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LOU DOBBS TONIGHT

Second Review Of Ports Deal To Begin; President Bush Defends Outsourcing While In India; Senate Debate May Give New Rights To Illegal Aliens; Cardinal Roger Mahony Lends Support To Illegal Aliens; Marine Colonel Rickey Grabowski's In Same League As General Patton

Aired March 3, 2006 - 18:00   ET

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


ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Friday, March 3.
Live in New York, Lou Dobbs.

LOU DOBBS, CNN ANCHOR: Good evening, everybody.

Tonight, Dubai Ports World pushing forward with its deal to buy major U.S. port operations despite new charges that the Bush White House put commerce ahead of national security by failing to consult with anyone else about this sale.

We'll have complete coverage, including, of course, these new developments.

Also tonight, what appears to be another major U.S. security giveaway. President Bush says India can keep its nuclear weapons. The president also made outrageous remarks about the export of American jobs to cheap overseas labor markets.

We'll have that special report.

And three of the nation's top political analysts join me here tonight to discuss what has been a remarkable week for the nation, a terrible week for the president -- former White House political director, Ed Rollins; "TIME" magazine's columnist, Joe Klein; Michael Goodwin of "The New York Daily News."

And outrage tonight after one of the country's most powerful Catholic cardinals calls upon his parishioners to break the law to help illegal immigration. Is it time for the Catholic Church to lose its tax-exempt status?

We'll have that report.

All of that and a great deal more coming up tonight.

We begin in new developments in Dubai's efforts to take over major port operations in this country. Dubai Ports World today asked the Committee on Foreign Investments in the United States to begin a new extended review of the deal. The company is moving forward even though an American company is still taking legal action in Great Britain to stop the sale. At the same time, 10 leading Republican and Democratic senators today signed a letter demanding the Congress have the final say over whether this deal can proceed.

We turn first to Andrea Koppel in Washington -- Andrea.

ANDREA KOPPEL, CNN STATE DEPT. CORRESPONDENT: Lou, CNN has learned that DP World planned to file its formal application today with CFIUS -- that's the Committee for Foreign Investment in the United States -- to begin a 45-day investigation into whether its purchase of a British firm which currently manages the port facilities in six U.S. cities pose as threat to U.S. national security.

As you know, that 12-agency CFIUS committee already approved the deal in January after only a routine 30-day investigation. But after countless lawmakers staged a bipartisan revolt, putting the future of the deal in jeopardy, the company signaled it would voluntarily agree to a more intensive 45-day investigation. An investigation many lawmakers say should have happened months ago because DP World is a foreign-owned company, and as such, if the deal were to go forward, could pose a threat to U.S. national security.

DP World is owned by the United Arab Emirates. A spokesman for the Treasury Department which heads up CFIUS told CNN today that the 45-day investigation doesn't begin immediately. Rather, Lou, it begins after another review which could take up to 30 days -- Lou.

DOBBS: But which is expected to take considerably less time.

Andrea Koppel, thank you very much.

New evidence tonight that the Bush White House appears to believe that commerce is more important than national security. It turns out the Committee on Foreign Investments which is supposed to safeguard our national security interests failed to consult anyone outside the Bush administration before approving this deal.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): CFIUS, the committee headed by Treasury that approved the Dubai deal, did not talk to the 9/11 Commission about national security concerns. It did not talk to the port authorities. It did not even talk to lawmakers.

Ask the Treasury Department why not and it points to a confidentiality clause in the law.

ROBERT KIMMITT, DEPUTY TREASURY SECRETARY: What the law says is that we are barred from publicly discussing any information provided to us.

SYLVESTER: The law that applies to the Dubai ports sale recognizes the need to protect company's proprietary information while an acquisition is in the works. But critics say Treasury has been bending over backwards to fulfill this confidentiality request at the expense of national security.

SEN. CHARLES SCHUMER (D), NEW YORK: In the CFIUS committee is it is clear economic considerations and diplomatic considerations often trump homeland security.

SYLVESTER: The law reads, "No such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding."

Pat Mulloy helped write the law. He says the way the law has been interpreted is simply bizarre.

PATRICK MULLOY, INTERNATIONAL TRADE EXPERT: But it doesn't mean that you can't do what you're supposed to be doing as part of your agency responsibilities in carrying out the investigation to make sure that there's no national security problem.

SYLVESTER: Treasury's interpretation, in fact, has kept the entire CFIUS process in a shroud of secrecy.

DAVID HEYMAN, CENTER FOR STRATEGIC & INTERNATIONAL STUDIES: It's such a private process that even though there's -- it's known that there are 1,500 investigations that have gone on over a number of years, we don't know what the 1,500 are.

SYLVESTER: Congress is been bent on reforming CFIUS so that it's not kept in the dark anymore.

(END VIDEOTAPE)

SYLVESTER: And this confidentiality clause specifically says Congress can have access to the review process. Why were lawmakers not consulted on this deal and the hundreds of other cases that have been reviewed by CFIUS? Well, Lou, that is really anyone's guess.

DOBBS: Well, let's rather than guess at least inquire with the author you just spoke to, the author -- at least the co-author, if you will, of the legislation who has now on this issue, also on the issue of whether the 45-day review should be triggered, the more intensive review, has said clearly, unequivocally, that that was exactly the intent of Congress. Why did, if they wished to interpret the law, did they not go to those who had written it and authored it and created the architecture of the law?

SYLVESTER: That's a very good question, Lou. And what many people believe is that Treasury is really bent on this open investment policy, and that gets to the heart of this question, is whether or not they put investments, foreign investments, over national security. And I think we would pretty much know the answer to that, at least what many people would say, at least those on Capitol Hill -- Lou.

DOBBS: And it appears that Congress, at least a rising number of those in Congress, the House and the Senate, have tired of the Treasury Department's rather convenient interpretation of the laws that they've passed.

Thank you very much.

Lisa Sylvester.

President Bush tonight appears to be ignoring what is nothing less than rising anger on Capitol Hill about this Dubai ports deal. President Bush is focusing on geopolitical affairs tonight in Pakistan after a visit to India.

Before he left New Delhi, President Bush strongly defended the outsourcing of American jobs to cheap overseas labor market. What we call exporting America.

Elaine Quijano reports from New Delhi.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: President Bush capped off a three-day visit here to India by stressing the ties between this country and the United States. Speaking in the Indian capital of New Delhi, the president talked about how both countries are democracies made up of multicultural, multi-religious and multiethnic societies.

The president also addressed an issue that's been a sensitive one in the United States, issue of outsourcing. Mr. Bush acknowledged that Americans have paid a price for outsourcing, but he said isolationism is not the solution.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's true that some Americans have lost jobs when their companies moved operations overseas. It's also important to remember that when someone loses a job, it's an incredibly difficult period for the worker and their families.

Some people believe the answer to this problem is to wall off our economy from the world through protectionist policies. I strongly disagree.

QUIJANO: The president also said the rise of India's middle class, some 300 million strong, represents an immense opportunity for American business.

In his wide-ranging speech, the president also said there has been close cooperation between the U.S. and India on the war on terrorism. That is the issue that will be front and center when Mr. Bush sits down with Pakistan's leader, President Pervez Musharraf, in Islamabad on Saturday.

Elaine Quijano, CNN, New Delhi, India.

(END VIDEOTAPE)

DOBBS: While in India, President Bush signed an agreement that will allow India to keep its nuclear weapons and to acquire U.S. nuclear technology, commercial technology, despite three decades of U.S. objection. Many members of Congress say this deal will simply encourage Iran, North Korea and other states with nuclear ambitions to defy the United States and Europe and the United Nations.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): President Bush tried to sell the deal as a way to keep India's demand for oil in check.

BUSH: We must help countries like India and China to produce their demand for crude oil.

PILGRIM: But India uses coal for its electricity, and with India's population of more than a billion people, the need for oil for transportation is certain to keep growing.

HENRY SOKOLSKI, NONPROLIFERATION POLICY EDUCATION CENTER: They don't use oil to fire their electrical plants. They use coal. So the idea that somehow by throwing more nuclear electricity at them they won't consume as much oil strikes me as just totally phony.

PILGRIM: The concern is the deal, made to strengthen a strategic alliance with India, gives away too much and offers little, if nothing, in return.

JOSEPH CIRINCIONE, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: We've now given India everything except actual nuclear weapons. We've dropped all restrictions. We're going to sell them anything we want. And we didn't have to do that.

What the Indians are really interested in is weapons production. So a third of their reactors are now going to be free of any international inspection, and they're going to be able to devote them entirely to weapons production.

PILGRIM: Pakistan and India currently have approximately the same nuclear capacity, 70 to 100 nuclear weapons. Iran and North Korea, highly criticized for their nuclear ambitions, may seek more capacity. So this deal is likely to cause tensions.

It also caused tensions at home. The agreement requires congressional approval.

REP. ED MARKEY (D), ENERGY & COMMERCE COMMITTEE: This is not only a disaster for Asia. It's a disaster in our own hemisphere as well. This is going to lead to a cascading effect.

(END VIDEOTAPE)

PILGRIM: Now, the problem with the escalation of nuclear capacity in the region, it's already well under way. China just said it would sell two reactors to Pakistan for so-called civilian use, Lou. So it's really quite a problem and it will come back to haunt the United States, this agreement.

DOBBS: If -- if Congress passes it, it could be considered a temporary disturbance in -- in our foreign policy. Is it likely that this Republican-led Congress, Senate and House, will approve this?

PILGRIM: No. Many of the experts that we talked to today are dead set against the deal. I could not find a nuclear expert who thought this was a good deal. So the fact that that may trickle in to Congress may set the tone for the debate when it hits Congress.

DOBBS: This is -- again, the only word that comes to mind is "remarkable," because that is as tepid a word as I can offer.

Kitty Pilgrim, thank you very much.

Europe today failed in a last-minute attempt to convince Iraq to give up its nuclear ambitions. European negotiators met with Iranian officials in Vienna. The Europeans demanding that Iran completely suspend its uranium enrichment activities. The Iranians, however, refusing to comply. The United Nations Security Council now almost certain to consider Iran's nuclear program later this month.

Still ahead here, President Bush tells Indian workers how Americans can survive competition from cheap overseas labor markets. Outsourcing is just ducky, says the president. More or less.

We'll tell what you that means for middle class America.

And one of the most powerful Catholics in this country calls upon his parishioners to break the law, if necessary. We'll tell you why in our special report.

And new questions tonight about the performance of Governor Kathleen Blanco of Louisiana during the Hurricane Katrina disaster.

That story, a great deal more still ahead.

(COMMERCIAL BREAK)

DOBBS: President Bush praised the virtues of outsourcing in India despite the devastating impact on this nation's middle class. President Bush acknowledged losing jobs is painful, but the president said the solution is educating Americans so they can fill the jobs of the 21st century.

So we thought you might be interested in knowing just exactly what those jobs in the 21st century are. And we wanted to use the most reliable source possible. We turned to the Labor Department. Well, here we go.

Nursing assistants will be the fastest-growing job. The government says the job involves changing bed pans and offers low pay, little opportunity for advancement. As for education requirements, no high school diploma needed.

And the restaurant industry proud to say it's a leader in job creation and the cornerstone of the nation's economy -- 12.5 million people, in fact, work in restaurants. Nearly as many employed in manufacturing. That, by the way, should please Gregory Mankue (ph), a professor at Harvard. He, of course, the president's economic adviser. He's the one who said making hamburgers should be classified as manufacture.

Tonight it would appear that some in Congress care more about illegal aliens than they do about their middle class constituents. The Senate has begun debate on legislation that would grant sweeping new rights and protections to illegal aliens at the expense often of middle class working men and women. The bill is sponsored by Senator Arlen Specter.

Bill Tucker has the report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): Senator Specter sees the house one and raises the stakes. He wants to look at building a wall along the southern border, too. But why stop there? Why not the northern border and the sea coast as well?

And there's more.

MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: I think it really is a kind of patchwork, like a Frankenstein's monster. I mean, it's one organ from one body and a different organ from another all kind of stitched together.

TUCKER: In it, Arlen Specter wants to increase legal immigration by more than a million, grant amnesty to every illegal alien who entered country prior to January 4, 2004 who currently has a job, expand existing guest worker programs like H1 visas and L1 visas. And in addition, it would create a separate class of visas for temporary workers who come and find a job. They can bring their wife and kids.

DAN STEIN, FED. FOR AMERICAN IMMIGRATION REFORM: It is the globalization of the American labor market pitting the average American worker, your kids, my kids, against a global workforce, which will be able to come in to this country basically on demand.

TUCKER: This is not theoretical. Workers already suffer the very real consequences of unchecked immigration and uncontrolled visa programs.

Labor Department data shows high-tech H1B visa workers earn on average $13,000 less than American workers. A review of the L1 visa program found that the program cost American workers jobs. A wage review conducted by the University of North Carolina found wages in the construction industry in that state were suppressed by a total of $1 billion, largely because of illegal immigration.

The bill has a lot of observers scratching their heads.

ROSEMARY JENKS, NUMBERS USA: The Specter bill is going to prevent them from doing anything in the near term, because it's just too big. It's too over the top. TUCKER: How over the top is it?

(END VIDEOTAPE)

TUCKER: Specter's bill would fund a study to determine whether private investment Social Security accounts should be offered to guest workers -- Lou.

DOBBS: I'm speechless. Well, I'm not really. A moment's reflection.

And you have to wonder, what in the world are these people in Congress thinking about? The idea that -- how many bills do we have now? It's something -- I mean, we're approaching, literally, two dozen major initiatives.

The idea that building a wall around everything -- I mean, what in the world is he thinking about?

TUCKER: I don't know. I asked a number of people that, and they couldn't tell me what was possibly on his mind.

DOBBS: And giving more rights, offering more opportunities to illegal aliens, up to 2004. I mean, none of this makes any sense.

TUCKER: It's got a lot of people scratching their heads, Lou, because it doesn't make sense to them either.

DOBBS: But it's pretty clear that the Senate leadership and the Bush White House intend to, if you will, game the -- game and get a guest worker initiative out, and cut all of their Republican friends in the House loose for whatever happens in November. And what happens doesn't look like it's going to be very pleasant for them.

Bill Tucker, thank you very much.

One issue -- I have one issue after another. From illegal aliens to port security, the majority of Americans reject Bush administration policies. It's really, again, quite remarkable.

Sixty-six percent of Americans polled say they are against the Dubai ports deal, even as the Bush administration insists this deal would go forward, even though there has not been an adequate review in the determination of just about everyone outside the administration.

Seventy-five percent of Americans surveyed say they disapprove of how President Bush handled the Hurricane Katrina disaster.

Fifty-eight percent of senior citizens say the new Medicare prescription drug program simply is not working.

Fifty-seven percent of Americans surveyed disapprove of how President Bush is handling the economy.

Sixty-four percent disapprove of the administration's policy in Iraq. In other recent polls, 62 percent of Americans say they oppose the Bush administration's policy on immigration.

In Denver tonight, a 50-year-old heavy equipment operator, Mike Gray (ph), is in danger of losing his job because he's proud to be an American who happens to speak English. Mike Gray says his bosses are threatening to fire him because of a bumper sticker on his car that reads, "Lawn services done with pride by an English speaking American."

He says his bosses in the county government say it's offensive to his co-workers. He says he's been accused of discrimination and harassment.

The Arapaho County government issued a statement admitting the dispute, saying, "There are complaints from both sides. It's importance for the county to find out what the true facts are."

Well, what they said initially was, that it was all a very reprehensible thing for Mike Gray to do, and they said that in no uncertain words.

Congressman Tom Tancredo of Colorado, who represents Mike Gray's district says, "No one should be offended that they're proud to speak English. I only hope the county commissioner will set this straight."

The U.S. Catholic Church has launched an aggressive political fight against border security reform supported by a majority of Americans. Los Angeles Cardinal Roger Mahony, the leader of the largest archdiocese in this country, is calling upon his parishioners to openly defy their elected representatives and lend their support to illegal alien lawbreakers.

Peter Viles reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE (SINGING): Take us by the hand...

PETER VILES, CNN CORRESPONDENT (voice over): On Ash Wednesday, Cardinal Roger Mahony of Los Angeles spoke in defense of illegal immigrants.

CARDINAL ROGER MAHONY, ARCHDIOCESE OF LOS Angeles: The bishops are asking all of us across the country to enter into prayer and special fasting remembering and recalling our own immigrant roots to make sure that we don't slam the door in the faces of those who are here.

VILES: Mahony also defended giving charity to those here illegally.

MAHONY: We must be able to minister to people, regardless of how they got here. People come to our Catholic charities. We need to be able to minister to these people in the name of Christ. VILES: At issue, a House-passed bill that states, in part, "Whoever assists, encourages, directs or induces a person to reside in or remain in the United States knowing or in reckless disregard of the fact that such person is an alien who lacks lawful authority to reside in or remain in the United States shall be punished.

TOD TAMBERG, ARCHDIOCESE SPOKESPERSON: It would criminalize simple humanitarian gestures like giving a sandwich to a starving person if that person happened to be undocumented, and it could even intrude inside the doors of the church.

VILES: Those who favor the House bill say it would crack down on the business of smuggling illegal aliens and anyone who knowingly harbors them.

IRA MEHLMAN, FAIR: You have church institutions that are providing shelter, help people, knowingly help people to get into this country illegally and remain here illegally. And no institution, even religious institutions, are above the law.

VILES (on camera): Cardinal Mahony has made a personal appeal to the president on this issue. In a letter to President Bush, he said the bill as written would "penalize Catholics for doing what their faith demands of them."

Peter Viles for CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: That brings us to the subject of tonight's poll. Do you believe that all churches in the United States should take a political position on border security, yes or no?

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

Still ahead, a governor to remember. New evidence that Louisiana's governor, Kathleen Blanco, was completely in the dark about New Orleans' dire levee emergency as Katrina struck.

Also, sentencing day for disgraced congressman Duke Cunningham and why Congress still doesn't get it when it comes to the idea of ethics reform.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Louisiana Governor Kathleen Blanco's response to Katrina is being questioned as well tonight. New video obtained by The Associated Press showing Blanco assuring the Bush administration the New Orleans levees remained intact, even as the levees were being breached. As Governor Blanco spoke her words, parts of New Orleans was already under eight and 10 feet of water.

In San Diego, California, today, former California congressman Randy Cunningham was sentenced to eight years, four months in prison for taking almost $2.5 million in bribes. It is the longest prison term ever given a U.S. congressman.

Congressman Cunningham received homes, yachts, antique furnishings, other items from defense contractors in return for his support. He could have received 10 years in prison, but prosecutors say they are satisfied.

(BEGIN VIDEO CLIP)

JASON FORGE, U.S. PROSECUTOR: Today's sentence is a sad but well-deserved ending to Mr. Cunningham's public career. Political corruption is a terrible threat to our democracy, and it is important, because of that threat, that sentences for those offenders be significant.

(END VIDEO CLIP)

DOBBS: Three former aides to Michigan's congressman, John Conyers, leveling serious charges tonight. They say Conyers used then as personal gophers and valets when they were supposed to be working for his office near Detroit. They also charged they were forced to baby-sit for Conyers' children.

Some in Congress, it seems, are still not quite serious about ethics reform. A Senate committee has rejected a bipartisan proposal that would have set up an independent ethics office on Capitol Hill.

The defeated provision was part of the lobbying reform bill that goes before the full Senate next week. Senator Susan Collins, a Republican from Maine, and Senator Joe Lieberman are vowing to bring back that provision when the Senate votes on the final package next week.

Taking a look now at some of your thoughts.

Al in Pennsylvania wrote in to say, "Wow, I'm impressed with President Bush and his negotiating skills during his visit to India. They get nuclear technology and we get mangoes. Can't wait to hear about the deal with Pakistan."

Nancy in Michigan, "I would rather have my job back than the ability to buy Indian mangos."

Donna in Tennessee said, "Mangos in exchange for technology? I guess we can eat those while we struggle to understand customer service reps who can't speak English."

Sandra in Alabama, "Lou, good work on the outsourcing of everything American. Why shouldn't our ports be for sale? Our politicians are."

And Jack in Texas, "Perhaps we should hire illegal, temporary guest workers to clean up the permanent mess in the White House made the current, temporary occupants." Will in Washington, "I have never in my 74 years seen such a lack of concern for the citizens of America by the elected officials in Washington, D.C."

Al in Arizona, "We no long have to worry about danger to our country from the outside. We must now be afraid for our security because of our own government."

And Kathy in Wisconsin, "I don't know what it will take for we, the people of this nation, to remember that we are the people, for whom this government was created. And that members of Congress and the president are responsible to us."

Elaine in Arizona, "Mr. Bush is selling our country out. I voted since Eisenhower and it is the first time that I am afraid for our country."

Maggie in Florida, "On hearing about the sell-off of American ports my son asked me, hey, mom can they sell the statue of liberty, too? It actually brought tears to my eyes. What is the answer?"

Send us your thoughts at LouDobbs.com. We'll have many more of those thoughts later in the broadcast.

Coming up next, as President Bush travels the world his support at home is slipping. Three of the country's top political analysts join me to discuss what has been yet another damaging week for the White House. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Bush administration lost some credibility this week as it continued its stubborn support of the Dubai Ports deal, insisting all the while there were no objections within the CFIUS committee amongst other thing.

Joining me now three of the country's leading political analysts: former White House political director Ed Rollins; Michael Goodwin, "New York Daily News"; Time Magazine's" Joe Klein.

Ed, let me ask you, the president of the United States is in New Delhi. And I'd like to share it with you and our audience precisely what the president had to say about mangoes.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The United States is India's largest trading partner, and India's one of the United States' fastest grows export markets. It's one of the reasons we met with the CEOs today, is how to further trade and how to further commerce and how to further opportunities.

And, oh, by the way, Mr. Prime minister, the United States is looking forward to eating Indian mangoes.

(END VIDEO CLIP) DOBBS: What do you think, Ed?

ED ROLLINS, FMR. WHITE HOUSE POLITICAL DIR.: You know, the reality is, they've lost their touch. I mean, it's just -- as I was saying to Joe earlier, every week it's something that just reinforces the message that these guys don't know what they're doing. They're incompetent.

I mean, we're almost to the point, where we're going to look fondly back on Jimmy Carter's administration. And I say that with great sadness as a Republican. But it's week after week after week that they just can't seem to find their way.

Normally a foreign trip gives you something. You go there, but if we're walking back with mangoes, and they're getting nuclear rods, that's not a very good swap.

JOE KLEIN, TIME MAGAZINE: It's not only week after week after week. It gets worse each week.

MICHAEL GOODWIN, NEW YORK DAILY NEWS: And I think the questions on this deal are particularly of great concern. I mean, if we're essentially letting India and helping India expand its nuclear and sort of taking the military part out of it out of the equation, let them go on their own there, I don't know what are we getting out of it?

I don't think the mangoes are going to matter in the end if we're just giving away the store here.

DOBBS: Well, surely his...

KLEIN: But we are getting -- listen, there's a geo-strategic argument for this that you may not buy, but this is what it is. If you think that China is going to be a threat, a military threat, in our future, a security threat, then we're forming a military alliance with India.

DOBBS: Well, now that's a great piece of rationalization for turning technology, commercial technology and meddling nuclear technology to the Indians in exchange for mangoes.

But it doesn't quite rationalize then why, if you think that is the geo-political reason that is to have balance and to avoid absolute hegemony by China in the region, it doesn't really explain why you have turned over part of your west coast ports to a Chinese communist government company?

KLEIN: You're absolutely right. And I happen not to believe that China's going to be a military threat in the future because it has never been in 4,000 years.

DOBBS: So now with get to do this and kind of go back to the fact that we don't believe what our rationalization was in the first place.

ROLLINS: I mean Pakistan and India have this incredible rivalry and they have had some balance in their nuclear weapons.

DOBBS: What that going to say to Musharraf?

ROLLINS: And that's the next question, and I think the reality is...

DOBBS: You want more?

ROLLINS: You can't very well be dumping on the North Koreans and the Iranians, which we need to do, when we're basically saying you can have whatever you want and we're not going to look.

DOBBS: So in other words, by following this deal -- whether you believe China is the ultimate military rival or opponent or economic competitor, the fact is you've just eliminated part of the foundation for carrying out your war on terror, because you have identified North Korea and Iran as the axis of evil, yet you've just eliminated any rationale for denying them nuclear power?

KLEIN: I sense I feel, increasingly -- well, I always felt it on the military side. But this administration is very much living in a past world. And especially...

DOBBS: I think they are fortunate to have identified which world they are living in.

KLEIN: It is very much in a pre-globalization world. You know, I spent this week talking to Democrats about what -- you know and their position is changing on globalization.

You know, you look at Bill and Hillary Clinton. Bill Clinton, a creature of the 90s, was in favor of the ports deal. Hillary Clinton votes against CAFTA, votes against the ports deal.

And among new Democratic, moderate Democratic intellectuals there is a tremendous push now to build a whole new social safety net to deal with the issues of globalization and the information age. The Bush administration isn't thinking, isn't acknowledging any of this.

ROLLINS: Well, state-of-the-art, Donald Rumsfeld is state-of- the-art 1976. And, you know, he wanted to get that job again so he could finish, and he has that same thought process.

GOODWIN: I mean think that they're not going to have a chance. I mean, first of all, I think that the ports deal is not going to be approved. I think that once they go through a review and I think as more documents come out, there is no way that is going to happen.

And I think there is a real question as to whether the treaty with India...

DOBBS: You just opened all of our hearts to the prospect of hope in America, 2006.

GOODWIN: You should be so lucky.

DOBBS: Absolutely.

KLEIN: We should always be hopeful it's America for God's sake.

DOBBS: I'm not sure that hope is always appropriate. Let me finish, though. I'm not sure it's always appropriate when it comes to frankly following the policies that this government has been enunciating and executing for the past some years.

Let's go to one thing. You wanted to say something. Go ahead, Joe.

KLEIN: What I wanted to say is that there is going to be a much bigger issue when it comes to foreign ownership, and "The Washington Post" opened it up yesterday. And that is military contracting. I am told that 20 percent of defense contracts go to foreign companies.

DOBBS: And I'm told it's much higher than that, and Duncan Hunter tried to push through legislation, the chairman of the House Armed Services Committee, tried to push through, buy America for U.S. military procurement and got snickered out of the Hill. And it's embarrassing.

KLEIN: Look, there's a serious conversation that has to be had. If it's illegal for a foreigner to own a television station, and it's legal for foreigners to manage ports we have to rationalize this and figure out what it is legal for foreigners to own and what they shouldn't own.

DOBBS: When we get through all -- you're talking about the Democratic intellectuals and the Republican intellectuals, and I am giving both parties great credit for accepting that they have intellectuals. The people of this country are a hell of a lot smarter than they are given credit for by either party.

This is straightforward. You do not build a rationale to sell key infrastructure assets. You don't build a rationale for fancy geo- political strategy and at the same time open yourself wide to terrorist attack or to ultimately to...

ROLLINS: We started down this trap when we took on Marine One, the President's helicopter, which was built by Sikorsky in Connecticut for ever since the president's flown in one, and we basically buy a French helicopter. Tells you a lot.

DOBBS: Michael, we're going to turn to you. We're going to turn to you when we come back. We'll be right back here with our insightful analysts on this issue. Some of this is getting pretty bold on the part of the administration and the Congress and these issues. We'll be discussing that in just a moment. Stay with us.

(COMMERCIAL BREAK)

DOBBS: There are so many issues. I just want to -- the president in India saying the United States will not give in to protectionists and lose those opportunities, talking about outsourcing American jobs. This president, this administration, his speech writers, his strategists, this has become the presidency of false choices.

You either outsource or you're a protectionist. You're either for free trade or you're an economic isolationist. You're either a stay the core patriot in Iraq, or you're undermining our military efforts and assisting the enemy.

Why is the national media -- forget the political aspects of it, but why is the national media, Joe, permitting these kind of false choices to go almost without comment, let alone some statement of critical judgment?

KLEIN: I address that very issue in my column on Monday! So these are very -- as I said, these are very complicated issues. Bush still lives in a world where ...

DOBBS: Because, you know what the answer to complicated issues are today? Oh to hell with it. Then let's just not deal with them, whether you're in Congress or up on 1600 Pennsylvania.

KLEIN: Well, right. Bush lives in a world where there's no downside to globalization. We now know that there is. You're not going to be able to put the toothpaste back in the tube. There's going to be a global economy, but there has to be major steps taken.

DOBBS: Why do people say things like that, Joe? We're not -- none of us are idiots. It's a global economy, but what in the -- in the world are people thinking when they say you have to be a free trader, even though it costs you $4.5 trillion.

KLEIN: Well, that's what I was about to say, is that there's a place in the middle.

DOBBS: There you go.

KLEIN: And this administration doesn't acknowledge that there have to be major steps taken to support the American middle class.

ROLLINS: Well, nobody else plays by the same rules. That's the problem. I mean, we basically, you know -- your points -- I mean, everything in this administration is black or white. You're either loyal or you're disloyal. You're either an isolationist or you're an internationalist. But the bottom line is other countries aren't playing by the same rules. And that's ...

DOBBS: Well, they're not playing by the same rules, as you mentioned, the middle class. This administration doesn't seem to care about the middle class at all and that is most of America. Those are the people who make America work.

GOODWIN: And the one thing I think this president had going for him with the middle class was this sense of protection, of security, and that's what he's forfeited on the ports deal.

(CROSSTALK)

GOODWIN: And I think that's why we're having this conversation, that the public has looked to George Bush, in particular since 9/11 -- I mean, that's why he was re-elected, and he's given it away over this bizarre little deal.

(CROSSTALK)

DOBBS: The pain, though, is going to be felt by middle class working men and women in this country.

GOODWIN: Sure.

DOBBS: And he's sitting there in India, proud of it.

(CROSSTALK)

DOBBS: Well, part of the reason why he was re-elected in 2004 and elected in the first place in 2000, is that he's been very lucky in his opponents. He had to run against two mortal stiffs. But I have a question for Ed, which is, knowing Karl Rove and knowing how he thinks, how do you think he's going to try and change the topic?

ROLLINS: Well I think Karl is ...

DOBBS: It won't be terrorism.

(CROSSTALK)

KLEIN: I mean, that's what he was going to try and do ...

(CROSSTALK)

ROLLINS: I think Karl has been distracted the last year with the CIA investigation and I think, to a certain extent, he was much better when he was the political adviser. When they made him the deputy chief of staff, he worried about policy.

There hasn't been any policy in a year and a half that's been successful. Andy Card is an old friend of mine, worked on my staff. He's been around a long, long time, and I think he's tired. And there's nobody else allowed to have any political ...

DOBBS: Well, somebody better get a rest.

ROLLINS: Well, the critical thing is you talk about blue collar workers hurting. This Congress ...

DOBBS: I'm talking about all of them.

ROLLINS: This Congress is going to pay a heavy price and they are running for the desks.

DOBBS: Well, let me ask you this, Michael -- is it time to start praying for gridlock?

GOODWIN: Well, look, I mean, for example, divided government always does stop the worst excesses. When you look at Congressional ... DOBBS: Then it's time to start praying for gridlock.

(CROSSTALK)

GOODWIN: I mean, I think that when you look at the Republicans only what they've done in Congress, but the ethical issues are all about one-party control. So definitely I think divided government is a big improvement.

ROLLINS: And that tragedy is just beginning. Cunningham going to jail today, you know, who in other times would have been shot for treason, it just the beginning. There is three or four major investigations going on of corruption.

And it's going to -- there's so many U.S. attorneys looking at this thing that by the middle of this summer, there's going to be 10 or 15 Congressmen, at least, that are going to be under very serious scrutiny and ...

DOBBS: What about in the Senate?

ROLLINS: You know, there's one or two in the Senate, but I think it really is a House ...

(CROSSTALK)

ROLLINS: ... and it's really a Defense Appropriation Committee, and these two guys that bribed ...

DOBBS: Well, Conyers, John Conyers, calling for the president's impeachment at the same time suddenly he's got aides coming for the others.

ROLLINS: But contrasting getting $2.1 million in bribes to having baby-sitters, your staff baby-sit is the ...

(CROSSTALK)

ROLLINS: Republicans will try to and make that, but it won't be good ...

DOBBS: John Conyers is learning about the consequences of energetic initiative.

ROLLINS: He can't get a good nanny. There's no illegals in his neighborhood.

GOODWIN: It's the job program for lawyers.

DOBBS: Well it's the job program for lawyers, but for everybody who cares about whether or not this country works, the idea that we're throwing away security on ports -- and I know some of us may disagree about this issue -- to turn over, whether it's to the Israeli government or the Dubai government, operation of port terminals and then to watch so-called experts hold forth that this is really fine is utter madness, and nobody out there is buying that, almost no one. But yet they persist a $7 billion commercial deal. The president of the United States is sitting in New Delhi -- and I happen to think that India is arguably the most important geopolitical partner this nation could have, but that doesn't mean it's a deal at any price.

Is there any part of this administration -- and I've got ask you this first, Ed. Is any part of this administration working right now, in your judgment? And I'm talking about in governance, not politics.

ROLLINS: Maybe Interior, but I'm not quite sure. I think the parks are still being run pretty well.

(CROSSTALK)

GOODWIN: I think the best thing Bush has done in the second term is John Roberts and Sam Alito, and Bernanke, I think, is a fine choice also.

He got the Patriot Act through, which should have gotten a bigger boost for him this week, but it wasn't because of all the bad news. So I think there are a couple of small items, but they're clearly being overwhelmed by the tide of sludge.

DOBBS: A tide of sludge. Joe Klein, this is a very dangerous thing to do. Gentlemen, I think you'll agree with me, we're going to give you the last word here.

KLEIN: Well, it's really calling into question a lifetime of covering politics for me. I always thought that the Democrats were mortally incompetent. These guys are worse than I've ever seen from the Democrats.

DOBBS: As you put it, you have inspired us with your hopeful message, and we appreciate that as we head into the weekend. We will restore faith and hope over the weekend as we rejuvenate.

KLEIN: Can't really be pessimistic and be an American.

DOBBS: Well, you certainly can't, but you sure as heck, as Ronald Reagan used to stay...

KLEIN: Short term.

DOBBS: ... trust but verify.

Thanks a lot. Joe Klein, Michael Goodwin, Ed Rollins.

A reminder to vote in our poll. The question is: Do you believe that all churches should take a political position on the issue of border security since the Catholic Church has? Yes or no? Cast your vote at LouDobbs.com. We'll have the results coming right up.

And coming up at the top of the hour here on CNN -- none other than Wolf Blitzer with "THE SITUATION ROOM" -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. The former FEMA Director Michael Brown returns to "THE SITUATION ROOM" live tonight, coming up at the top of the hour. He'll tell us what he thinks the government did right, what the government did wrong in the wake of Hurricane Katrina.

Plus, we're following a developing story we brought you first in "THE SITUATION ROOM" This afternoon. The former Navy top gun and ex- congressman crashes and burns in the eyes of the law. We're live in California. Duke Cunningham and the bribery case.

And the next challenger to take on Hillary Rodham Clinton. Who will it be? All that, Lou, coming up right at the top of the hour.

DOBBS: Terrific, Wolf. We look forward to it.

Still ahead, more of your e-mails and thoughts. "Heroes," our weekly salute to our men and women in uniform. Tonight, we salute a Marine whose courage put him in the same league as one General Patton. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll now: 93 percent of you say no. Excuse me. You say no that all churches should not take a political position on border security, despite the position taken by the Catholic Church.

More now on your thoughts. Robert in Texas wrote in to say: "Lou, if ineptitude, mendacity and demagoguery were Olympic sports, Bush would have easily won three gold medals. The only problem would be to decide which country he would represent."

Alex in Virginia. "This is the only country in the world where you can send your top leader out of this town to pick up some fruit, and the price is so reasonable: Nuclear technology."

And Bob in Ohio. "It looks like we had better get used to eating mangoes, rice and tacos. The way this administration is selling us down the tubes, we won't be able to afford anything else anyway."

And Jim in Texas: "For sale, USA. Contact White House for details."

Bob in New York -- "What did Bush spend faster? Our nation's surplus or all his political capital?"

Robert in Virginia: "It's OK for Muslims to chant 'Death to Bush' and burn his picture effigy and the U.S. flag, but it's wrong to have a cartoon of Mohammed. Brilliant."

Bill in Nova Scotia: "As a great admirer of your country, I can't help but wonder if the inmates are now running the asylum." We don't want to answer that, but we appreciate the thought.

We love hearing from you. Send us your thoughts at LouDobbs.com. Each of you whose e-mail is read here will receive a copy of my book, "Exporting America." Also, if you'd like to receive our e-mail newsletter, sign up at LouDobbs.com.

In "Heroes" tonight, our weekly tribute to our nation's men and women in uniform, we have the story of Marine Colonel Rickey Grabowski, a more than 20-year military veteran. His skill, his bravery helped save lives in Iraq. Lisa Sylvester has his story.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Marine Colonel Rickey Grabowski's commanding officer has put him in the same league as General Patton. Grabowski led the 1st Battalion, 2nd Marines on the charge to Baghdad in the spring of 2003. Their mission, to seize the bridges of Nasiriyah, where all the major roads in southern Iraq converge. Military analysts said they would find light resistance. But instead, gunfire rained down on them.

COL. RICKEY GRABOWSKI, U.S. MARINE CORPS: First, you could hear a pop here and there. And then within like 10 minutes, it was like it was popping all over the place.

SYLVESTER: On March 23rd, they fought for 17 hours straight.

Grabowski is a military man. He has spent more than two decades in the military as an enlisted Marine and as an officer. It's in his blood. One grandfather was a Marine; the other a soldier, as was his father.

His training helped him lead even when communications broke down and his battalion encountered the unexpected. Outside of Nasiriyah, they came across members of the ambushed 507th Maintenance Company. They were told more American soldiers were trapped in the city.

GRABOWSKI: You leave no one behind. And had those been Marines up there, and that had been an armor -- Army brigade or an Army battalion, they would have done the same thing for us.

SYLVESTER: They assisted U.S. Special Forces during the rescue of Private 1st Class Jessica Lynch. Grabowski received the Bronze Star with valor, but he wears it not for himself but for his entire battalion.

UNIDENTIFIED MALE: We ask for your blessing, God almighty.

SYLVESTER: Eighteen of his Marines were killed in the battle of Nasiriyah, and 15 wounded.

GRABOWSKI: And in the end, they were successful. Yes, we did pay a price, but we accomplished that mission, and that's the thing that I'll remember about those Marines and sailors probably until the day I die, of what they did, their sacrifices and their service.

SYLVESTER: Lisa Sylvester, CNN.

(END VIDEOTAPE)

DOBBS: The Marines who served under Colonel Grabowski in Iraq have received remarkable decorations. Those decorations include two Navy Crosses, four Silver Stars, numerous other awards, including the Bronze Stars. We wish to congratulate Colonel Grabowski for a job well done.

Tonight, Bill White, the president of the Intrepid Fallen Heroes Fund says thanks to all of you who donated to build the state-of-the- art facility for our severely wounded men and women returning from combat in Iraq and Afghanistan. Bill says, "For all of us at the Intrepid Fallen Heroes Fund, thank you. Over 550,000 Americans have donated to this effort to build the center for the intrepid. Thanks in large part to Don Imus, who deserves our thanks for bringing this critically important national effort to the great and generous American people."

Thanks to Bill White and all who have worked on this important project, and to all of you who have contributed to make it possible. Thanks for getting the right thing done.

That's our show for tonight. We thank you for being with us. For all of us here, good night from New York. We wish you a very pleasant weekend. "THE SITUATION ROOM" with Wolf Blitzer begins now -- Wolf.

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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