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Lou Dobbs Tonight

White House Reversal on Guantanamo Bay; Laying Down the Law; Civil War Fears in Iraq

Aired July 11, 2006 - 18:00   ET

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


KITTY PILGRIM, CNN ANCHOR: Tonight, a dramatic shift in U.S. policy in the global war on terror. The White House says terror suspects in U.S. custody will now be treated as prisoners of war.
ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Tuesday, July 11th.

Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

The White House today announced a major change in U.S. policy towards enemy prisoners in U.S. custody. The Bush administration extended limited Geneva Convention protections to detainees in Guantanamo Bay. Those protections outlaw any cruel or humiliating treatment.

Now, this change in policy follows a Supreme Court ruling against military tribunals to try enemy combatants.

Jamie McIntyre reports from the Pentagon on the administration's new policy on detainees.

Andrea Koppel reports from Capitol Hill on new hearings on how to put terrorist suspects on trial.

And Barbara Starr reports on fears Iraq is on the verge of an all-out civil war.

We begin with Jamie McIntyre -- Jamie.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Kitty, the Bush administration has said all along that it follows the spirit of the Geneva Conventions, but now with respect to one provision in particular, it says it will follow the letter as well.

(BEGIN VIDEOTAPE)

MCINTYRE (voice over): Rebuked by the Supreme Court for failing to abide by the Geneva Conventions in its plans to try terror suspects held at Guantanamo, the Bush administration is now reluctantly extending some limited Geneva provisions to all detainees. Specifically, Common Article 3, which bars "... outrages upon personal dignity, in particular humiliating and degrading treatment."

The new protections are being granted despite Justice Department arguments that the provision is too vague and subject to political interpretation by America's adversaries.

STEVE BRADBURY, ACTING ASSISTANT ATTORNEY GENERAL: The application of Common Article 3 will create a degree of uncertainty for those who fight to defend us from terrorist attack.

MCINTYRE: The Pentagon hopes the move will fend off further legal challenges to its detention policies, following the Supreme Court decision in favor of Salim Hamdan, Osama bin Laden's bodyguard and driver. Deputy Defense Secretary Gordon England concludes in a memo, "The high court ruling means that Article 2 applies as a matter of law to the conflict with al Qaeda."

In testimony before the Senate Judiciary Committee, the administration pledged to cooperate with Congress to fix the legally flawed military commissions that were struck down by the court, while protesters dressed in orange jumpsuits and wearing black hoods called for the closure of the prison facility at Guantanamo, a sentiment echoed by some senators.

SEN. RICHARD DURBIN (D), ILLINOIS: I think it's time for us to close Guantanamo and transfer these prisoners to another place for us to say it's a clear break from the past. The Supreme Court has made it clear the administration cannot continue to write its own laws and avoid the law.

(END VIDEOTAPE)

MCINTYRE: But the Pentagon says it has no place now to send those detainees while it works on new procedures. And, by the way, it insists that this extension of Geneva protections is not a change in policy because it says it was already abiding by the spirit of the Geneva Conventions -- Kitty.

PILGRIM: Jamie, just a point. The administration is talking about only limited Geneva Convention protections for detainees. Now, why is the administration not giving detainees full protection of the Geneva Convention?

MCINTYRE: I mean, basically it's a -- it's a maneuver to prevent legal challenges. Because this article was cited in the Supreme Court decision, it could possibly give opponents to U.S. detainee policy an opening to challenge those other policies in court. By formally adopting that as the procedure, they take away that legal argument.

PILGRIM: That's interesting.

Thanks very much.

Jamie McIntyre.

Well, as Jamie just reported, the Senate Judiciary Committee today began hearings on how the United States can try terror suspects. Now, so far, not a single suspect captured overseas has faced a trial.

Andrea Koppel reports.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice over): The chairman of the Judiciary Committee laid down a marker telling two government witnesses it will be up to Congress, not the Bush administration, to lay down the law.

SEN. ARLEN SPECTER (R-PA), CHAIRMAN, JUDICIARY COMMITTEE: We're not going to leave it to the Department of Defense or give the Department of Defense a blank check. We're going to establish the standards and the policy. But we want your input before we do it.

KOPPEL: What they want to do is figure out how the Pentagon should try suspected terrorists captured overseas.

Vermont Democrat Patrick Leahy argued, after four and a half years, existing military tribunals had yet to try or convict a single Guantanamo detainee and were, in his words, fatally flawed.

SEN. PATRICK LEAHY (D), VERMONT: I find it hard to fathom that this administration is so incompetent it needs kangaroo court procedures to convince a tribunal of United States military officers that the worst of the worst imprisoned at Guantanamo Bay should be held accountable.

KOPPEL: A top Pentagon attorney defended the use of military commissions over the option of a military court-martial.

DANIEL DELL'ORTO, PRIN. DEP. GEN. COUNSEL, DOD: Full application of court-martial rules would force the government either to drop prosecutions or to disclose intelligence information to our enemies in such a way as to compromise ongoing or future military operations, the identity of intelligence sources and the lives of many.

KOPPEL: But Wisconsin Democrat Russ Feingold sounded unconvinced.

SEN. RUSS FEINGOLD (D), WISCONSIN: Unfortunately, we have already heard some members of Congress argue that Congress should simply authorize the president's existing military commission structure. I think that would be a grave mistake.

(END VIDEOTAPE)

KOPPEL: And already, there's evidence that this heated debate is spilling over into other pressing issues here on Capitol Hill. Late this afternoon, the Senate Judiciary Committee held yet another hearing, this one on President Bush's nominee to take a seat on the 4th Circuit Court of Appeals. William Haynes has been nominated, and already some top Democrats and at least one Republican, John McCain, have raised questions about this nomination, Kitty, over the fact that William Haynes' current job is the legal counsel, the top legal counsel at the Pentagon, and he was instrumental in writing the regulations as to how prisoners should be treated -- Kitty.

PILGRIM: Thanks very much.

Andrea Koppel.

Well, insurgents and terrorists today killed as many as 60 people in Iraq. The sharp increase in violence is raising new fears that Iraq is on the break of a full-scale civil war. There are also new questions about U.S. strategy.

Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): In Baghdad, more than a dozen Iraqis may have been killed in attacks near the heavily guarded Green Zone housing the U.S. military command. It's the latest violence in the weeks since the Iraqi government said it was putting thousands of troops on Baghdad streets.

In a city that no longer is easily shocked, there was shock on Sunday. At least 40 unarmed Sunnis gunned down by militiamen rampaging through a Baghdad neighborhood.

Fears of civil war are again on the rise. This time the warning is from the U.S. ambassador.

ZALMAY KHALILZAD, U.S. AMBASSADOR TO IRAQ: A year ago, terrorism and insurgency against the coalition and the Iraqi security forces were the principal source of instability. Particularly since the bombing of the Golden Mosque in February, violent sectarianism is now the main challenge.

STARR: As the violence continues, Iraqis are placing their hopes in Prime Minister Nouri al-Maliki's efforts to gain control of the militias. But U.S. legislators just returning from Iraq also say more attention needs to be given to reconstruction.

SEN. JACK REED (R), RHODE ISLAND: The administration's sloganeering is wearing thin. Stay the course is difficult when a critical component, robust attention to the non-military demands of Iraq, is lacking.

STARR: Islamic Web sites have posted a video that purportedly shows the bodies of two U.S. soldiers brutally killed last month in Yusufiyah, Iraq, along with a statement that links the killings of the soldiers with the alleged rape of an Iraqi female in March.

CNN cannot independently authenticate the video or the claim of a link to the rape case, and it's not showing the video out of respect to the families.

(END VIDEOTAPE)

STARR: And Kitty, as Iraqi citizens continue to die in their country, now more than 2,500 U.S. troops have died in Iraq, nearly 19,000 have been wounded -- Kitty.

PILGRIM: Thanks very much.

Barbara Starr.

Well, Defense Secretary Donald Rumsfeld today visited Afghanistan, where U.S. troops are facing persistent insurgency. Rumsfeld declared that the United States is not preparing to withdraw its troops from Afghanistan. Rumsfeld met with the Afghan president, Hamid Karzai.

Now, this visit comes as U.S. and NATO troops continue a major offensive against insurgents.

A deepening international split tonight over how to deal with North Korea's nuclear and missile blackmail. Now, South Korea is criticizing Japan for trying to introduce sanctions against North Korea. And communist China appears ready to veto any U.N. resolution that threatens North Korea with sanctions.

Chinese officials tonight are in North Korea celebrating a friendship treaty. China is North Korea's closest ally.

Meanwhile, U.S. nuclear envoy Christopher Hill was in Beijing today. He's trying to convince China to persuade North Korea to return to six-country nuclear talks.

On Capitol Hill, the chairman of the Armed Services Committee, Congressman Duncan Hunter, today praised the president for building up U.S. missile defenses.

(BEGIN VIDEO CLIP)

REP. DUNCAN HUNTER (R), CALIFORNIA: Now is the time to reaffirm that this president should be applauded for adopting the policy of peace through strength and for understanding and having the wisdom to know that at some point, somebody who is unstable, like Kim Jong-il, would launch missiles.

(END VIDEO CLIP)

PILGRIM: Congressman Hunter said the North Korean threat is a challenge that this country must meet.

Now, Iran is also refusing to back down on its nuclear confrontation with the rest of the world. Iran's top nuclear negotiator, Ali Larijani, told European officials that Iran is not ready to begin talks on its nuclear program. The United States and Europe had demanded that Iran make a decision on those talks by tomorrow.

The nuclear crisis with Iran and North Korea will be high on the agenda of the G8 summit meeting in Russia next weekend. President Bush will stop off in the German city of Rostock tomorrow. The summit meeting begins in the Russian city of St. Petersburg on Saturday.

Still ahead, a showdown over so-called sanctuary cities for illegal aliens in this country. We'll have a special report.

Also, e-voting machines are not only vulnerable to fraud. They're also unreliable.

And a rush hour massacre in India. Terrorists blast commuters in India's financial capital.

We'll have the details.

(COMMERCIAL BREAK)

PILGRIM: The Senate today approved nearly $1 billion in additional funds to help secure our ports and borders. Now, the money will be use to pay for more inspectors and for more equipment to scan shipping containers. Senators are worried that terrorists might smuggle weapons of mass destruction into this country. And there will also be more money to buy equipment for Border Patrol agents.

The illegal immigration crisis hits towns and cities across this country, and local governments bear the brunt of the influx of illegal aliens and are responsible for providing services. Well, tonight, we have reports on two local governments responding in very different ways.

Bill Tucker reports on a city which is being advertised as a sanctuary for illegal aliens. And Lisa Sylvester reports on a county in Ohio which is training Americans for jobs being taken by illegal aliens.

So we begin with Bill Tucker in Jersey City, New Jersey, where a billboard advertises Cambridge, Massachusetts, as a sanctuary for illegal aliens -- Bill.

BILL TUCKER, CNN CORRESPONDENT: Kitty, sanctuary policies are highly controversial. Put simply, a sanctuary policy is where a city instructs its local law enforcement to ignore federal immigration law.

(BEGIN VIDEOTAPE)

TUCKER (voice over): This proud proclamation of Cambridge, Massachusetts, is not sponsored by the city. It's paid for by ProjectUSA, a group offended by the city's declaration of itself as a "sanctuary city."

CRAIG NELSON, PROJECTUSA: We think that it's just outrageous that the city of Cambridge, which is an affluent community and doesn't really have a problem with illegal aliens, can sort of strike this -- you know, take this moral grandstanding and score like cheap virtue points off of it.

TUCKER: And virtue points are exactly what the town's mayor is looking to score.

MAYOR KENNETH REEVES, CAMBRIDGE, MASS.: We want to see if we can offer safe haven to families with children and people who have come to America to have a better life. And we want our government to better figure out our borders and our policies.

TUCKER: Yet, only an hour away, the town of Sandwich argues virtue lies with legal residents. There, the town council has voted unanimously to declare itself not a sanctuary for illegal aliens.

RANDY HUNT, BOARD OF SELECTMEN, SANDWICH, MASS.: The message we would like to send is this: We don't welcome businesses that hire illegal immigrants. It's illegal, simple. And it does affect the local community.

TUCKER: It is illegal. It's a federal crime to establish a sanctuary policy. But by one count, there are more than 70 cities which have declared themselves sanctuary cities, including New York, Los Angeles, Houston, Dallas, Denver and Chicago. They do it because they can.

REP. TOM TANCREDO (R), COLORADO: And it most certainly is a blatant violation of the law. There is a provision of the 1996 Immigration Act that is very clear. It says states and localities can't do this. The unfortunate thing is there's no -- there are no teeth in it.

TUCKER: To correct that problem, the U.S. House recently passed a bill sponsored by Tancredo which would cut off federal dollars in grants and aid from going to cities with sanctuary policies.

(END VIDEOTAPE)

TUCKER: Now, this sign is scheduled to remain up for six months, Kitty. ProjectUSA says it picked this spot because it's a congested spot. And it calls the New York-New Jersey area a magnet for illegal immigration.

Kitty, back to you.

PILGRIM: Absolutely unbelievable. Thanks very much.

Bill Tucker.

Well, all across the country, illegal aliens are taking construction jobs once held by Americans. And now one county in Ohio has set up a program to make sure that employers have no excuse for not hiring legal available workers.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): In Hamilton, Ohio, students are learning to hang drywall.

UNIDENTIFIED MALE: We do ceilings, we bend drywall.

SYLVESTER: The local carpenters union is teaming up with Butler County to offer a program to train American and other legal workers in the construction field. Ryan Krause is one of the students.

RYAN KRAUSE, CONSTRUCTION STUDENT: I felt it was a great opportunity for me and the family. Something my boys love doing. I just wish it would have started about 10 years ago. SYLVESTER: Many of Ohio's construction jobs are now being filled by workers who are not in the country legally.

MICHAEL FOX, BUTLER COUNTY COMMISSIONER: It's depressing. The market sours. It's hurting American workers in what they can be paid.

MARK GALEA, OHIO CARPENTER'S UNION: A lot of the employers that use undocumented workers fail to report them, don't pay taxes. And it's hard for fair contractors to compete with that.

SYLVESTER: County Commissioner Michael Fox was fed up with hearing from contractors that there are no Americans to fill these jobs. So he decided to start a job training program.

FOX: We're going to train people for construction industry jobs. We're going to certify that they are legal, if you will, and then we're going to offer them up to you. So we're going to try to hit that argument head on and say, if you can't find people, we've got them for you.

SYLVESTER: Fox wants builders to sign a pledge to hire only legal workers as a condition to receive permits. And he's not the only one in Butler County, just outside of Cincinnati, who is not waiting for the federal government to solve the nation's illegal immigration crisis.

Sheriff Richard Jones has started a hotline for people to report employers who hire illegal aliens.

SHERIFF RICHARD JONES, BUTLER COUNTY, OHIO: I've run billboards throughout the county, newspaper ads telling the businesses that if you hire illegals, it is illegal.

SYLVESTER: Jones does not have the authority to detain the illegal aliens simply for breaking immigration laws, but he can go after the employers for violating tax laws.

(END VIDEOTAPE)

SYLVESTER: Sheriff Richard Jones says it costs the taxpayers in his county about $900,000 a year to house illegal prisoners. He sent a bill to the federal government, but so far has not received any money -- Kitty.

PILGRIM: Thanks very much.

Lisa Sylvester.

Well, Colorado lawmakers approve legislation on illegal immigration. It is being called the toughest in the nation.

The legislation requires nearly a million people in Colorado who receive benefits to verify their citizenship. And it applies to Medicare, Medicaid, unemployment insurance, food stamps, public housing and welfare. Exempt are emergency medical care and public school education. Now, penalties include up to 18 months in jail and a $5,000 fine.

Governor Bill Owens of Colorado called the state legislature into special session to take up the legislation.

Coming up, the mayor of Avon Park, Florida, wants to crack down on businesses that hire illegal aliens and make English the official language of his city. He joins me.

And President Bush takes credit for reducing the budget deficit. But it's still one of the largest in history. We'll have a report on the White House numbers game.

And most Americans will be casting ballots on electronic voting machines. But what happens when electronic voting machines fail? A special report on our democracy at risk.

(COMMERCIAL BREAK)

PILGRIM: New fears about the integrity of our democracy tonight. Voter activists worry that standards for electronic voting machines breaking down are dangerously lax.

Now, federal officials say they're working on tighter standards, but those new standards may not be ready for years.

(BEGIN VIDEOTAPE)

PILGRIM (voice over): Electronic voting machines, fast, easy, but what happens when they break down or fail? Federal guidelines permit one failure every 163 hours, which means one out of every 11 machines may break down on Election Day.

Critics say that's not acceptable.

JOHN WASHBURN, VOTETRUSTUSA: The reliability quotient for the hardware is too high. It allows too many machines to fail in any given election day and also be down for too long during that given day.

PILGRIM: Congressman Jerrold Nadler says voting machines have a higher failure rate than ATM machines and VCRs.

REP. JERROLD NADLER (D), NEW YORK: No machinery should be allowed to be purchased or used for voting that don't have a guaranteed mean time between failures of at least several thousand hours -- 70,000 would be good. That's what a VCR is. An ATM machine will go thousands of hours.

Do we care less about our voting machines than our ATM machines?

PILGRIM: The election assistance commissioner defends the current standards.

PAUL DEGREGORIO, CHAIRMAN, ELECTION ASSISTANCE COMM.: We believe that it is very important that these guidelines and any kind of standards be improved all the time, and we're working on spending federal money to do that because we want voters to have trust and confidence in the voting process in America.

PILGRIM: DeGregorio says a federal advisory board is currently examining options for tighter reliability guidelines, but it's not clear if those standards could be implemented in time for the 2008 election.

(END VIDEOTAPE)

PILGRIM: Now, federal law says machines may not have more than one error per 500,000 votes, but critics say that tough standard doesn't mean much if the machines fail altogether.

And that brings us to our poll tonight. Do you think it's an acceptable standard that electronic voting machines can fail almost a tenth of the time?

Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the broadcast.

So we would like to share some of your thoughts now.

Karla in Oregon writes, "About your question of what is most challenging for America's families, healthcare costs, food, and utilities costs, education costs, and the cost of housing, or a decent paying job, a category was left out. How about all of the above?"

Chuck in Michigan, "The greatest challenge to my family is finding a politician that will do anything to help middle class families."

And Genia, in Michigan, "All of your choices for today's question are right. If you have a good paying job, though, you can afford most of the other choices except medical care. America needs to take care of America first."

Do send us your thoughts at loudobbs.com. And we'll have more of your thoughts later in the broadcast.

And coming up, the mayor of Avon Park, Florida, wants to crack down on landlords that rent to illegal aliens. Mayor Tom Macklin joins me.

Also, three popular talk radio hosts will be here to discuss the budget deficit, the president's about-face on Guantanamo, and congressional hearings on illegal immigration legislation.

And terrorists massacre commuters in India. We'll have the latest developments on that rush hour train bombing.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: We'll be speaking with the mayor of a Florida city who wants to crack down on businesses that hire illegal aliens. But first, these headlines. A series of bombs on commuters trains in Mumbai, India, killed at least 174 people today.

Tim Lister reports.

(BEGIN VIDEOTAPE)

TIM LISTER, CNN CORRESPONDENT: It was the evening rush hour in India's commercial capital. In the space of a few minutes, a series of explosions tore apart crowded trains, all of them heading out of one of the city's main rail stations.

Passengers leapt in terror from moving trains. Jagged holes were punched into carriages. Panic and chaos as fellow travelers and bystanders tried to rescue the injured. But many were beyond help.

UNIDENTIFIED FEMALE: Limbs lying everywhere, dead bodies carried by the local business people who ran out of their shops to clear the dead bodies from the tracks and the platforms.

JENCY JACOB, REPORTER: It was a first class men's compartment, and the first class men's compartment was the place where the explosive was kept.

LISTER: The dazed sat bloodied on platforms. Anger mixed with shock. The number of dead climbed quickly into three figures, heavy rain hampering rescue efforts. All together seven explosions on local trains in what police say was a well-coordinated attack. Another bomb was diffused.

Mumbai has seen plenty of terrorism before. The worst previous attack coming in 1993 when at least 250 people were killed. In March of this year, 15 people were killed and 60 wounded in explosions at a Hindu pilgrimage in northern India. But the scale of these bombings dwarfs recent terrorist attacks in India from the government and appeal for calm.

SHIVRAJ PATIL, INDIAN HOME MINISTER: The citizens of Mumbai have faced similar trauma more than a decade ago. I am confident that the people of this great city have the will and courage to face this situation and will stand firm in their resolve to carry out their normal activities without succumbing to threats of terror.

LISTER: And the question remains, who had the ability to carry out such an ambitious attack? Indian intelligence officials suspect a militant Islamic group based in Pakistan, Lashkar-e-Taiba. Although banned in Pakistan, the group is often blamed for attacks in India. And just six weeks ago, Indian officials complained to Pakistan that it needed to do more to crack down on militant groups.

President Musharraf of Pakistan quickly condemned the Mumbai attacks, but the scale of these bombings is expected to complicate peace efforts between the two countries. Tim Lister, CNN.

(END VIDEOTAPE) PILGRIM: New York is stepping up security on mass transit lines following the bombings in India. Hundreds of extra police officers are patrolling subways, trains and ferries. Officials say the security measures are precautionary. There have been no specific threats to New York.

The Boston highway tunnel being treated as a crime scene after a concrete roof panel collapsed, killing a motorist. The state attorney general is also issuing subpoenas to companies involved in the design and the construction of the tunnel. The tunnel is part of a $14 billion highway project that has been plagued with construction problems and cost overrun.

Shuttle astronauts spent the day taking out the trash from the International Space Station. They loaded more than two tons of trash and equipment into the shuttle's cargo bay. Astronauts are also preparing for tomorrow's spacewalk. They may be using duct tape to fix a safety jet backpack that came loose during yesterday's spacewalk.

And the House today voted to crack down on online gambling. It adopted a measure barring banks and credit card companies from making payments to international gambling sites. The bill now goes to the Senate.

President Bush today focused on the economy. He praised new budget deficit numbers. The projected deficit this year has fallen sharply to just under $300 billion. Democrats said the new numbers cannot hide the fact that middle class Americans are being squeezed. Ed Henry reports from the White House.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): The president's tone was, "I told you so," reminding Democrats he predicted cutting taxes would spark economic growth and end up slashing the deficit.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You know, some in Washington say we had to choose between cutting taxes and cutting the deficit. Today's numbers show that that was a false choose. The economic growth fueled by tax relief has helped send our tax revenues soaring. That's what's happened.

HENRY: But the president's celebration reminded some budget experts of another moment in his presidency when the champagne may have been popped a little early.

STAN COLLENDER, BUDGET EXPERT: This is the budget equivalent of the president landing on an aircraft carrier and declaring mission accomplished. They're taking a lot of good news, short term, without really thinking the long term or asking anybody to think past today.

HENRY: It's still the fourth largest deficit in American history, $296 billion this year, forcing the president to get a little creative. BUSH: We are cutting the federal deficit faster than we expected.

HENRY: That's only because the administration itself had set expectations by projecting the annual deficit would be $423 billion. And what the president didn't mention is the overall national debt has soared by $3 trillion since he took office, a sharp reversal from the Clinton years that Democrats are eagerly pointing out.

SEN. HARRY REID (D-NV), MINORITY LEADER: We brought down the national debt by about a half a trillion dollars. So please, let's not boast about a $300 billion deficit.

HENRY: What neither party wants to talk about is that a collective failure to rein in federal spending has left the nation with a bleak long-term outlook.

COLLENDER: There's a fiscal train wreck about 15 years from now. That is, as Social Security starts to run a deficit as opposed to the current surplus it has, and as baby boomers retire and the cost of Medicare get much, much bigger.

HENRY: The president's budget director admit there's are new easy options.

ROB PORTMAN, WHITE HOUSE BUDGET DIRECTOR: The alternatives are pretty bleak. One would be to raise taxes dramatically when these programs cannot be afforded. Second would be to cut benefits dramatically. Nobody wants to do that.

HENRY (ON CAMERA): The president did try to tackle Social Security reform, but hit a brick wall of opposition mostly from Democrats but also from some Republicans. He's not likely to stick any more political capital in the battle meaning the problem will be kicked to another administration and another Congress. Ed Henry, CNN, the White House.

(END VIDEOTAPE)

PILGRIM: States and cities across the country are addressing the illegal immigration crisis on their own. Now, Avon Park, Florida, is one city that is not waiting for Washington to act. The mayor is proposing to fine landlords renting to illegal aliens and to deny business permits to companies that knowingly hire illegal aliens and also making English the official language of Avon Park. Tom Macklin is the mayor of Avon Park, Florida, and he joins me now. And thanks very much for being with us, sir.

TOM MACKLIN, MAYOR, AVON PARK, FLORIDA: Well thank you for having me, it's a pleasure.

PILGRIM: How do you plan on implementing the business permit contingency of this?

MACKLIN: Well what we're going to have is people when they come for an occupational license or business permit, they're going to tell the city exactly what their goal is for the community, what their business is going to be, that goes without saying.

And then we're going to have to do a little background research, see if they've violated any federal immigration laws in the past. And if they haven't, you know, we're going to let them know exactly what this ordinance entails and the stringent criteria that they're going to have to adhere to to continue to do business unimpeded in city of Avon Park.

PILGRIM: What about businesses that are already operating? Will you investigate?

MACKLIN: From a code enforcement perspective, obviously, if they're already here, we're going to rely on the complaints from citizens. You know, the eyes and ears of the community are the strength of a community regardless whether it's Avon Park or Cambridge, Massachusetts, who is taking a little different route, as obviously you reported a little earlier. So we're going to rely heavily on the citizenry of being partners in the process.

PILGRIM: So you're going to take tips from citizens of the town?

MACKLIN: Absolutely. As the sheriff, I believe, from Butler County earlier up there in Ohio said, you know, there's advertisements that can be put in newspapers, perhaps billboards if that's a good way of communicating with the citizenry. So obviously, as I spoke a minute ago, the eyes and ears of the community are the greatest asset that we're going to have in working to an end on this problem.

PILGRIM: How will you enforce the housing parts of this?

MACKLIN: Well, interestingly enough on my way coming up here today, I received a call from Mayor Lou Barletta of Hazleton, Pennsylvania, who as you know is going to be voting, whose council commission is going to be voting on a very like ordinance. Actually ours is a mirror image of theirs.

But they have actually -- as he discussed with me today, looked at perhaps some amendments to the ordinance prior to the vote that they're going to take on Thursday. He touched base with me on that.

In fact, the application process might go through city hall as opposed to putting a burden on the landlord, which might make that ordinance a little bit more palatable. That might be something that we amend our ordinance to as we have a public hearing on the 24th of July. So as it is, it's a living document. It's nothing that's been adopted as law yet. Certainly if we find some chinks in the armor or verbiage that needs to be closed up a little bit, to make it a little more palatable and less challengeable, we would obviously be doing that as we move forward.

PILGRIM: What do you say to critics who say this violates the fair housing act and title six of the civil rights act?

MACKLIN: Well I would say that as I've had it interpreted for me and also read it over and over, that I don't see anything in there where it talks about discrimination regarding illegal aliens. The key being the word illegal.

If it's an illegal act, I don't see that it should necessarily be something that would be challengeable. But it's overwhelmingly supported at least in the feedback that I have received from the citizenry, and not just of Avon Park but by and large the entire country that it's beyond time that local municipal and county governments embrace this, get their arms around it and try to resolve the issue and the lack of leadership from the state and federal levels.

PILGRIM: Mayor Tom Macklin of Avon Park, Florida, thanks for being with us tonight.

MACKLIN: Thanks for having me.

PILGRIM: Well critics say the proposed Avon Park laws are unenforceable. Or worse, the Southern Poverty Law Center says the landlord provisions violate the fair housing act and title six of the civil rights act.

Now CNN senior legal analyst Jeffrey Toobin joins me now for this. Let's look at what the Southern Poverty Law Center -- they have a statement that they issued today. And here's one of the first ones.

"The provisions punishing individuals who aid and abet illegal aliens by hiring undocumented immigrants is preempted by federal law and exceeds the city's authority."

Are they overstepping their bounds here?

JEFFREY TOOBIN, CNN SR. LEGAL ANALYST: They really may be. You know, Avon Park can't declare war on Cuba. Avon Park can't cut off diplomatic relations with Mexico. Those are exclusively federal responsibilities. And immigration has traditionally been thought of as exclusively a federal responsibility. That's what preemption means, it preempts the field. So I think someone challenging this law might have a pretty good argument that this is simply not something the city can do.

PILGRIM: If they argue it under keeping peace in the town -- I know Hazleton, Pennsylvania said that they were enforcing these laws under the attempt to try to keep law enforcement in place.

TOOBIN: That's certainly a legitimate objective. The question is can they start getting tangled in immigration law in order to support it? That's a tougher call.

PILGRIM: All right. Let's look at a second statement they have. "The prohibition against renting to undocumented immigrants subjects both the city and local landlords to liability under the Fair Housing Act, which forbids discrimination in renting based on race, color, religion, sex, status or national origin."

If they do it the way that the mayor just suggested, if they do it through the government applying for permits or something, could they do it? TOOBIN: See, I don't think that would be illegal. I think they're on -- the mayor is right, that there is nothing illegal about what he's doing. The question is, how would it actually work, administratively? You know, people -- immigration is a vast, complicated field, with visas and citizenship and student visas. How would people in city hall in a small town determine what someone's immigration status is? I certainly couldn't do it myself. And I imagine most people who were not used to this field would have a hard time.

PILGRIM: Very complicated to enforce. These mayors are trying to work their way through this. Thanks for helping us work through it legally, Jeffrey Toobin.

TOOBIN: OK.

PILGRIM: Well, coming up at the top of the hour here on CNN, "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks, Kitty. We're live in Mumbai, India, the scene of seven deadly commuter train explosions. Who is behind these terror attacks? And should the U.S. be on a higher state of alert? I'll ask New York City Police Commissioner Ray Kelly. He'll join us live right here in "THE SITUATION ROOM."

Plus, will push come to shove over embryonic stem cell research? We'll take a closer look at the latest political wrangling, including a presidential veto threat that puts President Bush at odds with some key Republicans.

And meet the Condinistas, political activists who believe Condoleezza Rice is the Republicans' ticket to winning the White House in 2008. All that, Kitty, coming up right at the top of the hour.

PILGRIM: Thanks, Wolf. We look forward to it.

Still to come tonight, the battle over illegal immigration and border security and a great deal more. Three of the nation's most popular radio talk show hosts will join us. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: We have this just in to CNN. A fire inside a Chicago commuter train has shut down service during the evening rush hour. Now, fire and police are on the scene. Chicago Transit Authority says services shut down on the blue line. Now, important to add, so far no reports of injuries. Again, we do have a fire inside a Chicago commuter train. It has shut down service during evening rush hour. We'll have all the latest for you throughout the night here on CNN. We wanted to bring you that as soon as we could.

Joining me now, three of the nation's most popular talk show hosts. Mark Simone of WABC Radio in New York, Mark Riley of Air America Radio, and Rick Amato of KCBQ joins us from San Diego. And thank you all for being here. Very much appreciate it. Let's start with the budget deficit. We'll start with the heavy lifting first, OK? The president came out and said that this year the budget deficit will be lower $127 billion. And let's listen to what he had to say about it, and then we'll work off that.

(BEGIN VIDEO CLIP)

BUSH: This economy's growing. Federal taxes are rising. And we're cutting the federal deficit faster than we expected. This good news is no accident. It's the result of the hard work of the American people and sound policies in Washington, D.C.

(END VIDEO CLIP)

PILGRIM: Good news or bad news, Mark?

MARK RILEY, RADIO TALK SHOW HOST: Amazing news. First of all, because this guy almost never announces this sort of thing. This is the kind of thing that he usually gives to a minion someplace within the administration, to announce these kinds of budget deficit figures. So obviously, it's a big deal for him, because right now nothing else is going all that well for him. If you look at Iraq, if you look at some of these other -- immigration, he hasn't gotten what he wanted.

So why not talk this particular thing up? And the numbers are a little fuzzy on top of that.

MARK SIMONE, RADIO TALK SHOW HOST: Oh, wait, wait, wait. They're not fuzzy. And he had some great economic numbers last year, and took a lot of heat from Republicans for not making a big deal out of it. Here's one misconception that you've been hearing all day, that it's the fourth largest deficit. That's if you mention -- go over it in dollars. And you wouldn't measure a deficit in dollars. It makes no sense at all. It's the percentage of the GDP. And right now, it's about 2.6 percent, which is pretty low. We generally run about a 6 percent deficit. Roosevelt in World War II ran a 30 percent deficit. So right now, it's 2.6 percent. That's a pretty low deficit.

RILEY: Well, wasn't there a surplus once upon a time when there was a different president here?

SIMONE: Yes, but you are not going to expect a surplus all the time. We've got...

RILEY: Well, not all the time. But we had one under Bill Clinton, we don't have one under George W. Bush. So we should celebrate the fact that the deficit, the hawk is less now.

RICK AMATO, RADIO TALK SHOW HOST: If I can jump in for a moment...

PILGRIM: Let's listen to Rick, because he has a disadvantage. He's not with us. Go ahead, Rick.

AMATO: Well, Kitty, this being a former "Moneyline" show, I think you understand as well as anyone that one number does not a trend make. And the fact remains, American middle class families are getting squeezed. They need to work two income job not to get ahead, but simply to keep from falling further behind. And I don't see that squeeze ending anytime soon.

The final remark about that is we all know there's a number that's forecasted, there's a number that's announced. And then there's a number that's readjusted later. So we don't even know if this number is any good anyway.

PILGRIM: What about this argument that tax cuts are the reason for the increased tax revenues?

RILEY: Tax cuts are the reason for the increased tax revenues? What am I missing here? That doesn't seem to make a whole heck of a lot of sense.

SIMONE: It has always worked that way. It worked that way under JFK. Ronald Reagan doubled revenue with his tax cuts. You know, here's the problem. Democrats have become like forensic accountants, looking for anything wrong they can find here. The real problem is, nobody wants to talk about how you get rid of a deficit. Tax cuts, we've got more revenue. You have got to cut spending. Bush is terrible when it comes to cutting spending, and Democrats are even worse.

RILEY: Well, I'll agree with you about Bush being terrible about cutting spending. But Bill Clinton managed to balance the budget. He managed to eliminate a deficit that he had when he came into office. How come Bush hasn't been able to do the same thing?

SIMONE: Well, first of all...

PILGRIM: Wait, we've got to get Rick on. Rick, go ahead.

AMATO: Well, let's remember, Mr. Clinton -- President Clinton did not have a war on terrorism that he was fighting.

RILEY: Or Katrina.

AMATO: Or Katrina.

RILEY: Which was a disaster for Bush.

AMATO: And at the same time, I do agree with both the gentlemen in the studio there, that this president does not have a control on spending. But I will give him a pass on Katrina and on the Iraqi war.

RILEY: I wouldn't give him a pass on Katrina at all. He put the guy in charge of FEMA that messed up Katrina. Messed up the response terribly. That's on him. Why should it be on anybody else?

SIMONE: You guys gave us Ray Nagin and Governor...

RILEY: Ray Nagin got reelected by the people of New Orleans. Who elected Michael Brown? SIMONE: Well, here's the problem. I'd love to...

RILEY: And how did he end up saying right after the disaster, Brown, you're doing a good job?

SIMONE: No, I agree, Bush is terrible when it comes to cutting spending, and that's how you eliminate a deficit. I'd love to hear...

RILEY: He's terrible when it comes to hiring competent people.

SIMONE: But I'd love to hear a liberal of a Democrat say, let's cut spending now.

RILEY: Bill Clinton did it. Didn't he? Didn't he say, let's cut spending? Let's cut spending now. Fine. Let's do that.

SIMONE: Let's (inaudible) instead of yelling about tax cuts.

RILEY: Where do you want to cut? You want to cut the Border Patrol like Bush did?

SIMONE: No, I don't want to cut the Border Patrol.

RILEY: Why not? He did it.

SIMONE: I don't think you can make the case that there's no waste or bloat in that federal government.

RILEY: Apparently there's waste and bloat in the border patrol because he cut it while he's been in office.

PILGRIM: Rick, last word on spending cuts.

AMATO: We need to cut spending somewhere, but you know, it's a tough nut to crack, I agree. But spending needs to be cut somewhere.

PILGRIM: We're having so much fun, we're going to take a break and come back. So stick with us. Mark Simone, Rick Amato and Mark Riley and first a reminder how to vote in tonight's poll. Do you think it's an acceptable standard that electronic voting machines can fail almost a tenth of the time. Do cast your vote, that's a yes or no vote, LouDobbs.com. We'll bring you the results in just a few minutes and we'll be right back.

(COMMERCIAL BREAK)

PILGRIM: Joining me once again, Mark Simone of WABC radio in New York, Mark Riley of Air America radio and Rick Amato of KCBQ, joining us from San Diego. We're off to the races again. Let's start with the Bush administration announcement today about the detainees at Guantanamo prison. They're going to be afforded some of the protections of the Geneva Convention and the Senate Judiciary Committee opened hearings today about how they should be tried. Here's what Democratic Senator Pat Leahy had to say first.

(BEGIN VIDEO CLIP) SEN. PATRICK LEAHY (D), VERMONT: I'm a former prosecutor and I find it hard to fathom that this administration is so incompetent that it needs kangaroo court procedures to convince a tribunal of United States military officers that the worst of the worst in prison at Guantanamo Bay should be held accountable. A military commission should not be set up as a sham. They should be consistent with the high standard of American military justice that has worked for decades.

(END VIDEO CLIP)

PILGRIM: So, how should the Bush administration handle the detainees?

RILEY: The way the Supreme Court told them they had to. I mean, this is really kind of like closing the door after the, the barn door after the horse has run the derby. The Supreme Court told them they had to make some changes and make the changes they did. It is interesting to see them try to get out ahead of the curve on all this. But the fact of the matter is they never should have been treating these Guantanamo detainees the way they have. They deserve a trial. They deserve justice. If they've done something wrong, lock them up and throw away the key, but don't just hold them there. That is un- American.

SIMONE: It says right in the Geneva Convention they don't qualify for it. You've got to be wearing a uniform, you have to openly display your weapons, you have to adhere to the Geneva Convention yourself, terrorists certainly don't do that.

RILEY: Terrorists display their weapons. Don't they?

SIMONE: No.

RILEY: Yes they do. I see Osama bin Laden walking around with one all the time. Of course they display their weapons.

SIMONE: A lot of experts that see Guantanamo Bay say it's physically the finest prison facility in the world. You know, we've had 80,000 detainees in Iraq, Afghanistan and Guantanamo Bay. And out of 80,000, we're talking about 150 reported cases of abuse. That's a pretty good rate.

RILEY: We've also had a couple suicides.

AMATO: This war, at the end of the day, this war will be won both on the battlefield and the perceptions of minds of people around the world. We've got to win on the battlefield and we have to win the war of perception. And I think America needs to take this opportunity right now to take the high road and set an example for the rest of the world, which we can be proud of. Even if it means that we go way out of our way to treat these enemies and these terrorist activities in a way which we feel we should not treat them.

RILEY: Rick is absolutely right. We have to be the model for this. We can't just say, well the terrorists do this and the terrorists do that and we have to replicate what they do. We have to be better.

PILGRIM: Gentlemen, we have ten more topics. I wish we had more time. So, we'll have to do this again. Thank you very much for being with us. Mark Simone, Rick Amato and Mark Riley, thank you.

Still ahead, more of your thoughts and the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll. 95 percent of you do not think it's an acceptable standard that electronic voting machines can fail almost a tenth of the time.

Let's take a look at more of your emails.

Dianna in Illinois writes, "good paying job, health care, education, college costs and food and utilities are all equally important and all out of control. The harder my husband and I work, the more behind we get."

Jeff in Florida writes, "The greatest economic challenge to my family is to survive the Bush administration."

Jay in Tennessee, "I could not pick any of the choices for your poll. As an American my greatest worry is the United State government."

And Dot in Kansas writes, "When will the politicians learn that they can fool some of the people some of the time but not all of the people all of the time. It is time to retire the politicians and elect some statesmen."

And Tim in Delaware writes, "I guess if the money's right, most politicians and business men will sell out this country."

Carolyn in Florida, "I have an idea, how about all the Senators and Congressmen who support amnesty for illegal aliens forfeit their government retirement packages to help this country with the cost of amnesty."

Well, do send us your thoughts, and I know you do to LouDobbs.com. And thanks for being with us. Please join us tomorrow. Senator Rick Santorum will be here. For all of us here, good night from New York. "THE SITUATION ROOM" starts right now with Wolf Blitzer, Wolf.

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