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LOU DOBBS TONIGHT

House Republicans Escalating Their Confrontation With Bush White House Over Dubai Ports Deal; Bush Stands By Veto Threat If Congress Tries To Block Deal; San Francisco Bridge May Use Chinese Steel; New Immigration Bills Face The Senate; Border Security To Play Role In Arizona Politics This Year; Rep. Duncan Hunter Vows to Kill Dubai Deal; Wolf Blitzer Discusses Ports; Chuck Grassley's Had Enough Of Immigration Stonewalling

Aired March 8, 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 Wednesday, March 8.
Live in New York, Lou Dobbs.

LOU DOBBS, CNN ANCHOR: Good evening, everybody.

Tonight, House Republicans escalating their confrontation with the Bush White House over the Dubai Ports deal. This is the biggest Republican revolt of the Bush presidency.

We'll have complete coverage.

As the White House proclaims the United Arab Emirates to be one of our closest allies in the global war on terror, the U.S. State Department accuses the United Arab Emirates of serious human rights abuses. What is going on in our government?

We'll have the special report.

Three of the top Republican leaders in Congress join us here tonight. The chairman of the House Armed Services Committee, Congressman Duncan Hunter, he wants to allow only Americans and U.S. firms to own critical infrastructure in this country. Congressman Hunter is our guest.

And I'll be talking with two powerful Senate Republican chairmen about the crisis over illegal immigration and the absence of border security. Senator Arlen Specter, chairman of the Senate Judiciary Committee, Senator Chuck Grassley, chairman of the Senate Finance Committee, join us.

All of that and much more ahead here tonight.

We begin with the intensifying showdown between House Republicans and the White House over the Dubai Ports deal. The House Republican leadership today defied President Bush's veto threat and pushed ahead with legislation to block the deal. Over just the past few minutes, the powerful House Appropriations Committee voted to kill the sale by an overwhelming vote of 62-2. At the same time, Senate Democrats are trying to block the deal and defeat Senate Majority Leader Bill Frist. Is Senator Frist simply a good soldier for the White House or is he President Bush's lap dog?

Ed Henry on Capitol Hill reports on the rapidly moving developments in the House and the Senate. And Suzanne Malveaux in New Orleans reports on the White House's determination to stand firm and push this deal through.

We turn first to Ed Henry on Capitol Hill -- Ed.

ED HENRY, CNN CONGRESSIONAL CORRESPONDENT: Lou, today on the Hill, it's really been a double-barreled assault on the Dubai port deal. We saw in the Senate, as you mentioned, Senate Majority Leader Bill Frist, for now at least, stopping a Democratic attempt to block this port deal altogether. But Democrats vowing they'll keep coming back, and again and again.

And there was no stopping the House Appropriations Committee, which just passed this amendment killing the port deal, because it had the backing of the House Republican leadership.

(BEGIN VIDEOTAPE)

HENRY (voice-over): The Republican House speaker, Dennis Hastert, making no bones about defying the president.

REP. DENNIS HASTERT (R), HOUSE SPEAKER: I think the House of Representatives is concerned about the safety of the American people. We've been talking about safety since 9/11 and before that. We're talking about safety for our children here, and we have some concerns about the safety of this country and the port deal. And we'll continue to do our best judgment on how to protect the American people.

HENRY: But the Republican revolt against the president is not yet a full-scale uprising. While Hastert is pushing to block the port deal, Senate Majority Leader Bill Frist wants the 45-day review to go forward before considering any legislation in his chamber.

The Republican split was on display in an event celebrating renewal of the Patriot Act. As Hastert answered a question about the port controversy, Frist ignored reporters.

HASTERT: Well, we want to protect Americans. We have a point of view of this ...

UNIDENTIFIED MALE: Senator Frist? Senator Frist?

UNIDENTIFIED MALE: Senator Frist?

UNIDENTIFIED FEMALE: Senator Frist?

UNIDENTIFIED MALE: Senator Frist?

HENRY: A key Republican senator is launching a last ditch effort to save the port deal, and is urging the president to deliver a more forceful public campaign to bring Congress on board.

SEN. JOHN WARNER (R), VIRGINIA: I have confidence that he and others will work in the next few weeks to take -- as we say in the Navy, right this sole ship and put her on an even keel.

(END VIDEOTAPE)

HENRY: And Senator Warner told me that he spoke to DP World, the company involved her, three times today, trying to cobble together emergency legislation, some sort of compromise to create a U.S. subsidiary of the company that would handle the operation of U.S. ports. But even Warner, a stalwart here for the president, one of the few on the Hill who's fighting for the president, acknowledges the political reality and told me, "I may be the last man standing" -- Lou.

DOBBS: And the Democrats trying to desperately -- to get to a vote on this important, critical national security issue. Senator Frist saying he is comfortable when the U.S. State Department is saying it is, in effect -- the United Arab Emirates is problematic, at best, in terms of human rights.

What in the world is Senator Bill Frist trying to accomplish here?

HENRY: Senator Frist really finds himself in a political pickle. He's got the Democrats pressuring him, he's got the House Republicans putting pressure on him as well. And he's thinking about running for president, but he's getting the pressure from all sides.

And he has a problem here, because since this amendment that Senator Chuck Schumer added today, it was to the lobbying reform bill. Since that changes Senate rules, you actually need 67 votes to cut off debate on it. Not the usual 60 votes.

DOBBS: Right.

HENRY: So Frist is going to need even more votes. He may not be able to cobble together those 67 votes to cut off debate.

Democrats are hoping he can't get there, and they're going to keep bringing this back again and again. He told me today in the hallway today off camera that he wants this 45-day review to go forward but he's still leaving open the option of legislation. But he's getting so much pressure, it's really coming in on him, Lou, fast.

DOBBS: So what you're saying is, he's going to have to move to cloture, is that correct?

HENRY: He's going to have to move, but may not have the votes to actually cut off of the debate. So the Democrats are going to keep bringing this back and there's going to be a role call where at some point we will find out whether or not Senator Frist has enough Republican colleagues to vote with him, again, stopping the port deal. So far, we only know really about three, four, maybe five Senate Republicans who were with Senator Frist in allowing a 45-day review to go forward. You know, you've got people like John Warner, John McCain...

DOBBS: Now I'm a little confused. I'm confused.

Ed, this is the same Republican leadership in the Senate who wanted an up-and-down vote out of Judiciary on court nominees, but is refusing to accord that courtesy and apparently extend the leadership's patience to an up-and-down vote on something as important as the Dubai Ports deal?

HENRY: That's why the pressure is coming in fast and furious. Democrats are making that very point.

They say -- and that's what Senator Dick Durbin was saying there. He believes Senator Frist can run but can't hide. He said they're going to keep bringing it back.

There's legislation on the debt ceiling that's coming up. They're going to try to attach it to that.

There is, as you know, border security legislation that's coming up. Senate Democratic Leader Harry Reid said they'll attach the port security amendment to that.

So this is going to keep coming up. And Democrats are saying they're not going to rest until they get that up-or-down vote -- Lou.

DOBBS: And senator Barbara Boxer here last night, even as we were reporting some progress in -- if you will, some unified bipartisan support to stop this deal, was expressing her skepticism about the Senate leadership in particular. It turns out that may be well-founded skepticism.

Ed Henry, thank you very much for that excellent report.

The White House tonight is standing firm, of course, in its public support of the Dubai Ports deal. White House spokesman Scott McClellan simply said President Bush's position on the sale remains unchanged.

Suzanne Malveaux reports now from New Orleans, where President Bush spent much of his day -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, obviously the White House is in a very difficult situation here. All they can do is continue to talk.

I spoke with Dana Perino (ph) of the White House, and this is what she said. She said, "We would be concerned about attempts to address this issue in a pending supplemental because it can slow down the progress of getting through legislation through Congress into the president's desk." She goes on to say, "We need to equip our troops. It is about funding our troops to get what they need to win an Iraq and the war on terror."

She goes on to say, "... to provide critical funds to rebuild our Gulf Coast and to help those affected by last year's hurricane."

Now, of course this is not final legislation. The White House simply emphasizing a couple of things here.

They are try to buy time. They say there's this 45-day investigation period, that they are very sincere about doing a rigorous investigation. They also say that there are open lines to members of Congress, communications, sincere, genuine open lines.

Of course they are hoping that Senator Warner, as well as Frist, will not simply go to the other side. The political calculus here is that the House is making this stand here but that the Senate will not do that. That cooler heads will prevail.

But, of course, they're simply buying time here, hoping that they convince those members of Congress not to move forward on blocking this particular deal. They're hoping this 45-day period will be a cooling-off period if they can hold on that long.

But clearly, they are sticking with their message here. But they also realize that this is a very difficult political situation that they're in. They are downplaying that tonight, simply saying, some believe that these Republicans may be overplaying their hand with this by linking this to the funding with Katrina and the Iraq war. But, of course, Lou, we're just going to have to wait and see how this plays out next week -- Lou.

DOBBS: Political issue and a critical national security issue.

Suzanne Malveaux with the president in New Orleans.

Thank you.

The Bush administration has never hesitated throughout this deal to call the United Arab Emirates a close and valued friend of the United States. But the U.S. State Department today accused the United Arab Emirates and other so-called Middle Eastern allies of serious human rights violations and abuses. The abuses include torture, floggings and religious oppression.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): Our key Arab allies have terrible records on human rights.

CONDOLEEZZA RICE, SECRETARY OF STATE: How a country treats its own people is a strong indication of how it will behave toward its neighbors. ROMANS: The State Department today says in the United Arab Emirates respect for human rights remains problematic, citing domestic abuse of women with the help of police, floggings, government corruption, and trafficking in women and children. In fact, just last year, the State Department says more than a thousand under-aged, enslaved boys were rescued from the camel racing circuit.

Other Arab allies.

Saudi Arabia's record is poor, with continuing serious problems like beatings, arrests, limited workers rights, widespread discrimination.

In Egypt, the State Department says serious abuses continued, including torture, lack of due process and restrictions on civil liberties.

RICE: We must call countries to account when they retreat from their human rights commitments.

ROMANS: Just last month, Rice called all three countries solid partners and allies. And during the ports deal furor, this administration has repeatedly held up the UAE as an important partner.

REP. BARNEY FRANK (D), MASSACHUSETTS: The marching orders from this administration are very simple. People who own capital are to be allowed to do whatever they want. Capital is king. And the owners of capital are to be allowed to make whatever decisions they want with no hindrance.

This is not even private capital. It's capital owned by a fairly repressive government. But the deference to the private capital runs this administration.

ROMANS: Above human rights, he says, and national security.

(END VIDEOTAPE)

ROMANS: And then there's China, another ally and business partner. This State Department report spilled 35,000 words on the poor record of China's communist government that "continued to commit numerous and serious abuses," Lou, a government against its own people repeatedly.

DOBBS: Do you believe that the Committee on Foreign Investment to the United States and the White House staff was aware that the U.S. State Department had serious concerns?

ROMANS: I'm not quite sure, Lou. But I would have to think that they were putting the finishing touches on that report when Condoleezza Rice was making that tour of the Middle East. And indeed, when CFIUS was reviewing this process.

DOBBS: Amazing. Thank you very much, Christine Romans.

The Committee on Foreign Investments has not yet begun its 45-day review of this Dubai Ports deal. But the committee has begun a new preliminary review that could last up to 30 days, although it's not expected to do so. And we on this broadcast will begin our countdown clock on that 45-day review, should it begin, if it begins, and when it begins.

Still ahead here, Congressman Duncan Hunter, the chairman of the House Armed Services Committee, will be my guest. He is fighting not only to reverse the great American giveaway and the Dubai Ports World deal, but the giveaway of all strategic U.S. assets. He has legislation to do just exactly that.

We'll be talking about it.

The United States facing new military and economic challenges across the globe. Has the world's only superpower reached the limits of its power? Has it exceeded those limits?

We'll have that special report.

And U.S. officials so intent on saving money on a bridge project, it turns out they're ready to buy cheap steel instead of following the law.

We'll have that story as well.

(COMMERCIAL BREAK)

DOBBS: Communist North Korea today test-fired two short-range missiles. Both missiles apparently landed on North Korean territory. U.S. officials say the test proves North Korea is a threat to countries in the region. The missile test comes as North Korea refuses now to return to six-country talks that had been aimed at ending its nuclear weapons program.

Iran today threatened to inflict what it called "harm and pain" on this country in the escalating confrontation with the United States, Europe, and Russia, over its nuclear program. Iran made the threat after the International Atomic Energy Agency in Vienna, Austria, referred the issue to the United Nations Security Council.

(BEGIN VIDEO CLIP)

JAVAD VAEEDI, IRANIAN NATIONAL SECURITY COUNCIL: The United States may have the power to cause harm and pain. But it is also susceptible to harm and pain. So if the United States wishes to choose that path, let the ball roll.

(END VIDEO CLIP)

DOBBS: Let the ball roll. What did the White House have to say about that? White House spokesman Scott McClellan called the Iranian remarks provocative. McClellan said the Iranian threat would further isolate Iran from the rest of the world.

Russia today insisted the United Nations Security Council must not impose sanctions or authorize military action against Iran to stop its nuclear program. The Russian statement is a clear indication that U.S. dominance in the world faces considerable hurdles and obstacles.

From the Security Council to the battlefield, U.S. strategists are finding superpower status does have its limits.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): U.S. might is at its zenith, but the world's only superpower is facing limits. Militarily, 60 countries have defense and security treaties with the United States. Our annual military budget is more than the next 20 biggest spenders in world and six times larger than China. Yet, clearly, the U.S. military is facing limits.

IVAN ELAND, THE INDEPENDENT INSTITUTE: Now the military's getting into post-conflict reconstruction and foreign aid. And they're very ill-suited to do that. So I think we tend to give the military a lot of money and expect it to do everything.

PILGRIM: Diplomatically, the United States uses hard persuasion and soft power, diplomatic leverage and cultural pervasiveness to influence everything from orange revolutions in the Ukraine to lifestyle in the Middle East. No single superpower could replace U.S. dominance, although China and India appear to have aspirations of greatness.

But now the United States finds itself in need of strategic friends for dealing with Iran's nuclear program, North Korean talks, keeping the peace in Kabul, or the fight against radical Islamists.

CHARLES KUPCHAN, EURASIA GROUP: The main threats are nonproliferation and terrorism. Those are dispersed. They're multinational, they're transnational threats.

We can't strike back at a nation state because these threats don't live in any single nation state. And that's the key reason why we really need friends and allies in this new age.

PILGRIM: Economically, the U.S. is super-sized, the largest and most powerful in the world, $10 trillion, yet the United States suffers economic slippage, with jobs increasingly outsourced and its industries migrating to cheap foreign labor markets.

(END VIDEOTAPE)

PILGRIM: Now, the United States is still the uncontested single superpower of the world, but many say the Bush administration needs to emphasize more strategy, less muscle. In short, foreign policy these days clearly demands more sophistication -- Lou.

DOBBS: To say nothing of our dependence now not only on foreign oil, but on China, for clothing, computers, consumer electronics, and the need of this country for $3 billion a day in foreign capital simply to keep this economy, this consumer economy driving.

Kitty, thank you very much.

Kitty Pilgrim.

That brings us to the subject of our poll tonight. Do you believe that the United States is exceeding its limits as a superpower military, economically and geopolitically, yes or no? Please cast your vote at LouDobbs.com. We'll have the results later here on the broadcast.

Hamas, the terrorist organization that now democratically rules the Palestinian Authority, has a new Web site for children. The Web site uses cartoons and stories to encourage children to become suicide bombers.

This is the latest propaganda effort to indoctrinate children in the terrorist death cult. Palestinian television regularly broadcasts films and interviews with children glorifying what they called martyrdom. School textbooks reinforce the message.

Still ahead, Congressman Duncan Hunter will be my guest. The chairman of the House Armed Services Committees says foreign firms must sell key American assets back to America.

And the San Francisco bridge project that may use cheap Chinese steel instead of American steel. If so, you would throw thousands of Americans out of work.

And the illegal alien crisis now a key political issue in this mid-term election year. A special report on a hotly-contested congressional race in Arizona that centers on border security.

All of that, a great deal more, coming up here tonight.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, California officials are being accused of caring more about awarding business to Communist China than in preserving middle class manufacturing jobs. Those California officials are ready to dodge federal buy America laws and throw thousands of Americans out of work all in the interest of commerce.

Casey Wian reports live tonight from San Francisco -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Lou, the massive bridge-building project behind me is already way over budget and behind schedule. Now the state of California is considering using cheaper Chinese steel as one way out of the mess.

(BEGIN VIDEOTAPE)

WIAN (voice over): California is taking bids for the contract to build the center section of the new Bay Bridge connecting Oakland and San Francisco. The bridge will be the largest of its kind in the world and nearly earthquake-proof, unlike its predecessor, which gave way during the 1989 Loma Prieta quake.

To save perhaps $400 million, or about a quarter of the overall cost in the center section, the state is soliciting bids from Chinese steel fabricating companies. Critics say that's a violation of the spirit of the federal "Buy America" law governing transportation projects.

TONY ANZIANO, CALTRANS: I fully understand the desire to save money on transportation projects. But the "Buy America" provisions in the Bay Bridge project would increase the overall cost about somewhere between 1 to 2 percent maximum. In exchange, this is what you'd receive.

You'd be sure you'd get top-quality workmanship done by American workers. More importantly, the dollars that you pay those workers will recirculate in your community.

And I think perhaps most importantly, from a security perspective, you ensure that vital, domestic industries are maintained and kept vibrant should we need them for anything down the road from military applications to domestic infrastructure.

WIAN: But critics say those cost savings aren't worth the price, the loss of hundreds more U.S. steel industry jobs.

REP. BRIAN BAIRD (D), WASHINGTON: Everything you see out here in large part is domestic steel. The contract that is currently being advertised and we're opening bids on in March, the main span of the bridge, does not have the "Buy America" components in it. And really, that was done to make sure that we could get this built as quickly as possible within our existing budget.

WIAN: Baird accuses California of dividing the Bay Bridge project into smaller pieces to circumvent the "Buy America" law. California Department of Transportation says that's nonsense because smaller projects allow more American companies to bid.

(END VIDEOTAPE)

WIAN: Congressman Baird says he wants the Bush administration to demand that California give up nearly a quarter of a billion federal transportation dollars for avoiding the "Buy American" law. After all, the president said in his State of the Union Address he wants people everywhere to buy American. Apparently everywhere doesn't include California -- Lou.

DOBBS: The -- and so the plan is for them to go ahead and just simply ignore the provisions for that money?

WIAN: Well, that's the plan right now. They're opening up bidding for as many companies that want to bid. There aren't that many in the United States that are able to submit a bid. They're fully expecting that the winning bidder is going to come from China. It could come from some place else overseas, but right now they're planning on going ahead and using the foreign steel, if that's the lowest bid, despite the federal law -- Lou. DOBBS: Casey, thank you very much.

Casey Wian tonight from San Francisco.

Time to take a look at some of your thoughts. The Dubai Ports deal continues to be your leading concern and issue, despite assertions from the president that the American people just need to be educated about this deal.

Nancy in New York wrote to say, "Lou, I am shocked and equally disturbed at the blatant display of certainty exhibited by the chairman of Dubai Ports World, stating he has no doubt this deal will go through. Sentiments shared by our president. Perhaps he has forgotten America's a democracy and the duty of Congress is to reflect the will of the people."

Milton in Texas, "Mr. Bush, let's outsource yours and Mr. Cheney's Secret Service detail to India. I know you think that India is a good market for American jobs. This has the potential to dramatically cut your security budget."

Tom in Texas, "Lou, do you think we could do better if we exported Congress to India? Then the sale of America would be complete."

Send us your thoughts at LouDobbs.com. We'll have more of them later here in the program.

Coming up, Jack Abramoff speaks about his top political connections to people who don't recall those connections.

And the Arizona congressional race that is pitting a fierce border security advocate against a candidate in favor of closer ties with Mexico.

Also, Senator Arlen Specter joins me here. The chairman of the Senate Judiciary Committee will be here to talk about immigration reform and his gold card proposal for illegal aliens.

Congressman Duncan Hunter, chairman of the House Armed Services Committee, joins us as well with his thoughts on where the port security debate stands tonight and where America will stand if his legislation is passed by Congress.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Major new developments tonight in the political confrontation over the Dubai ports deal between the White House and Congress. Over the past hour, the House Appropriations Committee voted overwhelmingly to defy the White House and to block the sale. At the same time, Senate Majority Leader Bill Frist is facing rising criticism in the Senate for his relentless support of this deal and the White House. Ed Henry reports from Capitol Hill -- Ed. HENRY: Lou, that's right. A major political problem for the president but also growing political pressure on Senate Majority Leader Bill Frist, that's because he's getting it from all sides. He's really being backed into a corner by his Republican counterpart in the House, Dennis Hastert, who got behind this effort today by the House Appropriations Committee, just in the last hour 62-2 to kill the Dubai port deal.

Also today, Democratic Senator Chuck Schumer put some heat on Senator Frist by out of nowhere offering an amendment on the Senate floor to the lobbying reform bill. Really caught Senator Frist off guard. Offering an amendment on the Senate floor that would also kill the Dubai port deal.

Frist was able to use a procedural maneuver to for now push it aside, but the problem for him is that Democrats are vowing they will keep bringing this amendment up on one piece of legislation after another. In the words of Democrat Dick Durbin, he can run, but he can't hide.

DOBBS: Ed Henry, thank you very much. And in just a few moments here, I'll be talking with the Chairman of the House Armed Services Committee, Congressman Duncan Hunter, about his legislation to roll back foreign ownership of our ports and other strategic infrastructure in this country.

The governor of Arizona Janet Napolitano today signed an executive order that sends more Arizona National Guard troops to the Mexican border. There are only 179 National Guard troops there on the Arizona border now, as border violence has been surging.

These National Guard troops will assist overwhelmed border patrol agents who are increasingly becoming targets of violence themselves. The growing national security emergency at our borders is playing a decisive role of Arizona politics in this election this year. Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Arizona's Eighth Congressional District is ground zero in the debate.

BLAKE MORLOCK, TUCSON RESIDENT: It seems to be black or white. Either people say let them say or get them out of here.

SCHNEIDER: Why here? Because beginning in the 1990s the federal government tightened border controls elsewhere, so illegal immigrants have been coming through the Arizona desert from Mexico.

GABRIELLE GIFFORDS (D), ARIZONA CONG. CANDIDATE: We have hundreds of people die in the deserts every year. There's a disaster along on the border.

SCHNEIDER: Between 1,500 and 2,000 illegal immigrants are apprehended every day by the border patrol in the Tucson sector. GUSTAVO SOTO, U.S. BORDER PATROL: The numbers in Arizona, we still account for almost half of the apprehensions nationwide. It is per se the last frontier.

SCHNEIDER: The problems caused are immense.

GIFFORDS: We don't know who those people are.

JOHN FIFE, RETIRED MINISTER: The devastation to the environment.

UNIDENTIFIED FEMALE: The hospitals have to treat and pay.

SCHNEIDER: One Republican candidate for Congress favors tougher enforcement.

RANDY GRAF (R), ARIZONA CONG. CANDIDATE: I believe there is a military aspect to this that will help immediately.

SCHNEIDER: A religious leader rejects that approach.

FIFE: It cannot be controlled with walls or militarization.

SCHNEIDER: The division can be unpredictable.

MORLOCK: You got the conservative Republicans who are in favor of guest worker programs. You've got liberal Democrats who say get them all out.

SCHNEIDER: A Republican candidate repudiates the views of leading Republicans who want the guest worker program.

GRAF: I just flat disagree with the Congressman and our senator and the president on this.

SCHNEIDER: And the campaign is just heating up.

MORLOCK: It can be difficult to sit down and have a rational conversation about it with someone on either side of the spectrum.

SCHNEIDER: Today, Arizona governor Janet Napolitano signed an executive order to deploy additional National Guard forces at the border. She's a Democrat. Bill Schneider, CNN, Tucson.

(END VIDEOTAPE)

DOBBS: It has already declared a state of emergency because of the crisis at the border between Arizona and Mexico as has another Democrat, Governor Bill Richardson of New Mexico.

By our estimates, there are as many as 20 million illegal aliens now in this country. Three million illegal aliens cross the border every year. The U.S. Senate is now considering three different bills on border security and illegal immigration.

All share a common theme, creating so-called guest worker programs. Senator Arlen Specter is the author of one of the bills. He joins us tonight from Capitol Hill. Senator Specter of course the Chairman of the Senate Judiciary committee. Senator, good to have you here.

SEN. ARLEN SPECTER, (R-PA) JUDICIARY CMTE. CHAIRMAN: Thank you for the invitation, Lou.

DOBBS: Senator, you're in markup. How did it go today? Are you near completion?

SPECTER: Well, we are really just getting started. We have scheduled four markups. The leader would like to bring the bill to the floor by March 27th. We're going to try to do that but we're not going to rush it. We're going to take the time we need to go through the issues thoroughly and come to a balanced judgment.

DOBBS: Senator Hillary Clinton today spoke out on U.S. immigration policy. She said Congressman Sensenbrenner's immigration bill, which passed the House as you know, and is now in the House Judiciary Committee, would be, quote, an unworkable scheme to try to deport 11 million people, which you have to have a police state to try to do. How do you react to her comments?

SPECTER: Well, I think we need border security. And the House passed bill goes a long way in that direction and I think that's an important aspect that has to be balanced.

I think when you have 11 million or more undocumented aliens, you have to find a way to bring them out of shadows. At the same time, you do not want to reward people who have broken the laws. So we do not want amnesty program. And my job as chairman is to hear all points of view, to analyze them thoroughly, to discuss them and to see if we can't find a way to bring people out of the shadows, not necessarily put them in line for citizenship, but to try to eliminate having them in a fugitive status.

And if they want to become citizens, to go through the processes which comport with the law.

DOBBS: Senator, when you say in the shadows, this is the language of lot of, frankly, a lot of pro-illegal immigration and open border's advocates, as I think you know.

They're seldom if the shadows as we look at Home Depots, where we see day laborer, aggregating. They make up about 20 percent, by most estimates, of the labor working in construction. They make up just about half, if not more, of all farm labor as you know in this country. We do not know precisely how many people here. Estimates as I reported earlier ranges high as 20 million. You have used a number of 11 million.

How is it that the United States government does not know nor do we have a way, as far as I know in the United States government, the federal government, to come up with a count of how many people we're talking about? And isn't that important as we apply your efforts at coming to compromise and conciliation? SPECTER: Well, it would be very, very helpful, Lou, if we knew precisely how many undocumented aliens, illegal aliens, were in the country if we knew where they were. When you talk about the shadows, if you have a program which says we're going to ferret them out, we're going to arrest them, we're going to deport them all.

Maybe the shadow's is a bad expression. Maybe a better expression would be that would turn them into fugitives. What we want to do is to try to find some way to get our hand on the problem.

We know that they take a lot of jobs where others don't want to take them. At the same time, we are aware of the fact that they depress salaries downward if they weren't available. They would be more compensation. We're juggling a lot of balls at the same time and nobody has tackled this problem for a long time and it's been thrust upon the Judiciary Committee and we're going to try to deal with it.

DOBBS: Well, Senator, we all wish you luck on that and the idea that the president likes to use the expression, willing workers and willing employers. In this case they're illegal employers and they're illegal aliens that are being exploited and it's not certainly the kind of thing I would -- certainly knowing your background, know that you would like to see continue. And I'll just throw in one pitch to you, Senator, if I may.

SPECTER: Sure.

DOBBS: Why don't you punish, punish, punish, illegal employers because they're exploiting people a way that is so un-American and is, frankly, doesn't reflect well on us and for people to defend it is, to me, unspeakable.

SPECTER: As you may know before I became a senator, I was a district attorney, a prosecutor. A big part of my job at that time was to punish them and I think when people violate the law, we ought to bring them into compliance, and a punishment is a part of it. I know how to do that.

DOBBS: Indeed you do. And Mr. Chairman, it's good to have you with us. Senator Arlen Specter.

Coming up here next, I'll be talking with Senator Chuck Grassley. He's the Chairman of the Senate Finance Committee. He's battling corruption and cover-ups in our immigration bureaucracy. And I'll be talking with the Chairman of the Powerful House Armed Services Committee, Congressman Duncan Hunter. He says Americans in U.S. firms need to be in charge of key U.S. infrastructure assets, stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest, one of the most powerful members of Congress, one of the Republican leaders to oppose the president on the Dubai ports deal. In fact, he's introduced legislation that would require American control of all of our critical infrastructure.

Congressman Duncan Hunter, chairman of the House Armed Services Committee, joins us tonight from Capitol Hill. Congressman, good to have you with us. Your bill has a lot of sponsorship. What do you think is going to happen?

REP. DUNCAN HUNTER (R-CA), CHAIRMAN, ARMED SERVICES COMMITTEE: Well, the first step is not my bill. It's what all the great Republicans are doing in the House right now, which is killing the Dubai ports deal. And once again, the Republicans, whose trademark is security, the congressional Republicans are coming through -- we're going to kill this deal and that's going to be passed very shortly.

DOBBS: Congressman Jerry Lewis introducing that amendment, correct?

HUNTER: Jerry Lewis has not only introduced it in his appropriations markup, but my understanding it has now passed.

DOBBS: Yes, 62-to-2.

HUNTER: Yes, and so it'll be coming to the full floor. And the Republicans will be taking that through. Now the second -- the bill that I've got, that is a long-range bill, is one that requires the secretary of defense to identify critical infrastructure in this country.

Infrastructure, like ports, power plants, other things that are critical to our national security and require American ownership, management and operation of those particular pieces of critical infrastructure.

DOBBS: You're confident that the Lewis Amendment, with the must- pass legislation -- I assume you support it, being so attached. And Senator Bill Frist, the leader in the Senate, making a lot of noises, and concerning a lot of people that he's lined with up with the White House and is going to follow the White House line. He's going to tow it to the absolute limit.

HUNTER: Well I don't think that Senator Frist has seen the information that I've talked to you about, Lou, that shows that the 66 high-speed switches that are used to trigger nuclear devices were not only shipped by Dubai to Islamabad, but they were shipped after an American customs agent asked that they not be shipped.

And the port director, or the customs director of Dubai said, "We're shipping that stuff now, they've shipped lots of bad stuff." And those are not the people we need to have running our ports and I don't think Senator Frist has that information. I gave the background to the White House yesterday. I don't think they had it.

DOBBS: That's incredible and it appears that the White House may not have had information about the administration's -- part of its executive branch, the U.S. State Department, detailing today human rights abuses in the United Arab Emirates.

There's a lot of things to be concerned about here. Are you concerned about just how well this administration right now is functioning and governing? Because this president is saying that everybody checked it out, everything was fine. Now we find out that concerns have been raised for Homeland Security by the Coast Guard. Point of fact, there's no room for the interpretation that they made on CFIUS to not trigger a 45-day review.

HUNTER: Well listen, the Committee on Foreign Investment, we've had -- we've looked at their actions. They let the president down, Lou, because they said this thing's OK.

They didn't know security in-depth investigation whatsoever and the president's got these mechanisms. He's off trying to work 35 countries around the world on various aspects of foreign policy. He's got a shop that's supposed to do this and they did nothing. And we need to reform that doggoned Committee on Foreign Investment because what they have turned into is a group that simply shapes for an investment in a way that it always passes. They never stop a deal and those aren't the people you need for watch dogs.

DOBBS: Well, we appreciate you being here, Congressman Duncan Hunter, chairman of the House Armed Services Committee.

HUNTER: Good to be with you, Lou. And the Republicans killed this deal.

DOBBS: OK. And the Democrats are working hard, I believe in the Senate. You may be hooked up with the Democrats in the Senate if Bill First has his way. What do you think?

HUNTER: He's -- I think he's going to come our way.

DOBBS: OK, Mr. Chairman, good to have you with us.

HUNTER: Good to be with you.

DOBBS: Wolf Blitzer is right here in our New York studios, he's just returned from Dubai and it's good to have you here, Wolf.

WOLF BLITZER, CNN ANCHOR: Nice to be here, Lou.

DOBBS: You're in Dubai, you're talking to Dubai Ports World, you're examining everything there. Here in the United States, it's pretty clear by just about 80 percent, Americans do not want key infrastructure assets in the hands of foreign-owned companies or certainly foreign-owned government companies. What did you learn in Dubai, and did it change your perspective of the deal?

BLITZER: The bottom line is, that they do an excellent job there in Dubai running these two major ports and I had access to both of these ports in Dubai. And by all accounts, everybody goes in there and out of there, they do an excellent job.

I don't think they really appreciate the concern that's obviously felt here, Democrats, Republicans, liberals and conservatives -- the concern after 9/11. They simply didn't appreciate that fundamental factor and they still seem to be convinced that when all is said and done, the president of the Unites States can push this through for them if he really wants to. DOBBS: Well the president may or may not, depending on what happens. It now appears that the House is going to show what in my opinion, would be backbone, and defy a White House that is trying to ram this down the throats of Congress and the American people.

It looks as though the Senate, Bill Frist, is towing the White House line. It'll be interesting to see whether Republicans or Democrats on the Senate prevail on this issue.

BLITZER: The chairman, the chairman of D.P. World, when I interviewed him yesterday, he didn't reject this notion of letting an American company basically be the subcontractor and take charge.

DOBBS: Congressman Pete King's compromise proposal.

BLITZER: Right. He didn't say -- I think they're all looking for some sort of face-saving layout of it. And what I learned in Dubai is that these guys are primarily interested in making money. This is almost a $7 billion.

DOBBS: Shocking.

BLITZER: There's a ton of money in Dubai and they just want to make as much as they can and if they can find a way that will allow them to be part of the deal, that will let them make money, they don't necessarily care about -- you know, they're going to be operating it directly. But if there's still an overall charge of raking the profits, I think they'll look for a way to do that.

DOBBS: Yes, there's just something that kind of hits me the wrong way, Wolf, that a chairman of a business, whether it's government-owned or private, has the grace to allow the United States government to make a decision about who's going to operate key infrastructure aspects.

I guess I'm sort of from a different school. I think the United States government would be the one that would extend grace, not the chairman of Dubai Ports World. It'll be interesting to see.

Do you think it's a good idea or bad idea for this company to move in and take the assets?

BLITZER: Based on everything that I've known and I've studied this now intensively for the last two, three weeks -- and I know you have as well. I think that this 45-day review that the president has ordered, the national security review, they presumably will get access to information that you and I don't have.

I'm willing to let them see what they come up with, because they clearly -- the CFIUS did not do a good job in the initial review. We're going to speak to Peter King, by the way, on our show coming up at the top the hour.

DOBBS: Chairman of the House Homeland Security Department. We're looking forward to it. Wolf, it's good to have you back in this country and you and I, a disagreement on this. I love it. I love it. BLITZER: I am willing to see what they come up with after 45 days and we'll see what they say.

DOBBS: You've got a deal. And, you know what? They're not going to consult either one of us on this.

BLITZER: No.

DOBBS: Amazing, isn't it? Wolf, thanks. It's great have you here in New York and back from Dubai.

BLITZER: Good to be here. Thanks.

DOBBS: Thanks.

A reminder now to vote in our poll. Do you believe the United States is exceeding its limits as a superpower militarily, economically, and geopolitically? Please cast your vote at LouDobbs.com. We'll have the results coming up here in just a few minutes.

And still ahead, Senator Charles Grassley tired of the stonewalling? He says immigration officials are treating him -- him -- like a second-class citizen. Think about what's happening to the rest of us. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, Senate Finance Committee chairman Senator Chuck Grassley says he's had enough of the stonewalling from our nation's immigration bureaucracy. Senator Grassley demanding immigration officials release documents that allege shocking fraud and abuse he says puts this nation's very security at risk.

Senator Grassley joins me tonight from Capitol Hill. Senator, good to have you here. You say stonewalling to you?

SEN. CHARLES GRASSLEY (R), FINANCE CMTE. CHAIRMAN: Well, yes. You know, it's a cultural disease in a lot of the bureaucracies. It tends to be just a little bit worse in immigration.

I had a meeting last week with Commissioner Gonzalez. He promised me that he was totally interested in a lot of allegations that had come forth. And I believe these are responsible whistle- blowers that have brought me information. He promised me documents.

He was serious about looking into allegations but, you know, just yesterday or the day before, he gave an interview to -- I believe it was AP -- in which he was -- said that there wasn't much substance to these allegations.

Now in the meantime, I've asked for documents. I'm not getting the documents. Last night I sent a letter to him with a handwritten P.S. down at the bottom that I want the documents this year, not next year. DOBBS: And if you think Director Gonzalez is treating you, the chairman of the Senate Finance Committee, like a second-class citizen, it makes you wonder what's going on with his organization period.

You said that -- you told the Senate Judiciary Committee that they'd be shocked to learn about the internal fraud and abuse at the Citizen and Immigration Service. Can you tell us specifically what you're talking about?

GRASSLEY: Well, yes. There's some gifts given out. There's some benefits given out for people presumably that don't qualify. There's not adequate review of people that qualify for L-1 visas. L-1 visas sometimes becomes a subterfuge to get people into this country to come in and out of will in place of the H-1B.

DOBBS: Senator, the idea that we can have a guest worker program -- Senator Bill Frist is moving that ahead. I just talked with Senator Arlen Specter. Emilio Gonzalez, the director, said in his confirmation hearings there was no way in the world you could carry that out with the inadequacy of his department. Now he's says you can. What you're telling us makes it sound like it would be a nightmare.

GRASSLEY: Well, yes. Can you imagine they can't do what they're doing right now with having 11 million people making applications staying in this country legally. In fact, I asked him exactly the same question that you raised when he was in my office just within the last week.

And he said -- all he could tell me is, he said, we're planning about how we can do it. But he didn't have an answer and right now, it's -- obviously, they wouldn't have the resources.

DOBBS: Senator, we're out of time. I've got to ask you with Senator Frist looking like he's toeing the line and where -- the White House and the Dubai ports deal -- where do you stand on it? For it or against it?

GRASSLEY: I would vote to not have the contract go through because I had 16 town meetings a week ago in my state. And very definitely this is not a popular thing in grassroots Iowa.

DOBBS: Senator Chuck Grassley, chairman of the Senate Finance Committee, thanks for being with us.

GRASSLEY: Glad to be with you.

DOBBS: Still ahead here, we'll have the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll, 95 percent of you say that United States is now exceeding its limits as a superpower militarily, economically, and geopolitically. More of your thoughts now, quickly. Gary in North Carolina wrote to say, "Lou, the administration is so out of touch, it would not be surprising if President Bush ordered the invasion of the Canary Islands to try to halt the spread of the bird flu."

John in West Virginia: "If our government cannot run a port, how can they run a country?"

Two excellent thoughts. Thanks for sharing them with us. We'll love hearing from you. Send us those thoughts at LouDobbs.com. You'll get a book called "Exporting America." And we thank you for being with us here tonight.

For all of us, please join us tomorrow. Thanks for watching. Good night from New York.

"THE SITUATION ROOM" starts right now with Wolf Blitzer, right here in New York City -- Wolf.

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