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LOU DOBBS TONIGHT

Gasoline Prices Soaring; White House Shake-Up; Generals Continue To Call For Rumsfeld's Resignation; U.S.-China Relations Showing Signs Of Strain

Aired April 18, 2006 - 17:59   ET

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


LOU DOBBS, CNN ANCHOR: Tonight, gasoline prices are soaring, already at $3 a gallon in some parts of the country and headed higher. It's war on the middle class, and elected officials are doing what they always do for middle class families.
We'll have complete coverage.

And the White House and Congress are doing what they always do as well about border security. It turns out they could be doing something simple to stop most illegal immigration.

We'll have that special report on the effectiveness of a border fence from the California-Mexico border.

Also tonight, is it time for Donald Rumsfeld to go? Three of the country's top radio talk show hosts tell us what their listeners are saying -- Randi Rhodes, Mark Simone and James Mtume.

And, oh, yes, what about the commander in chief? Communist China's president has arrived in the United States for what will be a four-day visit. That visit is off to an unusual beginning. We'll have that special report and analysis of the political, military and economic challenges to the United States.

All of that and more, right here, tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Tuesday, April 18th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Americans in many parts of the country tonight are facing high gasoline prices, in some areas as high as $3 a gallon. Crude oil prices soared to a new high today, more than $71 a barrel, raising fears that gasoline prices will be much higher as the peak driving season begins with the onset of summer. The higher cost of gasoline is the latest blow to middle class working families already reeling from rising living costs, higher interest rates and stagnant wages.

Louise Schiavone reports from Washington on the escalating gasoline prices, what is nothing less than a war on our middle class.

And Bill Schneider, also in Washington, reporting on the huge political impact of rising energy costs.

We go to Louise Schiavone first -- Louise.

LOUISE SCHIAVONE, CNN CORRESPONDENT: Lou, as the cost of crude and the price at the pumps skyrocket, big oil profits are swelling. Consumers, meanwhile, are getting clobbered.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: As you can see, it's still going up.

SCHIAVONE (voice over): He'll pay $47 to fill up his Cadillac this time around, as tensions with Iran led the price of a barrel of crude to settle at a new high above $71. American drivers find themselves spending about $2.79 a gallon or more.

UNIDENTIFIED MALE: I think it's a little bit ludicrous.

UNIDENTIFIED MALE: I think, basically, they are crazy.

UNIDENTIFIED FEMALE: Well, it just makes life a bit hard.

SCHIAVONE: So hard that even this former Texas oil man is worried.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And I'm also mindful that the government has the responsibility to make sure that we watch very carefully and investigate possible price gouging.

SCHIAVONE: CNN has learned that a task force of state attorneys general has been investigating the issue for months, with Connecticut's Richard Blumenthal telling CNN, "We're finding indications of collusion and profiteering at every level, to put it bluntly." Blumenthal says there's ample evidence that a supply shortage, achieved through failing to drill for and refine more product, has been engineered by big oil to achieve record profits.

MARK COOPER, CONSUMER FEDERATION OF AMERICA: We don't spend the money to increase either the crude capacity or the refinery capacity, and that's why the cash just piles up. And they are sitting on piles of cash, because they can't possibly absorb this massive increase in cash.

SCHIAVONE: The American Petroleum Institute says there could be more supply, noting, "We would welcome increased access to the huge oil and natural gas reserves on the Outer Continental Shelf and in the Alaska Natural Wildlife Refuge."

(END VIDEOTAPE)

SCHIAVONE: And, Lou, the industry notes that no FTC probe has ever found evidence of collusion, but a new congressionally-ordered FTC probe is under way, even at this time, with the agency pouring through thousand of pages of petroleum company documents. The results due out by Memorial Day, the official start of what promises to be an expensive summer driving season -- Lou. DOBBS: Any investigation there in Washington as to what Congress and the White House have been doing for the past several years about energy policy?

SCHIAVONE: Well, it's interesting. It's almost a cottage industry that, whenever prices spike, there's another call for an FTC probe. And we called the FTC today, and they said, "We're already investigating it." They've already asked to us investigate this.

The question is, what sorts of national policies can Congress and the president establish that will stimulate exploration and drilling -- Lou.

DOBBS: Louise, thank you very much.

Louise Schiavone from Washington.

President Bush today did say he's concerned about those rising gasoline prices. Other elected officials are also expressing concern as well. But none of them are doing anything about high energy prices, and they are not likely to.

However, middle class drivers and consumers are also voters. And it turns out they may do something come November about those officials who now are doing nothing.

Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Gas stations are becoming the hot new political prop.

SEN. CHARLES SCHUMER (D), NEW YORK: The price of gasoline is going up, up, up.

SCHNEIDER: Three bucks a gallon, and the peak driving season hasn't even started. President Bush brought the issue up without even being asked about it. He explained that there are three reasons for the price hike.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: One, the increase in the price of crude oil. Secondly, there's increasing demand. Thirdly, we're switching fuel mixes.

SCHNEIDER: Sounds like the president is saying, hey, it's nobody's fault. Many analysts are inclined to agree.

DAVID SANDALOW, ENVIRONMENT SCHOLAR, BROOKINGS INSTITUTION: The biggest factor in the price increase right now is supply and demand. There is huge increasing demand in China and in the United States.

SCHNEIDER: Poppycock, say Democrats.

SCHUMER: A 30 cent increase is hard to explain strictly by the laws of supply and demand. SCHNEIDER: They say, somebody is up to no good.

SCHUMER: I think that price-gouging laws could and should be strengthened, because I think there's more and more of it.

SCHNEIDER: President Bush was worried enough about the issue to add a fourth factor that might be worth looking into.

BUSH: And I'm also mindful that the government has the responsibility to make sure that we watch very carefully and investigate possible price-gouging.

SCHNEIDER: The president should be worried. Among voters who say the rise in gasoline prices is not causing them financial hardship, 43 percent intend to vote Democratic for Congress. Those who say gas prices are causing some hardship are voting 53 percent Democratic. And those who say gas prices are causing serious hardship are voting 64 percent Democratic. That includes 44 percent of Americans.

(END VIDEOTAPE)

SCHNEIDER: Experts say concern over Iran's nuclear ambitions and instability in Nigeria are driving prices up. It's hard to figure out whose to blame for that -- Lou.

DOBBS: And it is also hard to figure, Bill, what's going on when, on the same day, Senator Charles Schumer and President George Bush are both talking about price gouging. Some coincidence.

SCHNEIDER: That's right, they are, because that's the easiest thing for politicians to do, to say, somebody's to blame, we're going to get to the bottom of this price gouging. And, you know, there is, as Louise indicated in her report, there are investigations. And that's undoubtedly part of the picture.

But a bigger part of the picture and an important part of the picture is, where is the competition for alternative energy plans? Where is the alternative -- the competition for fuel efficiency and alternative fuels? We're not hearing a lot of competing plans from Democrats and Republicans on that.

DOBBS: Nor have we for about 20 years.

SCHNEIDER: Right.

DOBBS: Thank you very much.

Bill Schneider.

The shuffle at the White House is picking up. President Bush today chose U.S. Trade Representative Rob Portman to replace Josh Bolten as budget director and Portman's deputy to replace Portman.

Suzanne Malveaux reports from the White House.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): New Chief of Staff Josh Bolten is wasting no time in filling White House positions, starting with his old job as budget chief.

BUSH: The job of OMB director is a really important post, and Rob Portman is the right man to take it on.

MALVEAUX: So now Portman has Bolten's old job, and his deputy, Susan Schwab, moves into his as U.S. trade representative. Confusing?

BUSH: It's the game of musical chairs, I guess you'd say, that people love to follow.

MALVEAUX: And many in Washington are doing just that. On Monday, his first full day, Bolten announced he would be making personnel changes to refresh and reenergize the president's team. As CNN first reported two weeks ago, some Republican strategists and Bush administration officials say Bolten is focusing on legislative affairs and White House communications, specifically the position of White House press secretary.

CNN has learned from multiple Republican sources that Bolten reached out to Fox News anchor and conservative radio talk show host Tony Snow several weeks ago at the White House. Snow worked as a speech writer for the president's father, and had no comment about the story.

Republican sources familiar with Bolten's conversations about staff changes tell CNN those of interest inside the Bush administration include former Treasury spokesman Rob Nichols and former Pentagon spokeswoman and current CNN contributor Torie Clarke. Several weeks ago in THE SITUATION ROOM, Clarke dismissed the suggestion.

BLITZER: They would like you to come back if you'd be interested.

TORIE CLARKE, FMR. PENTAGON SPOKESWOMAN: You know, what did Sherman say? If nominated, won't run; if elected, will not serve. Not happening.

MALVEAUX: When asked over the past several days whether he plans to leave, McClellan said, smiling...

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: Look, I never speculate about personal matters.

(END VIDEOTAPE)

MALVEAUX: And today, President Bush issued a stern warning that, despite any discussions or outreach regarding personnel matters or changes, ultimately he is the one, Lou, that is going to make the call -- Lou.

DOBBS: The decider in chief, I think. Suzanne, thank you very much.

Suzanne Malveaux.

President Bush also today strongly defended his defense secretary from those retired generals calling for Rumsfeld's resignation.

(BEGIN VIDEO CLIP)

BUSH: I have strong confidence in Don Rumsfeld. I hear the voices and I read the front page and I know the speculation. But I'm the decider, and I decide what is best. And what's best is for Don Rumsfeld to remain as the secretary of defense.

(END VIDEO CLIP)

DOBBS: Rumsfeld himself today met briefly with 15 retired generals who are radio and television analysts and commentators. None of those generals have called for his resignation. Rumsfeld spent an estimated few minutes with the generals. The entire meeting lasted two hours and focused on the war in Iraq.

In Iraq, another American has been killed. Insurgents killed the soldier west of Baghdad when they fired on his Abrams tank -- 2,378 of our troops have now been killed in Iraq since this war began, 17,648 of our troops have been wounded in Iraq. Of those, 8,099 wounded so badly they could not return to duty.

Still ahead here, compelling evidence that a border fence may be the only way to effectively and quickly deal with our illegal immigration crisis. We'll have that special report.

And the illegal alien lobby is demanding that the Senate give in to pressure for amnesty for millions of illegal aliens.

And communist China's president has arrived in the United States, but in the other Washington.

We'll have that story and a great deal more still ahead right here.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Georgia's governor, Sonny Perdue, has signed a tough new law that will crack down on illegal immigration in his state. The Georgia law contains some of the toughest measures against illegal immigration in the country.

Under the new law, adults must show they're in the United States legally before they receive any state benefits. Employers who knowingly hire illegal aliens will be subject to state penalties. And state police are required to check the immigration status of every criminal suspect. The Mexican government quickly announcing its opposition to Georgia's new law. It's adamantly opposed. A spokesperson for Mexican President Vicente Fox says the law "... incurs discriminatory acts against the Mexican population and those of Mexican origin."

Mexico says it will closely watch the application of Georgia's new law. Tomorrow, the sponsor of the legislation, Georgia State Senator Chip Rogers, will be among our guests here.

A different result in Arizona tonight. Democratic Governor Janet Napolitano vetoed a tough illegal immigration bill passed in her state. The law would have given Arizona police the power to arrest illegal aliens on criminal trespassing charges. Governor Napolitano, for her part, says arresting illegal aliens should remain the responsibility of the federal government.

As states search for solutions to a worsening illegal alien crisis in this country, there's already a proven way to keep illegal immigration from growing, and perhaps even end it. It's called a border fence.

San Diego already has one. It has been a major success. Its leading supporter says the fence must be expanded.

Casey Wian reports tonight from San Diego.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice over): Fifteen years ago, this section of U.S. border near San Diego was known as no-man's land. Thousands of illegal aliens routinely crossed here and were often victims of robberies, rapes and murder.

Now, there are two layers of fence separating the United States from Mexico. And the local crime rate is down 50 percent.

The man most responsible for that is Congressman Duncan Hunter.

REP. DUNCAN HUNTER (R), CALIFORNIA: The experience her shows this: the fence works. And it means that a smuggler has to come across the first fence, he's got to cross a high-speed border patrol road. He then has to sit down with his welding gear for maybe half an hour to cut a hole at the fence, and if everybody's not at the Dairy Queen, you catch him.

WIAN: Hunter sponsored a new amendment to the House border security bill that would construct more than 800 miles of fence along the southern border. Hunter's amendment would require 22 miles of new fence around the Tecate port of entry, east of San Diego; nearly 400 miles across the Mexican border with Arizona, the businesses and deadliest section for illegal alien crossings; a 71-mile and 64-mile stretch covering parts of New Mexico and Texas where illegal alien traffic is growing at the fastest rate; and another 300 miles of fence from Laredo, Texas, to the Gulf of Mexico.

In San Diego, border patrol apprehensions have dropped from more than 200,000 per year in 1992 to fewer than 10,000 now. More illegal aliens are now resorting to desperate measures, such as hiding in cars going through legal ports of entry, where they are easier to catch. Others have taken to the hostile deserts and mountains, where their chances of success are higher, but so is the risk of death.

Another reason Hunter wants a fence.

HUNTER: This fence in Arizona would save about 500 illegal aliens a year, would save their lives.

WIAN: Hunter says he's confident his amendment will be included in any final border security bill.

(END VIDEOTAPE)

WIAN: Even if the fence initiative fails in Congress, the idea is far from dead. LOU DOBBS TONIGHT has learned the minutemen will soon announce plans to build their own fence with donated money on private land along the border -- Lou.

DOBBS: Casey, with such demonstrable success there -- now, the distance is about, what, 15 miles there in San Diego?

WIAN: That's --14 miles right now.

DOBBS: And the fact is, with the -- that kind of impact, why in the world would Congress not look at this and say, let's do it?

WIAN: It's really amazing, because Congressman Hunter says that when he first proposed this idea of a fence back in the '80s, people raised the argument of comparing it to the Berlin wall, and they're still doing it today, which is, of course, not an -- not an apt comparison at all. And there's lots of other evidence that shows that this would actually be very cost-effective.

Congressman Hunter estimates this section of the fence that he's talking about expanding would cost about $2 billion to construct. If you think about the fact that the United States spends $4 billion a year just incarcerating criminal illegal aliens, it's cost-effective just from that standpoint alone -- Lou.

DOBBS: Casey, thank you very much.

Casey Wian.

Thank you.

The fate of as many as 20 million illegal aliens living in this country could be decided by a handful of U.S. senators. These senators have not yet decided just how they will vote on immigration reform. They are under intense pressure tonight from both sides of the illegal immigration debate.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE) LISA SYLVESTER, CNN CORRESPONDENT (voice over): In Kansas City, Missouri, a call for Congress to listen up.

UNIDENTIFIED MALE: Call your state reps.

SYLVESTER: Immigration reform groups are rallying this week to stop plans for an amnesty.

UNIDENTIFIED FEMALE: We want to stand up for our country and stand up for our borders.

SYLVESTER: Lobbying efforts are focused on a dozen senators who ultimately could decide the issue. Representative Tom Tancredo is leading a letter campaign this week. To Nevada Senator John Ensign, he wrote, "You are one of the swing senators who could tip the balance towards either enforcement first or amnesty."

REP. TOM TANCREDO (R), COLORADO: We have written letters to them. We have written letters to the media in those states and asked constituents to please contact their senators and to get them in line behind an enforcement-first bill.

SYLVESTER: Nevada's construction boom has been a magnet for illegal aliens. They've cost taxpayers in Senator Ensign's district millions. He's up for re-election in November.

Another swing senator, Dianne Feinstein. She has said a guest worker program could take jobs away from Americans but sided with her Democratic colleagues to block a vote on an enforcement-only bill.

And New Mexico Senator Jeff Bingaman, he's a Democrat who's being pressured by his party to vote for amnesty. But most in his state adamantly oppose it.

Other swing senators, North Dakota's Senator Kent Conrad, South Dakota's Tim Johnson, and Utah's Robert Bennett. A number of factors could decide which side of the fence they come down on.

JIM EDWARDS, HUDSON INSTITUTE: The senators are feeling the push and pull on immigration from a number things, the politics, the geography, the makeup of their constituency, the -- say the industry presence in their district, as well as the internal Senate politics.

SYLVESTER: And one more powerful consideration, the voice of the people, who overwhelmingly reject amnesty plans.

(END VIDEOTAPE)

SYLVESTER: Senator Ensign has been in Congress since 1994, and he says in all the years that he's been in office, he has not seen an issue with this level of intensity. And incidentally, the calls that he has received, Lou, are heavily tilted towards stronger enforcement.

DOBBS: Now, there is no -- there is literally no question in this country as to -- as to what the people want. That is, American citizens. It is -- it is frustrating at best. Try to come to grips with why 100 senators who are supposed to be thinking wisely and well and in the national interest could be so paralyzed, some of them, over sorting out the special interests, rather than the national interests.

SYLVESTER: It's really amazing that you even have senators who are sitting on the fence, that you have these swing senators to begin with, because as you mentioned, if you look at the polls, even some of the polls in these so-called -- these swing states on this issue, the people, themselves, as you mentioned, overwhelmingly want stronger enforcement.

DOBBS: Lisa Sylvester, thank you very much. An excellent report. Good to have you here in New York.

That brings us to the subject of our poll tonight. Do you believe Congress should first demand that our borders and ports should be secured before even taking up the issue of immigration reform? Yes or no?

Please cast your vote at loudobbs.com. We'll have the results coming up.

Up next, the president of communist China has arrived in the United States. Our special report coming on what President Hu is trying to gain.

And three of the nation's most popular radio talk show hosts will join us. We'll find out what their listeners are saying about Donald Rumsfeld and more.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Communist Chinese President Hu Jintao landed in Seattle. He visited Microsoft's headquarters. He's attending a dinner at the home of Bill Gates this evening. Tomorrow he'll be touring Boeing's plant near Seattle before heading to Washington, D.C.

The fact that President Hu is visiting the White House last raises the question, what exactly is this trip about? What does he hope to gain?

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): Business first. The Chinese president's first stop at America isn't the White House, but Seattle. Bill Gates' house. And China's largest PC maker, Lenovo Group, said it is buying more than $1 billion of Microsoft Windows software over the next year.

NICHOLAS LARDY, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES: China is looking to foreign companies, including Microsoft, as sources of technology. Now, Microsoft is doing a lot of research and development there. A big part of China's growth strategy is to become more sophisticated on a technology side, move up the technology ladder. And companies like Microsoft potentially can help them do that.

PILGRIM: The deal is being touted as a so-called breakthrough. Up until now, Chinese computer makers have routinely ripped off software. Now, by offering to actually buy it, the Chinese hope to smooth tensions over intellectual property rights.

In advance of Hu's trip, China has also been making conciliatory gestures with its checkbook to other companies such as Boeing. China has done $15 billion worth of deals in this country in the past few weeks.

China had a record $200 billion trade surplus with the U.S. That is roiling Congress, demanding responsible trading practices and fair currency exchange from China.

FRED BERGSTEN, INSTITUTE FOR INTERNATIONAL ECONOMICS: China is very long on making promises and very short on delivering on those promises. And he wants to get away with giving as little as he can.

The economic issues are high on the agenda. The Chinese don't have much to offer and don't want to give much. So he wants maximum return for very little contribution.

PILGRIM: President Hu is also looking to bolster his reputation in Beijing by cleverly managing the relationship with the United States.

(END VIDEOTAPE)

PILGRIM: Now, the U.S. Treasury has been threatening to cite China for currency manipulation in a report that will be released later this month. But the Chinese have done very little to address charges of currency manipulation so far -- Lou.

DOBBS: And the blame lies squarely with the U.S. government, not the Chinese for the result.

Kitty, thank you very much.

Kitty Pilgrim.

Coming up next, from the White House to the gas pump, we'll find out what people are talking about with some of the country's most popular radio talk show hosts.

And communist China's president arrives in the United States. We'll examine China's political, economic and military challenge to this country.

And heat waves, floods and drowning polar bears. What global warming?

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Staff changes at the White House, a drumbeat of criticism at the Pentagon, and a middle class besieged by rising gasoline prices and increasingly disgusted with a Congress that no longer represents them.

Joining me now to talk about what they are hearing from their listeners, Randi Rhodes, the host of "The Randi Rhodes Show" on Air America Radio; Mark Simone, talk show host on WABC Radio; and James Mtume, "The Open Line" on Kiss-FM.

Good to have you here.

JAMES MTUME, TALK SHOW HOST, KISS-FM: Good to be here, Lou.

DOBBS: Let me start with Donald Rumsfeld. And what do you think?

MTUME: Of course he's got to go. But that's not the -- that's just the tip of the iceberg. You've got a president that has to go.

RANDI RHODES, "THE RANDI RHODES SHOW": Yes.

MTUME: And you have a situation here. And here's what -- here's what we've got right now. You've got the Republicans robbing the bank and the Democrats driving the getaway car.

(LAUGHTER)

MTUME: So let's be real clear what we're talking about. So you've got to -- we've got to re-think the whole paradigm. But one thing's for sure -- and I'm sure Randi's ready to go on this -- I need to -- we got to seriously look at this president and how far do we let it go?

It ain't even about Bush anymore. It's how far the American people are ready to be pimped and played, and stoop down to this level. I'm not going to be played like that.

DOBBS: Randi, are you ready to go?

RANDI RHODES, HOST, "THE RANDI RHODES SHOW," AIR AMERICA RADIO: He's exactly right. Well, look, I won't go as far as to say who's driving the getaway car, because, you know, Democrats have absolutely no control over everything. We watch sham bills -- you know, if the Republicans don't want it, it doesn't happen; if the Republicans want it, it happens.

That's just got to be accepted. And I know people are really down on Congress as a whole, but you've got to remember, Democrats control nothing, not even the getaway car. However ...

MTUME: But we laid down, Randi. We laid down. RHODES: ... I did not come here to be partisan. I came here today, Lou -- I swear to you -- I came here today to ask you to do something. Seriously! My callers -- my listeners -- yours, too, I'm sure -- always get to this point and they go, well, then, James, what do you want us to do? What do we do? What do we do?

If every single camera that's available in the media -- cable- wide, network-wide -- is not in Nevada at the nuclear test site on June 2nd to watch 1.4 millions pounds of explosives be blown up so they can do the math and figure out how to make a tactical nuke, a smaller nuclear weapon that will represent that much firepower for Iran -- if we don't show America this mushroom cloud that will explode in Nevada on the 2nd of June, there is no hope for the American people, there is no hope for the media.

You asked me last time I was here, Who's fault is it? And I said, "It's our fault; it's the media's fault." We have to tell this story. This president is manifestly insane. Donald Rumsfeld is insane.

You've got Josh Bolten, who is going to be talked about today -- "He's going to shake up things, He's going to re-energize" -- you know what his hobby is? He collects photographs of Bush's hands. That's what he does -- I suspect so he can write "left" and "right" on them, but that is what he does!

DOBBS: Mark? Spring to the defense of this beleaguered, besieged administration.

RHODES: Go, Republican Boy!

MARK SIMONE, TALK SHOW HOST, WABC RADIO: That's a lot to take. Well, I'm not a Republican, but let's see -- I'm glad to hear there's something that scares you more than Rumsfeld. Also remember, because of these six generals -- now, it may be that Rumsfeld was going to go anyway; there are going to be changes -- but because of these six generals, now Rumsfeld has to stay, otherwise it looks like a knee- jerk reaction. So you can thank these six generals ...

DOBBS: And we wouldn't want anybody accused of a knee-jerk reaction, would we?

RHODES: With a nuke.

SIMONE: Well, you can thank these guys for the next year of Rumsfeld that you'll probably get as a result.

Also remember, there's another group of very respected generals defending Rumsfeld, although they don't get any coverage. The "New York Times" puts the guys against Rumsfeld above the fold, no mention of the other guys.

I think Rumsfeld should go, just because you burn out after six years. But, there are some good things he did in the beginning. He did modernize things and got rid of some old weapons systems that probably should have gone, combat phased fast, lightning force, like he said it would be.

MTUME: They've left soldiers with bad equipment, they're getting -- arms are getting blown off.

RHODES: No body armor.

MTUME: No body armor.

SIMONE: Here's the real problem. Democrats always get everybody's attention, either with a gold star mother camping out outside of Bush's house, or with these six generals. And then they call for nothing. You've got to call for something. Demand another 100,000 troops. Demand a pull-out. Come up with something.

MTUME: I think there's a very important point that we haven't touched on, until we move to the next subject, that I do want to put out there. As far as I'm concerned, when I made that reference, as humorous as it was, I meant it. The reality is, even though the Democrats can't -- cause Republicans do control Congress and the Senate.

RHODES: Everybody.

MTUME: But there's such a thing as standing up and making a statement.

RHODES: But they have.

MTUME: Please -- rolled over on the Patriot Act. As much as we want to applaud Hillary Clinton, they all bought into the war.

RHODES: They're not all -- listen ...

(CROSSTALK)

RHODES: They didn't all buy in.

MTUME: I'm talking about the major ones.

(CROSSTALK)

MTUME: What major Democrat didn't?

RHODES: The whole entire Congressional Black Caucus fought, Feingold voted no. You've got to do the headcount.

(CROSSTALK)

DOBBS: I just want to understand what James is saying here.

(CROSSTALK)

RHODES: A hundred and twenty-three Democrats voted no, but they get no credit from guys like you, which is why they're afraid to stand up. They're afraid.

MTUME: Randi, please let me finish. I would just like the latitude of completion.

Now, as I said, I'm not a Democrat, I'm not a Republican. I'm into whatever makes sense. The one question I'd like to ask, Lou -- and you can probably do this on your show at some point -- where are all those neocons that constructed this?

Where's Wolfowitz? Where's Perle? Where's Feith? Where's Shulsky? The Office of Special Plans is really when the Pentagon schism started to happen. And I'd like to hear from that.

It's really un-American for a president to lie about it all. It means wiretapping. You know, what I thought was great, when they asked for the names of the people that they had wiretapped, eavesdropped on, they released a statement saying, well, we would like to give you those names but we can't because it would infringe on their right of privacy.

DOBBS: There are a few contradictions.

MTUME: I'm with Randi on that. This is insane.

RHODES: It is insane. That's the word and we have to stop being afraid to say so.

DOBBS: This is where we're going to take a break on insanity.

MTUME: On insanity.

DOBBS: We'll be back with more sanity in just a moment.

(COMMERCIAL BREAK)

DOBBS: We're back with Randi Rhodes of Air America Radio, Mark Simone of WABC Radio, and James Mtume of KISS-FM.

Mark, give us a sense of how your listeners are reacting right now to what is going on.

SIMONE: Listeners are upset, obviously, with the -- you know, things have gotten bogged down in a lot of areas, but they're also upset with the Democrats for what I was talking about before.

When you get everybody's attention, you've got to come out with something, not just get rid of Rumsfeld, because you don't know what the alternative is. You've got to propose something on the other side -- more troops, call for a pullout ...

RHODES: They have and they were smeared. Everybody that -- Jack Murtha ...

(CROSSTALK)

DOBBS: But wait a minute ...

RHODES: Let me finish this just because this is very important. When Jack Murtha stood up and he called for a pullout, a redeployment of troops over the horizon, they smeared a 37-year Marine. Max Cleland, when he was ...

(CROSSTALK)

SIMONE: Now, wait a minute. Whoa, whoa, whoa, whoa, whoa.

RHODES: They smeared him.

(CROSSTALK)

DOBBS: Wait a minute. The problem with Murtha is Murtha stood up there, whether you agree or disagree ...

RHODES: The generals apparently were talking to Murtha the whole time.

DOBBS: ... courageously and put forward his views.

RHODES: And apparently the same generals that are now coming ...

DOBBS: And the Democratic leadership would not support him, and that's the fact.

RHODES: Who's the Democratic leadership? Nancy Pelosi and Harry Reid?

DOBBS: Nancy Pelosi, Senator Harry Reid.

RHODES: So my entire Democratic identity depends on two people?

DOBBS: No, no, no, no, I didn't suggest that. I'm just suggesting to you that Murtha ...

RHODES: Don't you remember the day that Jean -- what's her name -- Jean Schmidt stood up and said Marines don't cut and run? And that got played on the media over and over and over again. And now you're saying that the Democrats didn't stand up for Jack Murtha?

DOBBS: No, no, no.

RHODES: Democrats stood up for Jack Murtha.

DOBBS: No, I'm saying to you that the Democratic leadership in the House and the Congress ...

RHODES: Democrats stood up for Cindy Sheehan, Democrats stood up for a lot of people ...

DOBBS: Randi ...

RHODES: ... but the media just keeps on running these clips over and over again, "Marines do not cut and run."

(CROSSTALK)

SIMONE: But this is the perfect example. Murtha talks about pulling out and you say to him, are you for pulling out? And he says no, I'm for redeploying. Now, I don't know what that means.

RHODES: I'll tell you what it means. It means that you have a force that's ready to help right over the horizon, if they're needed.

DOBBS: Very quickly -- your listeners, what are they most concerned about right now?

RHODES: They think their president is insane. Some of us think he's on drugs. Others think that the new guy, Josh Bolten, has a problem with collecting hands. Others of us know that guys like Jeff Gannon got press passes, and they had Web sites where there were pimps and prostitutes. They were male -- something very strange is going on. Karl Rove is on the verge of indictment.

DOBBS: Just a couple of minutes.

RHODES: Today the governor of Illinois just was brought in guilty. You have an Ohio governor, Republican, who stands indicted, and he's still the governor. There's so much corruption. And the message to Democrats...

DOBBS: James?

RHODES: ... who are in the minority...

(CROSSTALK)

RHODES: ... Don't say anything or we'll smear you!

DOBBS: I got to get to James, since we're out of time, Mark. I'm sorry. Your listeners, their thoughts, the things that are most important to them right now?

MTUME: Right now, the things that are most important to the listeners is where this country is going. You know, my listeners are obviously predominantly African-American. The concern is about jobs, the concern is about disconnection. And they're concerned what's getting ready to happen tomorrow.

We're dealing in a whole 'nother -- you know, like I said, mantra, with our school systems. And that's what we're most concerned about. But we -- my listeners were very clear about Bush's mental state a long time ago. We got it real quick. I'm glad you all are catching up.

SIMONE: People need a good alternative. Not hysteria, not anger. And Randi, with you, the "I" word used to be impeachment, not insanity.

RHODES: Yes, but he's insane now. Now he's talking about nuking Iran. We have a mess in Iraq that he's said he'd leave for the next guy. Well, this guy is like a daddy who will clean up all my messes? No, this is big. And it's -- on June 2nd, we can't get cameras out to that nuclear test site to see what I'm talking about. I mean, you feel insane talking about him being insane, but he is. DOBBS: There's one thing about that we should put on the record. The United States government, the military and the Energy Department, have, I would guess somewhere in the order of 5,000 or 6,000 models of what happens with varying megatonnage in tactical as well as well other nuclear weapons. So one wonders just why they want to put up another big bang, as it were.

Randi, thanks for drawing our attention to it.

RHODES: Thank you.

DOBBS: Mark Simone, thank you very much. James...

MTUME: I look forward to the next time...

DOBBS: ... Mtume, thank you very much.

(END VIDEOTAPE)

DOBBS: Well as promised, now the results of last night's poll, and, again, we apologize for the technical difficulties we experienced. We hope they won't recur. The question, what do you believe is needed to refresh and reenergize the Bush administration? Thirty two percent of you said staff changes, 68 percent said policy changes.

A reminder now to vote in our poll tonight. Do you believe that Congress should first demand that our borders and ports be secured before taking up immigration reform? Yes or no? Please cast your vote at loudobbs.com, the results coming right up.

Congress wants to spend $700 million to move a rail line that was just rebuilt at a cost of more than a quarter billion dollars. It is an example, you can put in the modifier you want, of our government using your money to subsidize special interests.

The freight line, along Mississippi's Gulf Coast was rebuilt after Hurricane Katrina. Now that it's operational, Mississippi's senators want $700 million to move it inland to make room for waterfront casinos and luxury condos. The money was slipped into a $106 billion war-spending bill that's supposed to be supplying our troops in Iraq and Afghanistan.

Texas tonight remains in the grip of an unusual Spring heat wave. Temperatures in many parts of Texas rising into the 90s again today. Temperatures soaring past 100 degrees yesterday in some parts. And power companies are imposing rolling blackouts to save power.

Unusual spring weather hitting southeastern Europe tonight. The Danube River is rising to record levels after heavy rainfall. Tens of thousands of homes are in danger of being destroyed by flooding.

And in Beijing, a health emergency is in effect after massive sandstorms. Some 300,000 tons of dust and sand fell on the city yesterday alone. Residents are rushing to hospitals with breathing problems. China says it will try to make artificial rain to clear the air.

And a new study says polar bears face extinction as the polar icecap is melting. The American Meteorology Society says polar bears are now unable to find enough food on shrinking ice sheets. They are trying to swim in search of food, and some are drowning.

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

WOLF BLITZER, CNN ANCHOR: Thanks very much. We are watching several stories, the P.R. offensive. The Secretary of Defense Donald Rumsfeld, meeting behind closed doors with retired generals. We'll speak to one man who was in the meeting.

Also, White House shuffle, who is in, who is out, and who may be next?

Plus gas pricing skyrocketing. Are the oil companies taking advantage of all of us over at the pump? Find out why one U.S. senator is calling for a federal investigation.

And Hillaryisms, sayings that come back to bite. All that, Lou, coming up at the top of the hour in THE SITUATION ROOM.

DOBBS: Looking forward to it, Wolf. Thank you.

Coming up next, communist China's bid for superpower status, what it means for America's middle-class and America's military and our nation. I'll be talking with the country's leading Sino-American analyst about a red storm rising. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Communist Chinese president Hu Jintao meets with President Bush Thursday in Washington. Tonight, however, he's in Washington state, where President Hu is putting a priority on a fellow by the name of Gates. Is that a slap in the president's face?

If so, it's not the only insult to the United States. Joining me now to examine communist China's military, economic and political challenges to America are from Washington, Richard D'Amato, chairman of the U.S./China Economic and Security Review Commission, and here in New York, Gordon Chang, author of "Nuclear Showdown: North Korea Takes on the World." Richard Fisher, chairman of the International Assessment and Strategy Center. Good to have you with us.

Let me turn you to, Gordon, first. Meeting with Bill Gates first? I can't recall, can you, the last time a head of state met with a businessman before meeting with the president of the United States?

GORDON CHANG, AUTHOR, "NUCLEAR SHOWDOWN": I can't recall it. Apparently what President Hu wants to do is to sort of try to influence American political opinion rather than engage the government in Washington. I mean, he's spending more time with the presidents of Microsoft, Starbucks, Boeing and Yale than he is with Bush. He turned down a visit to Crawford, and the reason he did that is, if he went to Crawford, he'd have to engage Bush, and have to talk about substantive issues. He goes to Washington with a one-hour meeting with Bush and not have anything but really a 21-gun salute.

DOBBS: At the same time as Hu has arrived here, the Chinese, the Chinese government, has announced that the they are curbing the media further, and they are continuing human rights abuses without question, a $200 billion trade deficit that is only going to get much larger this year and discussing certain concessions.

Is this a relationship or are we simply being told what to do by what a still a third-world country?

RICHARD D'AMATO, CHAIR., US-CHINA COMM.: Well, the Chinese are still very dependent on our economic largess and on American companies and technology and on our consumer market. They sell a huge amount, over $200 billion last year, and the trade budget balance. So they are very dependent on us.

On the other hand, they engage in protectionism in such a way that they are more -- they are not -- we're not as competitive with the Chinese as we should be. There are a whole series of persistent trade issues on the table that we've been talking to the Chinese about for several years: IPR violations, their rigging of their currency, which is very serious.

DOBBS: It's serious, but the fact is, we're the chumps who put up with this nonsense, Dick. We keep talking about the Chinese as if there's only one side in this relationship. And if we choose to give up $200 billion dollars in hard currency to their reserves every year through or deficit because we want to have some trinkets and drive down wages and prices in this country, then we're the dog gone fools.

D'AMATO: Well, we may be fools, but we have to deal with the Chinese on the situation. The opportunity here for a summit, meeting with the Chinese leader, is an opportunity for us to impress upon him the need to make some progress on Chinese protectionism in these areas. Congress is serious about it. We need to make some progress on currency and on IPR.

DOBBS: We've been hearing this administration, Dick, talking about the RMB adjustment and float the Yuan for at least two years and they gave up 2.1 percent on the exchange, which immediately floated back. I mean, this is -- these are kids' games and we look like idiots, don't we?

D'AMATO: Well, we look like we're ineffective.

DOBBS: OK., there's another way to say it, Dick.

D'AMATO: And I think that the point is that the president needs to take this opportunity to impress upon Hu that we can't tolerate it forever and there will be consequences that will affect their ability to take advantage of the American market. And Congress, of course, is very restless. DOBBS: Right. Well, they are restless, but they are not doing much. I agree with you, but the fact is I can't get excited about Congress being restless, Dick. Let me turn to Rick Fisher, real quickly.

Rick, you've just gotten back from Asia. Is it a foregone conclusion that China will be the -- will have hegemony throughout the world's greatest region?

RICHARD FISHER, V.P., INTL. ASSESSMENT & STRAT. CTR.: That depends on our actions. If we stop supporting the Democratic government of Taiwan, if we in any way reduce our alliance, commitments and our reliance relationship with Japan, that will happen, and people will look toward the end of the American era of peace in Asia. And that would be a disaster for us.

DOBBS: Another disaster that appears to be in the making is in the area of Iran. China has been supporting Iran's nuclear ambitions, in number of forms, opposing sanctions, Gordon, opposing they suggestion of action, meaningful action on the part of the United Nations. What role will the Sino-American relationship play in the resolution, if any?

CHANG: You need to talk to the Chinese, because it's not only supporting the Iranian's diplomatically, but it's also giving them materials and technology to make a bomb, and this is completely unacceptable.

The Chinese are ruthlessly pragmatic, and they'd get the message if we were resolute. We haven't been resolute, and that's the problem, from trade to Iran to North Korea, United States needs to change its policies.

DOBBS: Rick Fisher, any possibility that we're going to see this administration change anything about its policies? Dick, you first. Dick D'Amato?

D'AMATO: Oh, yes, well, we think that certainly the president is serious about trying to engage the Chinese on Iran and nonproliferation. There's an opportunity to make proposals to the Chinese, and see if they take them up with us in terms of cooperation with Iran.

They can't be serious in terms of supporting the development of nuclear weapons in Iran any more than we are. They've got to be concerned about it. Their problem is they are conflicted because they get so much energy from Iran.

DOBBS: Well, they are conflicted, but they are also the ones that are aiding and abetting their nuclear ambitions.

D'AMATO: Well, this is an opportunity to try and engage the Chinese leader and move him.

DOBBS: What's our leverage? President Hu's proved one thing, as has the Chinese leadership over the past two decades. They're not particularly -- they don't find American talk and nonsense particularly persuasive. What's the leverage? What do we got?

D'AMATO: Our leverage is our market. Our leverage is the openness of our economy and our ability to invest in China. The opportunity to reduce that market would be very serious for the Chinese.

FISHER: I agree with Gordon. There's a great shift under way, and we have about five years to lay down the clearest markers possible or else there will be a shift. The Chinese will be proliferating ad nauseum. They will be running over us economically and strategically we will be displaced in Asia. I don't see President Bush shaking things up during this visit, but it has to happen soon.

DOBBS: And all that is happening in this hemisphere. The Chinese are exerting extraordinary influence in the Western Hemisphere while the United States seems to be in, if you will, recession.

CHANG: It's not only Central America and South America, it's also the Pacific. You know, people say that we shouldn't treat the Chinese as enemies because that will make them enemies. But the Chinese have made it very clear they want to displace American influence. This is more than just power politics as usual.

DOBBS: Thank you very much Gordan Chang, Dick D'Amato and Rick Fisher. Thank you gentlemen, for being here. We appreciate it. It should be an interesting week.

Still ahead, we'll bring you the results of our poll. And we'll also have more of your thoughts, and we'll tell you what we know about what's going to happen tomorrow. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll overwhelming, 97 percent of you responding that you believe Congress should first demand that our borders and ports be secured before Congress takes up immigration reform.

Taking a look now at your thoughts, Edward in Arizona wrote in to say, "Lou, I'm not surprised that you've been targeted by militant immigrant groups to get you off the air. In our new style, quasi- totalitarian state, our politicians think nobody has a right to an opinion but them.

After all, who cares about the United States citizen anymore, other than the vast majority of U.S. citizens. In today's political world, all we're good for is footing the bill for multi-national corporations. What the hell ever happened to honor and patriotism."

Joe in New York. "Fire Lou Dobbs? The people advocating this are a bunch of pusillanimous cowards. Hell, not only should Lou not be fired , he should get a raise and a promotion for the great job he is doing. His program should be mandatory for all aliens, legal and illegal. They should have to quote him verbatim as a prerequisite to stay in the country. Keep up the great job you're doing. Don't give an inch. We're all behind you. Lou." I promise you, I, nor any member of my family wrote that.

Thank you. We love hearing from you. Send us your thoughts at loudobbs.com. Each of you whose email is read here receives a copy of my book, "Exporting America." If you want to sign up for our email newsletter, loudobbs.com.

That's our broadcast for tonight. We thank you for being with us. Please join us here tomorrow. Congressman Pete King, the co- sponsor of the strict border security bill that passed the House last year is among our guests as is Georgia state senator, Chip Rogers, the sponsor of Georgia's tough new law cracking down on illegal immigration. Please be with us. For all of us here, thanks for watching, good night from New York.

"THE SITUATION ROOM" begins now with Wolf Blitzer.

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

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