOOTING.COM: That they're entitled to come to this country, that they're entitled to have access to our social and economic welfare system. They're entitled, perhaps, even to have the vote. They're entitled to send large amounts of money home in remittances.

ROMANS: But this didn't begin with President Fox. Indeed, in 1997, then president Ernesto Zedillo told the National Council of La Raza in Chicago, "The Mexican Nation extends beyond the territory enclosed by its borders and Mexican migrants are an important part of it."

(END VIDEOTAPE)

ROMANS: Mexico is trying to have it both ways, driving its work force north with failed job creation policies, but calling its expatriates heroes for the money they send home. And, of course, American companies are more than happy, Lou, to accommodate all of this, exploiting the workers all along the way.

DOBBS: And let's be clear, the Bush administration and the Democratic Party and the Republican Party are aiding illegal employers of illegal aliens, aiding and abetting, failing to their duty, as the president has said, in enforcing border security, failing to deal adequately with illegal employers. It's a disgrace. It's a disgrace on both sides of the border. And it's -- the further disgrace is that the American people have neither the stomach nor the will or certainly the representation in Washington to do anything about it, save November.

Thank you very much. Christine Romans.

That brings us to the subject of our poll. Can you think of any reason that a U.S. citizen would believe a Mexican citizen has the right to legally cross our border without passing through customs?

Cast your vote at LouDobbs.com. We'll have the results later here in the broadcast.

Still ahead, why the H1B visa program might as well be called the cheap imported labor program brought to you by the United States government.

And no weapons of mass destruction in Iraq. You may be shocked to learn that the cot of the war may be slightly, just slightly understated. Nobel Prize-winning economist Joseph Stiglitz is among our guests here next.

(COMMERCIAL BREAK)

DOBBS: Tonight, new evidence that foreigners working in this country under the H1-B visa program are being exploited and they're taking jobs away from our middle class workers and depressing wages for all American workers. A new study shows H1-B visa holders in technology are now paid substantially less than Americans doing the same exact work.

The Center for Immigration Studies has found visa holders are paid on average $13,000 a year less than American workers for doing the same job in the same state. Eighty-five percent are paid below the median wage for that occupation and industry. Companies get away with those lower wages because there is no single standard for determining a prevailing wage.

Now taking a look at some of your thoughts, many of you wrote in about the comments by Senator Max Baucus last week, the top Democrat on the Finance Committee. He was in India last week, and the senator from Montana said outsourcing is a fact of life and we should just live with it.

Charles, writing in from Montana, said, "Why should we vote for people who merely blame our woes on a flat world? Let's make the world a sphere again. Flat worlds went out with Columbus."

I couldn't agree more.

And Jerry in California wrote in to say, "Lou, with respect and admiration, you just have to get with it. The world is flat, and there's no going back."

But Lila in Florida said, "Senator Baucus is right. The world is flat and getting flatter."

R.A. Greiner in Wisconsin, however, said, "The world is getting very flat. Our standard of living is going off a cliff."

And B. Max in Virginia said, "It's difficult to believe that a U.S. senator would advocate sending white collar jobs abroad. First we learned that Americans were not willing to do certain jobs and it was necessary to allow illegal aliens into the country. Now they're saying Americans don't want those white collar jobs either."

Please send us your thoughts at loudobbs.com. And each of you who's e-mail is read here receives a copy of my book, "Exporting America." And you can sign up for e-mail at LouDobbs.com.

We'll have more of your e-mails later in the broadcast.

In Latin American tonight, leftist leaders are celebrating yet another key political victory. Chilean voters over the weekend elected socialist candidate Michelle Bachelet to be their next president. She beat conservative billionaire businessman Sebastian Pinera with over 50 percent of the vote. Bachelet will join a long line of leftist politicians now gaining power in Latin America, including president-elect Evo Morales in Bolivia, President Hugo Chavez in Venezuela, Lula Da Silva in Brazil, Nestor Kirchner in Argentina, and of course we can't forget Fidel Castro.

Communist China is running a record trade surplus with the United States, now taking jobs away from middle class Americans. And the next thing you know, communist China may lay claim to the North America continent itself.

China scholars now say a map on display in Beijing suggests that Chinese explores discovered America in 1418, just about 70 years before Columbus. Most experts say the map is a fake.

The communist Chinese government, however, says it's genuine. In fact, China is using the map to somehow suggest that its rising power will not threaten its neighbors. We'll be back to you on that.

Coming up next here, the rising global death toll from the deadly bird flu and what's being done about it. We'll have a special report.

And communist Cuba has a new enemy, and it has nothing to do with the United States. We'll have that special report for you from Havana.

And a big victory for NASA in the search for clues to the origin of our universe.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Still ahead, the death toll from bird flu rising in Turkey. But first, let's take a look at this hour's top news stories.

A widening lobbying scandal on Capitol Hill. Republican Congressman Bob Ney says he hopes to regain his position as chairman of the House Administration Committee after this investigation into his involvement with Jack Abramoff. Congressman Ney stepped down as committee chairman over the weekend. The second congressman to step down from a House leadership post in this worsening Abramoff investigation.

The U.S. ambassador to Mexico, Tony Garza, out with a firm defense of America's right to defend its border and control immigration. Garza says Mexican government criticism of U.S. border enforcement is "excessive, often irresponsible, and almost always inaccurate."

Two Americans have died in Iraq in yet another helicopter crash. This the third U.S. helicopter to go down in Iraq in the past 10 days. Two insurgent groups saying they shot the Apache craft down. The U.S. government will not say what the cause of the crash was.

Tonight, the global death toll from the deadly bird flu is rising. Officials in Turkey today confirmed the death of a fourth child of the bird flu. That brings the worldwide death toll to at least 82. But the World Health Organization says the threat is diminishing and rising at the same time.

Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): The World Health Organization today coming out with contradictory statements, saying the risk of deadly bird flu in Turkey was steadily diminishing. But they still expect the number of cases to continue to rise.

A bird flu conference in Rome today, pretty clear the threat is not diminishing but spreading.

SAMUEL JUTZI, U.N. FOOD AND AG. ORG.: It is an international disease. It crosses borders. And there is no reason to believe that the virus which has been detected in the east of Turkey has not already passed the border.

PILGRIM: The official cases in Turkey don't tell the full story. Authorities there don't release the information of how many people are in the hospital with flu-like symptoms. A Turkish lab found the 12- year-old girl who died yesterday had bird flu and her brother tested positive yesterday.

There are now 20 confirmed cases and four fatalities in Turkey. In Cambodia, out of four cases, four dead. China, out of eight cases, five dead. Indonesia, 17 cases, 13 dead. Thailand, 22 cases, 14 dead. Vietnam, 93 cases, 42 dead.

HENK BEKEDAM, CHINA REP. TO W.H.O.: Of course money alone will not be not sufficient, technical capacities and capacities within countries will not be fixed overnight when one is being made available.

PILGRIM: The United States is quietly taking preventative measures. Since 2004, the U.S. Centers for Disease Control banned birds from some Southeast Asian countries, but two weeks ago, they added Kazakhstan, Romania, Russia, Turkey, Ukraine to the embargo.

(END VIDEOTAPE)

(on camera): Turkish officials have confirmed poultry outbreaks in 11 provinces. They're investigating possible outbreaks in another 14 neighboring countries, such as Syria, Iraq, Iran. They've been put on alert. There are also cases that turned out false today in Germany, Belgium and also Israel. Lou?

DOBBS: Kitty, it's alarming. Thank you very much, Kitty Pilgrim.

In Spain tonight a teenager has been arrested on charges he hacked into top secret U.S. Navy computers. The hack attack targeted computers at the Point Loma naval base in San Diego where nuclear submarines are maintained and based.

U.S. computer security experts immediately discovered the breach. They traced it to Spain. Spanish authorities say the 18-year-old suspect is part of a group that hacked into dozens of computer system all around the world.

Tonight, new evidence that communist China is playing host to North Korean leader Kim Jong-Il. China will not confirm that the reclusive North Korean leader is in fact in China. But Japanese television is now airing pictures of what it says Kim Jong-Il at a hotel where he is staying in Southern China. Kim Jong-Il reportedly arrived in China last week. Newspapers in Hong Kong say he will soon travel to Beijing to meet with Chinese President Hu Jintao. More than 2,200 of our troops have been killed in the war in Iraq. The war is also costing taxpayers hundreds of billions of dollars. Congressional researchers predict the war could eventually cost as much as $500 billion.

Two of the country's most distinguished economists and budget experts say the war could actually cost two trillion dollars. Joining me now, the authors of the study, Nobel Prize winning economist Joseph Stiglitz, professor of economics at Columbia University and Linda Bilmes, lecturer at Harvard University, former Chief Financial Officer at the Department of Commerce.

Thank you both for being here. Professor Stiglitz, let me start. Two trillion dollars is a far cry from the initial statements as to what this war was going to cost.

JOSEPH STIGLITZ, COLUMBIA UNIVERSITY: They Originally talked about $50 to $60 billion. Larry Lindsey, who I'm sure you know, had come up with numbers of $100 to $200 billion.

DOBBS: And he was sent away.

STIGLITZ: He was basically fired. They distanced themselves -- the administration distanced themselves from that number and said no, it was going to be $50 to $60 billion.

DOBBS: Linda, you are a budget expert. How could this administration, this Congress get it so wrong and tolerate such wrong headed estimates?

LINDA BILMES, HARVARD UNIVERSITY: Well, it's very hard to understand the estimates that are coming out of the administration, but basically there are there four types of costs that they don't include.

The first they don't include costs for taking care of our veterans, both medical care and disability when they come home. Second, they haven't included the cost of replenishing the military, bringing it back to its pre-Iraq levels. Third, there are other --

DOBBS: Linda, if I may interject.

BILMES: Yes.

DOBBS: Certain geniuses are in fact talking about cutting the size of our National Guard because they have such budget constraints, they're actually talking about reducing the level of our preparedness militarily. Go ahead.

BILMES: The National Guard and the Reserves right now make up 40 percent of the fighting force. We of course in our study have not looked, have not even included the cost of not having them here on the ground in order to take care of the homeland in the event of an attack.

DOBBS: You project out to 2010 Professor Stiglitz, these numbers, this is crushing. I'm going to ask you, as the great economist you are, to give us a sense of how in the world can the United States, admittedly the world super power, extraordinarily rich but also with trillions of dollars in debt, deficits, trade and budget that are crushing us. How much of this can we stand before it -- it actually puts so much pressure on us that we have to yield to it?

STIGLITZ: Well, we are lucky they we are as rich a country as we are. Cause otherwise this would really truly be crushing. But to put a perspective on this. We had a debate earlier this year, last year about what was described as our crushing Social Security problem.

DOBBS: Right.

STIGLITZ: That problem could have been fixed for the next 75 years with just a half a trillion. So in other words, we're spending four times the amount of money that would have completely fixed that Social Security problem for the next 75 years.

DOBBS: It's extraordinary, and by the way talking about $13 trillion in unfunded liabilities for Social Security, just about twice that for Medicare and Medicaid in this country. So the problems are enormous. Unfortunately they're not limited to Medicare -- I mean to Social Security. You could argue it is the simplest of the problem to solve.

STIGLITZ: Exactly.

DOBBS: Linda, let me ask you both this. I know you're coming in as budget experts and economists. And people hear economists and budget, their eyes glaze over. Let's put it in these terms, how can a democracy function when politicians of both parties, Congress and both houses and the executive branch are either ignorant and incompetent in discussing the cost of public policy decisions or, worse, lying.

STIGLITZ: that is why we did the study because we felt very strongly that the American people ought to know what this venture is costing. This was a war of choice. This was not like World War II where we attacked. We made a decision. We made the decision about when to go to war as well as whether to go to war.

How we made that decision had an effect on those costs. One of the things I find so upsetting is that we aren't including the long run costs of health care and disability payments. You mentioned the over 2,000 people have died already.

DOBBS: Right, governors are declaring states of emergency in terms of health care costs. The new Medicare program is a disaster in terms of the prescription. This administration, governors appealing to insurance companies to try to deal with it because they can't run a government correctly.

STIGLITZ: To put perspective on this, 16,000 have already -- 16,000 have already had some serious injury. Twenty percent of that 16,000 have serious brain injuries. They're going to require lifetime care. We know from the Gulf War that lasted just 30 days that we are paying today two billion dollars a year for those people. Can you imagine what we're going to be paying for the veterans that come back from this venture?

DOBBS: There are costs, there are consequences, there is tragic loss of life in any war. But the fact that we, nor our public policy elite on both parties have focused on the reality, of its cost, and only now becoming clear the cost on human lives and suffering, American lives and suffering along with everyone else.

Linda Bilmes, the idea that we could miss a budget this far, when we are looking at so many important decisions here in terms of the economic health and well-being of this country. How do you react to it? I will give you the last word. Your concluding thoughts.

BILMES: I think it is very, very important we should look at this war and decide whether the benefits, if any, outweigh the amount of money that we are spending. We are spending nearly $2 trillion or more on this war. And we would need to find a great deal of benefits to come anywhere near that amount of money, given the other needs of the people in this country.

DOBBS: Linda Bilmes, Joseph Stiglitz we thank you for being here. Thank you for your important work.

Still ahead, state governments are frustrated by a do-nothing Congress and a do-nothing administration when it comes to securing our border and dealing with illegal immigration.

Tonight, we'll report on what some states are now doing, taking matters into their own hands when it comes to border security and illegal immigration. That SPECIAL REPORT, and the space probe, on the launch pad right now, that some say poses a grave danger to Americans. We'll have that story, and the story of a great success in space, next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, some state governments fed up with the federal government's broken borders failure are taking matters into their own hands. Delegates in Maryland now considering a bill that would make it a crime to drive a car without a valid driver's license. What a thought. It is a brand new effort by state and local governments to try to crack down on illegal immigration. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): It's frightening to think that you may be sharing the road with someone who is not licensed to drive. Odds are in Maryland, that is the case. In the last three years, the number of drivers in the state without a license has increased nearly 60 percent. That includes teenagers on a joy ride and the elderly. But Maryland delegate Luiz Simmons says a disturbing percentage is attributed to the massive influx of illegal aliens in the state. LUIZ SIMMONS, MARYLAND DELEGATE: The penalty for driving without a license is nothing more than a glorified parking ticket. You pay $315. You never go to court, you never see a judge.

SYLVESTER: Simmons is proposing a trip to jail for 90 days for those caught driving without a license the first time. Second offenses, jail-able up to a year. Studies show that an unlicensed driver is five times more likely to be involved in a fatal accident than a licensed driver.

Immigrant groups like Casa Maryland (ph) say the measure will impact a disproportionate number of illegal aliens. Under Maryland law, aliens are able to get a driver's license, but the Motor Vehicle Administration has strict rules requiring proof of identity, state residency and age. So many illegal aliens do not qualify. Immigration reform groups argue a stiffer penalty for unlicensed drivers is one way states can deal with the illegal immigration invasion

IRA MEHLMAN, FAIR: Certainly, not only within the purview but a responsibility of people in state government to make sure that the highways are safe, that the people who are out on the road are licensed to know the rules of the road.

SYLVESTER: Last year Congress passed the Real I.D. Act, which sets uniform federal standards for driver's licenses. Even more illegal aliens nationwide will be ineligible for a driver's license.

(END VIDEOTAPE)

SYLVESTER: State delegate Luiz Simmons says he's doing this to address the public safety concerns. He expects with the passage of the Real I.D. Act, there will be an exponential increase in the number of unlicensed drivers in Maryland. And he wants to make sure there is legislation in place, keeping them off the roads. Lou?

DOBBS: Isn't it extraordinary, almost overwhelmingly awe- inspiring that we're dealing with an issue of the fact that it's illegal to drive without a driver's license in this country?

SYLVESTER: It's amazing how many people out there are on the roads, though -- estimated 60 percent increase here in Maryland are doing just that, Lou.

DOBBS: Some idiot, somewhere, will tell us that that makes perfect sense to them. Thank goodness it doesn't make sense to the government of Maryland and other states around the country coming to terms with it. Thank you, Lisa Sylvester.

A reminder now to vote in our poll. Can you think of any reason a U.S. citizen should believe a Mexican citizen has the right to legally cross our border -- illegally cross our border. Cast your vote at loudobbs.com. We'll have the results for you coming up in just a moment.

Coming up at top of the hour here, "THE SITUATION ROOM" with Wolf Blitzer. Wolf?

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. We're watching several stories including Al Gore, the former vice president, unplugged. Find out why he says President Bush has repeatedly broken the law. Gore calling for a special council to investigate, but is it just sour grapes? We're covering all sides.

Also, a women as president in the United States? Condoleezza Rice answers the first lady's ringing endorsement for 2008.

Plus, flu drugs that just aren't working. Why this nasty virus is getting stronger and more resistant to drugs. Dr. Anthony Fauci is our guest. And cell phone spam. Advertisers consider zapping your cell phones with their pitches. It may be annoying, but is it legal?

That, much more, all coming up, Lou, right here in "THE SITUATION ROOM."

DOBBS: Well, Wolf, this next story is perhaps -- well most certainly not amongst the most important of the day, but it is story about an event yesterday that sent me and I'm sure millions of other football fans perhaps cussing a little bit.

Over the past hour, the National Football League has admitted that Referee Pete Morelli made a stunningly wrong call during the Pittsburgh Steelers/Indianapolis Colts playoff game yesterday. With just five minutes left in the game, Steeler Troy Polamalu appeared to have intercepted a pass from Colts' Quarterback Peyton Manning and Morelli overturned the play, saying there was no interception.

Indianapolis went on to score a touchdown and a two-point conversion, putting the Colts only three points behind the Steelers. Mike Pereira the vice president of officiating for the NFL says Morelli was wrong. He was applying the wrong rule, one that is used when a player comes into contact with the player on an opposing team.

Polamalu didn't make contact with anyone, so the ball should have been and every fan reasonably watching that interception, knew it should have been his. After a wild finish, the Steelers beat the Colts 21-18. Steelers going to the conference championship, no help of course from officiating. But I'm sure everyone appreciates, as certainly I do, that the NFL admitted its error.

Still ahead tonight, scientists say they may have their hands on a major clue to the birth of our universe. Astrophysicist Charles Liu joins me here next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: NASA's newest interplanetary probe is sitting on the launch pad at Kennedy Space Center tonight. That rocket set to blast off for Pluto and beyond tomorrow. If all goes well, the probe will reach the ninth and last planet in our solar system, if you don't count the 10th, newly discovered, at around 2018 at the earliest. That's a few years out. And nuclear protesters demonstrating against this launch, saying that the 24 pounds of plutonium on board could trigger a serious nuclear accident were something to go wrong on the launch pad tomorrow.

Well, nothing has gone wrong with the Stardust Probe. Scientists at Johnson Space Center tomorrow, in fact, hope to receive their first glimpse of some of the oldest particles in our solar system, the universe in fact. Those particles picked up by the Stardust space capsule. It made an amazing picture-perfect landing in Utah desert over the weekend. The Stardust gathering space dust, while flying close to a comet. Scientist are saying that microscopic dust could answer key questions about how life formed.

Charles Liu is professor of astrophysics at the City University of New York. Joining us tonight. Good to have you with us.

CHARLES LIU, PROF. OF ASTROPHYSICS, CUNY: Always good to be here.

DOBBS: This was an amazing seven-year journey. A great success story for NASA.

LIU: Wonderful. It -- picture-perfect from beginning to end. And I have a little piece of something for you.

DOBBS: What is this?

LIU: It's aerogel. Basically it's spun up, nearly pure glass.

DOBBS: Can you see this? This is remarkable.

LIU: This is the stuff that captured the comet dust. It so light that you would need a block more than a cubic foot to weigh an ounce, and yet it is --

DOBBS: A cubic foot?

LIU: Yes. And yet it is strong enough to stop particle traveling at 10,000 miles an hour in its tracks.

DOBBS: All right. I will let you have that. That makes me nervous. It's what, five times the density of air itself?

LIU: Only five times density of air.

DOBBS: And yet it can capture one of these microscopic particles.

LIU: That's right. These pieces are generally smaller than grains of sand, but their impact's speed is thousands of miles an hour. Perhaps 10,000 or more. It penetrates through here. We want to catch it softly and gently so they don't break up upon impact. Whether they arrive, we can take them and literally slice the aerogel, slice by slice and pluck out the individual grains. DOBBS: How many of these particle, meteor filled with dust and ice, how many of these do we expect to have in that little mit of space gel?

LIU: Amazingly, maybe half a teaspoon's worth. Not very much at all by our standards, but for a scientist, that's more than enough to get important clues about composition, structural ideas, and maybe how they were formed and when they were formed.

DOBBS: And the dust as we look at it as our scientists look at it at Johnson Space Center. What are the specific questions that we think would be answered?

LIU: There's one very important one. And that is that everything in a comet is believed to be an extremely key part of the history of our solar system, four and a half billion years old stuff. Second thing is, it's possible that comets may have deposited material on earth. Actually organic material, such as the earliest component's, preprotein, pre-RNA, pre-DNA. Maybe we will find those these comets, too.

DOBBS: It's remarkable. Seven years, a quarter billion dollar project. Absolutely perfect. A Happy ending. Unlike the Genesis probe and we're about to launch another effort, hopefully in the next day, a new probe out to Pluto and beyond. We'll see what that brings.

LIU: Let's hope so.

DOBBS: Charles Liu, as always, to lead us through all of these amazing, amazing events.

LIU: Always a pleasure. Thanks, Liu.

DOBBS: Still ahead here, we'll have your thoughts and the results of our poll and stealing from the state in communist Cuba. Not a good idea, Fidel Castro says.

(COMMERCIAL BREAK)

DOBBS: This just in to CNN, we are now told doctors in Palm Spring, California, saying that former president Gerald Ford has been readmitted to the hospital. The former president being readmitted after suffering from flu-like symptoms. Gerald Ford, our 38th president, admitted to the hospital over weekend. President Ford who is now 92 was hospitalized for tests just last month. And of course we here at CNN will have a complete update for you on the former president's condition as we receive further information.

Well, tonight communist Cuba has mobilized a new army of thousands in an effort to fight rampant theft and corruption in Cuba. President Fidel Castro says the threat of corruption in his country is even greater threat than that of the United States. Lucia Newman reports from Havana.

(BEGIN VIDEOTAPE) LUCIA NEWMAN, CNN CORRESPONDENT (voice over): These are the black shirts. Fidel Castro's new anti-corruption army. In a commando-style operation, all of Cuba's gasoline stations and refineries were taken over without notice overnight by nearly 30,000 young men and women.

They were appointed personally three months ago by Cuba's communist leader to prevent widespread thievery at the pump and at the cash register.

We're preventing black marketeering of fuel all over the country says Eduardo Campos (ph) who was brought to Havana from Eastern Cuba to replace one of thousands of station employees suspected of stealing hundreds of millions of dollars worth of gasoline and diesel.

But it's about more than just money. For the first time President Castro has recognized that corruption, rather than the United States, is his revolution's worst enemy.

FIDEL CASTRO, CUBAN PRESIDENT (through translator): This country, this revolution, can self-destruct. They, the Americans, cannot do it. But we can do it ourselves and it would be our fault.

NEWMAN: Castro says thousands of GPSs, or satellite tracking devices, have been ordered to keep tabs on everything from state cars to tractors to even ships to make sure they're where they're supposed to be.

In Cuba, corruption is so widespread that there's a special lexicon for referring to illegal transactions.

(on camera): Here they don't call it stealing from the state, they call it inventing. And, for example, if you want to buy a carton of eggs or a sack of cement on the black market, you call it resolving. Words you hear everywhere every day.

(voice over): After years of declaring that Cuban communism was indestructible the 47-year-old regime is on an offensive to prepare for the day that Fidel Castro and his designated successor, brother Raul Castro, are gone

FELIPE PEREZ ROQUE, CUBAN FOREIGN MINISTER (Through translator): Even the enemy knows it can't do anything with them around, but they base their hopes on the idea that they'll be able it confuse, defeat, divide or buy off those who come next.

NEWMAN: This week Havana awoke to red posters reading defiantly, strong on all fronts. A way of saying that more political and economic controls are under way to try to prevent Cuban communism from collapsing like it did in The Soviet Union. Lucia Newman, CNN, Havana.

(END VIDEOTAPE)

DOBBS: And now the results of our poll. Ninety-seven percent of you say there no reason that a U.S. citizen should ever believe that a Mexican citizen has the right to legally cross our border without passing through immigration.

A look now at some of your thoughts.

Jim in Michigan: I thought Alberto Gonzales was supposed to be our chief law enforcement officer, not an advocate for illegal aliens.

Ted in Texas wrote in about our series of special reports on the best government money can buy. "Best government money can buy," he wrote. "Of course, how else would they earn a living. It sure isn't representing the average American."

David in Florida said, "Lou, let's face it. We no longer have a democracy of the people, by the people and for the people, we have a government of, by and for the corporations and their lobbyists. Call it what it is, a Corpocracy."

Send us your thoughts at loudobbs@cnn.com. Thanks for being with us tonight. Please join us here tomorrow. For all of us, good night from New York. THE SITUATION ROOM begins right now with Wolf Blitzer.

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

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