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Lou Dobbs Tonight

Bush's Grim Warning: Heavy Fighting to Come in Iraq; Dems in Disarray Over War Funding; Chaos in Iraq

Aired May 24, 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, President Bush accusing Democratic presidential candidate John Edwards of naivete on the issue of global terrorism after the former senator said the president has made the country less safe.
Is this election campaign turning nasty already?

We'll have the story.

Also, the Democratic leadership in Congress facing revolt. Will congressional Democrats remain united on ethics reform, war funding, immigration?

We'll have that report.

And CNN has obtained an explosive memo written by a top aide to Hillary Clinton advising Clinton to miss the Iowa caucuses. We'll see what is in store for the senator.

We'll have that story.

And two leading Senate opponents of the Senate's grand amnesty compromise, Senator Jim Bunning, Republican, Democrat senator Ben Nelson are among our guests here tonight.

Join us for all of that, all the day's news, and much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, May 24th.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

We begin tonight with a grim warning by the president about the war in Iraq. President Bush today said there will be heavy fighting in the weeks ahead and more American casualties. The president said the summer will be a critical time for the future of this war.

President Bush's remarks came just hours before an expected congressional vote on war funding. That vote likely to expose sharp differences of opinion among Democrats.

Suzanne Malveaux reports now from the White House and the president's blunt warning.

Dana Bash reports tonight from Capitol Hill on the disarray in the Democratic Party.

And Jamie McIntyre reporting from the Pentagon on the changing U.S. military strategy.

We turn first to Suzanne Malveaux at the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, as you know, the president has been under tremendous pressure to bring U.S. troops home. The administration looks at this Iraq funding bill as really a victory because it contains no timeline to bring those troops home, but it is also a short-term victory as officials acknowledge here they know the Democrats are going to hit them hard again, another fight for funding come the fall. And also, the president acknowledging today that he believes that the violence will increase.

(BEGIN VIDEOTAPE)

MALVEAUX (voice over): Today Mr. Bush warned Americans of more bloodshed this summer.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're going to expect heavy fighting in the weeks and months. We can expect more American and Iraqi casualties. Yes, it could be a bloody -- it could be a very difficult August.

MALVEAUX: But Mr. Bush tried to reassure Americans the fierce sectarian fighting is only short term.

BUSH: Certainly there's been an uptick in violence. It's a snapshot, it's a moment.

MALVEAUX: Mr. Bush used a new tact to illustrate the terrorist threat he believes Americans will face if the U.S. fails in Iraq by personalizing it for reporters.

BUSH: They are a threat to your children, David.

And it's a danger to the American people. It's a danger to your children, Jim.

MALVEAUX: Without naming names, the president accused his war critics of being uninformed. Yesterday, Democratic presidential candidate John Edwards dismissed the war on terror as simply a Bush slogan.

BUSH: And this notion about how this isn't a war on terror -- and my view is naive.

MALVEAUX: But recognizing that his view is losing public support, the president pointed to his top general in Iraq as the man who will be assessing Iraqi progress by a September deadline. The president has consistently opposed any deadlines because he says it would signal U.S. strategy to the enemy.

BUSH: It's his decision to give the assessment.

MALVEAUX: Even before that assessment, the administration is now planning for what comes after the troop increase. The president was asked, in fact, whether it was a plan B.

BUSH: Actually, I would call that a plan recommended by Baker- Hamilton, so it would be a plan B.H.

(END VIDEOTAPE)

MALVEAUX: Lou, that would be the Baker-Hamilton plan. It's a strategy that was presented to the president six months ago that was largely rejected -- Lou.

DOBBS: Suzanne, thank you very much.

Suzanne Malveaux from the White House.

The Democratic leadership facing a major test over the war funding bill. Many Democratic congressmen are expected to defy the leadership and vote against those new war funds. Anti-war Democrats say they feel betrayed because the legislation doesn't contain a timetable for withdrawal.

Dana Bash has the report from Capitol Hill.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice over): Make no mistake about it. Democrats are not happy about giving in to the president's demand for a war spending bill with no timeline for withdrawal.

REP. JIM MORAN (D), VIRGINIA: The Democratic leadership is allowing his bill to pass because, unlike the president, they will not leave our troops unprotected in battle.

BASH: In fact, opposition to Iraq has grown so intense...

REP. JAMES MCGOVERN (D), MASSACHUSETTS: Just show me the money -- that's all he wants. Mr. Speaker, I simply can't support it.

BASH: Most House Democrats plan to vote against funding the war with no plan to end it. Even the Democratic chairman who wrote the bill.

REP. DAVID OBEY (D), APPROPRIATIONS CHAIRMAN: I hate this agreement. I'm going to vote against the major portion of this agreement, even though I negotiated it, because I think that the White House is in a cloud somewhere in terms of understanding the realities in Iraq.

BASH: But many Democrats are torn, reluctant to withhold funding for troops in harm's way. Freshman Tim Walz rode in to Washington on a wave of anti-Iraq sentiment. His Minnesota constituents have been pleading with him not to fund the war.

REP. TIM WALZ (D), MINNESOTA: Well, they're saying, don't give him the money. They are saying that loud and clear.

BASH: But up until two years ago, Congressman Walz was Command Sergeant Walz, a 24-year veteran of the Army National Guard, so he's defying his constituents, voting to fund the troops even though there's no plan to bring them home.

WALZ: It's gut-wrenching, because I have to take care of these soldiers. I have to make sure they get the money.

BASH: Many Democrats call the funding bill another blank check for the war, but it does have conditions. If Iraqis don't show political and military progress, the measure threatens to cut off their economic aid and forces the president to revise his Iraq strategy.

So, this funding measure may not have a timetable to bring troops home, but the president will, for the first time, get and sign a funding bill that does directly challenge his Iraq policy. And we do expect it to pass Congress with significant Republican support. So this is a significant change when we are talking about the politics and the dynamics of the debate here when it comes to Iraq -- Lou.

DOBBS: Thank you, Dana.

Dana Bash from Capitol Hill.

Defense Secretary Robert Gates today said insurgents are trying to influence decisions on possible withdrawals from Iraq. The top U.S. commander and the U.S. ambassador to Baghdad will present their report on the effectiveness of strategy in Iraq in September.

Jamie McIntyre has the story from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): With more than 80 U.S. deaths so far, May is coming close to April's toll of 104, ranking it as one of the deadliest months of the Iraq war.

The U.S. troop buildup was supposed to hold violence down to build political reform. But there are conflicting numbers about whether it's working.

Health Ministry statistics cited by "The Washington Post" suggest sectarian murders are again on the rise, with the number of unidentified corpses in the Baghdad morgue about the same as before the U.S. crackdown. Just over 300. But the Pentagon insists overall deaths in Baghdad are trending down from 1,400 in January to 800 in February, and averaging about 500 a month in March, April, and so far this month.

ROBERT GATES, DEFENSE SECRETARY: We think there's some positive things going on. I think we're being very careful not to indulge in happy talk or to be optimistic when there are grounds not to be.

MCINTYRE: Gates said the much anticipated September report will be an important contribution to an overall evaluation of how things are going in Iraq, but that any decision on whether to change course is going to be up to President Bush.

(END VIDEOTAPE)

MCINTYRE: And Lou, at that Pentagon briefing, Secretary Gates said he's as impatient as anyone for this situation in Iraq to take a more positive turn. He said perhaps even more so because, he said, he would give anything to stop writing the condolence letters he's writing. But again, he pleaded for patience for this current strategy to play itself out -- Lou.

DOBBS: Jamie, thank you.

Jamie McIntyre from the Pentagon.

And worsening violence in the Middle East. Heavy gunfire interrupted a two-day-old truce between the Lebanese army and radical Islamists in the northern Lebanese city of Tripoli.

Meanwhile, Israel tonight carrying out a series of air strikes against radical Islamist terrorists in Gaza. One of the targets, a home used by the Palestinian prime minister. Those air strikes followed repeated Palestinian rocket barrages against southern Israel.

And Iranian president Ahmadinejad today told Israel that Israel would be uprooted, as he put it, if Israel were to attack Lebanon this summer. This just the latest assault against Israel by the Iranian president.

Meanwhile, the United States has begun major naval exercises in the Persian Gulf. Close, of course, to Iran. Two U.S. aircraft carriers at the center of that fleet taking part in these extensive maneuvers.

Joining me now, General David Grange, one of the country's most distinguished former military commanders.

First, General Grange, what do you make of the new, new strategy?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, I'm not sure it's a new strategy. I think it's a strategy with a shift in priority.

Priority going with trying to set up some kind of collaborations to co-op people not to fight and to get along with each other with some type of truce, even if it's fragile, and then going after the enemy to kill them as the second priority. And I believe it makes sense.

DOBBS: Is this a winnable conflict under the terms of this new strategy or shift in priorities within the old strategy, as you put it?

GRANGE: I believe it is. The problem we're going to have, again, Lou, as we've talked before is patience and time. And I don't know if we have that in this type of a conflict.

And I believe that it can work if there's the commitment, the true commitment, not just fence-sitting by Iraqi government officials, and we maintain a will and we do something about the influence of Iran. Yes, I do.

DOBBS: Well, contextually, of course, when we talk about patience and time, the military commanders, the general staff of our forces in Iraq and in the Pentagon, have squandered four years of opportunity. And the civilian leadership, of course, doing even worse.

At what point is it reasonable to say that this is -- this is simply a failed approach and that we have to reconsider our involvement, period? Is September soon enough?

GRANGE: Well, I think in September we're going to have, I think, a pretty valid report with new command structure on the ground, a new strategy, additional resources. So I think an honest assessment can probably be made at that time.

However, you know, like you said, years were lost. I don't know about four, but at least two years were lost because of leadership failures and not being resourced to the level they should have been resourced at.

And as you know, and we've discussed before, counterinsurgencies take about 10 years to 12. They have been historically successful. And so I'm not sure we have that kind of time. But I do think that progress is being made, though it be very small.

DOBBS: General David Grange, thank you.

Coming up here next, President Bush declares the grand compromise on the immigration legislation is most definitely not, he says, amnesty. And in so doing, the president is contradicting many of the most respected Republicans in Congress.

We'll have the story.

Also tonight, CNN has obtained a memo about Hillary Clinton's presidential election strategy. Is Iowa in or is it out?

And Congress declares it's serious about wanting to end the culture of corruption in Washington. Really? Is it really business as usual, or is this real reform?

We'll have that story, a great deal more, straight ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: CNN has obtained an internal memorandum from the Clinton campaign urging Senator Clinton to skip the Iowa caucuses, but the candidate herself, she says Iowa is on her schedule.

Candy Crowley has the report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Big developing caucus 2008 news for you now: Will Hillary Clinton skip the Iowa caucuses?

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): Heartburn at Camp Hillary, after an internal memo spilled into the public domain.

"My recommendation," wrote Clinton's deputy campaign manager, "is to pull completely out of Iowa, and spend the money and Senator Clinton's time on other states."

Whoa. Skip Iowa? This is heresy in the state which holds the first-in-the-nation contest of the primary season. Iowa likes its presidential candidates early and often.

GOV. BILL RICHARDSON (D-NM), PRESIDENTIAL CANDIDATE: You have a great gift. And the gift is that you are the first arbiter of who the president should be.

CROWLEY: Iowa, to which they all pledge allegiance.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I was here in Mason City once before. And I was privileged, really. And I say this with all sincerity. What a beautiful, beautiful place this is.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: This is just the first of many visits that I'm going to make to Cedar Rapids. So...

(CHEERING AND APPLAUSE)

CROWLEY: All of them pledge allegiance.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: But I just want to pledge to you that I will be here over and over again.

CROWLEY: Bowing out of Iowa would be one way to draw the sting if Clinton loses to John Edwards, who is currently leading state polls. But the memo, obtained by CNN, its authenticity confirmed by the campaign, does not talk about poll numbers.

It says, instead, this is about the calendar, arguing that so many huge states are moving up their own primary contest to get a cut of the action, Iowa's importance to the process is fading. Long story short, Hillary Clinton is not pulling out of Iowa. She said so in an interview she gave to "The Des Moines Register."

"I am someone who encourages people to raise ideas," she said. "But I make the decisions. And I have made the decision that we are competing in Iowa." And she's got the stats to prove it, including 10 state campaign offices and an upcoming two-day, six-event trip.

(END VIDEOTAPE)

CROWLEY: Though the disowned memo came out of the Clinton campaign, it could have easily come from any other. They are all struggling to figure out whether the old strategy of an intense campaign in Iowa and New Hampshire will bring success in a primary season where delegate-rich, big states are in play far earlier than ever before -- Lou.

DOBBS: Candy, these candidates are facing some very tough choices now with the acceleration, as you point out, of all of these earlier primary dates. The senator also demonstrating, did she not, that she can make a decision quite directly and simply against competing views within her own campaign.

CROWLEY: Absolutely, she did. And they were -- listen, they hopped on this very early.

This is not something you want to have out there in Iowa, as you saw in that lead part. It was -- it was huge news in Iowa when this memo came out. And they -- you know, everybody from that campaign was on the phone to reporters, and then she, herself, talked to the "Des Moines Register" to make sure that this was tamped down.

DOBBS: I assume step two will be to find out who in the world was leaking a campaign memorandum.

CROWLEY: I can tell you that it came from a rival campaign. So -- now, where they got it...

DOBBS: And you wonder how -- well, it sounds like a leak by any definition.

CROWLEY: Absolutely. Absolutely.

DOBBS: Thank you, Candy.

Candy Crowley.

The House of Representatives today approved mandatory disclosure of lobbyists who bundle campaign donations. Lawmakers also passed a second measure outlining new rules for Congress and lobbyists.

Andrea Koppel has the report.

(BEGIN VIDEOTAPE)

ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice over): Last year, Democrats pledged in the wake of the Jack Abramoff lobbying scandal once they controlled Congress, they'd break the link between lawmakers and lobbyists.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: You cannot advance the people's agenda unless you drain the swamp that is Washington, D.C.

KOPPEL: But now that they're in power, Democrats have backed off a key campaign promise to double the amount of time from one to two years that ex-lawmakers and senior staff must wait before lobbying Congress.

Freshman Democrat Nick Lampson says it's a pledge that shouldn't be broken.

REP. NICHOLAS LAMPSON (D), TEXAS: Well, I didn't come to Washington, D.C. , to get rich. I came to do public service.

KOPPEL: The man Lampson beat last November was the former Republican majority leader, Tom DeLay, who resigned, caught up in ethics scandals. Now Lampson worries the Democrats' new lobbying reform legislation falls short.

LAMPSON: There are good measures in this.

KOPPEL (on camera): But it just doesn't go far enough?

LAMPSON: It doesn't go far enough.

KOPPEL (voice over): What it would do is require lawmakers to disclose when they're job hunting with a lobbying firm, create a public database of registered lobbyists who would also have to disclose more of their activities, including what's known as bundling, soliciting small campaign contributions and then bundling them into a larger donation.

But while some Democrats grumbled this legislation wasn't tough enough, others, like Virginia's Jim Moran complained Democrats were going too far. In particular, with bundling, which Moran explained, is a big source of campaign cash.

MORAN: We will do this, but then to expect us to raise a million dollars every time we run, that's difficult.

KOPPEL: The realities, say congressional watchdogs, Democrats can only go so far with lobbying reform if they want to stay in power.

SHEILA KRUMHOLZ, CENTER FOR RESPONSIVE POLITICS: If they pursue all of the goals that they espouse in the beginning, they might be shooting themselves in the foot electorally.

(END VIDEOTAPE)

KOPPEL: But Democrats dismiss all the criticism and cynicism and insist this lobbying reform, which passed tonight by 396-22, is the most sweeping reform since Watergate -- Lou.

DOBBS: Thank you very much.

Andrea Koppel from Capitol Hill.

The so-called reforms would provide for better disclosure of lobbying activities, but does very little to curtail those activities.

Among the elements in this legislation, contacts with lobbyists would have to be reported on an electronic database to which the public would have access. Lobbyists would have to report interaction with members more often, quarterly instead of every six months. And members of Congress would be prohibited from influencing private employers to hire employees for partisan reasons. And lobbyists would have to certify they haven't violated congressional rules on gifts and travel.

Time now for some of your thoughts.

David in California said, "Lou, when Bush's term is up, do you think he will open up his presidential library in Mexico City or Beijing?"

And Robert in Tennessee, "Dear Lou, If this grand compromise immigration bill passes, I can give you Bush's legacy in three words: He squandered America."

And John in Georgia, "Lou, to quote a mafia hit man, 'If a squirrel goes up the pant leg of a politician, he will come back down hungry.' Who elects these politicos, Americans or the illegals?"

We'll have more of your thoughts coming up here later.

Up next, do the American people deserve an immigration bill that is bad but better than nothing, as some of its supporters say?

We'll find out.

And President Bush defends that grand compromise on immigration and declares it's not amnesty.

We'll have the latest.

And many state and local Republicans are simply outraged with the Republican Party and fellow party members who are supporting this grand compromise legislation.

We'll tell you what's happening all across the country.

That special report, a great deal more, coming right up.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: "The New York Times" taking an unusual departure from its usual and all-but-total support for illegal immigration and focusing today on legal, lawful immigrants. "The Times," a long-term supporter of amnesty, the paper today ran an article pointing out that the new legislation would penalize legal immigrants. "The Times" reporting the new bill makes it harder for illegal immigrants to be reunited with their families.

Also in "The New York Times" today, a reversal of sorts from New Mexico's governor and Democratic presidential hopeful Bill Richardson. Richardson says he does not support the new amnesty bill, saying the bill isn't compassionate enough. And in that article, the presidential candidate is also reported to suggest there is an "anti- immigrant fervor" from television news hosts like myself and from the Republican presidential candidates.

Well, today we did -- we called and received a statement from the governor's office because I was somewhat taken aback to think that Governor Richardson would think I was anti-immigrant. The governor saying in that statement that he was not suggesting that Mr. Dobbs is -- if we can see that statement -- that Mr. Dobbs is anti-immigration. In fact, the governor -- do we have that full screen?

We do not have that full screen. I apologize.

The governor did not mention Lou's name. It was a reporter who brought his name up in quote.

The governor went on to say he did like and -- well, does like and respect me. And it's reciprocated.

Governor, I like and respect you. We don't agree on this, but I like and respect you.

The Bush administration and architects of the so-called grand compromise on illegal immigration insist they're committed to the passage of this legislation. Supporters of the deal say they plan on doing this despite widespread concerns the bill is seriously flawed.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): It's not perfect, but to many it's good enough.

BUSH: It's easy to find something to be against in this bill. All it takes is to take one little aspect of it and ignore the comprehensive nature and how good it is.

ROMANS: But there are dozens of loopholes and plenty of concerns. From the left, not generous enough to families. From the right, it rewards illegal immigration.

SEN. JON KYL (R), ARIZONA: Yes, I have learned some new words from some of my constituents.

ROMANS: But "The Washington Post" editorial board calls it the "best hope in decades" to fix a "non-functioning immigration system". "The Wall Street Journal" declares this compromise "the best chance in years". And the "Boston Globe" says it's far "better than the status quo with a realistic shot at becoming law".

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: If we don't act now, I don't know when this country is going two act.

ROMANS: There is plenty to fix in this deal, but a sense that broken is better than nothing.

RANDEL JOHNSON, U.S. CHAMBER OF COMMERCE: To start over I think would denigrate the efforts of the senators in administration who put a lot of time and effort into this.

ROMANS: But critics call it a...

GEORGE GRAYSON, COLLEGE OF WILLIAM AND MARY: Giant leap of faith which is going to land us in a quagmire much deeper than anything we've experienced in recent years.

ROMANS: We have been here before -- September, 1986.

SEN. ALAN SIMPSON (R), WYOMING: There are three million to 12 million human beings in the United States who are here illegally. They are being used and exploited, and this is their only vehicle out of the dark. Because you know, every one of you here, that we will never grant a separate legalization to these unfortunate people unless we know it isn't going to happen again.

ROMANS: Well, here we are again.

(END VIDEOTAPE)

ROMANS: Today's architects of reform are confident it will be different this time. Senators Kyl and Kennedy say there's plenty of work ahead, but they say this bill will proceed. And they insist it is better than the status quo -- Lou.

DOBBS: Well, let's denigrate the senators. I mean, these people are effectively acting as clowns.

When they say that they want to proceed with this, that a bad piece of legislation that will cost, according to the Heritage Foundation, $2.5 trillion over the course of the next 30 years, when it will put forward no standard for legal, lawful immigrants that approaches the benefits given to illegal aliens, how in the world can they possibly continue this pathetic charade?

ROMANS: Well, Senator Lindsey Graham today said you can't...

DOBBS: Speaking of charades.

ROMANS: You can't knock it down. He said he doesn't want to hear people knock it down without putting up what is another plan. He said, this is a compromise between everyone, and it's a best hope.

DOBBS: Lindsey Graham -- I don't know what the people of South Carolina think about that senator, but let me tell you what I think about their senator. This senator called people who opposed it basically bigots. That was the effect of what he said, talking at a La Raza conference. And now he's trying to act tough.

I don't know what the people of South Carolina are telling the good Senator Lindsey Graham, but the man is talking in two different directions and from the same general orifice.

This is remarkable. I just cannot imagine what these people are thinking about.

ROMANS: I can tell you these senators standing up there today in a press conference, Lou, they were all very passionate about this, passionate about fixing it this way, with what they've got in front of them now.

DOBBS: These passions...

ROMANS: ... and working it out. They admit there are flaws, and they want to try to work them out.

DOBBS: They admit there are flaws? They are the architects of those flaws! I mean, that's what I cannot comprehend. They have acknowledged the flaws. They have had over a year to fix the flaws from a year ago, which they ran through.

And the Republican Party, if they've learned nothing other, it is that the Republican senators can absolutely destroy the Republican congressmen, who are going to be looking at the same legislation. It's just mind-boggling what they are thinking about.

As you look at this and you think about -- they admit it's flawed -- why not -- it seems two questions occur. Why not enforce current U.S. immigration laws? Why not simply enforce our borders and ports without doing anything, and, if you don't want to do that, what is to make anyone think that any of this legislation would be enforceable?

ROMANS: Well, that's a question -- we're looking in the 1986 Senate discussions, the last time there was amnesty, a lot of people brought that up. They said, no, we're going to do it this time in '86, and they were going to enforce the laws, we're going to make sure employers don't hire illegals, and then we won't have this problem again. So we've been here before.

DOBBS: Yes. We've been here before, and many of the same people who took us through those iterations over the course of the past 40 years are still involved in the last 21 years since 1986.

And the problem is compounded each time, a problem that is arguably six to seven times worse than it was 21 years ago.

Christine, thank you very much. Christine Romans.

Now, our poll question tonight. Do you agree with most senators, apparently, Democratic and Republican, that a bad immigration bill is better than no bill at all? We'd like to hear from you on this. Yes or no. Cast your vote at loudobbs.com. We'll have the results coming up here later.

New Hampshire joining the list of states opposing the controversial Real I.D. program. The Real I.D. Act was passed two years ago to create a national identification card. Opponents say the program is too costly. Critics also say the card threatens personal privacy. Twelve other states have already rejected the program.

Up next here, the president strongly defending his grand compromise, and senators defending their efforts to pass it. We'll have that special report. Republicans across the country outraged over the Senate Republican support of legislation. We'll have that story, and two leading Senate opponents from both sides of the aisle join me. Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: President Bush today defended his grand compromise, declaring the immigration measure isn't amnesty, and the Senate defeated another amendment aimed at the temporary worker portion of the bill. And some Republicans who supported the deal are now being assailed by members of their own party.

Louise Schiavone reports now on last-minute Senate action on the grand compromise, as senators are preparing to sell the deal to their wary constituents over the week-long Memorial Day recess. Casey Wian reporting tonight on Arizona Republicans, who are just simply outraged that their senators support this immigration deal.

We turn first to Louise Schiavone -- Louise.

LOUISE SCHIAVONE, CNN CORRESPONDENT: Lou, voters across the nation were left out of that little clique of Senate and White House politicians who drafted this immigration compromise, and they'll have lots of questions for their senators over the Memorial Day recess.

(BEGIN VIDEOTAPE)

SCHIAVONE (voice-over): In a Rose Garden news conference, President Bush tackled the biggest complaint about the immigration bill.

BUSH: This bill does not grant amnesty. Amnesty is forgiveness without a penalty.

SCHIAVONE: The penalty in this compromise is the Z visa, requiring illegals not only to alert authorities that they're in the country against the law, but also to pay thousands in fines. Disgruntled voters think it's laughable to expect millions who have skated through illegally so far to now follow through on the expensive and complex new plan, and senators are hearing from them.

SEN. MITCH MCCONNELL (R), KENTUCKY: The phones have been ringing off the hooks. If we settled anything this week, it's that Americans aren't shy about expressing their views on immigration.

SCHIAVONE: The bill's authors maintain their precarious hold on the bill, defeating by just one vote a proposal to phase out a guest worker program in five years, a program that critics say is nothing more than a gift to big business.

SEN. BYRON DORGAN (D), NORTH DAKOTA: Being able to bring in cheap labor through the back door, even as they export good American jobs through the front door.

SCHIAVONE: Defenders of the guest worker visas insisted they cover jobs that Americans could not or would not do.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: The guest worker doesn't get in here unless there's a refusal of any American to do that job. If there's any American any place who will do the job, they get it! Do we understand that?

SCHIAVONE: Senators also said no to a proposal to facilitate information sharing about immigrants between federal and local authorities.

(END VIDEOTAPE)

SCHIAVONE: Lou, the Senate has rejected a proposal from Louisiana's David Vitter to strike the entire Z visa program from the bill -- that vote was 29-66 -- while accepting an amendment from Vermont independent Bernie Sanders, requiring companies that use the H-1B visa program to bid for them at auction, the proceeds going to science and technology scholarships. Those visas long used by technology and research firms to bring foreign workers into the U.S.

DOBBS: And Louise, just to keep the record straight, 70 percent of those visas in the H-1B program going to Indian companies in this country, hiring workers not high-skilled, as is the purpose of the program, but approximately four-fifths of them coming in at level one, are low-skilled.

This is just nuts, to sit there and listen to what some of these senators are saying. But the idea that this program is moving ahead with all of these amendments being defeated, it looks like the so- called grand compromise coalition is holding fast so far.

I love particularly your report in which Senator Mitch McConnell said that if we've learned anything this week, we've learned that voters aren't -- or his constituents aren't shy about voicing their opinion on immigration? The senator sounded like he would prefer they were shy.

SCHIAVONE: You know what, Lou, this is actually quite a fragile compromise, and there's a lot of disagreement among Democrats, among Republicans. The votes on the real controversial issues are 49-48. Be interesting to see if it holds up in the House.

DOBBS: Yes, I certainly hope that American citizens are not shy about expressing their opinion on this. This is just -- this is incredible, what's going on. And they will be next to their constituents for a whole week, probably quite a few days longer than the good senators would like to be, forced to contend with their constituents and actually represent somebody who put them in office.

Louise Schiavone, thank you very much.

Republicans in Arizona tonight are outraged that both of their senators, Senator Jon Kyl and Senator John McCain, are supporting this legislation that would provide amnesty. Casey Wian has the report.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: We are enraged!

CASEY WIAN, CNN CORRESPONDENT (voice-over): Protesters outside the office of Arizona Republican Senator Jon Kyl are angry he helped craft the Senate secret deal to grant amnesty to millions of illegal aliens.

UNIDENTIFIED FEMALE: Kyl's in denial!

WIAN: Arizona's GOP chairman says about 500 Republicans have left the party because of the amnesty bill. The split is so severe that supporters of Republican Senator Kyl showed up to protest a news conference by Republican state lawmakers opposed to the Senate plan.

JACK HARPER, (R) ARIZONA STATE SENATE: This bill has nearly destroyed the Republican base -- volunteer base, precinct committeemen are mumbling about changing parties because they feel betrayed.

WIAN: Arizona Republicans also feel betrayed by Senator John McCain who has missed nearly half of the Senate's votes while campaigning for president. State Representative Russell Pearce, says McCain should start showing up for votes or resign.

RUSSELL PEARCE, (R) ARIZONA STATE HOUSE: I don't know what it takes for our senators and our congressmen in D.C. to wake up that they are citizens of their states and not citizens of Washington, D.C. It's hard to compete, I suspect, with the K Street lobbyists on Washington, D.C. that have thick checkbooks. But this is simply wrong when we continue to reward those folks who have broken our laws and broken into our country and we will not tolerate it.

WIAN: One of their first steps is to join a new coalition legislators from 25 states dedicated to border security.

JUDY BURGES, (R) ARIZONA STATE HOUSE: This cooperation of states has been hailed similar to the American revolution. The sleeping giant is waking up to the reality that an invasion from the south has occurred.

WIAN: In Arizona, the nation's main gateway for illegal aliens, Republican leaders say they've never seen the party this divided.

(END VIDEOTAPE)

(on camera): State Republican Chairman Randy Pullen says he believes Kyl and others underestimated the blow back they would get on the amnesty bill. He says Republican discontent has been simmering since President Bush promised to work with Democrats on immigration reform after the election. That discontent is now boiling over, Lou.

DOBBS: Yes, I have to tell you, Casey, I tried to remain constrained waiting to see the details of this legislation. But once you take a look at what is being pedalled here by these senators and this White House, it's pretty hard not to be outraged.

WIAN: Many of the lawmakers that we showed in our piece made the same point that you did, Lou. We've got immigration enforcement laws on the books. The problem is that we are not enforcing existing law, not enforcing border security. We don't need a flawed bill to fix the problem.

DOBBS: It's remarkable. And border security is the responsibility of this president. Border and port security, the safety of the nation, the national security and for him to suggest he needs a guest worker program to be able to fulfill his constitutional oath is just laughable. It would be laughable if it were not so tragic. Thank you very much, Casey Wian.

The House of Representatives has just voted to approve an amendment to the war funding bill. That amendment will raise, as well, the minimum wage for the first time in a decade. This increase is a key part of the Democratic legislative program that has been stalled for some time now. The minimum wage will rise from $5.15 an hour to $7.25 over a period of two years. This amendment also giving businesses billions of dollars in tax breaks. They're waiting for the vote on the war funding legislation itself. And there we have it, the war funding bill has been passed with those important amendments.

Coming up next, the battle over the amnesty legislation. Senator Ben Johnson, Senator Jim Bunning join us. We'll have a view from the Democrats and the Republicans. Next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Senator Ben Nelson, Democrat, says he won't support any bill that supports amnesty. The senator's voted for the amendment aimed at striking down the temporary worker program. And the senator says his top priority is boarder security. He joins us tonight from Washington, D.C., of course. Senator, good to have you with us.

SEN. BEN NELSON, (D) NEBRASKA: Thank you, Lou.

DOBBS: We have just reported that over in the House, that the war funding legislation has passed with amendments raising, of course, the minimum wage. Your reaction?

NELSON: Well, it's the -- essentially the bill that the Senate sent over. Particularly as it relates to Iraq and the benchmarks that are going to be placed on the Iraqi government to comply with in order to have really what I think will be the conditions for remaining in Iraq.

DOBBS: Let's turn now to the issue of, I don't know what to call it, this grand compromise, grand bargain. Senator, what in the world are your colleagues thinking in that chamber? I mean, I have been talking to a number of senators this week, from both parties, and I detect a certain reserve and a certain amount of embarrassment at what is being carried out in that chamber.

NELSON: Well, I'm very concerned about it because I think, and I've said this for a long time, that we need to secure that border. Before we start talking about what we do with the people who are here illegally. If we are going to close the back door to legal immigration as we will by securing the border, then we can open the front door to legal immigration.

It's a three-step process. Step one and step two go together. Secure the border, cure the problems with legal immigration, and then, hold and penned illegal immigration and what you do with those here illegally once you got the border secure to keep more from coming across the border.

DOBBS: In point of fact, is this not a statement of fact? If we were to enforce existing U.S. immigration law, correctly fund and staff those enforcement agencies, both at the border, the ports and internally. And, at the same time, secure our borders as is the requirement by the oaths of office that you in the Senate and those in the House and the president of the United States take, wouldn't we be where we need to be?

NELSON: Absolutely. But we can't, we shouldn't enter into an amnesty agreement. All the talk about amnesty and there are those that are saying it isn't, it is amnesty. That's only going to encourage more people to come across the border illegally to try to get here while they can.

DOBBS: And that is the evidence and the testimony of so many in this.

I want to bring up one other thing. You are co-sponsoring Senator Cornyn's amendment to prevent the legalization, amnesty, for absconders, for terrorists, violent criminals, known gang members. We've been waiting for that vote all afternoon. We're told that a number of those leaders in that grand compromise coalition don't like it. What's going on, senator?

NELSON: Well, you know, we found that loophole where these gang members, terrorists, sex offenders who haven't registered, all kinds of people that you don't want to have in your country could get a waiver to be here permanently. The people who shouldn't be here at all.

DOBBS: So what in the world would be the delay to vote on that?

NELSON: Well, I'm not sure why there's a delay, but I think we'll get our vote on it up it. It will probably be right after the break because Senator Cornyn and I are not going to give up on it. You just simply can't have that kind of a loophole in this legislation.

DOBBS: Well, it says something, does it not, senator, about the atmosphere in that chamber that that wouldn't be an automatic yes vote.

NELSON: I wouldn't even -- I think you could do it by unanimous content. I wouldn't even think you'd have to put it to a vote. So we're going to continue to press real hard on it. There was some question about what the language meant today. I think we got through that. We're going to press hard, we're not going to give up on it. Just in case the legislation should pass.

DOBBS: Well, do you it will?

NELSON: I don't know at this point in time. I think I would have bet earlier that was going to. Now, I think there's people are starting to cool to it a little bit, but I just don't know.

DOBBS: Well, that in and of itself, it is uncertain that this kind of nonsense would be permitted in this great body that the Senate once considered a great deliberative body. I mean, that speaks volumes as well. Senator Ben Nelson, we thank you for being with us here.

NELSON: My pleasure, Lou, thank you very much.

DOBBS: Thank you.

Coming up, another strong opponent of the grand compromise legislation that the president of the United States and Senator Ted Kennedy are so excited about. We'll be joined by Senator Jim Bunning, Republican of Kentucky, here next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Our poll question tonight, the question, do you agree with most senators, apparently, Democratic and Republican, that a bad immigration bill is better than no bill at all? Yes or no, please cast your vote at loudobbs.com. We'd love to hear from you. We'll have the results here in just a few minutes.

Coming up at the top of the hour, "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks, Lou. Tracking troops in Iraq. A high-tech way of keeping them safe. We're watching this.

Also, more and more National Guard resources are being used overseas. Take a closer look at how that's affecting our safety here at home.

And there's a new book out called "The Extreme Makeover of Hillary Rodham Clinton." The author, Bay Buchanan, battles it out with former Clinton Special Counsel Lanny Davis.

All that, Lou, coming up in "THE SITUATION ROOM."

Wolf, thank you very much.

Senator Jim Bunning is one of three Republicans leading the opposition to this so-called grand compromise immigration legislation, whatever you want to call it.

The senator says the bill rewards law breakers and penalizing legal lawful immigrants. Senator Bunning joins us now from Capitol Hill. Good to have you with us, Senator.

SEN. JIM BUNNING (R), KENTUCKY: Thank you, Lou, very much.

DOBBS: Senator, "The New York Times" even pointed out today that this bill penalizes people who want to be here lawfully, who have been in the legal system. Why is there this enthusiasm among 12 of your colleagues at least from both parties to drive this thing through at the behest of the president?

BUNNING: Well, unfortunately, the president can't be right every time. And on this issue ...

DOBBS: I will stipulate to that fact.

BUNNING: On this issue, he is on the wrong side.

The most vocal opponents that I've heard from are people who have waited patiently in line to get into this country legally.

DOBBS: Senators, let me ask you this -- are you hearing from your constituents in Kentucky? What are they saying? I mean, I hope you're hearing from your constituents. What are they saying to you?

BUNNING: 2,100 in three days -- 100 in favor, and they were all from a very strong Catholic area in Louisville, so it's the Catholic Church people that are calling -- and 2,000 of my other constituents who are dead set against this bill.

DOBBS: Well, and we should point out, a lot of evangelicals and Protestant churches as well pushing for this legislation. But you're exactly right. The Catholic Church extraordinarily active.

At this juncture, with that kind of response, what do you expect to happen? What are your colleagues in the Senate hearing from their constituents? And let me ask it this way -- do the constituents matter to your colleagues in the Senate?

BUNNING: Well, they better. Especially those who are up for re- election in 2008, because this bill is going to be acted on in 2007, and they're going to have to answer to their constituents very quickly on this bill.

DOBBS: All right. And as you look at what's happening, the amendments that are being moved forward, to this point, the attempt to either reduce -- to eliminate the guest worker program altogether, failed. Why, why are we seeing this president and these senators press so hard for a bill that is so manifestly and completely, obviously, unnecessary to these senators and to this president to carry out their oath of office to secure our borders, our ports, to protect this nation, and, at the same time, carry out and faithfully execute and implement and enforce the immigration laws of this nation? BUNNING: Well, that's the good question, Lou. We have laws on the books. If we had enforcement of those laws, we'd do just that. Unfortunately, we haven't been enforcing our laws, and so, therefore, we have over 12,500 illegals in the country. And now, this bill -- the Z visa gives them amnesty -- not only does it give them amnesty, but it gives them a VIP line to citizenship if they have to happen to return to their country and come back.

DOBBS: Senator Bunning, we're out of time. I appreciate your being here, and good luck.

BUNNING: Thank you very much. We're going to do the best we can.

DOBBS: Thank you very much, Senator. Senator Jim Bunning.

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

(COMMERCIAL BREAK)

DOBBS: Well, the results of the poll are in: 97 percent of you say you do not agree with most senators, Democrat and Republican, that a bad immigration bill would be better than no legislation at all.

Time now for our one last thought. Al in Louisiana wrote in to say" "The Democrats have proven themselves just as two-faced and incompetent as the Republicans. We are and will remain independent voters."

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

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