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LOU DOBBS TONIGHT

Protecting Our Troops; Is the Army Broken?; Gonzales Under Fire

Aired April 5, 2007 - 18:00   ET

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


LOU DOBBS, HOST: Tonight, the Navy's top commander says American sailors and marines will defend themselves if Iran or anyone else ever tries to take them hostage.
We'll have that exclusive report tonight.

Also, the Army is stretched to the breaking point by the wars in Iraq and Afghanistan. Is our Army already broken?

We'll be examining what is a breakdown in military readiness.

And startling new evidence that illegal immigration is costing this country and you as a taxpayer hundreds of billions of dollars.

We'll have complete coverage of that story, all the day's news, and much more, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, April 5th.

Live in New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The Navy's top commander, Admiral Michael Mullen, today told CNN that he is confident Iran would never be able to capture any of our sailors or marines in the Persian Gulf.

Meanwhile, our Army are is stretched so thin by the wars in Iran and Afghanistan that it appears to some to be incapable of fighting a war anywhere else in the world.

Barbara Starr tonight reports from the Pentagon on her exclusive interview with Admiral Mullen.

General David Grange joins us to tell us whether this Army is already broken and whether it can ever recover.

We turn first to Barbara Starr -- Barbara.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Lou, the chief of the U.S. Navy today had a message for Iran.

(BEGIN VIDEOTAPE)

STARR (voice over): In an exclusive interview with CNN, the chief of naval operations, Admiral Michael Mullen, is blunt when asked if U.S. troops could ever be captured by Iranians in the Persian Gulf.

ADM. MICHAEL MULLEN, CHIEF OF NAVAL OPERATIONS: My expectation is that American sailors are never seized in a situation like that.

STARR: There are 19 U.S. Navy ships patrolling in the Gulf. Even before the British incident, commanders had stepped up security procedures. Now there is even more caution. If Iranians attempted to capture U.S. sailors or marines, Mullen says they will defend themselves.

MULLEN: They have the right to engage, to shoot. And they do not have to ask permission.

STARR: The Navy will ask the British for details about the incident. The U.S. Navy has procedures to keep its troops safe when they board cargo ships. A helicopter overhead to keep watch, and a combat ship within shooting range.

Mullen will not criticize the British troops. No one yet knows what duress or coercion they may have suffered. But there are rules of conduct for U.S. personnel in captivity.

MULLEN: Who you are, what your Social Security number is. And very limited, in terms of any kind of response, when you become a prisoner or a hostage.

(END VIDEOTAPE)

STARR: Lou, we asked Admiral Mullen about the ultimate scenario of concern, at least one of them, could the Iranian military shut down the Strait of Hormuz and shut off a good portion of the world's oil supply? Admiral Mullen said that is a matter of continuing concern to the U.S. military, but that if the Iranians tried to do that, he didn't think they could keep it up -- Lou.

DOBBS: Barbara, thank you.

Barbara Starr, from the Pentagon.

Those 15 British hostages taken by Iran and released yesterday are now in the United Kingdom. The British sailors and marines landed at Heathrow airport. Helicopters flew those troops to a British base in southwest England. British Prime Minister Tony Blair insists that Britain made no deals whatsoever to secure the release.

Earlier, four British troops in Iraq were killed in a roadside bomb attack. One hundred forty British troops have been killed since the beginning of this war.

Our military today reported the deaths of seven more of our troops in the war. Five of those troops were killed in Baghdad over the past 24 hours.

Seventeen of our troops killed in Iraq so far this month, 3,266 of our troops killed since the beginning of the war. 24,476 of our troops wounded, 10,931 of them seriously. Major new concerns tonight that the wars in Iran and Afghanistan may have broken our Army. The latest edition of "TIME" magazine reports, "Today's Army finds itself under the greatest strain in a generation." "TIME" magazine says half the Army's combat brigades are now deployed overseas. The remainder now recovering from their latest deployment are preparing for the next.

And for the first time in decades, the Army no longer has a combat brigade ready to deploy in the case of an emergency anywhere else in the world.

Joining me now to assess this question is General David Grange, one of the country's most decorated soldiers and military leaders serving in the infantry, airborne and Special Operations in his career all over the world.

General Grange, much discussed, much debated. Is, in fact, as "TIME" magazine reports, our military right now, our Army, broken?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Lou, I don't think it's broken, but close to it. And I say that knowing just because of the resolve, the can-do attitude of the people that man this military. And that's really the only reason.

They've been run hard, put away wet. Equipment is in dire need of replacement and repair. And with this pace, it cannot be sustained for a long period of time.

DOBBS: For example, as "TIME" magazine reports, the 82nd Airborne division doesn't have a ready combat brigade ready to go in case they were to be called upon anywhere else in the world.

What is the implication of that?

GRANGE: Well, you know, historically, the 82nd Airborne always had a ready brigade...

DOBBS: Right.

GRANGE: ... with airborne and parachute capability. It was that when I was in the 82nd. It's been that way for quite a long time. But because of the current deployments and mixing of units, other brigades have taken that role during this time that the 82nd cannot.

Now, does that mean it has an airborne capability? Maybe not. It may be just the airborne battalion or the Rangers, or the 173rd, or some other unit. I don't know. But, some other unit will take that responsibility.

They have to have a brigade ready. That's a requirement.

DOBBS: And, also, "TIME" magazine reporting a critical shortfall in specialized fields such as aviation, engineering, intelligence.

How have we come to this situation? How could our military leaders, our civilian leaders as well, permit us to get into this kind of a situation?

GRANGE: You know what's interesting? These fields that we've mentioned have always been some time of a shortage, but more so now. Some very critically short. And these are the combat support, combat service support specialty supports.

What's kind of unusual, we're at war, many are dying, mostly infantrymen, and the highest man specialty is infantrymen in the United States Army. But they're critically short in other specialties, and many majors, captains, they're not staying in the military. And so this is a requirement that's going to be a problem in the future for this Army.

DOBBS: Well, Secretary of Defense Robert Gates has taken over, a man considered by many to be superbly qualified, superbly talented. He's been there in very short time, but it is remarkable that the world's only superpower could be in this kind of position, which, in effect, we're saying does not have the reserve readiness to take on a new emergency in a world that is filled with challenges, that the equipment that we have now, and particularly in Iraq, is simply wearing out. Our Air Force, since 1991 -- really, since 1990 -- has been in a state of -- you could argue, constant war in Iraq over a period of what is approaching 17 years.

I mean, where in the world is the intelligence? And I'm not talking about military intelligence. I'm talking about the intelligence, the strategy, the honesty of leadership in the U.S. military and amongst our political leaders to permit us to get into this kind of a situation in this country?

GRANGE: You know, the shame of the whole thing is it started with the fall of the Berlin Wall. When the Cold War ended, this all started. And it's just continued to get worse, all the way up until 9/11, when there was then a recent surge to try to bring it back somewhat.

So this is a long period of time of readiness degradation throughout the armed forces. If there is another emergency, it will pretty much be an Air Force and Navy fight. Not a ground fight.

DOBBS: And the Air Force, already, as you put it, well worn in its responsibilities over the course of the almost past 17 years in Iraq. This should be, it seems to me, very troubling to every American that our political and military leaders have permitted us to get to this point. It is troubling, at the very least.

General Grange, thank you for being here to offer your insight.

Turning now to the political battle in Washington over the abrupt firing of those eight U.S. attorneys, Attorney General Alberto Gonzales is scheduled to give testimony to the Senate Judiciary Committee April 17th. The attorney general is already preparing for what is likely to be an intense grilling.

Brian Todd has the report from Washington -- Brian. BRIAN TODD, CNN CORRESPONDENT: Lou, Justice Department officials acknowledged to us those Judiciary Committee hearings in less than two weeks are crucial. The attorney general is now hunkered down preparing for it. Justice officials tell us he's staying behind closed doors, canceling a family vacation, and will go through mock grilling sessions, possibly with outside legal advisers.

As if to ratchet up the pressure, Senate Judiciary chairman Patrick Leahy sent Alberto Gonzales a letter scolding him for "not responding in a timely manner" to the committee's inquiries, and instructing him to include in his written testimony "all the specifics of your role in firings."

We're also told Gonzales is reaching out to at least a dozen members of Congress to smooth the way. Most of them are Republicans. But analysts say he's on shaky ground with them as well.

(BEGIN VIDEO CLIP)

DAVID WINSTON, GOP CONSULTANT: You've begun to see some Republicans in the Senate wanting to get a better understanding from this attorney general of why he can't come up with what happened. And that's where it's at, at this point. He has been unable to clearly define the sequence of events.

That has been consistent. And he's in trouble as a result of it.

(END VIDEO CLIP)

TODD: In fact, other GOP consultants tell us what Gonzales says in the coming weeks and how it's received will be crucial to his support in Congress. One of them said, "He has a tall order. It has to be a compelling presentation."

Lou.

DOBBS: And a persuasive, one would imagine, explanation for his words over the course of the past couple of weeks.

Thank you very much.

Brian Todd from Washington.

These stories still ahead.

Twenty-eight million dollars, is that too much money for four months' work of work for a CEO, while the company posted billions of dollars in losses and thousands of employees face layoffs?

And the call for tough action in the national crisis over alcohol abuse usage in our colleges and universities.

And more pet food is being recalled tonight in the scandal over toxic pet food from communist China.

We'll have the latest and a great deal more when we continue. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Three Yale University students tonight are facing charges of burning the American flag. The three were charged with reckless endangerment and arson.

One of those three men claims the flag-burning was a prank and not politically motivated. The other two men say they are simply innocent.

Two of them are foreign nationals. One from Britain, the other from Greece. They were ordered to turn over their passports. The third is an American citizen born in Pakistan.

Three states are now introducing legislation to crack down on excessive drinking in our nation's colleges and universities. The action follows a release of what are simply stunning figures from the National Center on Addiction and Substance Abuse, finding that almost half of all full-time college students are abusing alcohol and drugs.

Christine Romans has our report on "The War Within".

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): The public health crisis of dangerous college drinking, so far this year it's the subject of bills in three states. In Massachusetts, a bill to ban alcohol on state campuses, even for students 21 and older. In Florida, one measure requires state universities and community colleges prepare annual reports on drug and alcohol use on campus. In New York, Assemblyman Jeffrey Dimowitz wants to ban alcohol sales and ads at state and city university athletic events.

JEFFREY DINOWITZ (D), NEW YORK STATE ASSEMBLY: Obviously, these events are attended by many students and many non-students who are also young. And we don't want to encourage people to drink.

ROMANS: Some of these measures face long odds. Alcohol sales at games provide states with vital revenue. And the ACLU opposes bans on alcohol advertising, to say nothing of a cultural acceptance of dangerous drinking.

MATTHEW GEVER, NATIONAL CONFERENCE OF STATE LEGISLATURES: They see college presidents and parents and other people involved in the university system just not doing anything. But the lawmakers think, you know, if they're not going to do it, then we're the last resort. So we should step in and do something.

ROMANS: Lawmakers at least sending a message to what the National Center on Addiction and Substance Abuse calls "... these Pontius Pilate presidents and parents, deans, trustees and alumni" who "have become part of the problem..."

(END VIDEOTAPE)

ROMANS: Because cultures and enforcement vary so much from campus to campus, lawmakers say they'd like to see statehouses set standards for reporting campus substance abuse trends, and to work towards shrinking that estimated 40 to 49 percent of college students who are binge drinking or using drugs -- Lou.

DOBBS: That's an astounding figure. Almost half the students doing that. I mean, that's -- we've moved beyond permissive to utterly mad behavior.

ROMANS: And (INAUDIBLE) says it is that intensity of drinking that is really, really troubling. Even where you're seeing static numbers in overall drinking, or new kids trying drinks earlier. That the intensity and the frequency of that heavy drinking is what -- kids are drinking to get drunk. Over and over again, these experts who study this sort of thing say that it's a real problem.

DOBBS: And as you report, I mean, this permissiveness has become a cultural and a social acceptance of this kind of conduct. It's hard to explain.

It's just grown over the last couple of decades to these kinds of proportions. You don't hear much about binge studying, do you, on American campuses?

ROMANS: No, you don't really hear a lot about binge studying.

DOBBS: I wonder if there's any correlation.

Thank you very much.

Christine Romans.

A new study suggests the risky behavior of our teenagers is a result of immature brains. The study concludes that stricter laws and other rules would be far more effective in reducing risky behavior than education programs in controlling teen behavior.

The Temple University psychologist who authored this report says straight up, "Adolescents are at an age where they do not have the mental capacity to control themselves. As adults, we need to do some of the controlling."

And some of the ways under consideration to control teen behavior, as Christine Romans was just suggesting, among them, raising the driving age, increasing the price of cigarettes, and far stronger enforcement of underage drinking laws.

Up next, we'll have the latest on the threat to your pets, how to protect them as this pet food scandal and recall widens.

Senator Barack Obama's fund-raising success bolstering his campaign hopes. But will it be the money or the message that ultimately determines who the nominees of the Democratic and Republican parties are? And $28 million for four months of work, is that just a little too much for a CEO? Well, we'll try to answer that question here.

And there will be a great deal more as well when we continue. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Ford Motor Company posted a record $12.7 billion in losses last year. Yet, it's CEO, Allen Mulally, was paid $28 million for just four months of work last year.

While Mulally was handsomely compensated, to say the very least, 38,000 Ford workers were given out buyout packages. And 14 Ford plants are now scheduled to be closed.

Mulally's compensation package also includes access, of course, to corporate jets for his business and personal travel. It's a perk that costs the company hundreds of thousands of dollars additionally each year. And it's also a pretty good -- maybe the record for four months worth of work.

More proof tonight that business is fragrantly abusing America's visa program to replace hard-working Americans with cheap foreign labor. U.S. Citizenship and Immigration Services now reports that big business snatched up the annual quota of 65,000 new H1B visas for foreign worker visas in just one day this week.

As Bill Tucker now reports, corporate America wants even more cheap labor entering the country.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice over): H1B workers are irresistible to American business. Claims by the corporate elite that it's not about the cheap labor don't ring true.

A soon-to-be-released study from the Center for Immigration Studies finds that wages reported for H1B workers averaged $12,000 below the median wage for the U.S. worker in the same occupation and in the same location in 2005. It was $16,000 less for computer workers. No wonder America's richest man recently told Congress the program should be expanded.

BILL GATES, FMR. CEO, MICROSOFT: I don't think there should be any limit.

TUCKER: What Bill Gates knows and isn't saying, but what a former director at ICE will say is that for some, there is no limit.

VICTOR CERDA, FMR. CUSTOMS ENFORCEMENT DIR.: Homeland Security is announcing that the cap was met, the 65,000 cap. That doesn't include necessarily the 20,000, the first 20,000 who earned masters degrees in U.S. universities. They're excluded.

TUCKER: Also excluded are universities and nonprofit research organizations. They are unlimited.

Nor do H1B workers call in any one category. All the worker needs is a college degree. Even fashion models can apply. The biggest group under the cap are tech workers.

The United States Citizenship and Immigration Service recently released data on H1B approvals in 2004 and 2005. Nearly 117,000 visa applications were approved for the fiscal year 2004, 130,000 for 2005. Both years a far cry from 65,000.

And a company doesn't have to be American to apply.

KIM BERRY, THE PROGRAMMERS GUILD: The industry's created this perception that there's this great need, and that's why we bring in the workers. What's happening, the top three users are foreign consulting firms. First, they bring in the workers, and then they aggressively try to find work for these workers.

TUCKER: Those three companies are India's Infosys Technologies, Wipro, and Cognizant Technology Solutions.

(END VIDEOTAPE)

TUCKER: And as you might expect, India's National Association of Software and Services Companies was quick to complain.

The organization, known as NASSCOM, is made up of 1,100 companies in India, many of whom make their money off work outsourced to India, and engineers working on H1B visas. NASSCOM thinks the cap should be large enough for "market forces to operate freely," Lou, as it did when the cap was 195,000, just about three years ago.

DOBBS: You know, it's a competitive world. I give those Indian companies all the credit in the world.

TUCKER: Absolutely.

DOBBS: My complaint are with the idiots who run the United States government and who permit this kind of conduct. I mean, I love the fact that we can't even control the number of H1B visas. Even with the cap, they overrun it by, say, double.

TUCKER: Right.

DOBBS: Which is ludicrous to begin with.

No one really has a clear count on the number of these visas out there, or how many people are still in the country with them. That's your Citizenship and Immigration Services at work.

And then you have people like Bill Gates saying it should be unlimited. Guess what, Bill, old buddy -- it is unlimited the way this government is operated. And the people being punished, American workers as a result.

TUCKER: And it's not like we don't know, Lou. There have been studies going back to 1995 from the government telling us that.

DOBBS: Well, and they were supposed to be, by the way, providing accurate reporting on that every year since. But mysteriously, that just has not quite happened.

We should point out -- you mentioned those three Indian companies. We should point out that 70 percent of -- 70 percent of all of those visa applications are originating with those Indian corporations. Those aren't American corporations seeking those workers.

Now, the other side of this is, I'm thrilled to have some people in this country who want to come here, even temporarily, who have college educations and can provide necessary skills. But if corporate America really wants to back it up, and if those fine folks from India want to back it up with emphasis, (INAUDIBLE), and so forth, maybe they ought to lift their wages up to the prevailing American wage, and then we wouldn't be so skeptical of their intent.

Bill Tucker, thank you very much.

These son of a guns. We'll get them.

Coming up next, the latest on a widening pet food scandal.

Also, outrage after the White House bypasses Congress using recess appointments to fill top government jobs with some highly controversial candidates.

And Senator Hillary Clinton, Senator Barack Obama, they've got huge war chests for their campaigns. Will all of that money pay off?

We'll have a special report.

And new evidence that illegal immigration and border security is -- the failure to provide border security and port security is costing American taxpayers hundreds of billions. We'll examine the facts of our illegal immigration crisis here tonight.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Senator Hillary Clinton and Senator Barack Obama are only just $1 million apart on the campaign fund-raising so far. But supporters of Senator Barack Obama says that's enough to bolster his credibility. Bill Schneider reports now on how the money may shape the campaign.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN CORRESPONDENT (voice-over): What do the first quarter fund-raising totals tell us about the Democratic race? That Hillary Clinton and Barack Obama are in a class by themselves. By nearly matching Clinton in total contributions, Obama proved his campaign is no pickup team. He argues money follows message. SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: It's the candidate that raises the most money. But a lot of times, it's the candidate who has the best message and then the money follows.

SCHNEIDER: Obama's message is strongly anti Iraq War. But he also appeals to a longing for unity in the country. It's a rare combination. It seems to be working. Meanwhile, Senator Clinton says ...

SEN. HILLARY CLINTON, (D) PRESIDENTIAL CANDIDATE: I'm proud I have such strong financial support from across the country with so many donors believing in my campaign.

SCHNEIDER: The first quarter tends to be easy picking for fundraisers. The second quarter is when it gets tough. You need to show sustainability. Obama looks well positioned to do that. His contributions came from twice as many individuals as Clinton's did and in smaller amounts. He can go back to them for more. But Clinton has some advantages too.

DAN BALZ, "WASHINGTON POST": He's trying to energize a group of people who don't necessarily always participate in the process but who are hungry for something different. I think she is going more for what you would call kind of the core Democratic constituencies who often have been instrumental in helping somebody win a nomination.

SCHNEIDER: And she has a powerful weapon when it comes to raising money. Her husband. The candidate who raises the most money, doesn't necessarily win the nomination. Ask Howard Dean who raised more money than any other Democrat in 2003. You need enough money to cross the threshold of credibility, to get your name known and your message out. What's different for 2008?

BALZ: I think the difference this time around is that the threshold seems to be much, much higher than it's been in the past.

(END VIDEOTAPE)

SCHNEIDER (on camera): Clinton and Obama are on track to raise $100 million each by the end of this year, and, Lou, this just in, in the 24 hours following Obama's announcement yesterday morning of his first quarter fund-raising he raised 435,000 more on the Internet. Most from new contributors.

Each of the two major party candidates is likely to raise and spend as much as $500 million by the end of the campaign in November 2008. Our first billion dollar election. Lou?

DOBBS: Do you think that's something we ought to be proud of?

SCHNEIDER: Well, let me try to put that in perspective. I checked this figure, Procter & Gamble spent over $3 billion last year on advertising. So is $1 billion too much to elect a president? I don't know.

DOBBS: Yeah. That's not the only question, I guess, I've got, Bill, here. I've also got a question about why does it take all of that money to do something that is at its foundation pretty simple. And that's to put yourself before the American people with very specific statements of policy and positions. And try to get something done.

I think it's -- it's a little concerning when we're judging candidates based on how much money they're raising. It sort of feeds into this whole thing. We know it cost $2.6 billion just for the mid- term elections last year. A lost that money coming from corporate America. It's going to be fascinating to see what this money will buy in 2008. You could probably do a fair test in this country. And most Americans wouldn't think they're getting their money's worth.

SCHNEIDER: That, I wouldn't quarrel with. But it does take a lot of money to get yourself well-known. It's a very big country. One of the biggest expenditures that the candidates have is making their names familiar to lots of Americans. To do that, you got to go on television. You do that either by making some sort of media sensation or by spending money on advertising.

DOBBS: I guess you can put me under the column of cranky idealist on this sort of thing.

Thank you very much.

SCHNEIDER: Sure.

DOBBS: Bill Schneider.

Republican contender Mitt Romney is backtracking a bit today. In campaign appearances, Romney has boasted about his life long experience, as he put it, as a hunter. But it turns out he's only been hunting twice. Once when he was 15. Once last year.

In a video posted on YouTube, former House Speaker Newt Gingrich delivered a statement in English and Spanish clarifying recent remarks he made about bilingual education. Gingrich concedes his choice of words was poor. And his comments were not an attack on Spanish.

The fact is I happen to agree with part of what he said in terms of the idiocy of having so many languages on a ballot and we should be an English as official language nation. But his choice was worse than poor. They were pathetic.

As we reported earlier here on the broadcast, states are now introducing legislation to crack down on excessive drinking in our nation's colleges and universities. That's the subject of our poll tonight. Should state legislatures enact legislation that would ban alcohol sales and advertisements on public university and college campuses, yes or no? Cast your vote at loudobbs.com.

We'll have the results here later in the broadcast.

Up next, an American citizen turning over military secrets to communist China. Just how substantial is the damage to our national security? And startling numbers on the true cost of illegal immigration. We'll hear from the author of a new study. And Congressman Bill Bilbray, head of the Congressional Immigration Caucus joins us. Stay with us for that and a great deal more. Straight ahead.

(COMMERCIAL BREAK)

DOBBS: New information tonight about the tremendous financial cost of our illegal alien crisis. A new report finds illegal aliens are costing the country $100 billion a year. The report estimates that if the Flake-Gutierrez guest worker program should become law or so-called comprehensive immigration reform. It would cost taxpayers $400 billion over the next decade.

The report is entitled "The Fiscal Cost of Low-Skill Households to the U.S. Taxpayer." Robert Rector is one of the authors, a senior fellow at the Heritage Foundation, joining us tonight from Washington, DC. Congressman Brian Bilbray, is chairman of the Immigration Reform Caucus, a leading critic of the Flake-Gutierrez immigration bill. Joining us tonight from San Diego. Thank you both for being here.

Let's very quickly put up the costs of this, as you have determined it, Robert. You are putting up as a simple straightforward fact that there are 17.7 million low-scale households. Not all of these, obviously, are filled with illegal aliens in this country. The total fiscal deficit for awful these households totaling $397 billion.

I mean, at what point, with an annual -- this creates an annual fiscal deficit of nearly $400 billion. Or almost $4 trillion over 10 years. Now, of course, some of that money is necessary to spend because these are American citizens who have not been able to move into a higher income bracket, who are poor, who are struggling, in many cases. What percentage do you believe is due to illegal immigration?

ROBERT RECTOR, HERITAGE FOUNDATION: It's not just illegal immigration. It's the legal immigration system as well, is focused on bringing in people without a high school degree. And I would estimate that legal and illegal immigration is costing taxpayer through these low-skill immigrants about $100 billion a year. About a quarter of that total.

Increasingly, the low-scale part of our population is a part that we're deliberately importing. We've imported over 11 million high school dropouts in the last 20 years. They cost the taxpayers a bundle.

DOBBS: Well, Congressman Bilbray, how do you react to that? I'll tell you, I'm far less concerned with as a matter of legal immigration we're bringing in people with skills an education, one assumes so that we're doing so out of a sense of the national interest and our needs of a nation. But the illegal immigration is perplexing at the very least, isn't it?

REP. BRIAN BILBRAY, (R) CA: Well, this study really shows why we spend billions and billions. We try to reduce the number of people who are undereducated, under-trained. Because they don't have the ability to produce the resources to be able to pay for the overhead that you have.

And then when you have people that stand up and try to justify illegal immigration that we need more poor, uneducated people in the country, the Heritage Foundation sort of re-enforces that this is an issue that goes beyond legal and illegal immigration. It's a concept that we should try to get those paying a major portion of the expense of what they produce.

We're really talking for every illegal immigrant family in this country, we're giving them the equivalent of a brand-new mustang convertible every year. That's something that I think we've got to recognize is the real expense of illegal immigration.

DOBBS: Robert Rector, let's put up this chart of showing the cost of low-scale workers. And this is an interesting way to look at it. They pay under $10,000 in taxes. Yet, they receive more than $32,000 in benefits.

The tax burden, obviously, is the difference between the two. And that is an impressive number. But it rises to over $1 million over the lifetime of such workers.

There's another way to look at this. It seems to me, Robert Rector. And that is if low-skill workers are being brought in by corporate America, what they're really doing is pushing the burden of providing for those low-skill workers, particularly, illegal immigrant, off on the American taxpayer, so that the company, the employer of those illegal aliens won't be paying that 32 -- or $22,000, and the difference, if we can assume that, each year.

RECTOR: That's exactly right. When the Chamber of Commerce will come to me and lobby and say, oh, we have to have these workers. We'd have to pay a dollar an hour more if we didn't have them.

I say, look, each one of these workers that you bring in like this, if they come in with family, it's costing the taxpayers $22,000. Do you as an employ want to pay that cost? They say, oh no, no. We don't want to pay that.

They just want to shift those costs onto the taxpayer so they can make a tiny bit more profit. It's a terrible, terrible idea. And we have a very generous system for people born in the United States, we support them through welfare. We subsidize their Social Security. We give basically free education for their kids.

But what we really have now is a kind of trans-national welfare outreach where we're pulling more welfare recipients into the country.

DOBBS: And of course the Bush administration right now is upset with those folks out in California who are giving away birth control pills to illegal aliens. That's what seems to concern them rather than $400 billion. Let me ask you this, Congressman Bilbray, we have to wrap up, Robert Rector just mentioned the Chamber of Congress, the country's biggest big business lobby, wants to push all of those costs for low-skill labor off on, illegal labor, of an the American taxpayer.

What do you say to a group of people who are telling -- all over Congress saying to you guys we need to bring in the illegal aliens because we need people to pay for the Social Security for the baby boomers. Do they not look at any of the facts, any of the empirical basis, the underlying reality of this country's experience?

BILBRAY: Lou, I had them in my office last week, we had, let's say, a brisk discussion about this, what I like to call the shift and the shaft. And no, the excuse really is the fact that it's good for us right now and our group. And they don't look at the long-term impact. Especially the impact not just on our budget and our fiscal crisis that we've run into in this country.

But what about our grandchildren's fiscal stability. This is not sustainable as we would say in the environmental community. It's one of those things that people are saying just give me what I want right now. I don't care about the long-term impacts to the nation.

DOBBS: And they don't really care about the short-term impact either. Suggesting that we need more of these workers. At the same time, wages in construction, landscaping, leisure and hospitality, the predominant industrial employers of illegal aliens, all of the wages are declining there over the course of the past five years. Putting a lie to just to about everything that's been said on behalf of illegal immigration.

Robert Rector, we thank you very much at the Heritage Foundation. And we thank you very much, congressman Brian Bilbray.

BILBRAY: Thank you, Lou.

DOBBS: A reminder now to vote in our poll. Should state legislatures enact legislation that would ban alcohol sales and advertisements on our public university and college campuses? Yes or no. Cast your vote at loudobbs.com. We'll have the results here coming up in just a few moments.

Up next, the pet food recall is widening. We'll tell you how to protect your pets and protect them from tainted pet food. And we'll also have some ideas for you on what you can do for them.

We'll have the latest as well on a naturalized American citizen now charged with conspiring to steal American naval technology for China. Acting as an agent to the communist Chinese government. Stay with us.

(COMMERCIAL BREAK)

DOBBS: New development tonight in the widening pet food crisis in this country. Another company tonight recalling pet food because of the toxic wheat gluten imported from China. Sunshine Mills, recalling several of its dog biscuit brands which include some of the Nurture and Pet Life products, as well as some of its private label brands including Champion and Ol' Roy. China is for its part denying any responsibility for the tainted wheat gluten. Beijing, in fact, says it has no record of exporting the wheat gluten that has been linked to the deaths of cats and dogs in the country.

The Chinese company that made the wheat gluten is investigating the crisis, but says it sells most of its products within China.

Separately the Food and Drug Administration tonight is warning consumers not to use American Bully Pet Chews because they might be contaminated with salmonella.

Now we'd like to help you pet owners identify the products that are safe for feeding to your animals. And here's a partial list of the products that are not involved in this recall. Their manufacturers are assuring customers that the products are safe.

All Purina dry dog and cast food. All Royal Canin brands. All Premium Edge pet food products. All Breeder's Choice products. And all Solid Gold pet food. These manufacturers all say their foods are safe.

The Natura brand products. Canidae products. The entire line of Wellness brand products. The Newman's Own line of pet food and cat food brand Whiskas.

And a reminder, we're posting this information with a list of safe brands on our Web site, loudobbs.com. When we say safe, the manufacturers are assuring us and you that they're safe. I wish we had the testing facilities to give you that certainty ourselves.

But we thought it would be helpful to give you the many types and varieties of pet food brands and products everything from parakeets to poodles and Persians. This is the best we can do. And we hope it is helpful to you.

You'll also find which ingredients to look for in pet food. As well as links to both the FDA and the American Veterinary Medical Association. So we do hope it's helpful to you. Loudobbs.com.

Turning to the trial of a spy for communist China, that trial is under way in Southern California. The case is being called the most important espionage case in a generation in this country.

As Casey Wian reports, Chi Mak is accused of giving the Chinese sensitive U.S. military information and technology that could be used against this country's interests.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Former defense industry engineer Chi Mak spent more than two decades at Navy sub contractor Power Paragon in Southern California. Federal government prosecutors say during much of that time Mak was secretly transferring restricted technology to the communist Chinese government. The 66- year-old naturalized U.S. citizen faces five charges, conspiracy to violate export control laws, two counts of attempting to export a defense article to the People's Republic of China. Acting as an agent to the foreign government and making false statements to the FBI.

Mak is accused of trying to send technology about the Navy's quiet electric drive program for submarines and warships to China.

MICHAEL PILLSBURY, PENTAGON CONSULTANT: We don't actually have a quiet electric drive yet. This is another example of future weapons technology that the U.S. is working on. It's extremely important because if a submarine can have its signature concealed so that it cannot be found and located. Then the submarine cannot be attacked.

WIAN: Prosecutors say Mak also admitted to investigators he passed information to China on a system to launch aircraft off of carriers using magnets. A power system for naval radar, a paper on warships ability to operate after being attack and a map of a nuclear facility in New York.

And also in his home, they found hundreds of documents related to navy research projects. Some marked "restricted from foreign distribution." Those documents corresponded to tasking lists in Chinese found in Mak's home and trash.

The documents included information on intercontinental ballistic missile interceptors, a nuclear submarine reactor, electromagnetic guns and torpedo launchers. Mak's defense attorneys say prosecutors are trying to make a statement because they have lost other recent Chinese spy cases.

RON KAYE, DEFENSE ATTORNEY: I think that they are taking multiple pieces of evidence and spinning it in a very suspicious, nefarious way. But ultimately, we anticipate that we'll be able to show the truth to the jury. To show them exactly why our client was loyal to the United States. And did not -- was not an agent of the People's Republic of China.

WIAN: State Department counterintelligence official Joel Brenner says the Mak case is significant because the technology he allegedly passed, quote, "shortens by years the technological advantage of the U.S. Navy. It degrades the Navy's deterrent capability I in the Taiwan Strait."

(END VIDEOTAPE)

WIAN (on camera): Brenner also says that China is in effect using American taxpayer funded research to bolster its own war- fighting capabilities. The Chinese government denies it stole U.S. military technology. Lou?

DOBBS: It's interesting. Amongst all of those charges, it doesn't say espionage.

WIAN: So, that is very clearly not in the original -- the charges, that he is facing. The government has not charged that he's a spy for the government of China. They've charged that he's violated export control laws. Charged that he has transferred sensitive data to the government.

DOBBS: How long was this investigation, Casey?

WIAN: Two years. Two years.

DOBBS: Well, keep us up to date on this critically important case. We thank you very much. Casey Wian, from Santa Ana, California.

For more now, I'm joined by Michael Pillsbury. He's a Pentagon consultant. Joins us from Washington. Very familiar with this case. Michael, good to have you with us.

PILLSBURY: Hi, Lou.

DOBBS: Are you surprised there's no espionage charge given all the charges against Chi Mak?

PILLSBURY: No, espionage is a very clear violation of the law of which you're stealing classified documents that are stamped secret or top secret, and you're being run by a foreign intelligence service to do that. This seems to be very different from that.

DOBBS: How so?

PILLSBURY: Well, he's apparently has been passing information that is not stamped secret or top secret. But the government witnesses are going to say that it should have been classified. Or that it is technology information that requires an export license in order to provide it to a foreign government.

DOBBS: Now, Michael, I guess it seems almost everywhere we turn these days, the most recent estimates, over 3,000 front companies from China. The People's Republic of China that are working in industrial espionage. By the way, they're not the only country to be doing it, of course.

But it seems that there is always a stage in this country right now, in the administration, the operation of this government, where you have to just scratch your head. If these are such critical documents and the knowledge is so sophisticated. And critical to the interests of the United States, why in the world would they not be better protected?

PILLSBURY: Actually, it's fairly common not to stamp secret or top secret on materials. Everyone sort of knows are sensitive and could cause damage to the country if they're disclosed to the wrong person.

DOBBS: OK. I'm not sure that really answers the question, though, Michael. Just because you don't stamp it, why in the world would you not protect that kind of information?

PILLSBURY: Well, part of the government's case here is that Mr. Mak had training in just how to protect the information that's in the category that he gave away. So what I find sinister here is the Chinese government has agreements with our government in which we provide them science and technology information openly.

They also have the benefit of a very lax export control system. So they're sort of being greedy here and going a bit further to get really sensitive material.

DOBBS: Well, they seem to be greedy or nefarious. And we seem to be either negligent or outright fools. Let me ask you this, how do you think this case will turn out, in your judgment?

PILLSBURY: There's a chance for acquittal because the whole case depends on how persuasive the government witnesses are.

DOBBS: Right.

PILLSBURY: In saying this really was damaging material even though it wasn't stamped secret or top secret.

DOBBS: Your judgment is it was vastly damaging?

PILLSBURY: Yes.

DOBBS: Michael Pillsbury, Pentagon consultant. We thank you very much. Appreciate it.

Coming up next, the result of our poll, how many of you think that there should be legislation banning alcohol sales and advertisements on our public universities and college campuses? We'll have that and more, straight ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight, interesting. Seventy- three percent of you say state legislatures should enact legislation to ban alcohol sales and advertisements on our public university and college campuses.

We thank you for being with us tonight. Please join us here tomorrow when among our guests will be Congresswoman Nancy Boyda, who wants to block efforts to give amnesty to illegal aliens in this country.

From all of us here, thanks for watching. Good night from New York. THE SITUATION ROOM begins now with Suzanne Malveaux.

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