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Lou Dobbs Tonight

U.S. Announces New Strategy on Iran; Marine Massacre in Haditha?; Pentagon Report Presents Sober View of Iraq War; In New York City, Hospital Workers Who Report Illegal Aliens Can Be Fired; Arguing Against Anchor Babies

Aired May 31, 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: Tonight, President Bush has announced a bold, new diplomatic initiative to halt Iran's nuclear weapons program and offers Tehran the first direct diplomatic talks with the United States in more than a quarter century.
Tonight, a debate over an illegal alien crisis and whether so- called anchor babies, babies born to illegal alien mothers in this country, should be automatically entitled to U.S. citizenship.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Wednesday, May 31st.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The Bush White House today announced a major shift in U.S. policy toward Iran. The administration said it's willing to join Europe in direct talks with Iran for the first time in more than a quarter century. But Secretary of State Condoleezza Rice made it clear that the Iranians must suspend their nuclear weapons program first. President Bush called this change in tactics robust diplomacy, but the shift in U.S. policy follows the administration's failure to win Russian and Chinese support for tough U.N. sanctions against Iran.

Suzanne Malveaux reports from the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, like many stories we cover here at the White House to get a bit of spin, this is really no exception. U.S. officials really downplaying the significance of offering to talk, to reach out to Iran. One of them saying that this is not a strategic shift, but, rather, a change in tactics. But, of course, Lou, many diplomatic sources say that considering the kind of pressure the United States was under from those overseas, as well as at home, they believe it's a situation where the U.S. blinked.

(BEGIN VIDEOTAPE)

MALVEAUX (voice-over): Ever since Iranian students stormed the U.S. embassy and held 52 Americans hostage in 1979, the United States has consistently refused to talk directly to Iran's government. Not anymore.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The United States is going to take a leadership position in solving this issue.

MALVEAUX: This issue, Iran's nuclear program, and what the U.S. believes is Tehran's quest for a nuclear weapon. The U.S. says it will only talk to Iran if it provides some evidence it's committed to giving up its nuclear ambition.

CONDOLEEZZA RICE, SECRETARY OF STATE: As soon as Iran fully and verifiably suspends its enrichment and reprocessing activities, the United States will come to the table with our EU colleagues and meet with Iran's representatives.

MALVEAUX: If Iran does not cooperate, the administration says it will face possible U.N. Security Council sanctions.

RICE: We and our European partners agree that path will lead to international isolation and progressively stronger political and economic sanctions.

MALVEAUX: Diplomatic sources say the president had been pressured for months by those already engaged in talks with Iran, Germany, France, and Britain, to join the negotiations. Mr. Bush was especially lobbied hard by British Prime Minister Tony Blair and German Chancellor Angela Merkel, who felt a U.S. presence would give the negotiations more weight. But a senior administration official says it was Mr. Bush who raised the idea with world leaders and gave the go-ahead Wednesday morning.

Officials say one important factor in getting that go-ahead was getting consensus among permanent members of the U.N. Security Council, especially Russia and China, to sanction Iran if it refused to cooperate. Tuesday, Mr. Bush called the leaders of Russia, France, Germany, and Japan to make sure his international coalition was on board. But conservative scholar Michael Rubin believes the talks with Iran are a bad idea.

MICHAEL RUBIN, AMERICAN ENTERPRISE INSTITUTE: The Iranians believe we draw our red lines in pencil, because we've already given them five or six last chances.

(END VIDEOTAPE)

MALVEAUX: And there's some scholars and critics who go on to say they believe that this is simply rewarding bad behavior, noncompliance by Iran. Secretary of State Condoleezza Rice, however, saying that this is not a big bargain here, and they also maintain that if these talks do not work out, that they have not ruled out the military option -- Lou.

DOBBS: Thank you very much.

Suzanne Malveaux from the White House.

Iran tonight appearing to quickly rebuff the U.S. offer. The Iranian government declaring that the United States offer to hold direct talks with Tehran is simply a propaganda move. The government official and the Iranian news agency said Iran will not stop its enrichment of uranium, because that would be contrary to the interests of the Iranian nation.

President Bush today said he is troubled by reports that U.S. Marines may have massacred Iraqi civilians in the city of Haditha. President Bush said anyone who violated the law will be punished. Tonight, there's new information about what happened in Haditha last November.

Jamie McIntyre now reports from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): A military source tells CNN it was evidence, including death certificates, indicating many of the 24 civilians killed at Haditha had been shot at close range that in March kicked off a full-scale criminal probe into the alleged massacre. Corporal James Crossan was one of 12 Marines in a four-vehicle convoy that was hit by a roadside bomb, the incident that sent other Marines of his unit on a house-to- house hunt for the bombers. He told CNN Haditha was a dangerous place.

CPL. JAMES CROSSAN, U.S. MARINE CORPS: Like any other place in Iraq, the -- you can't tell who the bad guy is. We found the majority of them and we got rid of them, but the place is just crawling with insurgents and IEDs everywhere, still.

MCINTYRE: The IED blast killed T. J., a fellow Marine who Crossan called his right-hand man. Corpora. Crossan suffered a broken back and pelvis and was knocked unconscious. He said his fellow Marines were not the kind to snap.

CROSSAN: I don't know what happened, but they might have got scared or they were just pissed -- really pissed off and did it. But, like, just the person -- it just depends on the person. Like, after seeing so much death and destruction, pretty soon you just become numb and really don't think about it anymore.

MCINTYRE: CNN has learned the preliminary investigation was conducted by an Army colonel, Gregory Watt (ph), who sources say questioned officers, including battalion commander Lieutenant Colonel Jeffrey Chessani and Kilo Company commander Captain Lucas McConnell, as well as Marines at the scene of the killings, the most senior of which was a staff sergeant identified by "The New York Times" as Frank Wuterich.

Sources say Watt also confirmed that payments of $2,500 were made to each of 15 families. A total of $38,000 in compensation for the deaths of noncombatants.

TOM MALINOWSKI, HUMAN RIGHTS WATCH: A payment to a victim's family is not an admission of guilt, but it is an admission that these people were civilians and that they were killed by U.S. forces. Otherwise, they wouldn't be getting compensation.

MCINTYRE: The Pentagon is promising a full accounting once all the investigations are complete. And the president insists justice will be done.

BUSH: If, in fact, the -- you know, the laws were broken, there will be -- there will be punishment.

(END VIDEOTAPE)

MCINTYRE: Pentagon officials won't say how long it will be before the results of the investigation are made public, but they insist that there will be a full accounting. And congressional sources indicate that could come sometime in the next two weeks -- Lou.

DOBBS: And Jamie, this -- this was first reported by "TIME" magazine back in January. Why so long to get to this point, the public examination of what did or did not happen in Haditha?

MCINTYRE: Well, essentially what happened was, when the local villagers complained, the U.S. military didn't believe them. And when "TIME" magazine took up their cause, the U.S. military didn't believe them either, essentially refusing to believe that Marines could have done something. It was only after "TIME" magazine persisted and found somebody in the military who paid more attention to them that the whole investigation got kicked off, and once they started looking into it, they realized right away that the initial account was not accurate.

DOBBS: Jamie McIntyre from the Pentagon.

Thank you.

Another one of our soldiers has been killed in the war in Iraq. The soldier died of wounds he received in an insurgent attack against his convoy last week. Now 2,471 of our troops have been killed in Iraq, 18,184 has been wounded. And of those, 8,344 seriously wounded.

The Iraqi prime minister, Nouri al-Maliki, today declared a state of emergency in the southern Iraqi city of Basra. Al-Maliki said he will crack down with an iron fist on gangs that are fighting one another and carrying out sectarian murders. British troops in Basra have been unable to stop the violence.

A new Pentagon report says the insurgency in Iraq will "likely remain steady" for the remainder of this year. The Pentagon report indicates the Bush administration is taking a much more cautious view about the progress of this war than it did in the past.

John Roberts reports.

(BEGIN VIDEOTAPE)

JOHN ROBERTS, CNN SR. NATIONAL CORRESPONDENT (voice-over): The Pentagon report paints a bleak picture for the prospect of good news anytime soon in Iraq, stating in frank times that the strength of the insurgency will likely remain steady throughout 2006. Compare that with this rosy assessment exactly one year ago. RICHARD CHENEY, VICE PRESIDENT OF THE UNITED STATES: I think the level of activity that we see today from a military standpoint, I think, will clearly decline. I think they're in the last throes, if you will, of the insurgency.

ROBERTS: The contrast couldn't be sharper, but it's no surprise to military experts, who saw no reason for such sunny optimism.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: It was clearly wrong at the time. It's clearly still wrong. I thing he was careless, frankly, in his effort to put a positive face on some of the things that were happening in Iraq.

ROBERTS: And the report spells more trouble for Republicans whose political fortunes erode with each piece of bad news from Iraq.

STU ROTHENBERG, CNN POLITICAL ANALYST: Republicans need a change in the overall mood. They need the public to get more optimistic, hopeful, to believe that the administration is in some way succeeding. This report suggests otherwise.

ROBERTS: What's more, the Pentagon acknowledged for the first time in this report that Sunni insurgents have joined al Qaeda in recent months, increasing the terrorists' attack options.

O'HANLON: It's horrible. It's horrible news to see that Iraqi resistance fighters may be now adopting some of the tactics of al Qaeda: suicide bombings, mass casualty events.

ROBERTS: Surprisingly, some Republicans welcomed the report. About time, they said, that official assessments matched both the reality on the ground and voters' perceptions of Iraq. And they saw it as an opportunity to draw distinctions with Democrats.

ED ROGERS, REPUBLICAN STRATEGIST: The best way to manage it politically is be honest with everybody and then have a debate. Well, should we cut and run, or should we tough it out? That's a fair debate to have, and it's better than trying to convince people that things are going well when they aren't.

(END VIDEOTAPE)

ROBERTS: The Pentagon report did have some good news. It found that increasingly Iraqis are able to take the lead in the fight against insurgents. But there was nothing in it to suggest that U.S. troops may start coming home in large numbers soon. And that, Lou, is the development that American voters are waiting to see.

DOBBS: Indeed, John. Thank you very much.

John Roberts from Washington.

Still ahead here, should the United States Constitution grant automatic citizenship to the children of illegal aliens born in this country? Tonight we'll hear both sides of this important debate. Also, illegal aliens and their attorneys are now playing the race card in this nation's illegal alien crisis, and they're calling immigration officials "the Gestapo." We'll have a special report.

And what our nation's politicians and our nation's media refuse to tell you about the Senate's so-called comprehensive immigration reform legislation. We'll have a special report on what is deliberately being hidden from the citizens of this country.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, illegal aliens and their attorneys, emboldened by talk of amnesty and Senate legislation to that effect, are now mounting new challenges to this nation's immigration laws. Hundreds of illegal aliens arrested on immigration charges last week are now arguing that they are victims of racial profiling. They are playing the race card in their efforts to remain in this country illegally.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Interstate 40 near Barstow, California, is a well-known hub for illegal alien smugglers, though it's 200 miles from the border. Last week, the Border Patrol apprehended more than 600 illegal aliens here, including the now deported mother of 12-year-old Wendy Ortiz and her two brothers. The Ortiz family was traveling on I-40 when they were apprehended by Operation Desert Denial.

WENDY ORTIZ, DAUGHTER OF ILLEGAL ALIEN: It was a white Tahoe that stopped us. It was like a regular car. And they were stopping every single car.

WIAN: Though Wendy says every car was being stopped, her attorney now claims all of the operations, more than 600 arrests, were the result of racial profiling by immigration officials.

LUIS CARRILLO, ATTORNEY: She is a victim of this harassment, this Gestapo operation of the Border Patrol. The only people they were stopping were Latinos. In other words, the juero (ph), the gringos, had free passage.

WIAN: You heard that correctly, the attorney accusing the Border Patrol of racial profiling, himself repeatedly using the pejorative terms "gringo" and "juero" to refer to Caucasians. Carrillo wrote a letter to the inspector general of the Department of Homeland Security requesting an investigation into the five-day Operation Desert Denial.

The Border Patrol did not respond to requests for comments but told the "Victorville Daily Press," "Enforcement of federal law does not stop at the border, and smuggling must be eradicate eradicated, specifically along the main arteries of our nation's highways."

Carrillo claims that's a waste of taxpayer money.

CARRILLO: The practice and procedure of the Border Patrol, Immigration and Customs Enforcement is always to engage in racial profiling when it comes to the Latino community.

WIAN: Border Patrol sources say that's false. They say agents only use race or ethnicity to determine potential legal status in combination with dozens of other factors, including clothing, demeanor, means of transportation, location, and evidence of other criminal activity.

(END VIDEOTAPE)

WIAN: We asked Carrillo if he knows of a single case during the past decade where the Border Patrol has been officially sanctioned for racial profiling. He says he's not aware of any, because, in his words, "The big shots in Washington are covering it up" -- Lou.

DOBBS: We, the big shots in Washington, in point of fact, don't want to enforce any immigration laws whatsoever, and have a proven record on that basis.

What is the basis for Carrillo in this? I mean, the idea that racial profiling would be brought forward at this point, what does he do now, this attorney, and others?

WIAN: Well, I don't know where they go from here, but Border Patrol agents will tell you every time they do these interior enforcement, large-scale interior enforcement operations, attorneys come in with these charges of racial profiling. They have never stuck, to our knowledge.

One thing I can say is, as the Border Patrol gets more man power and gets more serious about enforcing our immigration laws, we're probably going to see a lot more of these cases, because it's about the only card left that these attorneys have left to play -- Lou.

DOBBS: The race card. And it's instructive, as you reported, that the Border Patrol has not in any instance been found guilty of racial profiling.

WIAN: Yes, and it's one of the -- one of the first things that Border Patrol agents learn when they are rookies coming out of the Border Patrol academy, is how to tell whether someone is a likely illegal alien or not. There are -- there are clues that go way beyond a person's race or ethnicity -- Lou.

DOBBS: Thank you very much, Casey Wian.

Our nation's elected officials are refusing to discuss the real costs of the Senate's so-called comprehensive immigration reform legislation. But as we have been reporting here on this broadcast throughout, the cost is extraordinary and understated by nearly every report.

The legislation would cost taxpayers tens of billions of dollars each year over the next 20 years, and trigger a radical shift in the country's demographic makeup. You won't hear any of this from politicians, who are more interested in protecting business interests rather than the people's interests.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The ayes are 62, the nays are 36.

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The devil is in the details. There's a lot more to the Senate immigration reform bill that passed last week that you may not know.

Take the temporary guest worker program. As Senator Jon Kyl points out, it's more like a permanent worker program.

SEN. JON KYL (R), ARIZONA: The temporary worker program really isn't for temporary workers. You get in as a temporary worker and then can immediately apply to become a permanent resident of the United States.

SYLVESTER: And the bill will cost the federal government $92 billion in the first decade, spending on Medicare, Social Security and food stamps. Federal revenue from illegal aliens would offset some of that amount, but not nearly enough to cover the added expense.

States and local governments will also be hit with new mandates, ranging from $30 million to $85 million in the first year. These numbers are according to the nonpartisan Congressional Budget Office. And guess who is covering the cost of the amnesty bill?

JEFFREY FREDERICK (R), VIRGINIA DELEGATE: Ultimately, the taxpayers will pay, as they are doing right now, the hard-working, legal citizens and legal residents.

SYLVESTER: Another surprise, the Senate legislation not only offers amnesty to as many as 20 million illegal aliens, it would also double or even triple legal immigration over the next two decades through the handout of hundreds of thousands of more green cards. Those workers could then petition to bring in their families.

MATTHEW SPALDING, THE HERITAGE FOUNDATION: The intricacies, the complications of a 600-page Senate bill which has all sorts of loopholes and legal holes in it, and different things that are very complicated, I think are just not kind of getting out to the general public.

SYLVESTER: Amnesty proponents like to call the bill "earned legalization," pointing to a list of conditions. But in reality, illegal aliens won't have to prove they learned English. They just have to enroll in an English class.

And as for the requirements to pay back taxes, many illegal aliens don't report enough to pay any income tax.

(END VIDEOTAPE)

SYLVESTER: The bill calls for a tiered system, citizenship for those in the country for five years or longer. Those here for less than two years would have to return home, in principle. The reality, Lou, is that the U.S. government has had a very difficult time with documents fraud and getting illegal aliens to leave now. After an amnesty plan, it will be much harder to get them to leave, not easier -- Lou.

DOBBS: As you say. And in addition to this, requiring identification, verification of status, that would begin for new illegal aliens, illegal aliens already employed. There would be no penalty at all to those employers, as many as 10 million to 20 million illegal aliens living and working in the country.

This is a sham, a pathetic sham. And to hear Senator Ted Kennedy, Senator John McCain, Senator Arlen Specter stand up in front of the American people, Senator Chuck Hagel, Senator Martinez, to say that this is public policy, it's devastating in what it contains and pathetic to the extent that the senators didn't even know they were voting, apparently, many of them, to require consultation. That the United States government consult with the government of Mexico before putting up a border fence.

Remarkable.

SYLVESTER: There are so many of these loopholes and these things that senators are now finding out after the fact. And one of the reasons, Lou, is because they only took 10 business days. In fact, less than 10 business days to debate this entire thing, 600 pages, and this is the result of that.

DOBBS: I suspect they would not admit to it, but I have to believe, maybe I have to hope, Lisa, that perhaps these senators, supposedly part of a deliberative body, have to be feeling some embarrassment and some shame for what they've done. But the American people, as always, would be paying the price.

Thank you very much, Lisa Sylvester.

Up next, three of the nation's leading political analysts join me.

Also ahead, a giant of the American automotive industry makes it official to hell with American workers, let's go overseas for that cheap labor. The war on the middle- lass is escalating.

And should babies born to illegal aliens in this country automatically become U.S. citizens? They do now. But the Washington State Republican Party says that has to stop. Both sites of that debate coming right up.

Stay with us.

(COMMERCIAL BREAK) DOBBS: Auto parts maker Delphi announces thousands of its jobs which once were paid a middle class wage will be moving to cheap foreign labor markets, and thousands of Americans will be losing their jobs. Meanwhile, Delphi will give its top managers $100 million in bonuses.

What war on the middle class?

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): There's little room in Delphi's future for America, except as a consumer. The company will slash its hourly workforce in this country from 33,000 to just 6,000. It will keep 9,000 management personnel on its payroll.

The once mighty auto parts maker Delphi will become a shell of its former self. It will be primarily a management company in charge of the company's global operations. Delphi defends the dramatic move, saying cuts in wage costs are necessary to keep the company competitive and viable.

ALAN TONELSON, U.S. BUSINESS & IND. COUNCIL.: The problem is that if all they do is cut costs, especially wage costs, they are simply pricing their products out of the reach of more and more American consumers who are, after all, also American workers.

TUCKER: American workers who are now looking at a decline in wages and their standard of living. Some critics of trade policy warn that the American auto industry is going the way of textiles and clothing, which is to a foreign manufacturing base. In the eyes of one retired engineer for Delphi, it's a lose-lose proposition for U.S. workers.

DEN BLACK, FMR. DELPHI ENGINEER: There is no possible way that we could compete with a third-world or second-world nation who wants to be in competition with us. The playing field is not level. It is not fair.

TUCKER: Auto workers in Mexico earn less than $2 an hour. Workers in China earn less than $1 an hour.

(END VIDEOTAPE)

TUCKER: And don't be lulled into thinking that only hourly jobs are ultimately on the line. In the case of Delphi, it's spending tens of millions of dollars on research and design centers in Singapore; Bangalore, India; Juarez, Mexico; and a new one in Shanghai, China -- Lou.

DOBBS: And how much are they spending on those labs?

TUCKER: They are spending $50 million on the Shanghai lab. The other labs have been in place for a while. Juarez went in, in the mid-'90s. DOBBS: It's -- it is a wonderful thing, those retention bonuses for a bankrupt car parts maker. Sending those jobs, sending that intellectual property, all of that production overseas, and then corporate America asks what, we're not innovative? We're not being competitive?

This is disgusting and disgraceful, and I must say that the people who are running that company should be embarrassed and should be apologizing to the American people. This isn't competition. This isn't being competitive. This isn't productive.

This is just simply cutting costs and cutting jobs and the American dream for tens of thousands of people because they don't have the sense to operate effectively and efficiently. I mean, I just -- this is disgusting.

You would think, you would think perhaps the White House, the Congress would awaken to the fact that the only way to be competitive is to start producing efficiently and innovatively at home. It's incredible.

Thank you, Bill. I just -- it's disgusting. Bill Tucker, you have not lowered by blood pressure here tonight.

Taking a look now at your thoughts.

Eleanor in Kansas, "Your links to senators and representatives are extremely helpful and convenient," referring to the links on our Web site, loudobbs.com, which you can go to and hook up with your senator, your congressman. Up until now it hasn't been easy to contact. Thanks to you I've been able to contact congressmen weather they are in my district or out of my district.

Janet in Florida. "I'm a member of the invisible middle class. In November, I'll become visible -- at the polls. Can't wait to vote.

Dave in Connecticut. "Lou, you are a blow hard, a liar, a bully, and a bigot. In addition to that, you are just plain boring. It is high time CNN regained its credibility starting by canceling your show."

I'll put you down as an undecided.

Martin in California. "Lou, I'm a probation officer in Riverside County, California. Every day at work I see first hand the impact of having open borders as I deal daily will illegals on probation. It's getting so bad, we don't have enough interpreters to handle the influx. I know many people who feel exactly as you do, but don't have a voice or are too intimidated to speak out."

I hope no American is ever too intimidated to speak out. Send us your thoughts at loudobbs.com. We'll have more of your thoughts coming up here later in the broadcast.

In tonight's poll, our question is -- "On which of these issues do you believe President Bush and the Congress have been most successful? Border security? Illegal immigration? The war in Iraq? The economy? All of the above? Or perhaps none of the above? Cast your vote at loudobbs.com. We'll have the results here later.

A warning tonight to hospital workers in New York City, report any illegal aliens seeking medical treatment and you may be fired. That warning is the latest move to reassure illegal aliens that they will be protected in this country, despite the simple fact that they are breaking our laws. Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In New York City, hospital workers who report illegal aliens are being told they can be fired.

The New York mayor's Office of Immigrant Affairs and the city's hospitals, in an open letter, in nine languages to immigrant communities says, people who work in a public hospital will not tell the immigration service or other law enforcement agencies your immigration status. We will not tell anyone. Adding, all of our employees know that if they break this promise, they can lose their jobs.

City officials say they want to reassure illegal aliens who are increasingly worried because of the immigration battle in Washington.

ALAN AVILES, NYC HEALTH AND HOSPITALS CORP.: This continuing uncertainty has fueled fear that many undocumented immigrants have about being reported and deported.

PILGRIM: But health care workers have to ask a patient's immigration status or hospitals won't get reimbursed for treating uninsured illegal aliens. Under section 10.11 of the Federal Medicare Modernization Act of 2003, one billion dollars is being spread among the country's health care facilities for treating uninsured illegal aliens over a four-year period.

States with the highest number of illegal aliens, California, Arizona, Texas, and New York, receive the largest portion of that money. Some think that putting concern for illegal immigrants ahead of concerns for the huge drain they are putting on already-strained health care resources is an outrage.

REP. DANA ROHRABACHER (R), CALIFORNIA: To continue to provide health care and education benefits and other benefits to illegals is courting disaster. Our system's breaking down, and it does nothing but encourage more and more to come in the future.

PILGRIM: The American Nurses Association, in a recent letter to Congress, says, the nurses need to ask a person's legal status to do their jobs. And the American Hospital Association wants the burden of proof of legality to be placed on Medicare, not on the hospitals.

(END VIDEOTAPE)

City officials say the purpose of the open letter is to dispel fear in the immigrant communities. Make them feel welcome and protected regardless of their immigration status, Lou.

DOBBS: The issue seems to be that they should be no fear that they would not be treated properly. They have absolutely, every hospital has, in my judgment, at least, the responsibility to care for any person, irrespective of their immigrant status or anything else, for that matter.

But the idea that taxpayers are spending a billion dollars in the Medicare provision, under federal law, but billions more in social services and medical care, without having any suggestion that there will be enforcement of immigration laws is insane.

PILGRIM: It's encouraging illegal aliens to take advantage of the system and it promises them things and there's no repercussion.

DOBBS: To be clear, this is not the fault of the illegal alien. This is the classic in economics, the term is externality. Illegal employers exploiting illegal aliens and their labor and instead of -- and instead of paying as they should for their health care and other benefits, putting those costs out on taxpayers.

And this Senate can't figure out that it ought to be a felony for the employers of illegal aliens? Thank you very much, Kitty Pilgrim.

Up next, should the children of illegal aliens be granted automatic citizenship, as they are now under our Constitution? The debate over so-called anchor babies and a challenge to the 14th Amendment. We'll hear two opposing views in our debate tonight.

And three of the nation's leading political journalists join me to discuss the Senate's so-called comprehensive immigration reform bill, and the war on the middle-class and a lot more. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Anchor babies are the children born to illegal aliens in this country. It is commonly believed that the U.S. Constitution gives these children automatic U.S. citizenship with all of its privileges. The 14th Amendment says, quote, "All persons born or naturalized in the United States and subject to the jurisdiction thereof are citizens of the United States and of the state wherein they reside."

But a growing number of this nation's elected officials are now arguing that citizenship for anchor babies is not guaranteed in that amendment. Joining me now to discuss that view, from Seattle, Diane Tebelius, she's is the chairwoman of the Washington State Republican Party, which passed a resolution challenging automatic citizenship for so-called anchor babies.

And Dwight Pelz is the Democratic from the Washington State Democratic Party who thinks he sees a pretty good issue for his party. He calls the State Republican Party resolution an inhumane response to the illegal alien crisis. Thank you very much for being here.

Let me turn you to, if I may, Diane. Why was it -- why did you take up the issue?

DIANE TEBELIUS, REP. PARTY CHAIR., WASH. STATE: Well, I think that the -- you have to understand what's happening in the state of Washington. There's a total lack of frustration about what is happening on our borders. In 2000, across our border, came the millennium bomber. He was undetected and but for the good eyes of some federal employees, he was captured. People are frustrated and angry about this is happening.

DOBBS: Why this specific move? This resolution now by your party?

TEBELIUS: Because there are a lot of people believe that the 14th Amendment has not been interpreted according to its original intent. And that intent dealt with after the Civil War, and that was to legitimize and make citizens the ex-slaves. They think that it's been extended far beyond what it should have been and they were asking for Congress to look at this issue and, in fact, there is a House bill that talks about that very issue.

DOBBS: Dwight Pelz, your reaction?

DWIGHT PELZ, DEM. PARTY CHAIR, WASH. STATE: Well, it's hard to misinterpret the 14th Amendment. It's very clear. It says that people born in the United States shall be citizens of the United States.

DOBBS: I must say to you I think it's hard to misinterpret a lot of our Constitution, but our courts have done so, and in my judgment, quite often.

PELZ: Well, the language is crystal clear, and we're having a debate about immigration in the United States, and I believe it can be a debate that's contained within the context of our U.S. Constitution.

TEBELIUS: I don't think the debate would be there but for the fact that we have this huge illegal immigration problem. No one is suggesting that legal immigrants' children should not be made citizens but they are saying, "Look it, if there's illegal immigration, the intent of the 14th amendment was not to cover that."

PELZ: Well, you know, if it's there's a debate here, the debate really should be between Diane Tebelius and the Republican office holders in Washington state, who immediately distance themselves from this proposal.

The highest-ranking Republican official is the attorney general, and he doesn't agree with this plank. The former chair of the state party said that this resolution was an unfortunate development out of a convention, and it brings disunity within the Republican Party. Republicans are split on this issue.

TEBELIUS: I disagree on that. First of all, no one knew exactly what was coming out of the platform at the party and they listened to what the press had to say, not what our words were. And had they heard what we said, they would not be disagreeing with it. But the real issue here, Mr. Dobbs, as you well know, illegal immigration is a problem. People do not want amnesty. They want the borders secured and they want a reasonable guest-worker program and that is not happening.

PELZ: Well, that's what the Democratic Party's position is, tightened security, path to citizenship, reasonable guest-worker program. But the Republican congressmen from eastern Washington, where the fruit is picked, he was alarmed at this proposal, because the ag community in Washington state is dependent on migrant labor to help get the crops in.

DOBBS: So the Democratic Party in Washington does not support amnesty, does not support the McCain/Kennedy comprehensive immigration bill, then, sir?

PELZ: Well, the Democratic Party actually doesn't have an official position on those. We defer to our U.S. senators, Senator Murray and Senator Cantwell, six of our congressmen are Democrats.

DOBBS: And they voted for amnesty, right?

PELZ: They voted for the Senate bill, along with John McCain and Chuck Hagel from Nebraska. It's a bipartisan measure. Republicans are split on this.

DOBBS: No, actually, it's not a bipartisan measure. It was 63 votes for it. The principle votes, of course, of that coming from the Democratic Party. The majority of the Republicans in the Senate actually voted against it, but said President Bush made the Democrats the majority party in the Senate, as you know.

PELZ: There's a war within the Republican Party on this measure and we saw that this weekend in Washington state.

TEBELIUS: You know, I think it's silly to be talking about this being an issue of war in the Republican Party.

DOBBS: Since that's silly, let's move to something that isn't. And that is, what is the likelihood of a legal challenge? Where do you go from here?

TEBELIUS: Well, this is simply our platform. These are principles that we talked about. We supported legal immigration. We said we ought to tighten the borders, make sure that a guest worker program is meaningful. It is a platform in which we're saying we're crying out to our elected officials.

DOBBS: So like amnesty, too?

TEBELIUS: No, we did not. Our platform specifically said we oppose illegal amnesty in any form. And so we have said to our officials, do not get...

PELZ: ... And as Democrats, we believe there should be a path to citizenship for our hard-working...

DOBBS: I think we got it.

PELZ: ... immigrants in America.

DOBBS: And hard-working American citizens, where do you stand on those?

PELZ: Well, I'm in favor of hard-working American citizens. I am one, and so is my wife.

DOBBS: And you're joined by about 300 million other folks who are pretty good citizens and work hard, too.

PELZ: Absolutely.

DOBBS: Thank you very much, Diane, thank you both for being here to shed some light on what's going on in Washington state and the illegal immigration crisis.

Still ahead, we'll be talking with three of the nation's leading political analysts. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Joining me now, John Fund, columnist with the "Wall Street Journal." Miguel Perez, syndicated columnist with "The Record" in New Jersey. And from Washington D.C., Tom DeFrank, Washington bureau chief of the "New York Daily News." Good to have you all with us.

Let's start with what is happening in -- right now, in Washington state. We're just reporting, Tom DeFrank, the idea that there's going to be a challenge to the 14th -- interpretation of the 14th amendment on anchor babies. Do you think that's going to go anywhere?

TOM DEFRANK, WASHINGTON BUREAU CHIEF, NEW YORK DAILY NEWS: Really not, Lou. I mean, obviously I'm not a lawyer and I'm not a legal expert.

DOBBS: But you're a political expert if there ever were one.

DEFRANK: Well, but it's a -- it's a legal issue, and I think legally that's a hard -- that's a hard road to go, to plow. I just don't think so.

DOBBS: John?

JOHN FUND, COLUMNIST, WALL STREET JOURNAL: Let's have a case. Take it up in the Supreme Court. That's the only way to resolve it.

MIGUEL PEREZ, COLUMNIST, THE RECORD: It's going too far. I think we should reform immigration, reform the broken immigration system, but why go after the children now? It's -- it's just going too far. DOBBS: Yes, it's an interesting case. It's part of the frustration here. The idea that we have a president -- we have just reported, as you know, for weeks here, and months, years, I mean, on illegal immigration, our border security crisis.

Today, in the "Washington Post," Robert Samuelson in his column discussed the issue of immigration and the Senate legislation. And one of the things he said was "one job of journalism is to inform the public about what our political leaders are doing. In this case," he says, "we failed."

And he's referring to the fact that the number of legal immigrants would be admitted to this country, Tom DeFrank, wasn't even discussed by the Senate. They wouldn't have even known what was happening if the Heritage Foundation and Robert Rector hadn't shown them that there would be over 100 million -- an explosion of 100 million legal immigrants with this legislation. All right, why did that happen, do you think, Tom?

DEFRANK: Well, I just think that there was such a -- such a rush to get a bill, the president needs a bill. The Senate needs a bill. They need something to bludgeon the House Republicans with. I just think they didn't really want to have time. I don't think they really wanted to talk about it much, I just think they wanted a bill, and the details, we'll work it out later.

FUND: Lou, the Heritage Foundation numbers including a lot of double counting, a lot of extrapolations. The Congressional Budget Office, whom your Lisa Sylvester just cited in the last segment, they came up with entirely different numbers. I think they should have been in the debate.

DOBBS: Actually, they didn't. The Congressional Budget Offices that we've been reporting here for the last two weeks, three weeks, came in for the an estimate, John. I think you know this, based on six-to-seven million illegal immigrants, made no assumptions about the extended families that would come in. It was a vast...

FUND: ... We should have had a debate about both numbers, but the assumptions of the Heritage Foundation's report were assumptions and extrapolations.

DOBBS: But John, you're missing the point. Whether it is $40 million, or $60 million, the Senate wasn't honest enough to even have the discussion. And in my opinion, this Senate is an absolute disgrace on this. And to hold itself up as some paragon of a deliberative body taking on a serious public policy issue, that's disgraceful, don't you think?

FUND: The media could have raised the issue and they should have.

DOBBS: Well we did. Did you do it, Tom, in your newspaper?

DEFRANK: Yes, no, we've done a lot of stories on it.

DOBBS: Yes, I thought so. Miguel?

PEREZ: It doesn't take me by surprise at all that a lot of legal immigrants would follow these illegal immigrants once we make them legal. It happened in 1986, where a lot of people were given amnesty and then they claimed their relatives. It's to be expected that this would happen. I don't know what the alarm is. Why are we so alarmed by legal immigration? I thought the problem was illegal immigration.

DOBBS: I think you're missing the point. You have a Senate talking, Miguel, about comprehensive immigration reform.

PEREZ: Uh-huh.

DOBBS: I'm all about illegal immigration, brother. I want it shut down, and I want those borders secured. Make no mistake about it. But when the United States Senate isn't forthcoming in its own public policy deliberations and doesn't even know the facts, I mean, that's the issue.

It's not a question of legal immigration or otherwise. It's just an absurdity. If we're being given a road map to our future by a president and a Senate...

PEREZ: ... Lou, it seems to me that all the alarm is because a lot of legal immigrants from Latin America would be coming and people are xenophobic. They are alarmed about the fact that, look, we're going to change the demographic, makeup of American and blah, blah, blah.

DOBBS: I don't think Americans are xenophobic. Do you think it would make one ...

PEREZ: That's what it's all about.

DOBBS: Miguel, let me ask you something. Do you think it would make one wits difference to anyone in this country that we had three million illegal aliens who were coming here from Germany, from the United Kingdom, from Australia or Indonesia? Do you think that would make any difference to them? Or do you think the fact of that kind of massive illegal immigration is the issue?

PEREZ: Yes, it does make a difference, because we wouldn't be so alarmed about the Mexican border. There are a lot of people ...

DOBBS: Miguel, come on.

PEREZ: There's a lot of people who are coming here legally, violating their visas and staying from all over the world.

DOBBS: We've got to take a break.

PEREZ: Why are we so concerned about Mexico?

DOBBS: Well, I want -- because they are the ones sending their people. They exporting their poverty, their lacks of education.

PEREZ: They come from all over Latin American over the Mexican border.

(CROSSTALK)

PEREZ: But they are also coming from all over the world legally and overstaying. So why we aren't raising hell about that?

DOBBS: We are raising hell. If you've been paying attention here, Miguel, I'm raising a lot of hell ...

PEREZ: OK.

DOBBS: ... and trying to raise a few issues and facts about this. It's like the old saying, give them hell, but, you know, we're really just trying to get the truth out there. Thank you, Miguel. We'll be right back with Tom Fund, Tom DeFrank, and Miguel Perez. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Coming up at the top of the hour, "THE SITUATION ROOM" with Wolf Blitzer. Wolf, what are you working on?

WOLF BLITZER, CNN ANCHOR: Thanks, Lou. Nuclear negotiations, more on the U.S. opening the door to talks with Iran, if Iran stops its enrichment uranium -- enriching uranium. We're just getting reaction now for the first time from Iran. We're going to bring you that.

Plus, Secretary of State Condoleezza Rice joins us in "THE SITUATION ROOM."

And terror funding outrage -- the Feds cut some money going to New York and Washington. One U.S. Congressman says the government now has declared war on New York.

And an ominous forecast on the hurricane season. All that, Lou, coming up right at the top of the hour.

DOBBS: Thank you very much, Wolf.

Now, back with the panel. Tom DeFrank, let me ask you, the Jefferson -- Congressman Jefferson case, constitutional crisis, 45-day -- almost everything in this case is frozen -- $90,000 in cash frozen in the Congressman's freezer. The president has frozen the documents obtained for 45 days. Where are we headed with this?

DEFRANK: Well, I think we're headed to probably indictments of Congressman Jefferson, who probably should be pursuing his next employment opportunities. But I think -- I don't think it's a constitutional crisis. It's a constitutional separation of powers issue that needs to be looked at. But I don't -- I don't think it's a constitutional crisis at all.

Mainly, I think a lot of Republicans are looking at a way to stick it back to the White House over what they perceive as White House arrogance over the last five years. That's a piece of it. And the Democrats, of course, pile on as well.

DOBBS: Do you agree with that?

FUND: The White House should have negotiated with house lawyers on the more -- a better way to search the offices, but let's face it, judges have had their chambers searched by the FBI, in investigations.

If we have the Congressmen literally able to keep all of their papers there away from any search, I mean, they could literally move all of their criminal operations, if they should choose to have them there and no one can touch them. So I think this is ...

(CROSSTALK)

DOBBS: Well, there are those, as you know, John, who would argue that many of them do have criminal operations.

FUND: No, I don't agree with Mark Twain that Congress is a native criminal class. I don't.

DOBBS: You don't. Well, I do. Well, Miguel, let me ask ...

PEREZ: I'm not at all concerned about the separation of powers here. I think if you're a crook, you're a crook, and you should be investigated, period, and especially if you're in a position of -- a Congressman. That's all there is to it.

FUND: They didn't have to do it in the dead of night. They could have negotiated that with House lawyers. The House lawyers could have moved in and taken them.

DOBBS: The dead of night is the way that Washington seemingly likes to work in other ways.

(CROSSTALK)

DOBBS: So the executive, the FBI, was simply conforming to work habits I believe.

DEFRANK: Well, it was probably not smart for the FBI allegedly to threaten to kick in the Congressman's door if the sergeant of arms and his staff didn't stand aside, either.

DOBBS: All right, do you think -- let me turn you to you, John, really quickly, we've got a few seconds. This new initiative apparently on the part of the administration to get involved directly with Iran, is it a breakthrough? Is it perhaps something that will be productive?

FUND: It's born out of frustration, because right now we're not going to have effective sanctions on Iran because the Chinese and the Russians are blocking them. I think the White House is trying to find plan C.

DOBBS: And Haditha, the massacre, Miguel -- alleged massacre in Haditha, your reactions? PEREZ: Shames us all. This is the country that's the beacon of human rights, for the rest of the world. And we have to clean that up. We have to investigate it and we have to be straightforward about it. If we committed wrongs, we have to come out and say to the whole world, listen, we were wrong.

DOBBS: It makes us -- it makes us all gut sick, to even think that there would be such charges, let alone the prospect of a reality and a truth. Thank you, Miguel. Thank you, John. Tom, thank you very much, from Washington, D.C. Tom DeFrank, John Fund, and Miguel Perez here in New York.

Up next, the results of our poll. They are overwhelming. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight. We asked on which issues the president and Congress have been successful in your view: border security, illegal immigration, the war in Iraq or the economy. Your response, overwhelming. Ninety-two percent of you say none of the above.

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

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