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LOU DOBBS TONIGHT

President Bush Considering Compromise Proposal on Immigration and Border Security Crisis; White House Declaring Victory After Utah Congressman Chris Cannon Wins; U.S. Free Trade Agreement with Oman About to Go Before Congress; Gulf Coast City Mayor Wants Chinese Help To Rebuild; Republicans Drafting Legislation That Criticizes News Organizations that Report on Secret Government Programs; Floods Ravage East Coast; David Walker Interview; Arlen Specter Interview

Aired June 28, 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, the White House appears ready to compromise in the political showdown over our illegal immigration and border security crisis. Will President Bush finally decide to secure this nation's borders and set aside his plan to give amnesty to millions of illegal aliens?
We'll have complete coverage for you.

And the chairman of the Senate Judiciary Committee, Senator Arlen Specter, is holding hearings on whether President Bush has exceeded his constitutional powers. Senator Specter joins us tonight.

And at least nine people have been killed in severe flooding across the Northeast. More than 200,000 people have been evacuated. We'll have a report from one of the worst affected areas. Complete coverage coming up now.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Wednesday, June 28th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

President Bush tonight is considering a compromise proposal on our immigration and border security crisis that could end months of political deadlock. President Bush today met with Republican Congressman Mike Pence at the White House. They discussed Congressman Pence's plan to make border security the first priority of any discussion on immigration reform legislation. The White House meeting comes one day after Republican Congressman Chris Cannon, who supports the president's pro-amnesty agenda, won a closely-watched primary election in Utah.

Ed Henry reports from the White House on the rising pressure on the president to end the deep divisions within his own party over the issue of illegal immigration and total lack of border security.

Lisa Sylvester reports from Washington on border security hearing today in which congressmen blasted the Department of Homeland Security. Peter Viles tonight reports from Provo, Utah, on the primary election victory of Congressman Chris Cannon and what it means.

We turn first to Ed Henry -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lou, the president tried today to pivot off this win by immediately taking a new shot at trying to strike a compromise.

(BEGIN VIDEOTAPE)

HENRY (voice-over): The White House is declaring victory after Utah Congressman Chris Cannon won a tough Republican primary by supporting President Bush's push for border security, plus a guest worker program.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: Comprehensive reform is something that Americans want.

HENRY: But in a sign of the continued split in the Republican Party, the White House celebration of Cannon's win got some cold water poured on it by House Majority Leader John Boehner.

REP. JOHN BOEHNER (R), MAJORITY LEADER: We have members who want a more comprehensive plan than others, but I think it's clear that the vast majority of our conference believes that strengthening our border, securing it and enforcing our laws are critical steps in the process of cleaning up the problem that we have.

HENRY: The president, however, tried to seize the moment by summoning a leading conservative, Indiana Congressman Mike Pence, for an Oval Office meeting with the president and vice president to discuss Pence's compromise legislation that first tightens the U.S. borders and gets illegal immigrants to leave the country temporarily. Then, within two years, a guest worker program would be triggered to allow one-time illegal immigrants to return to America after the Homeland Security Department certifies the borders have been secured.

REP. MIKE PENCE (R), INDIANA: I call it a no amnesty guest worker program. And the president listened intently. He told me that he was intrigued with my proposal, and he said he found it interesting.

HENRY: The president was especially inquisitive about Pence's provision creating private sector based Ellis Island centers that would help former illegal immigrants come back in an orderly way and return to the workforce.

PENCE: If you return home and apply for the legal right to be in the United States of America, that doesn't involve amnesty because you're applying for that visa outside the United States of America.

(END VIDEOTAPE)

HENRY: But John Boehner today repeatedly refused to answer reporters' questions about whether House Republican leaders could support something like the Pence plan. Pence does have a lot of street credibility with conservatives on Capitol Hill. But the bottom line is, right now House leaders are not convinced that anti-amnesty lawmakers will jump on board this plan -- Lou.

DOBBS: Ed, thank you very much.

Ed Henry from the White House.

On Capitol Hill today, congressmen blasted the Bush administration for its failure to secure our borders and to enforce our immigration laws. One lawmaker declared that illegal aliens can cross our borders with impunity. The congressmen were holding a hearing on government efforts to gather intelligence on threats to this nation and our borders.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The federal government estimates 500,00 illegal aliens enter the United States every year. But outside estimates put it as high as three million. Porous borders pose a national security risk. The Coast Guard recently discovered merchant mariner licenses were issued to potential terrorists in the last two years.

JAMES SLOAN, U.S. COAST GUARD: We've associated nine individuals who actually have associations with terrorism over the course of that period of time.

SYLVESTER: A House subcommittee has launched the first of a series of summer hearings investigating border security.

REP. BENNIE THOMPSON (D), MISSISSIPPI: This administration has dropped the ball on border security by underfunding critical programs, for recruiting Border Patrol agents, leaving large flanks of our border vulnerable.

REP. ZOE LOFGREN (D), CALIFORNIA: And we have had reports that people drive, walk, sail, ski, sled, crawl and probably a few other things across the border with impunity.

SYLVESTER: A report by the Department of Homeland Security's inspector general found that the federal government is not effectively sharing border security intelligence among agencies and with local law enforcement. DHS acknowledged more needs to be done.

CHARLES ALLEN, DHS CHIEF INTELLIGENCE OFFICER: Very candidly, Mr. Thompson, we have been behind in our information management, and I'm not happy with it. And I know that the secretary isn't either.

SYLVESTER: But border security alone will not be effective, according to former INS agent Mike Cutler. He criticized U.S. policy that focuses on border security and ignores interior enforcement.

MIKE CUTLER, FMR. INS AGENT: It's kind of like trying to play baseball and telling your outfielders not to bother showing up in the outfield. Hit the ball over the second baseman's head and you've got an in-the-park homerun. And that's the way immigration has been enforced and administered for far too long.

SYLVESTER: U.S. immigration unofficial policy is to turn a blind eye to nonviolent illegal aliens in the interior of the country.

(END VIDEOTAPE)

SYLVESTER: Several lawmakers highlighted the lack of resources. On the northern border, for example, on average there are 250 border agents at any given time. And they are charged with securing 5,000 miles -- Lou.

DOBBS: Lisa, thank you.

Lisa Sylvester from Washington.

A congressman who supports the president's amnesty plan for illegal aliens has won a closely watched Republican primary in Utah. Congressman Chris Cannon defeated his opponent, John Jacob, with the help of a last-minute endorsement from the White House and a huge spending advantage. Jacob strongly criticized the five-time congressman for supporting a guest worker program and amnesty for illegal aliens.

Peter Viles reports from Provo, Utah.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): He is a political rookie, but John Jacob can count votes.

JOHN JACOB, REPUBLICAN PRIMARY CANDIDATE: Well, not looking good.

VILES: In voting that surprised both campaigns, incumbent Chris Cannon won a 56-44 victory despite voter anger over the border crisis.

REP. CHRIS CANNON (R), UTAH: The vote was about immigration. And there are a lot of people that are frustrated. They voted for me because they want a solution to this problem, and I think that Republicans have to step back and look at that and say, hey, we have to have the courage to do something that makes sense.

VILES: By that, Cannon means a House-Senate compromise that includes a guest worker program for illegal aliens.

CANNON: There's going to be a lost of pushing and shoving, a lot of arguing about what that means. I don't think there's going to be much of a path to citizenship here, but there's got to be something that makes the groups happy that are demanding that.

VILES: Both campaigns agreed President Bush's last-minute endorsement boosted Cannon's victory margin. JACOB: It's hard enough to beat an incumbent, and in Utah beating the president would be pretty difficult. So I'm going to have to get him to support me next time.

VILES: With out of state money from business lobbies flowing to the Cannon campaign, Jacob was outspent by 2-1. He campaigned against any guest worker or amnesty program but conceded he may have misjudged voter sentiment.

JACOB: They want to have mercy on the people who are here. Maybe the guest worker program is what they're interested in. I'm not sure if that's it, or if I just messed up and said things that were inappropriate, made people feel like I would not that be good a congressman.

VILES: He was referring to his admission last week that he had gambled in past. A no-no in Mormon Utah. And comments last week that Satan was undermining his campaign.

(END VIDEOTAPE)

VILES: Now, to boost turnout, the Cannon campaign made about 150,000 of those automated phone calls, roughly half of them featuring the voices of the president and the first lady, who is very popular here. The tactic clearly worked. Turnout was much higher than anyone had predicted or anticipated.

It was 19 percent. I know that doesn't sound like a lot, but that's a record, 19 percent turnout is, for a primary in this district -- Lou.

DOBBS: And in Salt Lake, the turnout, though, was very, very light, 7 percent according to at least one report that I saw, Pete. And we perhaps should not dismiss a couple of things here. And perhaps add just one.

First, Jacob talking about Satan -- and he didn't say this in some sort of allegorical or metaphorical way. He said Satan was responsible for his campaign finance. And no matter how devout the state or its voters may be, that had to give pause to a lot of voters there.

VILES: Yes, he later made jokes about it. People say, "Why would you say such a thing?" He made a joke, "The devil made me do it." What was a joke, but when he said it he didn't appear to be joking.

He was trying to express a degree of adversity he felt in his businesses, his frustration that he couldn't put more of his own money into his campaign. But it was a very unfortunate choice of words -- Lou.

DOBBS: An unfortunate choice of words. And the other part of this -- this election that people might want to just understand a little better is the role of Joe Cannon, Congressman Cannon, in a very, very Republican area. What role did Joe Cannon play, who is also the state party chairman?

VILES: Well, by the party rules, he's supposed to be neutral. He said he was trying to stay neutral.

He failed to stay neutral, Lou. He went on to conservative blogs and made disparaging comments about John Jacob.

So, when you have the Republican Party in your own state, the Republican Party in Washington, and the president, and an incumbent with a big fund-raising advantage, you've got no margin for error -- Lou.

DOBBS: So, as all -- all sides of this debate try to define precisely what the outcome means, it should be pointed out that with all of this going on, a five-time congressman won the primary by fewer than 7,000 votes.

VILES: It's exactly what happened.

DOBBS: Peter Viles from Provo, Utah.

Thank you.

Congressman Cannon's Democratic opponent, by the way, in November will be one Christian Burridge, a political novice as well. Burridge is an attorney who practices immigration law and who strongly favors a so-called comprehensive immigration reform package, including, of course, amnesty for illegal aliens. It should be quite a contest.

Turning now to the deadly floods that are affecting large areas of the northeastern United States tonight. At least nine people have been killed, two other people are missing.

In Wilkes-Barre, Pennsylvania, officials have ordered as many as 200,000 people to evacuate their homes. A foot of rain has fallen over the past 24 hours.

In Rockville, Maryland, a big earth dam is in danger of failing tonight. The water level in that lake is 25 feet higher than normal.

And in Binghamton, New York, 15,000 people have evacuated their homes. That under a mandatory evacuation order. Floodwaters have already inundated many homes and businesses in the area.

We'll have a report from one of the worst-affected communities in the Northeast later here in the broadcast.

Also ahead tonight, the Bush administration's addiction to so- called free trade policies threatening the security of our nation's ports. Once again. We'll have that report.

And thousands of foreign workers could soon be brought into Mississippi to rebuild a community devastated by Hurricane Katrina. We'll have that report. And U.S. senators accusing the president of an astonishing power grab. The chairman of the Senate Judiciary Committee, Senator Arlen Specter, is holding hearings on whether the president has exceeded his constitutional authority. He's our guest here tonight.

(COMMERCIAL BREAK)

DOBBS: Tonight, elected officials at all levels of government are giving away critical American assets. We have two reports tonight.

Bill Tucker on a so-called free trade agreement that will literally turn over our seaports to foreign owners. Sean Callebs reports tonight from the Gulf Coast on plans to rebuild after Hurricane Katrina using thousands of foreign workers.

We begin with Bill Tucker on the U.S.-Oman free trade agreement -- Bill.

BILL TUCKER, CNN CORRESPONDENT: Lou, the U.S. free trade agreement with Oman is about to go before Congress for approval. Congress should look twice, though, before giving it their traditional rubberstamp of approval.

(BEGIN VIDEOTAPE)

TUCKER (voice-over): The United States is on the verge of further compromising its port security in the name of free trade. All for Oman, a small Middle Eastern country which shares borders with Yemen, Saudi Arabia and the United Arab Emirates.

LORI WALLACH, PUBLIC CITIZEN: Under the Oman free trade agreement, foreign port operators would have a right, an absolute trade agreement right, to establish operations, to acquire, to operate, to run port facilities within the U.S.

TUCKER: Specifically, the agreement allows for "landside aspects of port activities, including operation and maintenance of docks; loading and unloading of vessels directly to or from land; marine cargo handling; operation and maintenance of piers; ship cleaning; stevedoring; transfer of cargo between vessels and trucks, trains, pipelines, and wharves; plus waterfront terminal operations."

The free trade agreement with Oman expected to come up on the Senate floor Thursday.

SEN. BYRON DORGAN (D), NORTH DAKOTA: Listen, this is an outrage. But it's one more symptom of trade agreement that sell away this country's interests. We have seen it time and time again. And what could happen here is a circumstance where the United Arab Emirates simply buys a company in Oman, and all of a sudden they're managing America's docks and ports.

TUCKER: Few in Congress were aware this provision even existed. It's prompted Congressman Sherrod Brown to renew his call for a national security study on all free trade agreements before they're agreed on.

REP. SHERROD BROWN (D), OHIO: This is again a perfect example of why before we negotiate the trade agreement we need to know what in fact its national security implications are for the United States of America. I hope that Congress learns its lesson.

TUCKER: But there is another free trade agreement just like Oman's waiting in the wings. The free trade agreement with Peru, already approved Wednesday by the Peruvian legislature. Once approved by Congress, there is little recourse in these agreements.

(END VIDEOTAPE)

TUCKER: That's because under the terms of the agreement, Congress cannot restrict any agreed upon commercial activity. If it does or tries, those foreign companies can sue the United States of America, drag it before an international tribunal, and demand payment from U.S. taxpayers for being denied their commercial rights, Lou, under the free trade agreement that Congress approved.

DOBBS: And under the terms of the World Trade Organization, further -- a simple giveaway of our national sovereignty. This is -- it's almost impossible to express the ignorance being displayed by the United States Congress. Forget the administration's pursuing these free trade policies, but to abrogate their constitutional responsibilities through fast track authority and not to understand these free trade agreements and the impact, it's unconscionable.

Bill Tucker, thank you very much.

A Gulf Coast mayor has come up with a unique plan to rebuild his city after Hurricane Katrina. He wants now almost a year after Katrina to bring in thousands of Chinese workers to do the job.

Sean Callebs reports from D'Iberville, Mississippi.

(BEGIN VIDEOTAPE)

SEAN CALLEBS, CNN CORRESPONDENT (voice-over): Take a drive through the small coastal town of D'Iberville 10 months after Katrina. Almost no new housing construction, and few, if any, new jobs.

In an effort breathe new life into the community, town leaders want two huge Chinese companies to bring thousands of workers here to start rebuilding.

MAYOR RUSTY QUAVE, D'IBERVILLE, MISSISSIPPI: We can't afford to sit here and wait and wait on houses and wait on economic development to start. Private enterprise has ran this country from the beginning. Private enterprise money will rebuild these communities.

CALLEBS: For eight months, D'Iberville has been in quiet discussions with a Chinese contractor. So, how many workers do they want to bring to this town of about 5,000?

NINGSHENG CHEN, TANGDU INTERNATIONAL ENTERPRISES (through translator): According to the local officials, and we're talking about probably around 2,000 to 3,000 people.

CALLEBS: It's big topic at Cafe New Orleans, one of the few restaurants still open. Joe Dawson lays hardwood flooring and was shocked at the idea.

JOE DAWSON, CONSTRUCTION MANAGER: I just say it is wrong. I absolutely say it's wrong. They do not need the workers. There is plenty of people here that can do the work.

CALLEBS: The mayor says the "help wanted" sign has been out for months. But he says big contractors claim they're too busy to rebuild the town's water and sewer systems and 4,000 homes that need to be constructed. Rusty Quave says his town is hurting.

(on camera): So you make no apologies for what you're doing?

QUAVE: No. I don't feel guilty at all. I didn't go out and approach these people and say, "Hey, I need your help."

CALLEBS (voice-over): Chinese and D'Iberville officials say they aren't talking about illegal workers but admit the biggest obstacle is obtaining visas for some 3,000 Chinese laborers to set up shop in Mississippi.

The mayor says it's a long shot.

QUAVE: And this might not ever happen. But it's somebody that came to the table and put out a plan and said, hey, would you be interested in looking at it?

(END VIDEOTAPE)

CALLEBS: Lou, and a lot of big questions still unanswered. Not the least of which, where would 3,000 Chinese workers stay in a community with virtually no housing? And what would happen to them once the job was done? The town says they would go back home.

And also, the Chinese contractor who pitched this idea to D'Iberville has actually approached a number of Gulf Coast towns. So far, Lou, this is the only city that is biting.

DOBBS: It is a remarkable story, Sean, that you're bringing us tonight. The idea that 10 months after Katrina neither the federal government, the state government of Mississippi, this community has created the energy, the vigor, the entrepreneurship to deal with this issue is mind-boggling.

CALLEBS: And you hear that from the mayor. He says he has virtually pleaded with contractors in this area, come to this community of about -- it was 8,500 people, now 5,000. Instead of people living in tents, let's get these homes build up. But if you look across the way, Biloxi, with all its casinos, those are the towns that are drawing the big contractors.

DOBBS: Sean, it -- it's a shame. I remember one of my favorite expressions that was always associated with this country, "can do," and it applied to every phase of human activity. But particularly rebuilding in a disaster. This is a shame.

Sean Callebs, thank you for that remarkable story.

Sean Callebs.

Coming up next, deadly weather and rising floodwaters in the Northeast taking a heavy toll. Two hundred thousand people evacuated. Almost a dozen feared dead. We'll have that report.

President Bush accused of violating his constitutional powers by a fellow Republican. Senator Arlen Specter, chairman of the Senate Judiciary Committee, is holding hearings on that very issue. He's our guest here next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Republican congressmen tonight are drafting a resolution that strongly criticizes news organizations that report on secret government programs to track suspected terrorists. That resolution comes amid rising republican anger, specifically at "The New York Times."

Andrea Koppel reports from Capitol Hill.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Waves of Republican outrage continue to ripple through Congress over a "New York Times" story that revealed a secret program to track international terrorist financing.

REP. TOM PRICE (R), GEORGIA: Mr. Speaker, I rise today in frustration over the recent leak by the "New York Times" of a vital national security program.

REP. PETER KING (R), NEW YORK: And the real anger toward "The New York Times," I think what they did was absolutely disgraceful.

KOPPEL: And now the latest salvo, this seven-page Republican resolution condemning administration leakers and demanding the cooperation of the news media in not disclosing classified intelligence programs.

REP. DENNIS HASTERT (R-IL), SPEAKER OF THE HOUSE: When people who persistently leak this information to news sources and then news sources insist on printing it, it goes back to the old saying in a playoff, the old saying that basically loose lips kill American people.

KOPPEL: House Republicans are not alone in targeting the "New York Times" and other media. For days, right wing bloggers have been up in arms, while conservative radio talk show hosts like Rush Limbaugh have had a field day. RUSH LIMBAUGH, RADIO TALK SHOW HOST: In fact, I think the "New York Times" should start running ads and get some jihadists and get some terror members and have them say, "They saved my sleeper cell. Thanks to 'The New York Times.'"

(END VIDEOTAPE)

KOPPEL: And this is a copy of the resolution that the House will begin debating and then possibly voting on tomorrow. CNN tried to get some kind of reaction to the resolution from the "New York Times" executive editor, Bill Keller. He didn't respond, Lou.

Nevertheless, in today's "New York Times," the editorial board defended a free press, writing, "even if it runs the risk of being labeled unpatriotic in the process" -- Lou.

DOBBS: Thank you very much, Andrea Koppel, from Capitol Hill.

Coming up next, rising floodwaters across the Northeast have already killed people and forced hundreds of others to evacuate their homes. We'll have that report.

And I'll be joined by the head of the Government Accountability Office, the agency holding the federal government accountable to the American people. You'll want to hear from him.

And the chairman of the Senate Judiciary Committee, Senator Arlen Specter, will hold hearings on whether President Bush has exceeded his constitutional authority. He's our guest here next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: In moments I'll be joined by the chairman of the Senate Judiciary Committee, Senator Arlen Specter. The senator's investigating whether President Bush has in fact exceed his constitutional powers.

But first, there are states of emergency tonight in parts of the eastern United States as rising floodwaters are taking lives and forcing mass evacuations.

In Maryland, three people have died after being swept away by the floodwaters. Two teenagers are missing tonight after disappearing in a Maryland creek. More than 2,000 people have been evacuated there.

In New York, a state of emergency is in effect for 10 counties after the rising river flooded streets and homes. As many as 15,000 people have been forced to evacuate there.

And in Pennsylvania, three people have died. The governor, Ed Rendell, has declared a state of emergency in 46 counties. National guard troops and the coast guard are working to evacuate people still trapped in their homes in Pennsylvania. The flooding has forced 200,000 people tonight to evacuate Wilkes-Barre, Pennsylvania. Officials are concerned that dikes there won't contain the rising flood waters. Governor Rendell says the next 12 to 15 hours will tell whether this is a full scale disaster for his state.

Jason Carroll reports now from Wilkes-Barre, Pennsylvania -- Jason.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT: One foot of rain fell in Wilkes-Barre, Pennsylvania in the past 24 hours. The rain has come and gone but the problems are still here. If you look behind me, you can see the results of the swollen Susquehanna River. The dikes here can hold 41 feet of water, but the river has already reached 38 feet in some parts and it still hasn't crested.

So that's a major concern for people down here. Two hundred thousand people in the surrounding area have been ordered to evacuate. The national guard has had to rescue people from rooftops who were flooded out in sections of eastern Pennsylvania. Five hundred people are in shelters in Susquehanna County and counting. Three people drowned in flood waters.

In the southeastern portion of the state, there are problems there too. Emergency officials in Bucks County are keeping an eye up there on the Delaware River.

UNIDENTIFIED MALE: Right now the creeks are starting to go down. The problem is the Delaware river. It is already sliding over its banks. Projections are looking that it's going to be worse than our '05 April flood and may be approaching a record level.

CARROLL: Many roads and bridges have been washed away and that is making it difficult for some emergency crews to reach people in rural areas to check on them. Some of the locals out here, who we have been talking to, say from their point of view, it doesn't appear to be so bad as compared to what they saw out here in 2004 when the area flooded very, very badly. At this point, they're just waiting to see how much more the flood waters continue to rise.

Jason Carroll, CNN, Wilkes-Barre Pennsylvania.

(END VIDEOTAPE)

DOBBS: And out west, nearly 1,000 tourists have been evacuated from the Grand Canyon after they had been trapped by wildfires. Eight hundred tourists and about 200 park employees were stranded on the north rim of the grand canyon after the fires shut down a highway Sunday. The wildfire tonight is only partially contained. It has already burned more than 50,000 acres.

Turning now to our illegal immigration crisis, our border security crisis, the government accountability office this month sent an astonishing reports to the United States Senate, exposing the lack of immigration enforcement in the workplace.

The GAO determined that workplace enforcement is a low priority for the government. The agency found that in 1999, the INS devoted only 240 agents to work side enforcement. That was then about 9 percent of their staff. Shockingly, seven years later, only 100 agents, just 4 percent, are tasked to address the issue.

With reports like these, the Government Accountability Office aims to improve federal programs, ensure that government work and accurately represents the will of the American people. David Walker heads the GAO, as comptroller general of the United States and joins us here tonight. Good to have you with us.

DAVID WALKER, UNITED STATES COMPTROLLER GENERAL: Good to be with you Lou.

DOBBS: This is an astonishing report. To lay out this fact, what is your reaction? You have got a pulse, you have concerns like any citizen as well as your role. How do you explain this?

WALKER: We have a serious problem with illegal immigration. The fact of the matter is we are not enforcing existing laws adequately. We are not dedicating enough resources to it. We're not leveraging technology enough. And as a result, we have a lot of situations where people who are not legal are able to gain employment and that is serving to draw more people in to the United States because of the economic implications.

DOBBS: Your office also released a report in March stating that the immigration benefit fraud is a very serious problem in the country. Do you believe the U.S. citizenship and immigration services is capable of administering a so-called guest worker amnesty program of any sort, of the scale being discussed.

WALKER: They'll have to impose a lot more controls, leverage technology at a lot greater extent and we'll have to use a lot tougher enforcement mechanisms if we want any system to work. We were supposed to have tough enforcement after the last reform act in 1986 but haven't had it.

DOBBS: The idea that border security is an issue, almost five years after September 11, the Department of Homeland Security, I have to tell you, honestly, millions of Americans, I wonder, how can we call it a Homeland Security Department when we're not securing our ports, not securing our borders.

WALKER: It is a huge undertaking. There is no question that we are going to need more resources in the form of human resources, financial resources. We'll need to also use technology to a greater extent. But we're going to have to have enforcement as a key part, especially on immigration. You and I can walk around any city in this country today and there are places where you can go every day and see illegals congregate and yet nothing is being done about it.

DOBBS: Let's go to some other issues that sometimes I think many don't associate with your office and your role in the federal government. Looking at the federal debt, the national debt, the trade debt. We're talking trillions of dollars, unfunded liabilities, for Social Security, for Medicare, for Medicaid. What in the world does Congress say when you tell them, folks, this is no way to run a government?

WALKER: Well, many people know that we have a serious financial problem. But they don't realize how serious. We have gone from $20 trillion in total liabilities and unfunded commitments five years ago $46 trillion.

DOBBS: Can you say that again?

WALKER: From 20 trillion to 46 trillion in five years and it is going up every second of every minute of every day because we're still running debts at or near record rates. Demographics are working against us. Interest costs are compounding against us because we're a debtor, not an investor.

DOBBS: Is there, I won't say it that way. Are there any number of senators in Congress who are actually paying attention to what you and your office and your great staff are doing? Are they responding in any way?

WALKER: Well, more people are paying attention now. Congressman Wolf recently proposed that there be a bipartisan tax and entitlement reform commission to try to jump start this effort. We clearly need to do something. We need to do it soon because time is working against us.

DOBBS: Dave Walker, controller general of the United States, good to have you here.

WALKER: Good to see you Lou.

DOBBS: Thank you for the good work you and your people do in the federal government. We don't often get to say that.

WALKER: Thank you very much.

DOBBS: Taking a look at your thoughts.

Leslie in Iowa, "of course I believe that voting machines should be banned until their integrity can be assured, but then, I believe the politicians we vote for should be banned from running until their integrity can be assured."

Mike in Indiana, "I can not believe that we accept lower standards for voting machines than we accept for ATMs or gasoline purchases at the pump. Receipts are standard in the businesses of banking and commerce. They ought to be standard in the business of Democracy."

And Rick in Florida, "My Lou Dobbs Tonight poll vote is the only vote I'm confident will be counted, unlike my vote in November with the electronic voting machines."

Send us your thoughts to LouDobbs.com. We'll have more of your thoughts coming up here later.

That brings us to the subject of our poll tonight, as reports were circulating throughout the country. We thought we would ask it straight out. Are you among those saying that they will boycott upcoming elections in protest of these e-voting machines. Yes or no, please cast your vote at LouDobbs.com. We'll have the results coming up here later.

At the top of the hour here on CNN, THE SITUATION ROOM with Wolf Blitzer.

WOLF BLITZER, CNN ANCHOR: Thanks Lou, an eye for an eye. Israeli jets buzz the home of Syria's president while on the offensive in Gaza. They're threatening more to come. Is the Middle East reaching a breaking point? We're covering all sides of the story.

Plus, happening now, floods and evacuations from North Carolina to New York. Thousands of people have been displaced, large areas underwater now. We'll have the latest.

Also Democrats turning to faith. Barak Obama and Hillary Clinton reaching out to evangelicals. And good-bye fatigue from Charlie Gibson, to Katie Couric, to Star Jones and Dan Rather, the bittersweet and the just plain bitter. Jeanne Moos on the never-ending good-byes. All that Lou, coming up in THE SITUATION ROOM.

DOBBS: Thank you very much, Wolf.

Next year Senator Arlen Specter says President Bush is challenging the clear language of the United States constitution. The chairman of the Judiciary Committee joins me to discuss his investigation as to whether or not the president is exceeding his constitutional powers.

What role will border security and the illegal immigration crisis play in the upcoming midterm elections? Three of the country's best political analysts join me here. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Senator Arlen Specter, chairman of the powerful Senate Judiciary Committee, accuses President Bush, perhaps, of a power grab and perhaps being in violation of the U.S. Constitution. Either way, President Bush has reserved the right to revise or ignore more than 700 -- or rather 110 laws through 750 signing statements.

Senator Specter told Senate a hearing, quote, "There is a real issue here as to whether the president may, in effect, cherry-pick the provisions he likes and exclude the ones he doesn't like." Senator Specter is going to hold hearings on the president's use of these so- called signing statements.

Senator Specter joins us tonight from Capitol Hill. Good to have you with us.

SEN. ARLEN SPECTER (R-PA), JUDICIARY CMTE. CHAIRMAN: Nice to be with you. Thanks for the invitation, Lou.

DOBBS: This has got to be a tough role for you, part of the Republican leadership in the Senate, as the chairman of the Judiciary Committee, holding hearings on whether the president is exceeding his constitutional powers. What has been the reaction from the White House?

SPECTER: Well, Lou, I don't like to disagree with the president, but you put it very succinctly and bluntly that the president is revising the legislation or ignoring the legislation. And part of the duty of the Judiciary Committee is constitutional oversight.

And the Constitution provides that the president can veto a bill, and he can come to us and say I'm not going to agree with it unless you put this qualifying language in. But just unilaterally, on his own, after the bill is submitted, passes both Houses to strike certain parts of it and ignore other parts, as you note, that is not in conformance with the Constitution.

DOBBS: You've scheduled a hearing the 18th of July with Attorney General Alberto Gonzales on the issue. Do you think he will be forthcoming? Can it be in any way -- to what agree do you think it can be helpful in putting some light on this issue?

SPECTER: Well, there are a number of issues. And I think that the attorney general can state what the legal basis is. He can answer the questions as to why not come to the Congress and tell us what you'd like to have done? When we had an issue about interrogation techniques with the McCain Amendment passing 90-9, then the president finally negotiated it out and ...

DOBBS: On torture, you're referring to.

SPECTER: Yes, on torture, on interrogation tactics which of could amount to torture and then the president said he's not going to pay any attention to the bill. Well, that's not what the Constitution says.

DOBBS: That's not what the Constitution says, and it is not really what we need by being an American to reserve on the issue of torture. It is not part of any part of this country as I understand it.

On the idea that a president -- and to my knowledge and you are the expert, but to my knowledge no president has ever used signing statements to simply push away from the provisions of law, rather to -- they have used them to articulate a specific interpretation, but never to simply reserve the power to not follow the law as laid out by Congress.

SPECTER: Lou, I think it is true that no president has used the signing statements as often or in the same direction that President Bush has. And I believe if he doesn't like provisions of the bill, he ought to tell us what he doesn't like, and then he can veto it.

And we have the authority then under the Constitution to override his veto, but he simply can't pick and choose what he's going enforce and what he's not going to enforce. DOBBS: Senator, let's turn quickly -- I have just a minute left, but on comprehensive immigration reform, the president meeting with Mike Pence from the House on his so-called compromise proposal.

Have you got some sense that the Senate and the legislation that you passed which has created, I think, at the very least, some resistance and controversy -- have you got some sense that the president may be willing to look at the idea of actually securing our borders and taking control of our borders and ports before discussing so-called comprehensive immigration reform?

SPECTER: Well, I think the president wants a bill. He wants a bill which is going to have a guest worker program because we need that for our economy. But I think everybody agrees that securing the border is number one. You've got to secure the border. You've got to have employer verification because if you don't, no matter what you do, with the 11 million who are guest workers, who are going to have more of a problem later.

So that I think ultimately we have to work out a timetable where we get it all done at the same time, in the same bill. Nobody wants to let more people in without having the border secure, and we're prepared to commit to secure borders. We have got to have a timetable on the rest of it as well.

DOBBS: I guess I'm taken aback, Senator, by what -- it seems your reticence, almost a reluctance, to suggest that we're willing to secure the border. Shouldn't we be eager to secure these borders and to secure these ports?

SPECTER: Listen, I'll accept the word eager as well as willing.

DOBBS: All right.

SPECTER: I want to get it done, Lou. And I think there's a real sense of urgency to getting it done, and that's why we push very hard.

DOBBS: Well, Senator, we appreciate you being here and thank you for illuminating further the issue of the constitutional powers of the United States and the possible violation of the powers, that the signing statements by President Bush are unprecedented, just about 750 of them.

SPECTER: That's it.

DOBBS: We thank you very much for being here.

SPECTER: Nice being with you. Thanks for the invitation, Lou.

DOBBS: Senator Arlen Specter, chairman of the Senate Judiciary Committee.

Coming up here next, we'll have more of your thoughts. And is President Bush ready to compromise on amnesty and border security? We'll hear about what has been a week -- a short week already of political developments. Our political analysts join us here next. Stay with us.

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DOBBS: Joining me now, Ed Rollins, former White House political director and Democratic strategist Robert Zimmerman and Hank Sheinkopf. You're outgunned here, two to one tonight. You ready?

ED ROLLINS, FORMER WHITE HOUSE POLITICAL DIRECTOR: They're good Democrats.

DOBBS: Let's turn to the Supreme Court's decision. A partial victory for Democrats. A substantial victory for redistricting in Texas. But protecting the rights and minorities in that one district in Texas.

ROLLINS: This is very important. The scary part of this though is the idea that you can reapportion at any time other than once a decade is frightening. Because it throws the Congress in total chaos. Equally as important, you can decide at some state senator you don't like and they decide to throw someone else out by doing a reapportion plan. It creates havoc. I mean, I think states are going to have to go back to saying every 10 years we're going to do this and set some kind of a statute from that respect.

DOBBS: The Supreme Court making an important decision -- the idea is that -- just talking with the chairman of the Senate Judiciary Committee, Arlen Specter, the signing statement's an abuse of constitutional power, perhaps a violation of the Constitution. We'll see what those hearings produce. But 750 signing statements, Robert, by a president to avoid implementing and honoring law?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: Well, it's even more than that. For all intents and purposes, the president has essentially abolished the role of Congress by these 750 signing statements. It is truly -- truly basically said that congressional laws can be disregarded. In the past they've been used to deal with clarifications. And they've been used judiciously by past presidents, Reagan, Bush, Clinton.

This situation now is these signing statements have been done to in fact ignore laws that protect whistleblowers of nuclear energy facilities. They've been done to in fact make sure the Congress does not have to be informed of immigration service problems. And so there are a whole range of laws.

DOBBS: They don't want to be any way.

ZIMMERMAN: They don't want to be anyway. But they should be required to be.

DOBBS: The one that gets me is on the issue of torture. Every general and every part of the command staff of our military saying absolutely torture should be absolutely banned 100 percent and is, in point of fact, to hold a reservation through a signing statement on that issue. It is remarkable. Senator Specter taking on his president, you've got to respect that -- To hold hearings, on the use of these signing statements and on the application of 110 laws.

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Why do we have to respect it? Where has he been? Suddenly he's all -- where has he been? This is a constitutional crisis.

On the other side, I'm fascinated by the immigration issue and the fact that he's brought it now back to the Senate so they can get diddle it along. Make it a privilege of being judicious of their deliberations, stopping the House from jamming anything through, and protecting the president. Not bad in a year when you're at risk to lose the chamber.

DOBBS: You say not jamming anything through. There is an interpretation that the House Republican leadership at least has been responsible, then in point of fact the Senate has been irresponsible. It is only now holding hearings on legislation that had passed in two weeks, 715 pages of legislation that gave the president exactly that it wanted, which would have been absolutely deleterious to the rights of nearly every working American and their families.

SHEINKOPF: No question. And Senator Specter is slowing the train down.

ZIMMERMAN: And the hypocrisy though of it is to now hold hearings after they pass the legislation. It is like having previews after you open on Broadway. It is a complete reversal and a complete abuse of the legislative process.

DOBBS: Perhaps the House thought since the Senate, in all of its wisdom, whether wise or not, attaching $50 billion in taxes to their legislation, they perhaps should start holding hearings since there wasn't a thorough one.

ZIMMERMAN: They should have read the bill first before they passed it.

DOBBS: It would have been helpful, I would admit that.

ROLLINS: The reality is, as we've said over and over again on this show: the only thing you're going to get out of the House this year is security.

That's what the public cares about. And the rest of it is all complicated and you can argue different polls. It is a complicated issue. We ought to secure the borders right now and decide in the next Congress how you are going to handle the 12 million or whatever number of illegals are here and who they are and what their backgrounds are and what contribution.

And equally as important, every other week there is a new figure that comes out, how big our population is going to be and what are we going to do with it? You just heard the controller general basically talk about the debt that are facing.

DOBBS: Forty-six trillion dollars. ROLLINS: And so what is the debt -- what is going to be the debt of adding this -- all of these people, we have no idea who they are and that they are.

DOBBS: You're asking for enlightened government, a responsible Congress.

ZIMMERMAN: Which we are capable of.

DOBBS: We are capable of it, I read my history books. You'd have to go back a ways. Let me ask you this. The victory by Chris Cannon, five-term Congressman, Ed in Utah. Is this a big boost for the president's comprehensive immigration reform?

ROLLINS: I would not -- first of all, If I was an incumbent congressman and I was challenged by nobody and my brother was the party chairman in the state that is the most pro-Bush and the president came in and helped me and I only got 50 percent plus of the vote, I would be very concerned about my policies are right.

ZIMMERMAN: The real issue here is the fact that it just shows the president's base is just eroding dramatically. In fact, a recent "Washington Post" poll came out showing once again on Iraq, his base among conservatives declining by a third.

DOBBS: And with that, gentlemen, as always, good to have you with us. We thank you. Ed Rollins, we appreciate it very much. Hank Sheinkopf, thank you very much. Robert Zimmerman, thank you.

Still ahead here, we'll be thinking of you for your thoughts tonight on flag burning. The U.S. Senate, freedom of the press, gay marriage was last week. Stay with us. We'll have tonight's poll numbers next as well.

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DOBBS: The results of our poll tonight, 71 percent of you say you will not boycott upcoming elections in protest of the use of e- voting machines. Taking a look now at more of your thoughts.

Clovis in California saying: "The next time someone implies that you are racist because you think this country should have English as it's official language, ask them what is the official language of Mexico?"

You have a point.

And George in New York: "Lou, I wonder who has done the most damage to this country: the flag burners or the U.S. Senate?"

Mark in New Mexico: "Dear Lou, amnesty for insurgents who've killed Americans in Iraq? Perhaps it would sound more palatable if they called it the guest insurgent program!"

And Bill in Ohio: "Lou, the proponents of illegal immigration are more and more showing their colors. Unfortunately, they are not red, white and blue."

Lauren in Texas: "Lou, I thought we had freedom of the press. I guess sit is only agree if they agree with the Bush administration."

And Billy in Texas: "Lou, the president says that the 'New York Times' published highly classified information. If it was highly classified, how in the hell did the 'Times' have access to it?"

We love hearing from you. Please send us your thoughts at LouDobbs.com. Each of you whose e-mail is read here receives a copy of my book, "Exporting America." We thank you for being with us tonight. Please join us here tomorrow evening. Good night from New York, thanks for watching. "THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

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