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LOU DOBBS TONIGHT

No Deal in Mideast Summit in Rome; Air Assault on Tyre, Lebanon; Deadly Battle Near Bint Jbeil; Schwarzenegger Changing Positions As Election Nears; U.S. Military Sending More Troops to Baghdad; Tom Ricks Discusses New Book; James Inhofe, Ben Nelson Interviewed; Voting Machine Roadblock in Maryland Regarding Paper Trail

Aired July 26, 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 Israeli army suffering its worst losses so far in this conflict against Hezbollah. Can Israel defeat Hezbollah without launching a full-scale invasion of Lebanon?
We'll have complete coverage for you tonight from Lebanon and from Israel.

Also tonight, the war in Iraq has entered a decisive new phase. The U.S. military changing its strategy and tactics, trying to prevent an all-out civil war in Iraq. Among my guests tonight, a long- standing critics of the conduct of this war, Thomas Ricks, the author of the important new book, "Fiasco: The American Military Adventure in Iraq."

And outrage in Congress over United Nations proposals to tax Americans. Lawmakers say the proposals threaten our sovereignty and our prosperity. Two leading opponents of the plan, Senator James Inhofe and Senator Ben Nelson, join us here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Wednesday, July 26th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Tonight, Israeli casualties in the war against Hezbollah are rising. Terrorists today killed eight Israeli soldiers and wounded 22 others in a battle for a key town in southern Lebanon. An Israeli officer was killed in a separate engagement.

At the same time, the Israeli military has failed to stop Hezbollah rocket attacks against Israel. In fact, more than 100 rockets are hitting Israel each and every day.

Diplomatic efforts to end the conflict have stalled. Secretary of State Condoleezza Rice and officials from other countries today failed to reach an agreement in Rome on the outline of a cease-fire.

We begin our reporting tonight with John King from Rome -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And Lou, any hopes for a short-term end in the near future to this fighting apparently dashed by, as you noted, the failure of the emergency Rome summit to come to an agreement on any kind of a cease-fire plan, on any kind of an international peacekeeping force to go in to southern Lebanon.

Secretary of State Rice was here for the summit. Eighteen nations and international organizations represented at the table, European countries, Arab countries, Lebanon itself here represented, hoping to find a way to end the fighting. But they simply were hung up on a very substantial disagreement, and the United States would not budge.

The Europeans and the Arabs pushing for an immediate cease-fire, then deal with the difficult political questions, including should Hezbollah be forced to disarm? Secretary Rice saying no, that such a cease-fire would be meaningless if Hezbollah got to keep its rockets. She also noted Israel is unlikely to accept such a deal. After the summit she said the work would continue, but that she would not accept is a cease-fire that she did not think had any teeth to it.

(BEGIN VIDEO CLIP)

CONDOLEEZZA RICE, SECRETARY OF STATE: We are all agreed that we want most urgently to end the violence on a basis that this time will be sustainable. Because unfortunately, this is a region that has had too many broken cease-fires, too many spasms of violence, followed then by other spasms of violence.

(END VIDEO CLIP)

KING: Now, after the session, the diplomats trying to say this should not be considered a failure. They say they made some progress on constituting that new international force. Italy and France, for example, offered to -- offered to volunteer some troops. The U.N. Security Council will take that issue up immediately. Progress as well on a humanitarian package and on a reconstruction package.

But the biggest issue, Lou, as you know, was a plan to end the fighting. The Lebanese prime minister said he was going home quite disappointed.

(BEGIN VIDEO CLIP)

FOUAD SINIORA, LEBANESE PRIME MINISTER: The more we delay the cease-fire, the more we are going to witness more are being killed, more destruction, and more aggression against the civilians in Lebanon.

(END VIDEO CLIP)

KING: So no agreement here at the Rome summit. Secretary Rice quickly left for a previously scheduled trip to Asia, but, Lou, we are told the talks will continue among the foreign ministers and their deputies, at the Security Council, as well. We're also told to look for Secretary Rice to return to the region as early as this weekend, hoping to resolve the difficult issues that prevent an agreement on a cease-fire plan here. But the bottom line is, no cease-fire agreement means the fighting continues now into a third week -- Lou.

DOBBS: John, as you know, critics of this Rome conference suggesting -- saying straight out that failure was a foregone conclusion because there were no representatives of neither the Israeli government nor Hezbollah, and not any representative from either the Syrian or Iranian governments.

What do you think?

KING: That's a key point, Lou. And one of the key criticisms.

The U.N. secretary-general, Kofi Annan, said he would reach out to Syria and Iran, trying to get them involved in a solution. Israel did have observers here, but no direct participants in the summit. And the job of talking to Hezbollah will fall, at least in the short term, to the Lebanese government.

Some also say you couldn't expect an agreement in one day, but Secretary Rice's diplomacy in the Middle East had built up the hope that perhaps they could come up with some sort of agreement. The talks will continue, Lou. But there was so much tension when everybody left, finger-pointing, that in some -- some people think they even were further apart when they left Rome than when they arrived here.

DOBBS: John, thank you very much.

John King reporting tonight from Rome.

Israeli aircraft today launched new airstrikes against the southern Lebanese city of Tyre. Several huge explosions rocked the city's center. There's no word on how many people were killed or wounded in the attacks.

Karl Penhaul reports from Tyre.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT (voice over): Smoke billows seconds after an Israeli airstrike. It's a scramble to get the wounded out of the bomb zone.

"Anyone over there? Everything OK?" this Red Cross volunteer shouts. Amid the confusion, this woman and her son are reunited with her husband.

"Something fell on us. We went downstairs to the neighbor's," she tries to explain. "God destroy Israel!" she adds with rage.

This is the spot where the warplanes struck. Rubble and fire where homes stood just moments before.

(on camera): This is all that's left of a 10-story building. Residents say two Israeli rockets slammed into the roof, causing an immediate collapse.

(voice over): It was not immediately clear whether any victims were buried in the ruins, nor was it clear what the Israeli jets may have been targeting. Neighbors say this was an apartment building and civilians lived here.

These survivors of this Israeli airstrike are dragged bleeding to a waiting ambulance. "Where is she? Where is she?" this woman screams. She gets her answer seconds later as a younger woman, like her, coated in cement dust, is pulled from an alleyway and placed on a stretcher.

Flames lick through the rubble, firefighters clamber to douse them. And in the chaos of dust and smoke, an act of faith. This man has rescued his holy book, the Koran.

We can hear the wails of the ambulances, the crackle of flames, and the sobs of the survivors. And then another sound. Raw anger.

"God will strike Israel! Death to Israel!" they scream. And with raised fists, their chants of no surrender. "With our blood and our souls, we will sacrifice ourselves for Hezbollah!"

(END VIDEOTAPE)

PENHAUL: What was different about today's airstrike, that this was in downtown Tyre. It was a couple of blocks from the mayor's office. That was the last time that we saw any airstrikes in that area was almost a week ago now, because most of the strikes are concentrated in the eastern and southern edges of Tyre, where we've seen rockets being fired from Hezbollah militia fighters. Not clear there, though, as I say, what the target that the Israelis may have been hunting for -- Wolf.

DOBBS: Karl, let me ask you this. There are reports of 500 Americans remain in Tyre, even as Hezbollah is launching rockets from the city and Israel is conducting airstrikes.

PENHAUL: Absolutely, Lou. This is what U.S. Embassy officials have been telling us, that they've been saying that across southern Lebanon, some 500 Americans and a lot of them aren't living in the city of Tyre themselves.

Today, what we saw, in fact, was a convoy that was approved by the U.S. Embassy, and also they got safe passage for that convoy to pass with the Israelis. And some of those American citizens came from the town of Yaroun. That's just one mile from the border with Israel.

And what they described there was coming along a highway from hell. A young guy from Queens in New York was saying that the highway was littered with missiles and with shrapnel from exploded bombs, and he told me harrowing tales of how he and his family had lived for two weeks in a basement with little food -- Lou.

DOBBS: Karl, thank you very much.

Karl Penhaul reporting from the Lebanese city of Tyre.

The Israeli army today suffered its worst casualties of the conflict so far with Hezbollah. At least nine Israeli soldiers killed, 27 others wounded today. It's the worst fighting, and the worst fighting of the day was in a town that Israel said it had controlled just yesterday.

John Roberts in northern Israel has our report -- John.

(BEGIN VIDEOTAPE)

JOHN ROBERTS, CNN SR. NATIONAL CORRESPONDENT: Lou, the Israeli military is preparing to respond to the problems that it had in Bint Jbeil today, and also preparing to expand the ground campaign further outside of Bint Jbeil. It looks like they're moving a little bit to the west as well.

They've brought in these tanks, these Marav (ph) tanks, reinforcements in order to join the battle. It's pretty ironic, though, what happened today, because yesterday, General Gal Hirsch, who is the commander of the Galilee division -- that's the division that's in there doing all of the fighting -- told me they had complete control of the town of Bint Jbeil.

But this morning, as the Israeli army was conducting some mopping-up operations, sweeping out some of the areas of Bint Jbeil, Hezbollah launched a counterattack. These were guerrillas that were well dug in. They were hidden among the community. The Israeli army says perhaps hiding out in bunkers.

They launched this counterattack using improvised explosive devices, the type that we see all the time in Iraq. They also used anti-tack missiles, mortars, automatic fire. The fighting was described as fierce, hand-to-hand, house to house. Very, very fierce firefight.

Here is the way that an Israeli army...

(END VIDEOTAPE)

DOBBS: John Roberts reporting from northern Israel with the Israeli forces.

The Israeli military today also attacked suspected terrorist positions in Gaza, what some are calling Israel's second front in this conflict. Israeli aircraft and troops killed at least 25 Palestinians.

Israel has sharply increased its attacks on Gaza over the past month, trying to stop Palestinian rocket attacks against Israel. Israeli troops are also searching for a captured Israeli soldier.

Still ahead, we'll be live in Washington, where Iraq's prime minister urged Congress today to continue its military commitment to Iraq as Iraq edges closer to full-scale civil war. And Governor Arnold Schwarzenegger of California used to be a strong supporter of tough border security. He's now calling border security advocates prejudiced. This broadcast confronted Schwarzenegger on his flip-flop and his language today.

We'll have that for you next.

And hang on to your wallet. The United Nations wants you to pay taxes to none other than the United Nations. I'll talk with two U.S. senators who are fighting that U.N. proposal tonight.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Governor Arnold Schwarzenegger of California tonight appears to have a new re-election strategy. He's pandering to illegal aliens and their supporters in California. Governor Schwarzenegger once supported tough border security and the enforcement of our immigration laws, but the governor is changing his positions as he fights for a second term.

Casey Wian is live in Los Angeles with the report -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Lou, California Governor Arnold Schwarzenegger is about to arrive here at Olvera Street (ph), an historic Mexican marketplace. He's clearly trying to win Latino voters, but at the same time he's also angering Californians who favor border security.

(BEGIN VIDEOTAPE)

WIAN (voice over): The governor, who last year made headlines by praising the minutemen, is now calling border security activists prejudiced. Arnold Schwarzenegger ran through his latest script during a bus tour of southern California. At this San Diego stop, he expected a friendly, most Republican audience. Instead, he got an earful about the state's failure to take action to stop illegal immigration.

UNIDENTIFIED FEMALE: The illegals hop over our fence and they go right on to medical. They get everything free.

I've worked all my life, and this is baloney. There's something wrong with this picture. The federal government won't do anything about the illegals, and it should be up to you to see that our borders are closed and something is done here, because this is absolutely ridiculous.

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: What you should be mad about and what I'm mad about is for the federal government not to be able to secure the borders so we got into that mess in the first place. That is the biggest problem that we have.

WIAN: Later, referring to a woman who said "stop the invasion" and "we want our country back," Schwarzenegger told reporters, "It was pretty much the first time I saw the intensity of prejudice."

Equating border security with prejudice is apparently part of a new campaign strategy. We tried to ask him about that at an Orange County campaign stop.

(on camera): Governor Schwarzenegger, why did you call border security activists prejudiced yesterday?

(voice over): But he ignored our repeated questions. He did announce support for an immigration reform plan critics say is amnesty for illegal aliens. And he again made a thinly veiled criticism of border security advocates.

SCHWARZENEGGER: I hope that they reform the immigration system so that we have a really comprehensive reform there so we can move forward rather than having this whole kind of atmosphere of hatred that is being created right now in California, and as far as that goes, all over the country.

WIAN: The governor this week told the Spanish language newspaper "La Opinion" his previous support of California's Proposition 187, a 1994 effort to deny public services to illegal aliens, was a mistake.

Schwarzenegger leads Democratic challenger Phil Angelides by eight percentage points. In a statement, Angelides accused the governor of "... doing more flip-flops on immigration than the Wallenda Brothers and Olga Korbut combined."

(END VIDEOTAPE)

WIAN: Schwarzenegger is trying to promote his record on the California economy, but questions about illegal immigration and border security are coming up at every campaign stop and clouding his message -- Lou.

DOBBS: All right, Casey. Thank you very much.

Casey Wian reporting from Los Angeles.

In Mexico, leftist presidential candidate Andres Manuel Lopez Obrador continues to challenge Mexico's presidential election results. He said, "I won the election. I'm the president of Mexico."

Lopez Obrador claims election officials manipulated computers and gave his conservative opponent a slim victory. A winner must be certified by the 6th of September.

Venezuela's left wing strongman, Hugo Chavez, today blasted the United States for trying to stop Russia from selling weapons to Venezuela. Chavez today visited a small arms factory in Russia where he was shown rifles and other military weaponry and equipment.

Tomorrow Chavez signs a billion-dollar contract with Russia to buy 30 Russian fighter aircraft and 30 Russian helicopters. All this with the full support of Russian President Vladimir Putin, who is a strong critic of U.S. policies around the world. Sill ahead here, guess who wants to raise your taxes? None other than the United Nations. We'll have that special report on the U.N.'s attempt to tax Americans.

And the Iraqi prime minister today addressed Congress. As sectarian violence in Iraq continues to escalate, we'll examine the Bush administration's efforts to fight perceptions that Iraq is already in a civil war.

And I'll talk with the author of a provocative important new book on Iraq called "Fiasco: The American Military Venture in Iraq," who says the general's staff must claim one of the worst strategies in American military history.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: You may support the United Nations fervently, or you may think it's a waste of money and time and real estate. But whatever you think, the United Nations is considering a number of proposals to tax you. The U.N. is fighting to raise hundreds of billions of dollars in new global taxes to fund the United Nations and make the U.N. even less accountable to the United States.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Americans pay property taxes, sales taxes, gas taxes, income taxes, Social Security taxes, and if the United Nations had its way, would pay a global tax.

The United Nations wants an independent revenue source outside of member dues. But taxes have traditionally been a right reserved for sovereign governments.

PETE SEPP, NATIONAL TAXPAYERS UNION: For so many years we've been concerned about putting ceilings on taxes, how high they can go. Now we have to put walls around taxes to keep them from expanding.

SYLVESTER: Senators James Inhofe and Ben Nelson introduced legislation that reiterates the U.N. has no authority to impose taxes or fees on U.S. citizens. At the heart are the issues of sovereignty and accountability.

WAYNE BROUGH, FREEDOMWORKS: If you look at what the founders did when they set up our Constitution, they made it very clear that any tax that an American citizen pays comes to that piece of government that is closest to the people.

SYLVESTER: The United States already provides 22 percent of the U.N. budget.

DAVID KEENE, AMERICAN CONSERVATIVE UNION: Allowing the United Nations to actually have a revenue base which it could operate on without accountability to anyone would be a disaster. The U.N. is a disaster as it is in terms of management, in terms of waste, in terms of corruption.

SYLVESTER: A string of scandals has raised questions over how the United Nations is spending money. The oil-for-food debacle, oil revenues stolen instead of used to buy food. U.N. Secretary-General Kofi Annan's son Kojo criticized for using his influence to help a company secure lucrative U.N. contracts. And allegations U.N. peacekeeper in the Congo pressed girls into prostitution.

(END VIDEOTAPE)

SYLVESTER: And earlier this year, Secretary-General Kofi Annan was ripped by critics for accepting a $500,000 environmental prize from the ruler of the United Arab Emirates, a U.N. member state. After a public outcry, Annan donated the money to the people of Darfur, Sudan -- Lou.

DOBBS: Lisa, this idea of a tax is not just some idle thought. I mean, it is a genuine proposal moving ahead. And there are people, obviously, in this country who actually support it.

But here later on the broadcast, Lisa, as you know, I'll be talking with the two senators you mentioned, James Inhofe and Ben Nelson, who are -- who have drafted legislation to stop it.

Lisa Sylvester, as always, thank you very much, reporting from Washington.

That brings us to the subject of our poll tonight. Do you believe the United Nations should be allowed to have the power of taxation? Yes or no?

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

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

Daniel in Florida, "Lou, maybe it's time we outsourced the Senate, since those are jobs that Americans won't do. After all, if they were doing their job, wouldn't they at least read a bill before voting in favor of it?"

Tricia in Pennsylvania, "Lou, I'm touched by how much our government cares. What would we do without their protection from the dangers of things like the Constitution, affordable health care, including medications and potentially life saving research? They give a new meaning to the concept of killing us with kindness."

Joe in Massachusetts, "If the current administration continues to wage war on the middle class of America, they won't have to worry about al Qaeda or Hezbollah."

Jerold in California, "Lou, you are wrong. We are no longer the world's superpower. We are the world's super patsy."

Send us your thoughts at LouDobbs.com. More of your thoughts are coming up later here.

Coming right up, our democracy at risk. Why some communities across this country are refusing to use paper receipts to verify those electronic voting results and machines.

We'll have that report for you.

And sectarian violence in Iraq is escalating. The Iraqi prime minister today appealed to Congress for continued American support.

We'll have that report.

And I'll discuss the war in Iraq with "The Washington Post" senior Pentagon correspondent, Thomas Ricks, the author of the new book "Fiasco: The American Military Adventure in Iraq."

All of that and more coming right up

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Iraqi prime minister, Nuri al-Maliki, today addressed a joint session of Congress. He called for continued American support in the war against insurgents and terrorists in his country. His speech comes as the United States makes new efforts to play down talk of an outright civil war in Iraq.

Jamie McIntyre reports on the Pentagon's use of the new term "death squad" when referring to what it once called insurgents.

And Dana Bash is live on Capitol Hill with a report on today's speech by the Iraqi prime minister.

We turn first to Dana Bash -- Dana.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, Lou, the Iraqi prime minister had a tough task to begin with trying to convince Congress his country is on a path towards democracy and peace. But that task was a lot harder because he waded into the Mideast crisis before coming here, condemning Israel's actions but not Hezbollah's. And after his speech today, he left some Democrats and even some Republicans unsatisfied, because when he condemned terrorism, he did not single out Hezbollah.

(BEGIN VIDEOTAPE)

BASH (voice over): The Iraqi prime minister came before an increasingly skeptical Congress, passing the costly U.S. mission and the broader struggle on his soil as a war for the heart of Islam.

NURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): History will prove that the sacrifices of Iraqis for freedom will not be in vain. Iraq -- Iraqis are your allies in the war on terror.

BASH: Though that was intended to show he stands against all terror groups, Nuri al-Maliki did not specifically condemn Hezbollah, which some lawmakers were waiting to hear. Senator Chuck Schumer was among a handful of Democrats who boycotted the speech, furious that al Maliki last week denounced Israeli aggression but not Hezbollah's.

SEN. CHARLES SCHUMER (D), NEW YORK: That's not the kind of person you consider an ally.

BASH: But other senior Democrats, demanding al Maliki publicly clarify his stance on Hezbollah, backed off, saying Iraqi leaders reassured them in private.

REP. TOM LANTOS (D), CALIFORNIA: The prime minister is with the program, understanding that terrorism in the region, whether within Iraq or by Hezbollah in Lebanon, is unacceptable.

BASH: Al Maliki used his 30-minute address to implore Americans to stick with Iraq, even appealing to the U.S. Congress, that spent some $300 billion in his country, for more money.

NOURI AL MALIKI, PRIME MINISTER OF IRAQ (through translator): Much of the budget you had allocated for Iraq's reconstruction ended up paying for security firms and foreign companies.

BASH: Just as the prime minister was hailing Democratic transformation in Iraq, an anti-war protester interrupted his speech and was rushed out. Some called the prime minister overly optimistic in his assessment of Iraq's progress, and said he failed to address the key question on Americans' minds.

SEN. DICK DURBIN (D), ILLINOIS: We want to know when the time will come and how soon it will come that American troops can come home. That is the real test of our success in Iraq.

(END VIDEOTAPE)

BASH: Meanwhile, on the controversy over Hezbollah, just to give you a sense of how complicated this issue is for the Iraqi prime minister, the Senate armed services chairman John Warner told reporters earlier that he understands that the prime minister was under intense pressure not even to come on this trip to the United States. Why? Because of President Bush's strong support for Israel in the conflict raging right now in the Middle East, Lou.

DOBBS: Dana, thank you. Dana Bash from Capitol Hill. As the Iraqi prime minister was speaking in Washington, terrorists in police uniforms in Baghdad kidnapped 17 Iraqis from an apartment building. In a separate incident, gunmen kidnapped an interior ministry general as he traveled to work. These latest kidnappings come one day after President Bush described the security situation in Baghdad as terrible.

The U.S. military is sending reinforcements to Baghdad to help stop the rising sectarian violence. At the same time Bush administration officials are using new language to describe the conflict and the participants, to fight perceptions that Iraq has already descended into outright civil war. Jamie McIntyre reports from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): All-out civil war is seen by many as the worst case scenario for Iraq. So if, like White House spokesman Tony Snow, your job is to put the best face on the war, it's not a phrase in your lexicon.

TONY SNOW, WHITE HOUSE PRESS SECY: I'm not going to get into the labeling game. Because I don't know where you go with that, except you get a headline. The administration says civil war.

MCINTYRE: But with violence on the rise, especially in Baghdad, the U.S. does admit that sectarian or religious warfare has eclipsed the al Qaeda-backed insurgency as the biggest threat to Iraq's security. But instead of citing increasing warfare between Sunni and Shia militia, the military now refers to the enemy as members of death squads, which gives the impression of smaller criminal gangs.

COL. DOUGLAS MACGREGOR, U.S. ARMY (RET): If you say death squad, people remember Latin America. They think of a few people assassinating a limited number of their countrymen. This is a wonderful term if you're trying to divert attention from the fundamental problem on the ground.

MCINTYRE: Military spokespeople in Baghdad say the warring factions are in fact operating more like the Mafia than revolutionaries.

MAJ. GEN. WILLIAM CALDWELL, MULTINATIONAL FORCE-IRAQ: When we say death squads, what we're referring to is anybody who is operating outside of the law. Any illegal element that is out and intentionally using murder and killings to further their personal goals.

MCINTYRE: Press releases from Iraq, like this one just issued, now routinely refer to capturing or killing members of death squads. But what's often not said is that the kidnappings and murders are part of a cycle of attacks and reprisals between warring Shia and Sunni militias, some of whom are operating within the Iraqi Security Forces. To critics it appears an attempt to deny what many believe, that Iraq is sliding into a protracted civil war.

MACGREGOR: The American military and its spokesmen are trying to help the administration maintain the fiction that this is not happening in Iraq. It is happening.

(END VIDEOTAPE)

MCINTYRE: There is no one definition of civil war. Generally speaking, it involves at least two warring factions with irreconcilable differences and substantial casualties. But Lou, whatever you call the war in Iraq, the U.S. continues to believe that only a political settlement, agreed to by the Iraqis themselves, can stop it.

DOBBS: Jamie, thank you very much. Jamie McIntyre from the Pentagon.

In Iraq, 100 Iraqi civilians are killed every day. On average, this war is claiming two American lives every day, 2,567 of our troops have been killed, 19,157 Americans have been wounded. The cost of the war has surpassed $300 billion. And the violence in Iraq, no matter what you call it, is worsening, not lessening. "Washington Post" Senior Pentagon correspondent Thomas Ricks has written the definitive account of this war.

His new book is entitled "Fiasco." And in his book, President Bush, CIA director George Tenet, Defense Secretary Donald Rumsfeld are among those he holds most responsible for our strategic failures in Iraq, which began with disregarding the Powell doctrine. Ironically Secretary of State Colin Powell facilitated with his speeches at the United Nations in February of 2003, the breach of that doctrine and the onset of the war.

(BEGIN VIDEOTAPE)

THOMAS RICKS, THE "WASHINGTON POST": I think Powell probably has a lot of regrets about his role in all this, most especially his speech to the U.N. in February 2003, a month before the war, which we now know to have been utterly false. Almost every aspect of that speech was wrong. Some people in the intelligence community knew that and didn't tell him.

DOBBS: And in this book Tom Ricks also lays out clearly a wonderful account of the National Intelligence Estimate that devolved into the platform for the war, at least as a basis for moving forward. You also point out a strange journey from 1991 to the war outbreak in 2003. Wolfowitz right about supporting the rebels following the defeat of the Iraqi army, if not the elimination of the Republican guard in 1991 and his utter wrong-headedness of leading him to this conflict.

RICKS: Wolfowitz is an intriguing character to me. As one person I interviewed said Paul Wolfowitz is not a hack. He's a man of deep beliefs. He's very sincere. He said, he's also in some ways a very intelligent man but this person had decided that he was also a fool. And there's a lot going on there where these guys really believed that this was going to be different, that we weren't going to be like other powers going in to an Arab state, that we were going to be greeted as liberators.

And they so believed it that not only did they not have a plan B, they discouraged other people from thinking about plan B. What if our assumptions are wrong? And that failure, I think, helped create the insurgency, because we lost the initiative in the Summer of 2003.

DOBBS: In that same cast of irony over that same span of time, Schwarzkopf making the mistake of permitting the Iraqi military in 1991 to resume flying after that war and then with the strength that he could muster, urging caution and going into this conflict in 2003.

RICKS: That's a good point. I'd went down to see General Schwarzkopf in Tampa, Florida in January, 1993 and had a long talk. And he was really I think almost heartbroken about the notion of going to Baghdad because this is exactly what they had feared back in 1991.

And all those fears were being disregarded. And this is a man who not only had led the U.S. military in the previous war, he had campaigned for Bush and Cheney in 2000. He had gotten up in Florida on the stage with Cheney. This is a guy who goes hunting with the older President Bush. Yet, they wouldn't hear him.

I think what people like Powell, Scowcroft, Schwarzkopf didn't understand is that the younger President Bush, the new president, wasn't about stability. He was about radical change because of 9/11. He said we're going to change the Middle East, we're going to drain the swamp. And so he willing to kind of roll the dice. Stability was his aim, it was his target. And for people like Brent Scowcroft, that was way over their heads.

DOBBS: But, how in the world can we function if we do not hold our general staff accountable for what, as you demonstrate in this book, are manifest failures of leadership.

RICKS: I don't think we can function very well. I think the system is broken. If the military doesn't hold itself accountable and right now criticism of generals seems to be off the table, then the Congress needs to do it. And I think Congress is the biggest single problem we have in our system. This is a Congress that doesn't want to ask questions, or if it asks questions is willing to take no for an answer.

Here we are three years into this war and there's not been a single significant hearing on the conduct of the war. The division commanders have never been called up before Congress. How did it go? What's your relationship with Rumsfeld like? Not a single general has been relieved by the leadership.

DOBBS: Tom Ricks, the book is "Fiasco," an outstanding account of what has amounted to now more three years of sacrifice on the part of so many of our brave young men and women and trying times for this nation and you offer, as well, hope for all of us that we can at least begin to right this policy direction.

(CROSSTALK)

RICKS: I hope we do. Thank you.

(END VIDEOTAPE)

DOBBS: Tom Ricks. Well, Senate Judiciary Committee Chairman Arlen Specter today introduced legislation that would give Congress the power to sue the president of the United States. The new legislation challenges President Bush's assertion that he can disregard sections of legislation that he signs into law with so- called signing statements.

The American Bar Association this week charged President Bush with violating the U.S. Constitution by his issuance of more than 800 of those signing statements. The ABA says the signing statements amount to a line-item veto, which the Supreme Court ruled unconstitutional in 1998.

The United Nations has its eyes on you as a taxpayer. The world body wants to tax Americans. It wants to tax everybody, in fact. I'll be talking with two U.S. senators who have a strong response for Kofi Annan and the United Nations.

And many people are fighting to protect our democracy from possible e-voting fraud, but some elected officials think -- you won't believe this -- that they know better. We'll have a special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In a moment I'll be talking with two leading senators who are taking on the United Nations and the Secretary-General Kofi Annan. But first, Wolf Blitzer in Jerusalem reporting now on what's coming up at the top of the hour here on "THE SITUATION ROOM" -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou.

Our special edition of "THE SITUATION ROOM" includes news that's happening right now. A very bloody day for Israeli troops on the battle front. We're taking you live to the frontlines and on both sides of the border where the death toll is mounting.

Plus no cease-fire. Secretary of State Condoleezza Rice comes up empty handed in Rome. Now she's pointing fingers at Iran and Syria.

Also, U.N. observers killed by Israeli fire, was it accidental in the fog of war? Or a deliberate killing, as Kofi Annan is claiming, apparently at least? We're taking you behind the gunsmoke to see how the tragedy unfolded.

And weapons of war -- searing phosphorus, rockets packed with ball bearings and civilians in the crossfire. We're going to show you who is using what on the battlefield. All that, Lou, coming up right at the top of the hour.

DOBBS: Thank you very much. Wolf Blitzer reporting tonight from Jerusalem.

The United Nations is attempting to raise hundreds of billions of dollars in new funding by imposing taxes on citizens around the world, but specifically American citizens. The United States is already paying to keep the United Nations running each year, but the U.N. says American taxpayers should hand over even more.

Senator James Inhofe and Senator Ben Nelson join us tonight from Capitol Hill. Their new legislation would withhold significant U.S. funding to the United Nations if the organization proceeds with this global taxation plan. Gentlemen, good to have you with us.

Let me start with you first, Senator Inhofe. Just how preposterous, how outrageous can this institution be?

SEN. JAMES INHOFE (R), OKLAHOMA: Well, you know, I guess I'm the wrong person to ask because I'm the chief critic of the United Nations. There's so many things that they do that are wrong. And this isn't the first time that we've had this problem, Lou. Back in 1996, we passed legislation successfully to withhold funding if they continued with this effort for global taxation. The same thing in 1999.

The problem was we only did it for that given year. What we're introducing now will endure from now on. And what it will say is if you guys try to take away the only thing that we have, the only leverage that we have over the United Nations by changing the system from a dues system to some kind of a global taxation, it will be a worse disaster than it is today, if possible.

DOBBS: Senator Nelson, how can anyone in that august body, the U.S. Senate or across the way in the United States House of Representatives, even begin to support such an outrageous idea?

SEN. BEN NELSON (D), NEBRASKA: Well, I'm not sure that anybody does seriously. I know as the governor I voted for 43 tax cuts when -- I supported 43 tax cuts as governor and voted for all six tax cuts since I've been in Washington.

I'm not going to turn the budget -- tax budget over to Kofi Annan and the United Nations. So I don't know that there are those who are supporting it, but I think we'll get a lot of support when they find out what the United Nations seems to be proposing again.

INHOFE: I'm not sure. There may be some who are going to be supporting this. You know, there's this multinational obsession that some members of this body have that no idea is a good idea. And this comes from some multinational -- we'll find out.

DOBBS: Let me quote to you from the "Washington Times," an op-ed by Richard Rahn, the head of the Center for Global Economic Growth. He wrote, "In effect, we have the bizarre situation where the world's taxpayers pay people to advocate higher taxes on themselves and even worse, without any sovereign protection for the taxpayers. If this is not tyranny, what is?"

At what point, gentlemen, do we just say to this organization -- we're watching it operate right now. We've watched it operate in Bosnia, Rwanda, Darfur. At what point do we say this is an institution whose time, if it ever did come, certainly has now departed?

INHOFE: Well, certainly I think that time is getting very close. And this is the first step, because there's no accountability. There would be no accountability if they were successful in doing this. You named a few thing, Darfur and all that, the oil for food scandal the -- and if you'll remember, we found out just recently that Kofi Annan knew 30 days in advance of the Rwanda genocide that that was going to take place.

So where were they? Where are they right now in northern Uganda, where they have a person killing these kids, the boy soldier program. So I think I'm past that point myself, that I think this is the strongest step that we can take at this time.

DOBBS: And I should point out that just about a month ago, Congressman Ron Paul introduced legislation to take on the same issue in the House of Representatives. Senator Ben Nelson, I'm going to give you the last word here tonight, sir.

NELSON: Well, you know, if I thought that they would be as inept at collecting taxes as they are at enforcing Resolution 1555, it probably wouldn't scare me as much as it does. But we're simply not going to turn over our tax opportunities to international government this way. It's the wrong thing to do, and we're just simply not going to stand for it.

DOBBS: Senator Nelson, Senator Inhofe, we thank you both, gentlemen, for being here.

A reminder now to vote in our poll. Do you believe the United Nations should be allowed to have the power of taxation? Yes or no. Cast your vote at LouDobbs.com. We'll have the results here coming up shortly.

Still ahead, we'll have more of your thoughts, your e-mails and why are communities all across this country still refusing to use paper receipts to verify electronic votes? imagine that. We'll have that special report on our "Democracy at Risk," next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: More evidence tonight that many of this nation's elected officials remain somewhat out of step or just completely in the dark as far as their constituents are concerned. At least half the states in this country are now requiring a paper trail for electronic voting machine ballots. But in Maryland, that kind of common sense and concern about our democracy has hit a roadblock. Kitty Pilgrim has the report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): After 2002, Maryland switched to all electronic voting machines. But this year the governor became worried about voting security and decided the state needed to move to a voter verified paper system for the upcoming midterm election. The House voted to switch from the Diebold all electronic touch screen system to a system with a paper trail. The governor set aside $20 million to switch. But the measure was killed by the state Senate.

ANDREW HARRIS, MARYLAND STATE SENATE: The governor put money in the budget. Everything was lined up to go, and it just failed in the last few days of the session because I think the Senate leadership and the committee leadership didn't want it to pass.

PILGRIM: Many Maryland officials are outraged at Linda Lamone, the state administrator of elections. She gave a litany of excuses for not making the switch. Some voters would find it too difficult to use the paper ballots and using paper ballot technology would stop innovation on a new system in the future.

LINDA LAMONE, STATE ADMINISTRATOR OF ELECTIONS: It's going to stifle and it has already to some extent, the development of any other kind of independent verification technologies.

PILGRIM: The director of policy for the governor charges that Diebold had undue influence of election administrators.

JOSEPH GETTY, MD GOVERNOR'S DIRECTOR OF POLICY: There are two states that started very early with Diebold, Georgia and Maryland, and those are the marquee states for the Diebold system. Both election administrators, Linda Lamone in Maryland, have a national reputation based upon their quick advancement of e-voting in Maryland.

PILGRIM: He adds...

GETTY: ... In Maryland politics, strange thing happen all the time. Obviously, the vendor had lobbyists working the issue.

PILGRIM: So Diebold's electronic voting machines will be used for all 24 voting districts in Maryland in November.

(END VIDEOTAPE)

PILGRIM: Now, Maryland election officials defend their decision. They say we take machines from Diebold, we run additional tests and as a result we have a high level of confidence in the system. But the rest of the country is more concerned. And 27 states around the country have introduced legislation to require a voter-verified paper trail because of security concerns, Lou.

DOBBS: The House wants it, the governor wants it, the Senate leadership and the committee leadership along with the Lamone, who apparently is very enthusiastic about Diebold voting machines, fighting it. Is this a Republican/Democrat issue?

PILGRIM: They say that politics are involved, but they say really it's more that they're very beholden to the system that's in place.

DOBBS: Is the Senate Democrat or Republican?

PILGRIM: Democrat.

DOBBS: Democrat. Thank you very much. Appreciate it, Kitty Pilgrim. This is incredible, this story on e-voting machines and the impact around this country.

Still ahead here, more of your thoughts, in particular on the Middle East conflict and outsourcing, plus the results of tonight's poll. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of tonight's poll, 95 percent of you do not believe the United Nations should be allowed to have the power of taxation.

Take a look now at more of your thoughts. Joseph in New Jersey saying: "Dear Lou, I hear in the news their there may be a NATO force to protect the border between Israel and Lebanon. Might there be a possibility the U.S. could get a NATO force on the USA/Mexican border?"

And Diane in New Jersey: "If companies would only ship the CEO jobs overseas, they'd probably have enough money in any company to pay all of their employees a decent wage."

And Karen in Florida: "Lou, it doesn't matter to me whether the company is owned by the UAE, Oman or any other country. Only American companies should be operating in our ports. What is wrong with our Congress? They are simply not listening to the American people. In November, we should throw all the bums out."

Jonathan in New York: "There's a simple solution to illegal immigration: make it legal. Save for basic security measures we should open our borders. Your opposition to free trade and immigration has no basis in sound economic theory or good policy. Frankly, it smacks of xenophobia."

Really.

And Margaret in Connecticut: "We need a third party. These two are dithering idiots."

And Tony in Illinois: "You are an idiot. It's pretty." That is, I am an idiot. "It's pretty to sit and criticize. You have some strong views. You are an idiot."

OK.

And Ron in New York: "I'm glad to hear that you dismiss political correctness by referring to undocumented persons as illegal aliens, China as Communist Red China and Hezbollah as terrorists. It's disgraceful that your colleague attempt to hide the truth. Perhaps if they reported the truth, problems would have a better chance of being resolved."

We believe so. We love hearing from you. Send us your thoughts at LouDobbs.com. Each of you whose e-mail is read here receives a copy of Senator Byron Dorgan's new book, "Take This Job and Ship It." Thanks for being with us tonight. Please join us here tomorrow. For all of us, thanks for watching. Good night from New York. "THE SITUATION ROOM" begins now with Wolf Blitzer in Jerusalem -- Wolf.

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