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Pentagon Shake-Up: General Peter Pace Retiring; Bush in Europe; Congressman Jefferson Faces 16 Corruption Charges Over Foreign Deals

Aired June 8, 2007 - 18:00   ET


LOU DOBBS, HOST: Tonight, a surprise shake-up in the U.S. military's top leadership. The secretary of Defense letting the chairman of the Joint Chiefs go. General Peter Pace is retiring.
We'll have that special report from the Pentagon.

The federal government suspending a new program to keep terrorists out of this country because of bureaucratic bungling and delays. What in the world is our government doing?

We'll have the story.

And a crushing defeat for the pro-illegal alien lobby and its effort to ram amnesty through the U.S. Senate in defiance of the will of the American people. But neither the president nor those pro- amnesty senators are surrendering.


SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: The votes are there. If we go to final passage, it gets out of the Senate, I think, with flying colors.


ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Friday, June 8th.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

The chairman of the Joint Chiefs of Staff, General Peter Pace, is retiring. Defense Secretary Robert Gates acknowledged the rising opposition to the war in Iraq is behind his decision to replace General Pace. General Pace, of course, appointed by former defense secretary Donald Rumsfeld. General Pace is the first chairman of the Joint Chiefs not to serve two full two-year terms in more than two decades.

Barbara Starr reports from the Pentagon.


BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): In the face of overwhelming public opposition to the Iraq war, Defense Secretary Robert Gates made clear he's not willing to take the heat from Congress, so he's recommending to President Bush that General Peter Pace not be renominated as chairman of the Joint Chiefs of Staff as senior military adviser to the president.

ROBERT GATES, DEFENSE SECRETARY: The focus of his confirmation process would have been on the past, rather than the future. And further, that there was the very real prospect the process would be quite contentious.

STARR: For last two weeks, both Democratic and Republican senators warned Gates, a confirmation hearing would turn into a referendum on conduct of the war.

GATES: I wish that were not the case. I wish it were not necessary to make a decision like this. But I think it's a realistic appraisal of where we are.

STARR: Pace gave no hint of what was in the works just a day before the secretary's announcement.

GEN. PETER PACE, CHAIRMAN, JOINT CHIEFS OF STAFF: I will serve the nation as long as the nation want me to serve.

UNIDENTIFIED MALE: Yes, sir. Has there been any decision?

PACE: You're asking the wrong guy.

UNIDENTIFIED MALE: Thank you, sir.

STARR: Military and congressional sources say it's unclear if Pace would have been confirmed. But the political debate about the war and the rising death rate for U.S. troops now casts a long shadow.

Even the general nominated to be President Bush's Iraq adviser had a grim outlook this week.

LT. GEN. DOUGLAS LUTE, PRESIDENTIAL ADVISER NOMINEE: Where are we today? Not where any of us would like. Especially in Iraq, progress has been too little and too slow.

STARR: Admiral Michael Mullen will be nominated as the next chairman of the Joint Chiefs and take office just as the military's assessment of the war is expected.


STARR: Lou, sources tell CNN that General Pace was also, in addition to the war, facing two significant problems on Capitol Hill. His recent statements that he believes homosexual behavior is immoral, and a letter he wrote to the judge in the Scooter Libby case attesting to Mr. Libby's character.

But Lou, it is unclear whether changing the players will actually satisfy Congress about the conduct of the war -- Lou.

DOBBS: Barbara, thank you. Barbara Starr from the Pentagon.

Our casualties in Iraq continue to rise. Insurgents killing another of our troops. The soldier died in the hospital of his wounds.

Twenty-four of our troops killed so far this month, 3,503 of our troops killed since the beginning of the war. 25,830 wounded, 11,622 of them seriously.

President Bush today focused on national security, another issue on how to protect this country from missile attack. On a visit to Poland, President Bush reaffirmed his decision to base missile interceptors in Poland, despite the strong opposition of Vladimir Putin.

Tonight, President Bush is in Italy, where he has apparently fully recovered from a stomach upset that he had earlier in the day.

Suzanne Malveaux reports from Rome.


SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice over): Out for a walk at Poland's presidential retreat, Mr. Bush admitted to his host he got off to a rough start earlier in the day and needed some fresh air.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I need some fresh air. I got very sick this morning.

MALVEAUX: While looking better on his stroll in Poland, earlier in Germany at the G8 summit, he had to skip morning meetings. He held his first meeting with France's new president in his private quarters. After a few hours' rest, he rebounded.

Aides insisted the president's sour stomach wasn't from Russia's proposal to change his missile defense program. But rather, a pesky travel bug.

Then it was on to Poland. This is where Mr. Bush hopes to base 10 missile interceptors. It is a key component to the controversial missile defense system which he wants to build in Eastern Europe. Poland's leadership says it wants to cooperate.

PRES. LECH KACZYNSKI, POLAND (through translator): I can tell you that, as far as the missile defense system is concerned, the two parties fully agree.

MALVEAUX: But the Polish government fears that allowing the program to go forward will make its country a target for Russia. But Mr. Bush tried to reassure its nervous ally.

BUSH: I appreciate the support of the deployment of the missile defense interceptors here in Poland. We will negotiate a fair agreement that enhances the security of Poland. (END VIDEOTAPE)

MALVEAUX: And Russia's president, Vladimir Putin, does not want those missile interceptors in Poland. He considers it a threat to his country's security. So today he made another suggestion, putting those missile interceptors in countries that are friendlier to Russia, as well as Iraq.

Now, Lou, his next stop in this high-stakes diplomacy, President Bush will be meeting with the Italian president tomorrow, as well as the pope -- Lou.

DOBBS: He does have the support of Poland, however, for the deployment of the missiles. Does he, at the same time, Suzanne -- is he actively considering, is the U.S. government actively considering Putin's offer of the Azerbaijan radar facilities?

MALVEAUX: Well, first of all, they say that it really is much too soon, and there are quite a few military analysts who look at that quite skeptically, saying, look, they don't think that the Soviet-era type missile system base there would really be able to do the job. That's one thing.

The other thing I should also mention as well, the Polish government is the one that really approves this missile interceptor plan. But the Polish people here, polls show that they do not, that this is not something they want in their country -- Lou.

DOBBS: Suzanne, thank you very much.

Suzanne Malveaux, from Rome.

Back in Washington, D.C., a senior Democratic lawmaker, Congressman William Jefferson, today pleaded not guilty to corruption charges, 16 corruption charges. Prosecutors say Congressman Jefferson and his family made hundreds of thousands of dollars from corrupt business deals in Africa. Jefferson is the first U.S. official to face charges under the Foreign Corrupt Practices Act.

Brianna Keilar has our report.


BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): Embattled Congressman William Jefferson is vowing to take on the Justice Department.

REP. WILLIAM JEFFERSON (D), LOUISIANA: I am absolutely innocent of the charges that have been leveled against me. And we're going to fight -- I'm going to fight my heart out to clear my name.

KEILAR: In a federal courtroom in Virginia, Jefferson entered a plea of not guilty to 16 charges, ranging from soliciting bribes to racketeering to money laundering.

JEFFERSON: This is not who I am. This is not what I have done. KEILAR: Government prosecutors allege Jefferson received more than $500,000 in bribes and sought millions more using a network of family companies to hide the money. One of the most salacious allegations, that in 2005, Jefferson solicited a bribe from a government informant in return for promoting a company's joint venture in Nigeria.

CHUCK ROSENBERG, U.S. ATTORNEY: Mr. Jefferson requested $100,000 in cash from the cooperating witness. Mr. Jefferson said he would provide the $100,000 in cash to the Nigerian official as a bribe payment.

KEILAR: Shortly after the alleged exchange, the Justice Department says $90,000 of that money was found in a freezer in Jefferson's Washington home.

For the first time, Jefferson talked about the so-called cold cash.

JEFFERSON: Did I bribe a foreign official? Absolutely not. The $90,000 was the FBI's money. The FBI gave it to me as part of its plan, part of their plan, that I would give it to the Nigerian vice president. But I did not do that.

KEILAR (on camera): Jefferson's trial date has been set for January 16th of next year. He insists he has served his constituents honorably and will not resign from the House of Representatives.

Brianna Keilar, CNN Washington.


DOBBS: Coming up next, a stunning defeat for pro-amnesty senators, pro-amnesty lobbyists in Washington, and their efforts to ram amnesty through the U.S. Senate and impose their will on the American people.

We'll have complete coverage.

And Congress demanding action to cut soaring gasoline prices, again. Are lawmakers engaging in political theater?

We'll have a special report for you.

We'll be right back.


DOBBS: After almost two weeks of intense, sometimes bitter, debate in the Senate, the so-called grand bargain on amnesty failed. But pro-amnesty senators vow to keep going.

Dana Bash reports on the fight over amnesty and the future of so- called comprehensive immigration reform.


DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Last month, bipartisan bargainers announced their immigration deal with fanfare and optimism.

SEN. JON KYL (R), ARIZONA: It represents the best opportunity that we have in a bipartisan way to do something about this problem.

BASH: Now, standing at the same podium just a few weeks later...

KYL: Yes, I am disappointed.

BASH: So how did the grand bargain turn into the great collapse?

The classic Washington blame game has begun. Exasperated supporters say it was fearmongering.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: I listen to talk show hosts drumming up the opposition by using this word "amnesty" over and over and over again, and essentially raising the roil of Americans to the extent that in my 15 years, I've never received more hate or more racist phone calls and threats.

BASH: But those against citizenship for illegal immigrants say their opposition was hardened by insulting statements from the president.

BUSH: If you want to kill the bill, if you don't want to do what's right for America, you can pick one little aspect out of it. You can use it to frighten people.

BASH: Some Republicans, and even Democrats, blame Senate Majority Leader Harry Reid for trying to limit senators' ability to change the controversial bill.

KENNEDY: I personally believe that if we had taken more time, we would have had an opportunity of reaching a conclusion.

SEN. JOHN CORNYN (R), TEXAS: The Democrat majority leader squandered an opportunity. We were very close, I think within a matter of days, of being able to complete this bill.

BASH: Most Democrats accuse Republicans of stall tactics.

SEN. KEN SALAZAR (D), COLORADO: You know, they kept asking for six more hours, for 12 more hours. It's been going on for two weeks. The fact is there were some members on the Republican side who didn't want the bill.

BASH: Then there's this -- blame everyone.

SEN. ARLEN SPECTER (R-PA), RANKING MEMBER, JUDICIARY COMMITTEE: I think that Democrats were wrong. But the Republicans were wronger -- to use a word which doesn't exist.


BASH: Now, authors of this compromise are vowing to press on. They insist the immigration bill is not dead yet.

In fact, President Bush will be here on Capitol Hill early next week to try to rally support. But the reality, Lou, is that the Senate has a jam-packed schedule and Democratic leadership aides say privately they just doesn't see immigration coming back to the Senate floor any time soon -- Lou.

DOBBS: Well, Dana, you report on the so-called blame game. What is there to blame? It looks like that the Senate acknowledged, at least, in its vote against cloture the will of the American people.

BASH: Well, there are some people here who say that they look at the way the polling was done about this, and they say that the bottom line is the American people want the United States Congress to address immigration reform. They say that some people did not like the way this particular compromise was conducted.

But they say that, in the end, they tried the best they could. And right now, they are pretty upset about the fact that this particular bill is stalled and perhaps stalled indefinitely.

DOBBS: Well, it's not really so much a concern if the little darlings are upset. It's more about representing the will of the people, isn't it?

It's just purely rhetorical, Dana. I appreciate it.

BASH: Thanks.

DOBBS: Dana Bash from Capitol Hill.

Pro-amnesty senators from both parties are reeling from the effects of the collapse of the so-called grand bargain. But given the track record of Congress, many Americans doubted the bill would be in force even if it were to become law.

Lisa Sylvester reports.


LISA SYLVESTER, CNN CORRESPONDENT (voice over): The immigration bill went down in flames. Political parties are now pointing fingers. Several senators said this week the debate comes down to one word, "trust," or a lack thereof.

CORNYN: Frankly, I think people across this country don't really believe we're serious about making this work. They're used to a history of being over-promised and undersold when it comes to fixing our broken immigration system.

SYLVESTER: Senators from both party says their constituents were skeptical that the Senate immigration bill would be enforced when current immigration laws on the books are not. SEN. CLAIRE MCCASKILL (D), MISSOURI: We look the other way when people hire illegal immigrants. And until we stop looking the other way to those businesses who are not playing by the rules, we will never effectively deal with immigration in this country.

SYLVESTER: In 1986, enforcement promises were made. Those promises ignored. More recently, Congress promised a border fence. The subject of a new ad by

UNIDENTIFIED FEMALE: It certainly is a big border.

UNIDENTIFIED FEMALE: A very big border.

UNIDENTIFIED MALE: Last year, Congress authorized 700 miles of fence along the southern border.


UNIDENTIFIED MALE: But so far, just a few miles have been built.

CHERI JACOBUS, REPUBLICAN STRATEGIST: A fence on paper really doesn't work with the American people. They want to see the fence built. They want to see this working. It's not just symbolism. They want to see something real being done.

SYLVESTER: Poll numbers reflect Congress' credibility issue. According to an ABC News-"Washington Post" poll, only 39 percent of registered voters approve of the way Congress is doing its job. Fifty-three percent disapprove.

Another poll by Rasmussen Reports finds Americans believe used car salesmen are more trustworthy than members of Congress.


SYLVESTER: Nearly every senator talks about border security and enforcement, but the public is looking for enforcement action. And many say that does not necessarily require a new bill -- Lou.

DOBBS: Thank you very much, Lisa.

Lisa Sylvester, from Washington.

And that brings us the subject of our poll tonight.

The question is: Do you believe the failure of the grand bargain immigration bill is a failure of government or a sign that senators listened to the people?

Cast your vote at We're interested to hear your thoughts on this one. We'll bring you the results here later.

Time now for some of your thoughts.

Ben in North Carolina wrote in to say, "Lou, one day after the immigration bill is pulled, what's on every network? Paris Hilton. Please do not give that woman air time on your show."

I assure you, your reference to her is the only mention of her name on this broadcast.

And Jerry in Florida says, "Lou, you, above all of the other talking heads, make sense 100 percent of the time. Even my wife, who is a flaming liberal, agrees with you on border security."

And Edward in Ohio wrote to say, "Lou, now that the sham of an immigration bill looks dead, why don't we enforce current immigration law?"

A wonderful and absolutely central question that our friends in Washington might answer.

Don in California said, "Lou, I'm an atheist and a Democrat, but thank God for the stand the Republicans in the Senate took towards stopping the bill."

We'll have more of your thoughts here later.

Up next, the government can't keep up with demand for passports. So what does it do? It suspends the rules requiring passports as an effective measure to stop terrorism. This is homeland security?

And the price of gasoline still over $3 a gallon. What's going on in Congress? What's happening in the marketplace? Are fuel prices out of control, or are these members of Congress thinking about controlling those prices?

We'll have the story for you next.


DOBBS: Well, rules designed to keep terrorists out of this country on hold tonight. The government can't quite handle that project.

The border protection plan would require Americans coming back into the United States from Mexico, Canada, the Caribbean and Bermuda to show a passport. But the State Department, our State Department, is simply swamped with passport applications, and so they're suspending the rules.

Christine Roman has the report.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): The Bush administration has temporarily grounded a plan meant to improve border security.

TOM CASEY, STATE DEPARTMENT: We came to a conclusion in this instance that we did have an inability in some cases to meet the commitment that we had made to our customers, to the American people, to be able to produce passports in a fixed period of time that we -- given to everyone approximately 10 to 12 weeks.

ROMANS: More than two years after Congress passed a law to require passports for air travelers coming into the U.S. from Canada, Mexico, the Caribbean and Bermuda, the Bush administration is suspending until September 30th a plan meant to bolster border security. The Department of Homeland Security says, "... due to longer than expected processing times for passport applications in the face of record breaking demand."

CASEY: What we have done here today is simply take a temporary fix to what is a short -- what is a short-term problem and what was an unexpected problem.

ROMANS: Travelers are will be able to fly, provided they have a government-issued I.D. and receipt from the State Department proving they have applied for a passport. This Rule, called the Western Hemisphere Travel Initiative, is part of a reform enacted to protect the country from failures that led to 9/11. Both the 9/11 Commission and Congress urged strengthening of travel documents to keep terrorists from crossing our borders.

REP. TOM PRICE (R), GEORGIA: The program itself is wise to make certain we as Americans and legal residents have secure and safe I.D. to leave the country and to get back.

ROMANS: But his office has been flooded with hundreds of complaints from angry travelers furious with the bureaucratic delays.


ROMANS: A State Department spokesman says they're working around the clock and have hired hundreds of employees to process the passport applications. The next deadline now is a January 2008 start date for passport requirements at land border crossings. DHS says that travel document security remains a top priority for the government -- Lou.

DOBBS: A top priority, but since we can't handle it, we won't do it. Is that what they're basically saying?

ROMANS: An unexpected surge, rush of applications. They are suspending it until September 30th, until they can work through that backlog.

DOBBS: Do the lovely folks have any idea of what caused that unexpected surge?

ROMANS: They just will say...

DOBBS: To coin a phrase.

ROMANS: ... that it just wasn't...

DOBBS: Surge is sort of a popular expression in our government.

ROMANS: They didn't expect so many -- so many people to rush out to do this. There were 12 million, some applications processed in 2006. They're on track for maybe 18 million.

You know, I don't know. It was mandated a couple of years ago, caught them by surprise.

DOBBS: I can't imagine that happening to our government, but there it is.

Thank you, Christine.

Christine Romans.

No security problems at Cape Canaveral tonight, thank goodness. NASA's just a little more than an hour away from launching its first space shuttle mission this year.

The shuttle Atlantis -- there you see it -- it's on the launch pad ready for its blastoff. Its giant orange fuel tank is marked with white splotches, you may notice. Repair patches after a hailstorm damaged that orange insulating foam in February.

This 11-day mission is scheduled to deliver parts to the International Space Station. Construction of the space station still three years behind schedule because of the Columbia shuttle disaster in 2003.

And of course here on CNN, we'll have complete live coverage. That coverage begins at 7:00 p.m. Eastern with Wolf Blitzer in "THE SITUATION ROOM".

Up next here, the amnesty defeat, its political impact. I'll be talking with Republican senator Jeff Sessions, a leading critic and opponent of that effort at amnesty.

Also tonight, Congress hears a bleak assessment of the future of border security while they're talking about amnesty.

I don't know what's going on there. That's a surprising assessment.

We'll have a special report.

And Congress says it's acting to cut soaring gasoline prices. How are they going to do that?

And who is the biggest loser now that the grand compromise has collapsed?

We'll have those reports, a great deal more, straight ahead.

Stay with us.


DOBBS: As the Senate's immigration reform efforts were collapsing yesterday, members of Congress heard a bleak assessment of the future of border security. The Border Patrol saying a secure border is six years away.

Casey Wian reports.


DAVID AGUILAR, BORDER PATROL CHIEF: The borders are broken. But there was a long time in getting there.

CASEY WIAN, CNN CORRESPONDENT (voice over): Border Patrol chief David Aguilar told a congressional conference on U.S.-Mexico border issues that the border won't be secured before 2013. That's when the secure border initiative, including manpower, technology and infrastructure, is scheduled to be complete. Until then, Aguilar says the Border Patrol must "manage the expectations of the country."

AGUILAR: Too often, we hear, well, gee, if you're going be at 18,000 agents -- and we will be, 18,319 by the end of calendar year '08 -- you should have the border solved.

That's not the case. We're going to be working towards solving the border. We will be implementing SBInet, but there's a maturation process.

WIAN: Aguilar reports 596 assaults against Border Patrol agents this year. And he expects that to increase as the Border Patrol adds agents and 290 miles of fence.

Last year, the Border Patrol apprehended 1.1 million illegal aliens and seized 1.3 million pounds of narcotics. The border conference took place as the Senate's immigration reform bill went down in flames.

The author of last year's House border security bill called this America's last chance.

REP. JAMES SENSENBRENNER (R), WISCONSIN: If Congress blows it again, the impact of illegal immigration, particularly on public education, on health care delivery, and on social services, will be ghastly, not just in the Southwest, but all throughout the United States.

WIAN: Sensenbrenner wants the House to start over on border security.

Former Border Patrol agent Silvestre Reyes says, that would be a mistake.

REP. SILVESTRE REYES (D), TEXAS: If we don't do it, shame on us. And I think, myself included, every single member of the House and every single member of the Senate ought to get their butts voted out for not having worked hard enough to get comprehensive immigration reform done.


WIAN: Clearly, the divide is growing between lawmakers who want amnesty to be a priority and those favoring border security first.


WIAN: Chief Aguilar's admission that true border security is at least six years away came with a plea for patience. Perhaps we will see how much patience the American public has come Election Day next year -- Lou.

DOBBS: Casey, truly remarkable. I mean, nearly every part of this government is asking the American people for patience. Do we have anyone in any part of this government who actually knows what he or she is doing and can actually effectively execute the policies and the laws and the regulations of this government?

WIAN: Lou, it's hard to imagine that, what will be 12 years after September 11, we may have border security. At least on that issue, it's hard to see anyone who knows what they're doing -- Lou.

DOBBS: I tell you, it's just amazing. I -- I don't know what to tell you. I have heard of lame-duck presidents, but we have got a lame-duck government. I mean, this is ridiculous, in my humble estimation.

Casey, thank you very much.


DOBBS: Casey Wian from Los Angeles.

Pro-amnesty senators in Washington said they won't give up their efforts to ram amnesty through the Congress, no matter what anybody wants, this despite the refusal of the Senate to support amnesty for as many as 20 million illegal aliens in this country.

Earlier, one of the leading critics of that so-called grand bargain, Senator Jeff Sessions, who stood up and opposed that legislation, told me why he refused to support anything akin to amnesty.


SEN. JEFF SESSIONS (R-AL), ARMED SERVICES COMMITTEE: This not a good piece of legislation. It really needs to be redrafted.

It came at it with some new principles that sounded good. But, when everything got compromised out, it just didn't meet -- meet those ideals. We really need a bill with clarity, that has bright lines -- yes, you can do this; no, you cannot do that -- and, also, meets the principles that American people think are important in a bill of this kind.

And I think we need to start over. I believe they could have carried this to a vote within a day or two. I think for -- I don't see why, then, they would bring it back up.

But I will say this. I think the supporters of this bill may be at this very moment talking to senators who were not favorable, trying to find out how they can bring them on board to get their votes. And, maybe, if they can get enough of them, they might bring it back up. I certainly think they would like to.

DOBBS: Senator, what is it that escapes the leadership of the United States Senate about this syllogism that I have been saying for some time? Millions of Americans know it to -- I mean, they understand basic priorities. They are a lot smarter than the Senate is giving them credit for, smarter than this White House is giving them credit for.

We must secure our borders and our ports before we can control immigration. And, until we can control immigration, how in the world can we reform it?

SESSIONS: Well, I couldn't agree with you more.

The instincts and the heart of the American people have been right on this issue for 40 years. It's the politicians and the government officials that have not listened to them. And I think their voice is growing louder. And I think maybe their voice, I hope, will begin to be heard.

It's a good voice. They don't hate immigrants, but they're angry at us, because we haven't created a system that validates and furthers our good national values.

DOBBS: Senator, you pointed out, from the floor of the Senate, as did your colleague Senator Lamar Alexander, a number of Democratic senators, as well, that the public simply does not trust our elected officials, whether they're in the White House or the Senate or the Congress, to enforce the law. And how in the world can we trust this Congress to do anything that is in the interest of either the nation or the American citizens?

SESSIONS: That's the real problem. That's the fundamental problem.

And I think it has occurred because we haven't enforced the laws in the past. So, time and time again, we have said we're going to fix this problem; we're going to do better on immigration; we just passed this bill or that bill.

But, when the years go by, we are still arresting one million people every year coming into our country illegally. What kind of broken system is that, and maybe 500,000 getting by?

DOBBS: And, then, Senator, the various groups suggesting that a handful of restrictions, as "The New York Times" reported, stalled this bill, forgetting that fully 50 U.S. Senators voted against this -- the ending of debate on this legislation.

How does it make you feel when people talk about restrictionism, and when this country's bringing in more than two million people a year lawfully each and every year?

SESSIONS: People made up their mind.

You're -- you're correct. People have -- have opposed this bill, but the establishment is out there saying that they believe in it. They want it to happen emotionally. They haven't studied the bill. They don't know what's in the bill. They just think it sounds good to be for it.

And they have, oftentimes, attacked those of us who pointed out defects and flaws in the bill, and, sometimes, unfairly.

DOBBS: Senator, thank you very much for being here.

And, again, my compliments on what I thought were eloquent comments from the floor...

SESSIONS: Thank you.

DOBBS: .. and a great analysis of the issues that, certainly, were not coming from many other quarters.

Thank you very much, Senator Jeff Sessions.

SESSIONS: Thank you.


DOBBS: Well, let's take a look at the amnesty issue.

"TIME" magazine out with its new cover, talk about timing -- "TIME" magazine, by the way, one of our sister organizations here, under the Time Warner umbrella -- immigration, the cover story, "Why Amnesty Makes Sense."

The timing could have been perhaps a little better for that cover. But there it is. Perhaps, next week, the "TIME" magazine editors will consider why amnesty doesn't make sense.

And let's take a look at another interesting cover, "The Real Cost of Offshoring." Now, that's a topic that we have been reporting on here for some time, offshoring, outsourcing -- and "BusinessWeek" discovering truth, the real cost of offshoring, the overstatement of economic growth in the United States and its impact of permitting the practices of offshoring and outsourcing of American jobs.

I'm starting to be optimistic. The truth is emerging. Congratulations, "BusinessWeek." And it's a great read.

Congress tonight focusing on another issue, the soaring price of gasoline in this country -- the price of a gallon of gas still averaging more than $3 a gallon. Lawmakers doing what you might expect -- they're talking about it.

Bill Tucker reports.

(BEGIN VIDEOTAPE) BILL TUCKER, CNN CORRESPONDENT (voice-over): As sure as gas prices rise, voters get angry and members of Congress gather. Hearings are convened, testimony taken, and nothing gets done. Skeptics point to the money that big oil spends lobbying Congress.

UNIDENTIFIED MALE: The oil industry still has influence, even though, you know, historically, the oil industry's been fairly partisan -- 80 percent of their contributions since 2001 have gone to Republicans. And I think that the oil industry is probably giving more money over the last couple of months to Democrats than it historically has.

TUCKER: Since 1990, big oil has spent more than $200 million on Congress. It is money well spent. Since June of 1997, the price of a gallon of gas has risen from about $1.26 a gallon to $3.20 per gallon at the beginning of the June. That's an increase of 154 percent, dwarfing the nominal wage growth during that time of only 39 percent.

GEOFF SUNDSTROM, DIRECTOR OF PUBLIC RELATIONS, AMERICAN AUTOMOBILE ASSOCIATION: People are angry when they see these prices go up. They're concerned about their ability to pay now for the fuel, as well as in the future.

TUCKER: Which is why they call their members of Congress, prompting hearings and good speeches about the impact on working Americans and on oil company profits.

REP. ELIJAH CUMMINGS (D), MARYLAND: The people sitting in this room may not, but a lot of Americans are pinching pennies, and a lot of those pennies are falling into those billions upon billions of dollars that these companies are making.

TUCKER: Last month, as prices rose in advance of the Memorial Day weekend, the House did pass some price-gouging legislation.


TUCKER: That bill is now in the Senate, but President Bush has promised to veto if it passes, Lou. He calls it a form of price control.

DOBBS: Well, whether it's price control or not, this president, the past Congress have a lot to explain on what they call an energy policy.

This Congress now, with Democratic leadership, has an opportunity to focus on energy independence. And this is going to be a difficult issue. Talking about price controls for gasoline, it's probably not the rational response in public policy. Probably, the rational response lies in the case of creating initiatives and incentives to drive energy independence and alternative energy sources.

Bill Tucker, thank you, sir.

Oil prices briefly spiked this week, as a rare cyclone bore down on the Persian Gulf. Prices came back down, but at least 35 people are dead because of that storm in Oman. Drenching rain, as a result of that storm, turned normally dry streambeds into raging rivers, washing away both cars and people, bridges collapsing, roads swept away.

The storm has been downgraded to a tropical depression as it moves toward the coast of Iran.

Up next: The grand amnesty bargain collapses. What's next for these senators and this president? Three of the country's best political analysts join me to assess the impact and the future of presidential candidates of both parties. We will tell you which of the pro-amnesty senators is going to have a little trouble. It's not that one, I can guarantee you.

And later: "Heroes," our weekly tribute to the men and women who serve this nation in uniform -- all of that and more straight ahead.

Stay with us.


DOBBS: Joining me now, three of the very finest political minds in the country, former White House political director and Republican strategist Ed Rollins, Michael Goodwin, Pulitzer Prize-winning columnist, "New York Daily News," Democratic strategist Hank Sheinkopf.

Let me begin by asking you straight out, Hank, who's the biggest loser here? Harry Reid looked like he was going to cry, for crying out loud.

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Harry Reid looks none too good, but neither does anyone else.

Not coming to some conclusion, not doing what the American public wants, ultimately, is something that everyone will pay for. That's the bottom line. Now, they may not have wanted this bill, but they wanted something to occur. Different issue.

DOBBS: You agree?

MICHAEL GOODWIN, "THE NEW YORK DAILY NEWS": Well, I think President Bush is the biggest loser. I think he staked his reputation on this.

DOBBS: Well, some would argue he went in that way.



GOODWIN: He didn't have far to go, huh?

But I think what he did was, he divided the Republican Party. And that's a big problem for him. I mean, today, the -- the piece you played earlier of him saying, you can always pick this thing apart, but, basically, you don't want to do right -- what's right for America, well, that's what...


DOBBS: Terrible.

GOODWIN: ... Rudy Giuliani did at the debate. That's what Mitt Romney did at the debate.

So, you have got some of the leading presidential candidates bucking the president on a major issue like this. You have got to say the president is a loser.

ED ROLLINS, REPUBLICAN STRATEGIST: Well, I would totally agree with that.

The idea that 12 senators in the White House could sit down and craft a 600-page piece of legislation that probably affects more Americans than anything else, and say, you can't amend it, and we want it all done quickly, and what have you, is just the -- the arrogance of Washington today.

DOBBS: Oh, yes.

ROLLINS: But I think the other thing is, it -- is, it shows how weak this president is with his own party. I think that, with -- you know, with a long time still to go, they have pretty much moved away from him. And I think that his congressional relations staff has never been strong. But, in this particular case, I think he's the big loser.

SHEINKOPF: My response, Lou, is based on the fact that we don't think of him as being relevant at all. I mean, that's the difference here.


SHEINKOPF: And that's where I was coming from. He has no relevancy at all in this process, did not, had not.

DOBBS: Well, I guess where -- when I made my comment to you, Michael, I don't have, as they say, a dog in this hunt, neither the Democratic presidential candidates, nor the Republican candidates.

But it seems to me that this sudden sort of rush to say that the political system is not working, the Senate is completely fouled up, everything, you know, the fact is, the American people didn't want this legislation. They didn't get it. And I say, hooray. What's wrong with that approach, that view?

SHEINKOPF: That's fine.

I mean, look, normatively, politicians would follow American public opinion. Voter public opinion tends to determine what you do. Something happened here.

And we have talked about it on this program before. The probabilities of getting this kind of legislation done...

DOBBS: Right.

SHEINKOPF: ... by this Congress, at this time, zero to none. You're going to be getting too close to the 2008 elections. That's the real bottom line here.

DOBBS: Let me quote something from "The Washington Post" today which I thought was fascinating. It was a scathing indictment, this from Dan Balz of "The Washington Post," the columnist.

I just thought this was fascinating, if we could put this up, saying, "The collapse of comprehensive immigration revision represents a scathing indictment of the political culture of Washington."



GOODWIN: Well, that -- that's from the script that says anything they do is good because they did something.

I actually think, in this case, since it was such a bad bill -- first of all, I don't think any one bill could fix the situation we have now. It took 10 or 20 years to get where we are. You can't fix it with 600 pages, even.

DOBBS: Right.

GOODWIN: It -- it really needs some enforcement of what we have and to narrow the problem a bit. You can't solve it overnight. So, I -- I think this was -- this was a bad bill, and, in that way, doing nothing is better.

ROLLINS: The problem is, there's no trust on either side. Democrats obviously want to do something for the 13 million illegals that are in this country. Kennedy's talking about there's 400 or 500 people lose their lives every year coming across the border, which I didn't think was very powerful. And everything's about the future for them.

Republicans don't trust that they're going to, basically, seal the border. I mean, I think the reality is that...

DOBBS: I wonder why.

ROLLINS: Well, for the...


ROLLINS: ... simple reason that they haven't.

And I think -- so, I think you need to do one. I think you still have the '86 law in effect. You ought to basically use that law to strengthen the border, you know, until you get something else.

You know what viewer after viewer writes in to this broadcast? They say, enforce the law.


DOBBS: The existing law.

We have guest-worker programs. The president talk as if we have none. We have migrant workers in this country lawfully. We have an absolute imperative, under the oath office of the president of the United States, if no one else, to support and defend this nation, as well as the -- this Constitution.

GOODWIN: Well, a lot -- no -- and Congress did...


DOBBS: People are so much smarter than their elected officials. It should scare Washington.

ROLLINS: Hopefully.

GOODWIN: Well, they cut straight to the point, unlike Washington, which, you know....


GOODWIN: But Congress did pass a law to build a fence, right? I mean, let's build the fence. Anyway, that's been...


DOBBS: Was it Duncan Hunter who said they have built -- he passed a law, 854 miles of fence. They have put up 11.


DOBBS: Someone suggested earlier that the reason they put up those few miles was to provide a backdrop for photo-ops when Michael Chertoff or President Bush...


ROLLINS: The president has talked about putting 10,000 Border Patrols. There's supposed to be 2,000 a year. He funds 200.

DOBBS: Right.

ROLLINS: And then he takes 200 away and, as we said, put them on -- put them in Iraq. I mean, you have got to basically live up to your commitments. And I think that's the key thing, which they haven't done.


DOBBS: But what about the idea that this means that illegal immigration, that border security, port security will -- it will require every candidate running for office, in the primaries, as well as the general election, running for president, they're going to have to address these issues and provide prescriptions for resolution.

That's the way we build consensus in this country, isn't it?

SHEINKOPF: Answer. And I think there's no more important issue to debate.

GOODWIN: Right. Especially when this president has shown that he can't deliver a bill...

DOBBS: Right.

GOODWIN: ... then I think it is imperative that the next president start to lead that charge right now.


SHEINKOPF: The Congress is going to be called to task for not having done something.

DOBBS: Right.

SHEINKOPF: That is the difference. And, when people in the heartland, who decide presidential elections, stand up and say, look, protect our jobs; we're losing them because of X, Y, Z, whether they're right or wrong is not the issue. It's how they feel. And they pay the bills.

DOBBS: Well, they're going to be able to remind those people that they did get through the minimum wage increase, that they have done more in the first four months -- it may not be enough to satisfy a lot of people, but they have done more than the 109th Congress did in its entire term.

SHEINKOPF: Absolutely true.

DOBBS: Let me ask you. Let me ask you this, Ed. The idea that Prince Bandar, the allegations, $2 billion in...

ROLLINS: That's only -- that's only from British Air.


ROLLINS: So, God only knows how much -- how much he -- you know, I think Bandar needs to be totally investigated. And no one's going to do it.

DOBBS: What about the implications for American public officials and business...


ROLLINS: Well, obviously, obviously, American companies lost out in the bidding. We supplied a lot of Saudi stuff. We don't know what went on there.

Bandar had great relationships with the Bush administration. Everybody who ever left the administration that was tied to Jim Baker, what have you, went on his payroll. And I think, to a certain extent, there needs to be a full-scale look at this.

SHEINKOPF: It smells. It is more of the corrupt sense that people who have power and money will continue to have power and money, and those without will not. That is really what is at risk and what is at issue. And the government ought to do something about it.

GOODWIN: Yes, I mean, I -- look, I think the -- Bandar is kind of the nondenominational grease in Washington. I mean, anybody who comes through there hooks up with him sooner or later, and...

DOBBS: Or did, anyway.



GOODWIN: Well, perhaps that's over.

DOBBS: Yes. It does put into perspective his recall to Riyadh and Mecca and points east.

I want to just say one thing. You guys, I appreciate your analysis, but I have got one final piece of analysis for what this week has been.

I truly believe that the American people had their voices heard. And we had someone write in, and I would -- didn't share it earlier. They said, you should write your congressmen and your senator -- and we're going to give this viewer credit, because I just don't have it here at the tip of my tongue or my -- or my mind -- suggesting you write your senator, your congressman, and say, thanks for paying attention.

I think it was a wonderful idea.


DOBBS: Ed...

ROLLINS: Thank you.

DOBBS: ... Michael, Hank, thank you very much.

Up next here, "Heroes" -- we will have for you the remarkable story of an honor student who already has a Purple Heart, after his service in Iraq -- a terrific story, a better person.

Stay with us.


WOLF BLITZER, CNN ANCHOR: I'm Wolf Blitzer in Washington.

Coming up at the top of the hour in "THE SITUATION ROOM," we're standing by for the launch of space shuttle Atlantis, seven astronauts on board. That's happening in the coming hour. We will be watching it live, right here in "THE SITUATION ROOM."

Plus: the search for those two missing U.S. soldiers in Iraq. We have some exclusive new information on the abduction and who's behind it.

Also, the alleged secret payment to a Saudi prince with close ties to the White House, we're taking a closer look at the fallout -- all that coming up in "THE SITUATION ROOM."

LOU DOBBS TONIGHT continues in just a moment.


DOBBS: The results of our poll tonight, 79 percent of you say the failure of the grand bargain immigration bill is a sign that the senators did not fail, but, rather, listened to the people for a change.

And now "Heroes," our tribute to our men and women who serve the nation in uniform.

Tonight, U.S. Army Cadet Nicholas Browning. He already has a Purple Heart. He served a 12-month tour in Iraq.

Philippa Holland has his story.


PHILIPPA HOLLAND, CNN CORRESPONDENT (voice-over): As a newly enlisted sergeant in the Army Reserve, Nicholas Browning was six months into his freshman year of college when he was called up for duty in Iraq.

CADET NICHOLAS BROWNING, U.S. ARMY: I was kind of dumbfounded for a while. I just kind of -- just kind of sat down in my -- on my couch, and just stared at the wall. And I was like, wow, you know, this is -- this is pretty unexpected.

HOLLAND: Deployed with a psychological operations team, part of his job was convincing insurgents to surrender peacefully.

BROWNING: We were on a raid in Fallujah. It was about 2:00 in the morning. I was the driver of my Humvee. And we pulled up on the objective, and I opened the door. And I -- I stood up right outside the truck. And, as soon as I stood up outside, the -- someone threw a grenade down from a rooftop. And I was the closest one.

HOLLAND: The blast buried shrapnel in Browning's shoulder. He was awarded the Purple Heart for his sacrifice.

After completing his tour, Browning reimmersed himself in school. But service to his country remained paramount. He joined the Reserve Officer Training Corps.

His commander says, students like Browning represent the highest values in service to the nation.

LT. COL. TIMOTHY BUSH, U.S. ARMY: They come with very clear eyes, knowing what their country's going to ask them to do. And it gives me a great sense of optimism for this nation as a whole, with not only Nic (ph), but also all the other students in this program and all the students across the nation who volunteer to do this.

BROWNING: When I went there the first time, I was a soldier, and I did my job. And, if I go back this time, I will be a leader. And I think I can really help accomplish the mission that we're trying to do over there. And I think I can help people come home safe.

HOLLAND: After Saturday's graduation, Browning reports for active duty as a second lieutenant at Fort Lewis, Washington.

Philippa Holland, CNN.


DOBBS: Thanks for being with us tonight. Please join us here tomorrow.

For all of us, thanks for watching. Good night from New York.

"THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.

BLITZER: Thanks, Lou.


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