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Lou Dobbs Tonight

New Claim That President Bush Authorized Scooter Libby To Leak Top-Secret Intelligence; Top Senate Republicans and Democrats Today Hailed New Immigration Plan To Give Illegal Aliens Amnesty; Broken System Putting National Security At Risk; Byron Dorgan Interview; Luis Gutierrez Interview

Aired April 06, 2006 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Coming up tonight, a new claim that President Bush authorized former White House adviser Scooter Libby to leak top-secret intelligence. We'll be live at the White House with that report. We'll be examining the possible legal and political impact of this stunning new charge.
And top Senate Republicans and Democrats announcing a plan that would give millions of illegal aliens amnesty. Critics say the plan is nothing less than a sellout to corporate America and special interests. We'll be live on Capitol Hill with the report.

And how in the world will immigration officials decide which illegal aliens will be entitled to remain in the United States when they can't control our borders and ports? We'll have that special report.

And among my guests tonight, two senators who are strongly opposed to any guest worker program. Senator Jeff Sessions and Senator Byron Dorgan join us.

And I'll be talking with Democratic congressman Luis Gutierrez, who helped organize a huge rally against the Sensenbrenner legislation to secure our borders.

Those stories and a great deal more ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, April 6th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Former White House adviser Scooter Libby has testified that his authorization to leak secret intelligence about Iraq originated with the president of the United States. Libby's testimony raises new questions about White House tactics defending the president's decision to go to war in Iraq. The testimony also challenges the credibility of the Bush White House, an administration that has frequently criticized any leak of classified information. Libby faces perjury and obstruction charges in the CIA-White House leak case.

Suzanne Malveaux reports now from the White House -- Suzanne. SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, the White House and the vice president's office refuse to comment on this story, citing there is an ongoing investigation. But what this story reveals is that the president does not face a legal problem, but potentially a political one.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): There is no evidence that President Bush or Vice President Cheney broke the law. Court documents released today do show that the White House's campaign to rebut criticism of the Iraq war was being driven from the highest level, the president himself

STU ROTHENBERG, POLITICAL ANALYST: At the time this whole issue was really blowing up in the president's face.

MALVEAUX: In the summer of 2003, several months after the U.S. invaded Iraq, no weapons of mass destruction had been found. The administration was facing intense criticism that it had twisted the Iraq intelligence to justify the war. Most notably from former Ambassador Joe Wilson, who discredited Mr. Bush's statement that Iraq was trying to obtain materials from Africa to produce nuclear weapons.

ROTHENBERG: The president was on the defensive every day, and obviously the White House believes that it had information that -- that really challenged Ambassador Wilson's take on the entire issue.

MALVEAUX: According to senior administration officials and reported by CNN at the time, the Bush administration launched an all- out campaign to defend its rationale for war and discredit its critics. Part of that campaign involved declassifying a small portion of the super-secret National Intelligence Estimate, or NIE, which said in part, Iraq "will probably have a nuclear weapon during this decade," and then leaking that information to reporters, first on July 8th to "The New York Times."

Cheney's aide, Scooter Libby, quietly disclosing it over a breakfast meeting to its reporter, Judy Miller, and then 10 days later publicly releasing the declassified NIE to all reporters at a White House briefing. While the president's decision to declassify and release the report was completely legal, this revelation could present Mr. Bush with big political problems.

ROTHENBERG: Well, the president has a growing credibility problem for at least six months now. There's been clearly deterioration in his poll numbers in terms of honesty and trustworthiness.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If there is a leak out of my administration, I want to know who it is.

MALVEAUX: Democrats are already seizing on the controversy.

LANNY DAVIS, FMR. CLINTON WHITE HOUSE COUNSEL: I think the president has a problem of a double standard. (END VIDEOTAPE)

MALVEAUX: And, of course, Lou, it presents a possible problem in that it's a distraction for the president trying to push forward his agenda, also raises the possibility of a special prosecutor calling on the president to testify in the CIA leak investigation -- Lou.

DOBBS: No reaction from the White House as to why the president would say with the -- if there is a leak I want to know who it is when, apparently, if these allegations are correct he knew?

MALVEAUX: The president specifically, when he was asked about, I want to know who that leak was, was referring to Valerie Plame. When you take a look at these documents, they do not mention Valerie Plame as part of this ongoing campaign, if you will, of releasing that NIE report to reporters and disclosing that information, that that is two separate issues. The White House, again, not commenting specifically on this story today, but certainly those in the past saying that there was a very aggressive campaign to get out specific information from that intelligence report regarding Iraq.

DOBBS: So, the White House is no-commenting?

MALVEAUX: That's correct, Lou.

DOBBS: Thank you very much.

Suzanne Malveaux from the White House.

As Suzanne just reported, legal experts say the president does have the right to authorize members of his staff to leak classified information. In point of fact, officials and politicians frequently leak secret information in Washington, and they've been doing so for years.

David Ensor reports from Washington.

(BEGIN VIDEOTAPE)

DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): It is the executive branch, headed by the president, that decides what is classified and what is not. Most recently, the rules governing declassifying material were updated in a 2003 executive order signed by President Bush. There are complex rules for lesser mortals, but the order makes clear that the president and the vice president can order aides, such as Mr. Cheney's chief of staff, Scooter Libby, to give any classified material they want to a reporter.

JEFF SMITH, FMR. CIA GENERAL COUNSEL: Frankly, the president and the vice president have that right if they so choose to declassify something and put it out in public.

ENSOR: Now, intelligence officials say most commonly when administration officials want to declassify something, they will check with the relevant intelligence officials to make sure nothing they want to make public would compromise sensitive intelligence sources or methods.

(on camera): But that is not legally required and it is not always done. So no laws were broken here, but the revelation by Scooter Libby that the president authorized a leak puts Mr. Bush in an awkward position. After all, in public, he has always denounced leaks.

David Ensor, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Joining me now for more on these latest developments in the White House-CIA leak case, our senior political analyst, Bill Schneider, our senior legal analyst, Jeffrey Toobin.

Let's begin with you, Bill. To what extent does Libby's testimony challenge the credibility of this White House?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, for the very reason David Ensor just gave, that the president has always denounced leaks, he said that he wants to get to the bottom of them, they have no place in his White House. At one point he threatened to fire anyone who leaked information, presumably about the identity of a CIA agent, but he condemned leaks in general.

Later, he said if anyone committed a crime he would be fired. And, of course, this wasn't a crime because the president can declassify information.

It looks terribly devious, and I think it underlines the president's image of being an honest and trustworthy man. The image that got him elected after Bill Clinton.

DOBBS: Jeffrey, the legal aspect of this, it's simply he committed no crime, the president. No one then leaked information which he had declassified then has committed no crime.

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: Well, the -- Scooter Libby is not charged with illegally leaking information. He is charged with lying about his conversations with reporters.

However, if you read the full document where this disclosure was made, it's clear that Libby's strategy is to show that his entire course of conduct here was at the direction of the president and the vice president. And it very much suggests that he is going to have a plausible claim to have at least Vice President Cheney and perhaps even President Bush testify in his defense at the trial, which will keep this story very much alive for some time.

DOBBS: But in point of fact, he is charged with obstructing justice here and lying to the investigators. And how does this help him per se?

TOOBIN: Well, it doesn't -- this specific authorization that he asserts doesn't get him off the hook. But it does suggest that his entire course of conduct was at the direction of his -- of his superiors. And even though that's not a specific authorization to lie about it, I think many judges would let the defendant put that context in to explain the whole story to jurors.

DOBBS: Bill Schneider, you talk about the credibility of this White House. This just smells to high heaven. And even though, as we report, leaks go on in Washington, even secret information is leaked, but this is -- this is at a new level, is it not?

SCHNEIDER: Well, it is a president leaking -- leaking intelligence information for what is clearly a political purpose. Libby said himself in his testimony that the purpose of the leak was to discredit the information being promoted by Joe Wilson, who was a critic of the intelligence-gathering effort used to justify the war in Iraq.

The president wanted to discredit Ambassador Wilson, so he did it in this very devious by ordering his people on the White House staff to leak information to reporters. Leak information to reporters for political purposes. That, I think, is going to be seen by people as extraordinarily devious.

DOBBS: Jeff?

TOOBIN: The president's good fortune here is that neither the House nor the Senate is in the control of the Democrats. So the Democrats have no way of holding hearings, no way of keeping this story alive.

By no-commenting the story today, the White House probably makes the story go away until the next revelation in this trial. And the trial isn't scheduled until after the midterm elections, which is also fortunate for the president.

DOBBS: Gentlemen, thank you very much. Jeffrey Toobin, Bill Schneider.

For the record, the investigation into the CIA-White House leak case has now gone on for more than two years. That investigation started 827 days ago. By way of comparison, if you will, the Watergate investigation lasted 288 days.

Still ahead here, amnesty for millions of illegal aliens in this country may be nearing if the Senate has its way. We'll have the latest on today's Senate compromise. The Senate once again ignoring our nation's border security crisis as it grants new protections to illegal aliens. We'll have that special report.

And I'll be talking with Senator Byron Dorgan and Senator Jeff Sessions live from Capitol Hill tonight on what the leaders of the Senate are calling a "breakthrough," this Senate compromise.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Top Senate Republicans and Democrats today hailed a new immigration plan that would give millions of illegal aliens amnesty. The Republican and Democratic leadership calling the plan a "breakthrough," but the plan apparently has no mechanism to enforce those provisions of the compromise.

Dana Bash reports from Capitol Hill -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, all afternoon senators have been behind closed doors trying to figure out exactly how to get that compromise to the Senate floor for a vote. So they're not quite there yet, but those who support this compromise certainly are happy. They say they're hopeful and even a bit surprised.

In fact, one lawmaker said he was so surprised you could look out the window and you could see pigs flying.

(BEGIN VIDEOTAPE)

BASH (voice-over): Senate leaders from both parties rush to the cameras to celebrate.

SEN. BILL FRIST (R-TN), MAJORITY LEADER: We've had a huge breakthrough.

BASH: After a late night of intense behind-the-scenes talks, a compromise that would allow millions of illegal immigrants to eventually become U.S. citizens. Democrats were cautious but they were standing with Republicans, and that said it all.

SEN. HARRY REID (D-NV), MINORITY LEADER: We can't declare victory, but we've moved a long ways down the road.

BASH: On the most contentious issue, how to handle the estimated 11 to 12 million illegal immigrants, the legislation envisions three categories. Those in the United States more than five years could stay and get on a path to citizenship. Those illegally in the U.S. between two to five years would have to briefly leave the country through designated sites to get temporary work visas. They would then be eligible for green cards and eventually citizenship. Illegal immigrants in the United States less than two years could not stay legally.

Republicans are so divided on the issue, language matters as much as the details. Note Senator Lindsey Graham's effort to sell the compromise to fellow Republicans, who won't support anything that rings of amnesty.

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I think we've reached a plea bargain with 11 million illegal aliens.

BASH: Still, some Republicans quickly rejected the plan.

SEN. JEFF SESSIONS (R), ALABAMA: I'm not impressed.

BASH: Critics see the same faults as the last immigration overhaul. SEN. JOHN CORNYN (R), TEXAS: For about eight million people, it would represent the same repetition of the 1986 amnesty that was granted that unfortunately was unsuccessful in stopping both the flow of people coming across our border illegally...

BASH: Beyond the politics, some experts wonder if the plan is realistic, because asking people who are by definition "undocumented" to prove how long they've been in the U.S. could be a recipe for fraud.

MICHAEL CUTLER, FORMER INS AGENT: We will not even know the true identities of so many of these people because they're undocumented. What it really means is that they don't have any way of officially identifying themselves.

BASH: Key supporters like Senator John McCain admit it's not perfect.

SEN. JOHN MCCAIN (R), ARIZONA: Sure, there's some complexities associated with it, but as compared with the status quo it's nirvana.

(END VIDEOTAPE)

BASH: Now, right now, the Senate Republicans like Senator Jeff Sessions and Senator John Cornyn, who are not happy with this compromise, are determined to offer amendments to it on the floor, and they're trying to negotiate just how they can do that with leaders of both parties. So the Senate really is in a holding pattern until they work that out -- Lou.

DOBBS: Thank you very much. Senator McCain calling these complexities, these details. Senator Pat Leahy saying the devil is in the details in this compromise, and they don't yet know what the details are.

When will they know what the details are of what they are -- what they've wrought in the Senate?

BASH: That is a good question. They do have a very, very long bill, amendment, if you will. It's about 500 pages, and people are actually reading it. They spent all afternoon reading it.

The bigger question is just whether or not that can be changed. And that is what these Republicans really want to do, and that is what -- what really is holding everything up, if they actually can have that amendment changed -- Lou.

DOBBS: As I said, it's not perfect. It just sounds like they don't want to try to perfect it in any way.

Thank you very much.

Dana Bash from Capitol Hill.

President Bush welcomed the Senate leadership's deal to pass what the president calls a comprehensive immigration reform bill. President Bush spoke to reporters after a speech in Charlotte, North Carolina.

(BEGIN VIDEO CLIP)

BUSH: I'm pleased that Republicans and Democrats in the United States Senate are working together to get a comprehensive immigration bill. I want to thank the efforts of those involved in the process. I appreciate their understanding there needs to be a comprehensive immigration bill.

I recognize there are still details to be worked out. I would encourage the members to work hard to get the bill done prior to the upcoming break.

(END VIDEO CLIP)

DOBBS: That break coming up at week's end, and it's far from clear at this point, despite the news conference and the photo-op whether the Senate can pass an immigration bill. The new plan still faces considerable opposition, of course, not just in the Senate, but also in any prospective conference with the House of Representatives.

The Senate has spent so much time debating sweeping new protections for illegal aliens that it is, once again, all but ignoring border security. Senate leaders say they are passing comprehensive immigration reform as the president styles it, but their border security proposals are completely and utterly unworkable, as Bill Tucker reports.

(BEGIN VIDEOTAPE)

GRAHAM: We still have broken borders, ladies and gentlemen. The broken borders need to be fixed. But we no longer have a broken Senate.

BILL TUCKER, CNN CORRESPONDENT (voice-over): Critics were quick to respond with unbroken, unbowed and unworkable.

MARK KRIKORIAN, CENTER FOR IMMIGRATION STUDIES: And what the Senate is doing is the same bait and switch as 1986, where amnesty comes up front -- whatever they want to call it, it's still amnesty -- and the promises of enforcement are going to be abandoned in the future.

TUCKER: Here's some simple illegal alien math. Immigration and Customs Enforcement, ICE, says it has 5,500 special agents. If we take the low-end estimates of 11 million illegals, that's 2,000 illegals per agent. Take the high end of 20 million, and that's 3,636.3 illegals per agent to apprehend and deport illegal aliens.

But, as even the Senate knows...

SEN. LARRY CRAIG (R), IDAHO: Lou Dobbs doesn't know, nor do we know exactly how many undocumented foreign nationals are here.

TUCKER: The ICE agents would remain responsible for tracking down child pornographers, money laundering enforcement, documented benefit fraud investigation, along with joint task force operations, customs enforcement and port security responsibilities.

And what about at the border? The bill does call for additional border agents.

T.J. BONNER, NATIONAL BORDER PATROL COUNCIL: Ten thousand Border Patrol agents were authorized under the Intelligence Reform and Terrorism Prevention Act of 2004. And this Congress, this administration has not lived up to that promise, and there's no reason to believe that they're actually going to come up with the money to fund all of these new positions.

TUCKER: The bottom line is as plain as the math.

CUTLER: You can't enforce the bill because you don't have the manpower. You're standing in front of a fire hydrant with a thimble and you're trying to catch all the water.

TUCKER: Nothing in the Senate bill addresses people who entered legally and overstayed their visas or committed a crime and are now deportable.

(END VIDEOTAPE)

TUCKER: We did call both the Border Patrol and Immigration and Customs Enforcement today, and, Lou, neither agency would comment, saying it is not policy to comment on pending legislation.

DOBBS: A considerable part of our government is not commenting because of pending legislation or pending investigation.

TUCKER: Exactly.

DOBBS: Thank you very much, Bill Tucker.

In our poll tonight, the question, is the Senate compromise on immigration reform just another sellout to corporate America and the special interest groups that dominate our political process these days? Yes or no?

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

Up next, I'll be talking with Congresswoman Luis Gutierrez, who says the Senate compromise on illegal immigration is a great victory.

Senator Byron Dorgan calls today's compromise a cave-in to corporations that want cheap labor. Senator Dorgan will join us here.

And who would administer a guest worker program if such a thing should be created? The very same bureaucrats that have failed miserably at enforcing the existing immigration laws. We'll have that special report, as well, and a great deal more coming right up.

Stay with us.

(COMMERCIAL BREAK) DOBBS: The Senate's immigration reform compromise would create a completely unworkable, bureaucratic nightmare for the federal government. It is a bureaucracy that has completely failed to carry out current immigration policy and it will now find itself, if this were to become law, completely overwhelmed.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): The Senate compromise would allow illegal aliens who have been in the United States more than five years to stay, as long as they've paid taxes, held a job for three years, pay a $2,000 fine, pass a criminal background check, and no English. Those with two to five years residency could leave the country, be fingerprinted and immediately return, while those here less than two years would be required to leave and start from scratch.

MCCAIN: Every immigration expert that I know of say this is a workable solution.

DAN STEIN, FED. FOR AMERICAN IMMIGRATION REFORM: This is a workable solution if your goal is to destroy U.S. immigration enforcement for the next 30 years. Nothing about this compromise is workable.

WIAN: For example, how is the federal government going to verify the work and residence history of millions of illegal aliens who operate either under the table or with phony documents?

DEBORAH NOTKIN, AMERICAN IMMIGRATION LAWYERS ASSN.: The ability of the Department of Homeland Security to ascertain legitimate documents from those that aren't is going to be very important here. Leases, electrical bills, birth certificates of children, their children's report card showing they signed off, there's a number of ways this can be established for most people, even those who are undocumented.

REP. TOM TANCREDO (R), COLORADO: The fraud in this will be enormous. You can just hear the printing presses starting right now.

WIAN: A spokeswoman for Florida Senator Mel Martinez, one of the compromise bill sponsors, says there is no information on what types of documents would be acceptable to prove residency. No information on which agency would administer the legalization program. And no information on how illegal aliens who have been here less than two years would be forced to leave the country.

SEN. PATRICK LEAHY (D), VERMONT: The devil is always in the details, and we'll see what the details are.

WIAN: One particularly devilish detail, it's likely that illegal aliens who are here under the notorious catch and release policy, those who have ignored a notice to appear for a deportation hearing, could use those notices as evidence of how long they've been in the United States.

(END VIDEOTAPE)

WIAN: As Dana Bash reported earlier, several senators continue their efforts to convince the American public their latest compromise is not amnesty for illegal aliens. They say a more appropriate word, Lou, is probation.

DOBBS: OK. Casey, thank you very much.

Casey Wian from Los Angeles.

Tonight, a dangerous loophole in our national security framework that allows would-be terrorists to enter the United States with the full permission of the U.S. government. A State Department manual advises U.S. consular officers that when considering whether or not to admit a foreigner to the United States, "advocacy of terrorism is not always exclusionary."

Senator Wayne Allard has introduced an amendment to the immigration bill trying to close that little loophole.

(BEGIN VIDEO CLIP)

SEN. WAYNE ALLARD (R), COLORADO: They're part of the organized effort to export terrorism throughout the world. We should not have them exporting terrorism into the United States when they're granted a visa.

(END VIDEO CLIP)

DOBBS: The State Department says that consular officers can, in fact, prevent an advocate of terrorism from entering the country if they go through a thorough interagency appeal.

Coming up next, I'll be joined by senators from both sides of the aisle. They both oppose the so-called compromise in the Senate.

And from inside the immigration agency, scathing evidence of fraud and corruption. We'll have a special report.

And outrage over schools that ban the American flag. The latest on the fight in some schools just to be able to display the American flag.

All of that and a great deal more coming up.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: ... in any guest worker amnesty program. A whistleblower within that agency testified publicly today for the first time ever about a system that is broken and that puts our national security at risk. Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): All four of the 9/11 hijacker pilots abused U.S. immigration laws to stay in the United States. They exploited gaping loopholes at INS that still exist today at the U.S. Citizenship and Immigration Services.

MICHAEL MAXWELL, USCIS WHISTLEBLOWER: The immigration system itself is fundamentally flawed. This flaw has been building on itself for decades.

SYLVESTER: Michael Maxwell is the former director of the USCIS Security and Investigations Office.

UNIDENTIFIED MALE: Do you swear or affirm...

SYLVESTER: He testified before a House subcommittee that the agency is overwhelmed with cases. Incentives are given to employees to process applications as quickly as possible. Full background checks are often not done.

MAXWELL: Employees are tempted to grant benefits in order to receive cash, promotions, time off, rather than deny the benefit.

SYLVESTER: There was also rampant fraud. There were more than 500 cases of alleged wrongdoing by USCIS staffers in early 2005. Bribery, money laundering, even charges USCIS employees supported terrorists and worked on behalf of foreign governments.

Many of these cases were never fully investigated because of a staff shortage. Maxwell's testimony is particularly relevant as Congress weighs a guest worker program. USCIS would administer that program.

REP. J. GRESHAM BARRETT (R), SOUTH CAROLINA: If this system is broken, not only for the people coming in, but the people that are here today, what kind of sense does it make to all of a sudden open this system wide open for possibly millions more?

MAXWELL: Certainly, there is plain evidence that the system that exists now cannot handle the work load that exists now.

SYLVESTER: USCIS declined to go on camera, but in an interview in March Director Emilio Gonzalez said...

EMILIO GONZALEZ, USCIS DIRECTOR: I don't think that the fraud issue is one that would keep us from implementing a guest worker program. Obviously if people are of the opinion that there is rampant fraud in this agency, I would like to disabuse them of that.

(END VIDEOTAPE)

SYLVESTER: And despite what Gonzalez said, the GAO and the DHS inspector generals offices have detailed problems of fraud and mismanagement at the USCIS on nine occasions in the last year. The problem is USCIS is not set up as a law enforcement office, it's designed to be a customer service office. In one example, USCIS workers were pressured to decide a case in just about every four minutes. Lou?

DOBBS: It's unimaginable that anyone would think until the CIS is straightened out, putting any kind of burden on them. But, after all, it is Washington, from which you report this evening. We thank you very much, Lisa Sylvester.

Senator Jeff Sessions opposes today's so-called Senate compromise that would create a guest worker amnesty program. He blasted this amnesty today. Senator Sessions joins us tonight from Capitol Hill. Senator, you're disappointed with this. Did you have any expectations that your colleagues would be able to do better?

SEN. JEFF SESSIONS (R), ALABAMA: Well, I had no confidence really that a few people who are unconnected, really, the full details of the complexity of this issue could huddle and in one few hours draft a bill that was going to be a real improvement.

And frankly, they haven't. At least 75 percent, Lou, of the people that were covered by the committee bill that was rejected soundly, you know, with 60 votes today, will be treated the same way under this and the others ultimately will be on a sure path to citizenship and complete amnesty, too, the other 25 percent. So, no, it's not a good replacement and it should not make anyone feel better.

DOBBS: Well I'm glad to hear you say that because as I looked at it, it looked to me like the only thing that changed was that the illegal alien population, whatever it may be, somewhere between 11 and 20 million people was broken down into three categories instead of approached as one entity.

SESSIONS: Right, that the first 75 percent in the first category would be treated just like those that were treated under the bill that was rejected today as being too generous.

So, the others, with some steps, would get on the same track, so it's really no different. Also, it increases three-fold the number that can come here legally to work as a permanent resident, which means you can become a citizen tripling that number from 140 to 450,000.

DOBBS: Can I tell you what really scares me about what's happening in the Senate, Senator?

SESSIONS: Please.

DOBBS: The fact is the government isn't working. We just, Lisa Sylvester just reported on what's happening with the Citizenship and Immigration Services.

The agency is overwhelmed and can't carry out reasonably its responsibilities, immigration and customs enforcement. Overwhelmed, 5,500 agents trying to deal with the load they have today.

The U.S. border patrol and the United States Senate is acting like everything is hunky-dory and that whatever they wave a wand over will be fixed. When this government itself, we talk about broken borders on this broadcast. Senator, this government is starting to look broken.

SESSIONS: This Senate should ensure that when we pass any legislation of this kind, that it can be enforced and there are people in place to make it work and you are exactly right. There's no way we have the infrastructure, the people or the capacity to meet the demands of this program, it's absolutely not there.

DOBBS: How about this idea, Senator. The Senate, the Congress, environmental impact statements, how about one that says, "Let's have a middle class worker and family impact statement." Is anybody paying attention to 280 million folks there who are working on this compromise who are legal citizens?

SESSIONS: I think they should. Let me tell you what I just did. I came directly from the floor here. We requested, nobody has done this before, that the congressional budget office review the cost of this bill.

And as you have noted, there are real costs. They have concluded at a minimum, excluding two or three large categories of individuals, that will cost, because they didn't have time to figure it. That it would cost $5 billion over five years.

It's going to be far more than that, as they say in their report. That makes this bill a budget buster among other difficulties that it has and in fact, we will passed it without ever considering what the costs would be. This was the first time we even had an independent analysis of how much it might cost.

DOBBS: Do you think that the Senate is going to pass this compromise?

SESSIONS: You know a lot of momentum. People just seem to want to pass something. They're afraid that people will be disappointed with them if they don't pass something. But I really think there's got to be some second thoughts going on.

We can do it, Lou. We can pass a bill that enforces the security on our border and make sure that only legals come in. That enforces the workplace and treats humanely and fairly those who lived here. I think we can do that, and this bill just is not the one.

DOBBS: Senator Jeff Sessions, thanks for being with us.

SESSIONS: Thank you.

DOBBS: Let's take a look at some of your thoughts now.

D.A. in Florida says: How in the hell will they know if an illegal alien has been here more than five years or less than five years? What a bunch of B.S.

Robert in Ohio saying: Hey, Lou, seems to me that if big business stopped buying legislators, they could pay a working wage and Americans would be willing to do the job. Neil in Tennessee: I am so tired of the Bush administration saying the American people won't do the jobs the illegal aliens do and I'm tired of the people in Washington D.C. having jobs and not doing them.

Russ in Illinois: Ted Kennedy thinks that passing the so-called immigration reform is the Senate listening to Americans? Protests and prayers by church officials, marches by illegal immigrants and their kind, and the ditching of school by some Hispanic schoolers is justification for selling out us lowly, common folk again.

And Ken in Michigan: I can't freaking believe what they're doing in D.C. These people are supposed to be representing us, not illegal immigrants and big business. Let's call an apple an apple. This legislation is amnesty, period. I for one will do my best to make sure this issue is not forgotten come election time.

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

Still ahead, both sides of the immigration debate. Tonight I'm joined by a congressman who led 100,000 people into the street to support guest worker amnesty and I'll be talking with Senator Byron Dorgan who says a guest worker program will help destroy the America middle class. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Senator Byron Dorgan is one of the few Democrats who oppose a guest worker program and immigration reform legislation before the Senate. The senator says it's a sellout to corporations that want cheap labor. He has written an amendment to block any guest worker program at all. Senator Dorgan joins us tonight from Capitol Hill.

Senator, thanks for being here. I think most of us were taken by that spectacle of watching the Republican leadership, the Democratic leadership, before cameras today hailing this breakthrough. You're unimpressed?

SEN. BYRON DORGAN (D), NORTH DAKOTA: Well, I'm not impressed. I mean, look, this is the corporate strategy in this country now and Congress seems to be embracing it. The corporate strategy is export good American jobs and then import cheap labor. That might be good corporate strategy, but in my judgment, it's not good for the American worker.

There's all this discussion about immigration and immigrants. There's very little discussion about the American worker. In my judgment, they also have a very big stake in these decisions that are being made here in the Capitol and there's very little consideration given to the American worker.

DOBBS: I have been saying for some time that the American working man and woman, the middle class is the least represented group in all of Washington. It sounds like you do agree. DORGAN: I sure agree, absolutely. I mean, this so-called globalized economy, you know, there's this export of American jobs wholesale to China and Indonesia and Bangladesh, and now we hear the president and we hear leaders of the Congress say, well, you can't get Americans to do these jobs, so we need to import cheap labor.

The fact is, there is a price at which Americans would do these jobs but this Congress has not increased the minimum wage for nine years. Why? Because they want cheap labor that bottom for corporate decision makers, and so that's what is happening.

We're keeping American workers down, low wages, losing retirement benefits, losing healthcare benefits. That is not a route, in my judgment, to economic expansion in this country for all Americans.

DOBBS: Yes, it is, it's truly remarkable. Senator Dorgan, you know you're one of the few senators or Congressmen in Washington, D.C. who actually puts working people first. Why -- how can people who count in this country, the people who are the foundation of the country, that is the middle class, gain some representation? What is it going to take?

Do they have to march in the streets? Do they have to stay away from the polls? Do they have to make a decision about which party because both parties, Senator, frankly, I don't know if you agree with me, but I see the Democrats and Republicans both totally bought and paid for by corporate America and special interests.

DORGAN: Well, let me stick up for the Democrats.

DOBBS: I thought you might. I thought you might.

DORGAN: I'm a Democrat. Yes, I mean, look, this country has a Constitution that starts with, "We the people," so all the power in this country is the power of one casting one vote. One person casting one vote on a day in an even numbered year. That's what the Constitution is about.

So, I mean, people are going to have to respond to all of this at the ballot box. We have one party rule in this town, Lou. You know, a president, a House and the Senate are the same party, and there's precious little debate about things that matter.

And I would tell you this not just on the immigration bill, but I'm telling you, middle income workers and people who -- working families at the bottom of the economic ladder have very little representation in the agenda of the president or the party that controls the House and the Senate.

DOBBS: Does this so-called compromise become -- does the Senate pass it?

DORGAN: Oh, I don't even know that there is a compromise yet. In fact, I was just on the phone a few minutes ago. It appears to me that there is a lot of juggling going on. It's not altogether clear to me that there is going to be a bill passed but we'll see. It's going to go late into the night tonight and through tomorrow. And then we'll see.

DOBBS: Senator Byron Dorgan, it's always good to have you here.

DORGAN: Thanks a lot, Lou.

DOBBS: Still ahead, Congressman Luis Gutierrez is my guest. He says today's Senate compromise on illegal immigration is a great victory for the country.

And finally some common sense in this country's school flag ban controversy? We'll have that. That's news. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Colorado schools banning students from showing their support for the American flag are under pressure tonight to overturn that policy. The Colorado Senate has overwhelmingly passed a bill that would withhold grants from schools who will not allow their students to wear patriotic clothing or bring the American flag to class. Colorado state senators call the policy anti-American. It could be they're right.

The Colorado House is now debating the measure, and as we've reported on this broadcast, the Shaw Heights Middle School in Westminster, Colorado and the Skyline High School in Longmont, Colorado are banning students from exercising their First Amendment rights to display the flag. This comes after groups of students marched with Mexican flags in protest of the Sensenbrenner border security legislation.

And in California tonight, the Oceanside Unified School District has decided to overturn its flag ban. Starting Monday, students in that district will once again -- three cheers -- be allowed to bring the American flag to their school after Oceanside's policy came under intense attack, not only in the community, but all across the country.

Congressman Luis Gutierrez not only voted against the Sensenbrenner legislation, but he helped bring about 100,000 folks into the streets of Chicago to protest it. It was one of the largest demonstrations in the country supporting amnesty for illegal aliens. Congressman Gutierrez joins us tonight. Good to have you with us.

REP. LUIS GUTIERREZ (D), ILLINOIS: Thank you very much, Lou, for having me once again.

DOBBS: You say this is the Senate compromise that at least is shaped, if not completely formed, and not certainly legislation in final form right now, you think it'd be a victory for the American people, for the country. How so?

GUTIERREZ: I think that it finally settles and begins to settle at least -- let me be very careful with my words. It begins to settle the plight of 11, 12 million people who work and live in the shadows. It brings -- it helps to bring most of them out, allows them to earn their legalization here. You know, I believe that they should be given the opportunity, and that whatever penalty we impose upon them should fit the violation of the law. And I think that the Senate compromise does that very, very well.

You know, Lou, we want them to learn English, we want them to take civics classes, we want them to pay a $2,000 fine. We want to take their fingerprints at the beginning of the six-year term and at the end of the six-year term. We want to make sure that the road is rigid and firm and narrow, but secure for them that eventually they will be able to earn their legalization.

DOBBS: A couple of things on that. One is -- is it really your idea that, along with many of your colleagues in the House and the Senate, mostly in the Senate, that citizenship is something that should be bought? I have to tell you, you and I have a lot of differences on the issue of border security and the way in which to reform immigration. But the idea of buying citizenship, that's -- that's just -- does that feel right to you?

GUTIERREZ: Well, they're not buying it. They're paying -- they're paying a penalty. There are many that said that this was an amnesty, and we said they had to earn their legalization. I don't think you're buying your citizenship, unless you're buying your citizenship by picking tomatoes in Florida or grapes in California, washing dishes, doing work...

DOBBS: Well, as you know...

GUTIERREZ: ... which is low paid and low wage, but it's necessary to our economy.

DOBBS: We did a poll here, just so -- and I know where you're coming from and I respect that.

But the fact is, we did a poll here last night, and we got a huge response to it. But we asked, would you be willing to pay more for your produce and vegetables if the worker would make 40 percent more, and that would be $10 a year, and our viewers responded overwhelmingly.

They would pay over $50. They'd pay up to $100. There's so many distortions in this debate right now, because when we talk about the jobs illegal aliens want to do, we're saying the jobs that growers and farmers and big companies won't pay for. They won't provide a decent wage.

You're obviously linked to concern about those illegal aliens through a bond of the commonality as Hispanics, but the fact is, it's just not right in America for us to exploit people like that for any reason at any time.

GUTIERREZ: I agree. And I think this is going to help us end that kind of exploitation of those workers, and at the same time say -- I just want to go back to your question, Lou. I don't think they're buying it, Lou. They're earning it. They're working hard. DOBBS: Well, you know, Americans...

GUTIERREZ: They're making sure that they -- through their fingerprint -- and paying a price and...

DOBBS: Partner, we can go through that all night long, but the fact is, citizens of this country -- America has a strong work ethic. Americans, citizen and illegal, work hard in this country. I don't think we can ever distinguish among people in this country by how hard they work, because people work pretty hard, and usually a lot of folks in each family just to get by.

Let's turn to this issue of amnesty and to the idea that, as I've said, and I just want to get your reaction to it.

GUTIERREZ: Sure.

DOBBS: I've said that you cannot reform immigration meaningfully if you can't control it.

GUTIERREZ: OK.

DOBBS: And you can't control it if you cannot control our borders. Can you tell me what's wrong with that view?

GUTIERREZ: No, nothing wrong with that view. And I think we are going to control our borders a lot more effectively. We have a biometric card for all new guest workers. It's kind of impenetrable, right, so that we can make sure that no one is working here illegally. So employers know who to hire and not to hire, number one.

Number two, we want sophisticated measures on our borders and to put the kind of money and dollars that need to be there.

But Lou, I agree with you, but I think the other coin to the question is, we don't have the political will in this country, nor will we put the requisite resources to deport 11. It's just not feasible. You can't do it. And in lieu of not doing anything, do we really allow these workers to continue to be exploited, or do we figure out a way that we integrate them, much as we have past immigrants into our society?

DOBBS: I think most Americans would agree with you that we want to assimilate those in this country. But I think that Americans, particularly working citizens in this country, have had a bellyful of this charade about border security. They want real security, and then they want to deal with the issue of reform. And they see that urgency four and a half years after September 11th, the urgency to be fixing security at our borders and our ports.

Luis Gutierrez, we have to go.

GUTIERREZ: Thank you, Lou.

DOBBS: I apologize. It's always good to have you. Come back soon. GUTIERREZ: Look forward to an invitation in the future.

DOBBS: Come on back next week.

GUTIERREZ: Thank you.

DOBBS: You got it. Congressman Luis Gutierrez.

A reminder now to vote in our poll. The question is, is the Senate compromise on immigration reform just another sellout to corporate America and the special interest groups that dominate our political process? Yes or no? You'll notice we left the middle class out of that grouping. Cast your vote please at LouDobbs.com. We'll have the results coming up here in just a few minutes.

Also ahead, more of your thoughts, and we'll take a look at what's on tap for tomorrow. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of our poll: 97 percent of you say the Senate compromise on immigration reform is just another sellout to corporate America and the special interest groups that dominate our political process.

More of your thoughts now. Scott in Maryland: "Say it ain't so, Lou. We've been sold out in the Senate by both parties. The Senate rolled over on their backs like a bunch of dogs just to have their bellies rubbed by Mexican President Vicente Fox and La Raza." You've got to give -- give him credit for that writing.

Masayuki in New York: "I have lived in America for 10 years. I paid six years of U.S. college tuition and taxes, then struggled through an expensive legal process to legally get my green card. This decision by our government baffles me. How are we going to determine if illegals have been here for less than five years? Although I would immigrate again from Japan, I feel punished by this decision today."

The good news is, it's not a decision just quite yet.

Jim in Texas wrote in about the White House CIA leak investigation. "What's all the fuss about whether President Bush can declassify information? Let's say he can. But can he declassify information with the express intent of ruining the life of a career CIA operative simply to wreak vengeance upon her husband for being critical of his policies? Just where is Valerie Plame and Joe Wilson in all of this? Is it OK for the president to character assassinate any or all of his political rivals? If so, Lou, you better duck. You may just be next."

John in California. "Now that Scooter Libby has told us that our president has been the approved source of the leak, should we, Americans, fire him, or as he said he would do if he found out the source of the leak?"

Well, we've got to parse that a little bit before we get to a conclusion, but we'll try.

Send us your thoughts at LouDobbs.com. Each of you whose e-mail is read here receives a copy of my book, "Exporting America."

We thank you for being with us tonight. Please join us here tomorrow. We'll be reporting live from Washington, D.C., as the U.S. Senate readies its vote on immigration reform. Congressman James Sensenbrenner, the author of the strict House border security legislation, is our guest. We'll have others. Please be with us.

For all of us here, thanks for watching tonight. Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

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