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LOU DOBBS TONIGHT

Immigration Reform Defeated; Is Bush a Lame Duck?

Aired June 28, 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: Thank you, Wolf. Tonight, a crushing defeat for President Bush and the Senate's democratic leadership on amnesty, a glorious victory for the American people. Senators defying the open borders and illegal alien lobby standing up for the American people voting against amnesty. We'll have complete coverage for you tonight.
Also, President Bush struggling to assert authority after one of the biggest political defeats of his presidency. Has the president expired all of his political capital? Is he officially a lame duck? We'll have that report.

And stunning new evidence that communist China is still exporting dangerous food and other products to the United States. The FDA today blocking the import of five types of seafood because they're contaminated.

And three top members of Congress join me here tonight to talk about amnesty and its defeat. Senator Jeff Sessions, Senator Ben Nelson and Congressman Luis Gutierrez. All of that, all the day's news, much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Thursday, June 28. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody. The Senate today killed the so- called grand compromise on amnesty. Senators voting 53 to 46 against the Democratic leadership's efforts to ram the president's compromise legislation through the Senate. It was also a stunning blow to the president. Only 12 Republican senators voting to push ahead with his legislation. We begin our coverage with Andrea Koppel tonight on Capitol Hill. Andrea?

ANDREA KOPPEL, CNN CORRESPONDENT: Lou, it was make or break. By the time the vote was over, immigration reform lay shattered on the Senate floor.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The motion is not agreed to.

KOPPEL (voice-over): The vote fell 14 short of the 60 need to clear a key procedural hurdle. And even the bill's biggest supporters are now predicting immigration reform, at least in this Congress, is dead.

SEN. MEL MARTINEZ, (R) FL: I've been the sunny optimist from the Sunshine State, as many of you that have covered this know. But today's the time to be a realist. I don't see where the political will is there for this issue to be dealt with.

KOPPEL: The bill's top Democratic architect was less pessimistic.

SEN. TED KENNEDY, (D) MA: Disappointed in the outcome of the votes there. But understand full well that the inevitable outcome is going to be positive.

KOPPEL: The defeat is a big blow to President Bush and a bipartisan group of senators who made passing sweeping immigration reform a top domestic priority.

SEN. JON KYL, (R) AZ: This is an issue that crosses party lines, is not susceptible to a great deal of lobbying by the president or anybody else. We come to our positions based upon what we think will best serve our constituents.

KOPPEL: And for many of the 37 Republicans who split with their president to oppose the bill, it came down to guaranteeing that more illegal immigrants won't slip into the country.

SEN. DAVID VITTER, (R) LA: The message is crystal clear that the American people want us to start with enforcement, both at the border and at the work place.

KOPPEL: But 15 Democrats also opposed the bill. Even New Jersey's Robert Menendez who supported today's vote, said the bill failed to give enough support to family ties.

SEN. ROBERT MENENDEZ, (D) NJ: It says to many that they are good enough to work here and give their human capital and slave but never good enough to stay here.

KOPPEL: Rarely has an issue so consumed the capital. Calls mostly opposed to laying out a path to citizenship for an estimated 12 million illegal immigrants jammed switchboards and as Georgia Republican Johnny Isakson told me at the end of an interview, it even shut down Senate phone lines.

SEN. JOHNNY ISAKSON, (R) GA: This morning and in fact yesterday, I tried to make calls and I kept -- I couldn't get out. And I called two of my staffers from the Capitol, I called Chris Carr (ph) and Mike Quello (ph) and they got the voice mail but the phone didn't ring.

(END VIDEOTAPE)

KOPPEL: Now, late this afternoon, that problem was finally cleared up. But the bigger problem of immigration reform, well, that's going to take quite a bit longer to clear up. Lou?

DOBBS: You referred to it as immigration reform, as do so many of our colleagues. And usually we're far more careful when we talk about proposals. But this one has taken on that nomenclature, hasn't it? Reform. Even though demonstrably it was a change, but not so demonstrably and certainly controversially a great deal of division on whether that change was positive or negative.

Andrea Koppel, let me ask you this, do you suppose those senators watching their switchboards light up over the course of the past several days, that one of the lessons from all of this should be that our elected officials should perhaps expand their phone systems so they can better hear from the people they're paid to represent?

KOPPEL: That is a very good question, Lou. I don't know what to tell you. I haven't heard anybody say that they needed to expand the phone system. But certainly the volume of calls they were getting would indicate perhaps that's a necessity.

DOBBS: We'll offer that up for the Senate's consideration. They probably will table it. But nonetheless, offer it up. Andrea Koppel, thank you very much, from Capitol Hill tonight.

Eighteen senators switched their votes from yes just two days ago to no today. Giving opponents of amnesty enough votes to kill the legislation. Six Democrats and 12 Republicans changed their votes. Among them, Senate Minority Leader Mitch McConnell voting against the leader of his own party. Republican presidential candidate Senator Sam Brownback actually changed his vote today from yes to no.

He made the switch, we are reliably told, when he saw that the bill was clearly going down to defeat. Republican Senator Norm Coleman voted no because his amendment that would have limited sanctuary cities was tabled, or in effect, killed.

And freshman Democratic Senator Jim Webb of Virginia also had his amendment killed. He wanted to reduce the number of illegal aliens eligible for amnesty and to instill what he called fairness into the legislation. So he voted no today as well. Not a single senator went the other way changing their votes from no to yes. And if you want to see how your senator voted, please go to our Web site, loudobbs.com.

Opponents of this so-called grand bargain said today's Senate vote was a victory for America's democracy and the will of the people. Most senators refused to be intimidated by the strong-arm tactics of the president and the Democratic leadership. Senators also resisted aggressive lobbying by corporate interests, special interests, ethnocentric special interest groups.

Lisa Sylvester has our report from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): So many Americans called their elected leaders on the immigration issue, by 8:45 until morning, the Senate telephone system crashed.

SEN. JIM DEMINT, (R) SC: It has reengaged the American people and shown us we are truly a government of the people. They have spoken and they've spoken loudly.

SYLVESTER: A CNN Opinion Research poll this week found that only 30 percent surveyed supported the bill, 47 percent opposed the legislation. Before the vote, Senator David Vitter said boiled down to who would be heard, the public's voice or that of corporate lobbyists and special interests.

VITTER: This isn't just a vote about immigration. This is a vote about whether this body is out of touch, whether this body is arrogant or whether it will respect the true wisdom and common sense of the American people.

SYLVESTER: The final vote tally, 46 to 53. Not even a majority of the senators voted to keep the legislation alive. Senators who have to face their constituents in next year's election particularly were under pressure and tended to vote against the bill. Of the 20 Republicans whose terms expire, only three voted for moving forward. Twelve democrats are up for re-election next year. Five bolted from their party and voted to kill the bill. The Senate leadership acknowledged the issue is essentially dead until after 2008.

SEN. HARRY REID, (D) MAJORITY LEADER: I'm very disappointed we weren't able to pass this legislation. But we gave it the old college try.

SYLVESTER: Opponents said the will of the people had been expressed and heard.

(END VIDEOTAPE)

SYLVESTER: A number of senators took issue not just with the substance of the bill, but the process. Senator Chuck Grassley in a statement summed it up this way. Quote, "This should be a lesson. That you can't have a bill put together by a rump caucus of a few senators, bypass the committee process, limit debate and stop amendments from being offered and expect it to pass."

Lou?

DOBBS: And at the same time ignore the will of American citizens and the facts that were available to all of these senators for weeks and months, if not over the past three years, as we've been reporting on this issue almost nightly. Lisa Sylvester, thank you very much, reporting from Washington.

Some Republican senators are now calling upon the president to immediately ask the Congress for more money for border security. The failed amnesty initiative included an additional $4.4 billion offered up by the president for improved border security. But that money, of course, is no longer available because the president held that money hostage to passage of amnesty.

Opponents of amnesty said that money was simply a presidential bribe to win Republican votes in the Senate. Homeland Security Secretary Michael Chertoff, Commerce Secretary Carlos Gutierrez said they're disappointed the Senate failed today proceed with this legislation. Incredibly, the secretary of the Department of Homeland Security declared that this legislation would have made it easier to enforce security at our borders and our immigration laws.

(BEGIN VIDEO CLIP)

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: I have a job to do, which is to enforce the laws, and although they may not be adequate in every respect to the job, I will enforce the laws that we have.

CARLOS GUTIERREZ, COMMERCE SECRETARY: I was hoping that through this bill that the U.S. could get a head start on the rest of the world, that the U.S. could get an advantage over the rest of the world, that we could do something that would give us an advantage, not just for five years, but for the next 20, 50 years.

(END VIDEO CLIP)

DOBBS: Both Gutierrez and Chertoff still insist amnesty is the only way that they can tackle our illegal alien and border security crisis.

President Bush today called the Senate vote a disappointment. President Bush said the Congress must prove it can tackle tough issues such as health care and budget reform. However the Senate vote proved the president has run out of political capital. He appears increasingly less capable of dealing with tough issues himself. Elaine Quijano has our report.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): The disappointment was written on his face.

GEORGE W. BUSH, U.S. PRESIDENT: A lot of us worked hard to see if we couldn't find common ground. It didn't work.

QUIJANO: Just weeks after boldly throwing his remaining political capital behind immigration reform ...

BUSH: I believe we can get it done. I'll see you at the bill signing.

QUIJANO: Only 12 Republicans took the president's side amid GOP criticism the bill amounted to amnesty. The vote marked a painful defeat for President Bush on what was to have been his signature domestic initiative.

BUSH: Thank you for your time.

QUIJANO: The president also clashed with lawmakers looking into the dismissals of federal prosecutors. Mr. Bush asserted executive privilege for just the second time in his presidency, rejecting lawmakers' demands for documents and setting the stage for a possible constitutional showdown with Congress.

The White House accusing Democrats of, quote, "grossly overreaching." And the Democratic chairman of the Senate Judiciary Committee accusing the president of, quote, "Nixonian stonewalling." But the president is also facing a bipartisan backlash on Iraq. At Rhode Island's Naval War College, President Bush tried countering a growing chorus of GOP doubts.

SEN. RICHARD LUGAR, (R) IN: A course change should happen now.

QUIJANO: Pushing back against recent criticism from Republican Senator Richard Lugar, that the so called surge isn't working.

BUSH: It's a well conceived plan by smart military people. And we owe them the time and we owe them the support they need to succeed.

(END VIDEOTAPE)

QUIJANO: Now, there were some bright spots for the White House this week, namely supreme court rulings that confirm a conservative tilt, a court shaped partly by President Bush marking one of his legacies. Lou?

Elaine, thank you very much. Elaine Quijano reporting from the White House.

As Elaine just reported, the Bush administration faces a tough battle in defending its conduct of the war in Iraq. So is the Iraqi government. Iraqis are hiring an increasing number of lobbyists in Washington to influence the White House and the Congress. According to "USA Today," the number of lobbyists used by the Iraqi government has tripled since the beginning of the war. Eighteen lobbyists and firms are now registered to represent Iraqi clients in Washington.

Coming up here next, two lawmakers on opposite sides of the amnesty open borders debate join me. I'll be talking with Senator Jeff Sessions. And Congressman Luis Gutierrez. Also the federal government takes action to block the import of dangerous seafood's from communist china. But nonetheless refuses to recall thousands of dangerous Chinese tires affixed to American automobiles in this country.

We'll have a special report on the rising threat from illegal alien criminal gangs, gangs helping illegal aliens break our immigration laws. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Document forgers in Mexico and the United States were counting on boom business if the amnesty legislation passed, saying that they would be able to provide the documents required for illegal aliens to succeed in their applications for amnesty. But don't worry, the defeat of the legislation today won't destroy their business, as Bill Tucker now reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The use of phony documents by illegal aliens is no secret. SEN. LINDSEY GRAHAM, (R) SC: I can get you a Security Social card to my good friend from South Carolina Jim DeMint. We can go to the Jockey Light in Anderson and I can get both of us a Social Security card by midnight. Whatever name you want. Whatever number you want.

TUCKER: Even the Department of Homeland Security understands the problem.

CHERTOFF: Now, what have to writer (ph) are a number of these fraudulent documents and let me give you an example of a couple of things that look good and are used in order to try to -- have been used in order to try to get by our borders.

TUCKER: Except that no papers, no problem. They can be bought here. This spring, ICE carried out a series of raids in Chicago in part of its investigation into a massive documents fraud ring. Caught in those raids and awaiting possible indictment is this woman's uncle. The family's business is providing fraudulent documents.

SUAD LEIJA, GOVERNMENT WITNESS: There would be driver's licenses, the green card, the resident alien, state I.D. from 20 cities, utility bills, driver's licenses, passport, American and Mexican passport. Those are the major ones.

TUCKER: How good are they?

LEIJA: The document they sell is as good as what you have got in your pocket. You can't see the difference.

TUCKER: Any amnesty would be a major business opportunity. An affidavit related to the Chicago investigation with sworn testimony and transcripts of wiretaps show a cartel leader speaking of amnesty.

Quote, "Tell Colorina to be on the lookout because if there's amnesty he can fix his papers."

Fix it so that it would appear that the illegal alien was in the country prior to any date Congress would set to get amnesty and then be given official papers from the U.S. government.

(END VIDEOTAPE)

TUCKER: Not that the family needs amnesty to keep the business going. It's a $300 million currently for the Castorena-Leija-Sanchez (ph) crime family, now with operations in 33 states and 51 cities, Lou.

DOBBS: And that's just one of many.

TUCKER: Yep.

DOBBS: Bill Tucker, thank you very much.

Customs and border protection officers made an unusual discovery at the Ota Mesa, California border crossing Tuesday. Agents decided to search this pickup truck after the driver was noticed to be behaving, as they put it, suspiciously. Under the hood, the agents found three illegal aliens hiding in the engine compartment. They were detained for processing, one treated for burns, the driver arrested. He was charged with alien smuggling.

President Felipe Calderon of Mexico today quick to react to the Senate vote on the grand compromise on amnesty. President Calderon said the Senate made, quote, a great mistake, by voting against amnesty. The president of Mexico clearly refusing to abide by normal diplomatic courtesies which require foreign leaders to constrain themselves from comment on the affairs of other nations. Usually.

Time now for our poll question. Do you believe the president and the Senate now that they've defeated amnesty will commit themselves to securing our borders and ports and enforcing existing immigration law? Have they had an epiphany? Cast your vote at loudobbs.com. We'll have the results here later.

Up next, the nation's largest employer of illegal aliens, we'll tell you who that is and what's being done about it. We'll have that special report.

And another warning about dangerous products from communist China. This one about the food we eat. Again, that report and more straight ahead. Stay with us.

(COMMERCIAL BREAK)

DOBBS: More contaminated Chinese imports to this country. The Bush administration, however, still refuses to recall thousands of defective and dangerous tires made in China. The National Highway Traffic Safety Administration says an American importer must recall the almost 450,000 tires. The importer faces millions of dollars in penalties if it doesn't comply.

And contaminated toothpaste has been found in several more states also made in communist China. This toothpaste was first discovered in state institutions in Georgia. "The New York Times" reporting about 900,000 tubes of contaminated toothpaste were shipped to state institutions in Florida, North Carolina and South Carolina. That toothpaste contains a toxic chemical found in anti-freeze.

The federal government is taking action to stop contaminated fish from communist China from entering the country. Even as China continues to insist its products are safe. Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Chinese fish has been contaminated for years, since 2001, the FDA found banned toxins and drugs in Chinese imported fish. Finally today the FDA is officially banning five species of fish from China, catfish, shrimp, basa, dace and eel..

DAVID ACHESON, FDA: This is a long-term problem that we've been monitoring for sometime. We've reached the point where we now feel we need to broaden this import, holding import alert to a countrywide with China.

PILGRIM: The FDA says China is the world's largest producer of farmed fish, accounting for 70 percent of world consumption. Because of the problems, the FDA has upped its testing from one percent to now five percent of Chinese farm fish imports saying the importer has to prove it's safe before any shipment can be released for sale. Some consumer watchdog groups say it's not just fish from China that should be screened.

ANDREA KAVANAUGH, PURE SALMON FOUNDATION: I'm worried that the FDA is really only testing for a narrow band of chemicals and really just focusing on China probably because of the problems over the last few months starting with pet food and melamine. But there are lots of other places that we import seafood from that need some more scrutiny as well.

PILGRIM: Fish is generally not required to be labeled. So the consumer has to rely on the government to do its screening.

MIKE TAYLOR, FORMER FDA OFFICIAL: This is just another example of the FDA having to react to problems to detect and correct problems rather than having a system in place to prevent problems. And we really need to transform the way we oversee imports to be preventive and not just rely on FDA inspectors catching problems and reacting to them.

PILGRIM: Until then the consumer is left at risk.

(END VIDEOTAPE)

PILGRIM (on camera): Now, the FDA says there's no immediate health risks from the contaminated fish but prolonged consumption could lead to cancer. That's what they say.

DOBBS: And again, they've closed 180 of their food plants in China. At some point, will it -- it's purely a rhetorical question. Will it occur to anyone in this government to actually begin to function in protection of the American consumer?

PILGRIM: When you look at the rejected list. The Chinese products really dominate these lists.

DOBBS: Absolutely. And by the way, the reference to food labeling origins -- of national origins on labels, that was put into law in 2003. Again, an example of the federal government not enforcing the law. I wonder why. Kitty Pilgrim, thank you very much.

Up next here, the Supreme Court makes a ruling on race and education that could affect school districts all across the entire country. We'll be joined by our senior legal analyst Jeffrey Toobin.

Also tonight, the government says it's enforcing our immigration laws. But the government has a different role as well. We'll be explaining that. And after the Senate defeats the president's amnesty legislation, three leading lawmakers are joining me tonight. Senator Jeff Sessions, Senator Ben Nelson and Congressman Luis Gutierrez. Stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush today failed in his effort to award amnesty to millions of illegal aliens. He also won't have that guest worker program that he said was necessary for border security. As we've reported here before, this nation already has at least eight guest worker programs. No one at the White House apparently informing the president of that fact. Temporary work visas were given to more than 600,000 people last year. No one, however, in this government, knows how many of those overstayed their visas. But there are estimates.

For example, Senator Dianne Feinstein on the Senate floor today acknowledged the government has not exactly solved the problem.

(BEGIN VIDEO CLIP)

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: If we don't fix our visa overstay system, which is in this bill, 40 percent of visas overstay. Many of those don't go home.

(END VIDEO CLIP)

DOBBS: Forty percent? A GAO report shows the number could be almost 60 percent of those holding visas overstaying those visas. And the Bush administration, the Congress of the United States, they all could fix the problem, guess what, by enforcing existing U.S. immigration law, if they were serious about it. But they obviously are not.

This government might be as well the largest employer of illegal workers in this country. It's just another of many and mounting reasons why the Bush administration and the one before it have so little credibility on the issue of illegal immigration and border security.

Christine Romans has our report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): The biggest employer of people not authorized to work in this country, the government. A little noticed audit last year of so-called non-work Social Security numbers showed the government, retail and universities are top employers of non-citizens who are not authorized to work here.

From 2001 to 2003, seven federal agencies, seven state agencies and three local governments employed thousands of people using Social Security cards clearly marked as non-work documents. The government has issued some 7 million such cards, certain foreign nationals are eligible for them so they can get public benefits. But it is illegal for them to work. Yet the government over three years illegally employed more than 49,000 such cardholders.

REP. STEVE KING (R), IOWA: It's obvious that if they have the tools at their very disposal and they are not utilizing them to purge the illegals that they have on their own payrolls, how can they go to the private sector employers and demand that they comply with the law when the federal government is not complying with the law.

ROMANS: About a third of those workers found in the audit were later identified to have paperwork mix-ups. But the rest had no legal basis to be employed. The audit found unauthorized work by non- citizens weakens SSN integrity, and may require that the agency pay benefits to these individuals.

SHANON BENTON, THE SENIOR CITIZENS LEAGUE: We're concerned that because of a loop in the Social Security Protection Act of 2004 that they'll be able to go back and claim work that they performed while here illegally, which, as the report says, is going to be detrimental to the Social Security trust fund.

ROMANS: The report also found, "non-citizens who work without DHS authorization could affect homeland security because they may obtain employment in sensitive areas.

(END VIDEOTAPE)

ROMANS: It's a well-documented problem. Another Social Security audit several years ago found some half a million earnings files for Social Security numbers that were not authorized to work. Some employment histories as long as 38 years. That's 38 years working illegally on a non-work card -- Lou.

DOBBS: Well, thank goodness, Christine, that Congressman Steve King is working on the issue, and others. This is just another example of a dysfunctional, ineffective government. And this Senate, at least 46 members of this Senate, wanted to give this president more authority to screw up more programs? It's unbelievable.

ROMANS: Many folks saying that if the administration wants to prove that it wants to enforce the labor laws, they should look in their own personnel files and make sure the people who have Social Security numbers who are not allowed to work are not working for the federal government.

DOBBS: Christine, thank you. Can you imagine what in the world it would look like with this president, this government, this administration trying to process 12 million to 20 million Z visas? The nightmare is unimaginable.

An unusual message from Republican presidential candidate Congressman Tom Tancredo. The congressman decided to send ahead a little message to Homeland Security chief Michael Chertoff. Congressman Tancredo sent Chertoff a head of lettuce to show just how much he disagrees with recent comments by the homeland security secretary about the defeated immigration legislation.

Secretary Chertoff suggested failure to pass the legislation would hurt the agricultural industry. Congressman Tancredo also sent Chertoff a fruit basket and a card, saying, "much, much more where this comes from."

Today's crushing defeat of the grand bargain on amnesty, a major blow, of course, for President Bush, the pro-amnesty senators and the amnesty and open borders lobby. One of the biggest and most vocal opponents of the legislation and the leader of the opposition, and a very eloquent one in point of fact, is Senator Jeff Sessions. Senator Sessions joins us now from Capitol Hill.

Well, Senator, first of all, I've got to say, congratulations to you.

SEN. JEFF SESSIONS (R), ALABAMA: Thank you.

DOBBS: This is -- I said here earlier this evening that this is one of the first times that I can recall, and I'm talking about a number of years, in which I truly believe that the U.S. Senate heard the voices of their constituents, the people they've been elected to represent. Would you disagree?

SESSIONS: No, I couldn't agree more. But it was a little late coming, wasn't it? I mean, just going into that vote, I was not sure whether the other side would even -- they might get 60 votes and be able to move forward with the legislation.

But when it began to collapse, it just collapsed. And I think a big, big part of that was persons like yourself who read this bill, who night after night explained the loopholes and deficiencies. And I think that all added up to a collapse of support.

DOBBS: Well, we have sure been trying over the years to report the facts. There have been all sorts of cross currents, as you know, and it is pretty easy to step into them if you insist upon asserting the facts, as you did, Senator.

You hit three facts, put three facts -- you put a far greater number than that before your colleagues. But impressively before your colleagues in the United States Senate, irresistibly from the Congressional Budget Office, establishing that this legislation would constrain only 25 percent, at most, of illegal immigration.

And I know that you in other extrapolation took it down to just about half of that. That it would double, actually double legal immigration over the course of the next 10 years and that the cost would be $30 billion over 10 years just in terms of impact on the federal budget.

How in the world against that could any senator reasonably say that they could support such legislation, in your judgment?

SESSIONS: Those were the fundamental facts, I think, that I felt we needed to get to the senators. They were not hearing that from the people supporting the bill. And I drove that home repeatedly, probably ad nauseam to some of them. But the point I felt was that if you were going to vote for a bill that your constituents strongly opposed, you had to really believe it was the right thing to do and you could defend it. I wanted to be sure that our senators knew that they couldn't defend this bill in the face of the objections they've got.

And I think that, in a way, maybe came together. Their lack of confidence in the fact that this bill would work, it would not work, in my view. And two, the American people understood it and opposed it.

DOBBS: Well, Senator, I want to compliment, congratulate you.

SESSIONS: Thank you.

DOBBS: You were steadfast, and as I said, eloquent, throughout. And did a great service, not just to Alabamans but to all of the citizens of this country. Thank you, sir.

SESSIONS: Thank you.

DOBBS: Senator Jeff Sessions. Still ahead, one of the biggest amnesty supporters, Cardinal Roger Mahony of Los Angeles, on the defeat of the grand compromise on amnesty.

And I'll be talking with two lawmakers on opposite sides of the debate. Congressman Luis Gutierrez, Senator Ben Nelson. We'll be talking about the impact of today's Senate vote.

And a landmark ruling by the Supreme Court on race and education. Senior legal analyst Jeffrey Toobin joins me. We'll have his analysis of what this means for school districts all around the country. Stay with us.

(COMMERCIAL BREAK)

DOBBS: One of this country's amnesty supporters and one of the strongest supporters is expressing his disappointment in the defeat today of the amnesty legislation. Cardinal Roger Mahony, the archbishop of the Los Angeles Diocese, saying: "I express my gratitude to those senators who worked diligently and fearlessly to achieve an immigration reform system for our country which would have recognized and affirmed basic human dignity and rights."

Cardinal Mahony went on to say: "The legislation would have strengthened our national security." A view the Senate clearly didn't agree with, nor did the Congressional Budget Office.

Today's collapse of the so-called "grand bargain," also a devastating defeat for pro-amnesty open borders advocates and legislators in both the Senate and the House. Democratic Congressman Luis Gutierrez of Illinois, among the bill's strongest and most ardent supporters, he joins us tonight from Capitol Hill.

Congressman, good to have you here.

REP. LUIS GUTIERREZ (D), ILLINOIS: Thank you for having me, Lou.

DOBBS: Congressman, this defeat on a procedural vote in the U.S. Senate, what is your reaction?

GUTIERREZ: Well, my reaction is that those of us who desired to secure our border, to bring about comprehensive immigration reform, we extended every olive branch. We tried to get every compromise we could. We listened to every concern from those surrounding the debate. And at the end of the day, people walked away from being able to accomplish anything.

I think we were sent here to look for solutions to problems and to look for them in a fair and humane fashion. We certainly reached out to the other side of the aisle. I mean, this was a Republican- crafted proposal where they set the rules and the limitations of the debate with the support of the president. But they could only get 12 Republicans to step up and vote for it.

DOBBS: Congressman, you were sent there to come up with something fair, something humane, but your own Congressional Budget Office revealed that this legislation would have only curtailed 25 percent of illegal immigration. Your own Congressional Budget Office reveals that a net impact on the federal budget of $30 billion over 10 years.

The legislation would have reduced already authorized construction of a fence from 750 to 370 miles. The idea that this legislation could have moved this far against what are irresistible facts that are inconvenient to the -- at best if not detrimental to the common good and the national interest.

Do you think as a result of the facts emerging after so much rhetorical obfuscation on the part of both sides of this debate that we can have a situation arise in which we reach a consensus about what is good for this country, rather than an ethnocentric approach to it, from some of the special interest activists and corporate America in particular?

GUTIERREZ: I think clearly for me, Lou, what was central and critical to this debate was the word amnesty. Even though I came forward, along with many others, and said, we want to fingerprint them, we want to tax them and if they've done anything wrong, we should deport them, but if they haven't, if their violation is -- then we said, we're going to fine them steeply, we're going to put them on a probationary path.

It was going to take them, Lou, 20 years to become American citizens under the best of circumstances given the Senate bill. But we said we're going to make them earn and we're going to make them pay a consequence. Put them at the back of the line.

So we did all those things and people said, no. So you know what, Lou? We have 12 million people continuing to work in this country undocumented today and we will have them tomorrow because of our inaction. DOBBS: Well, we'll also have a border that is wide open across which an estimate 1 million illegal aliens cross. We have a border -- we have a port through which 95 percent of the cargo comes without interference or without screening. Do you -- I've got to ask you because in Spanish today -- you talked in length in Spanish, you said, and I'd like to put it up for our viewers to see.

Quote: "For those 10 million permanent residents who feel offended by the rejection of this legislation, who feel betrayed, who feel humiliated, who feel beaten down, the appropriate thing at this moment is to arm yourselves with the right to vote by naturalizing yourself and becoming citizens."

GUTIERREZ: Absolutely, I feel that way.

DOBBS: May I ask you a question? Why should they feel beaten down? Why should they feel humiliated? Why should they feel betrayed?

GUTIERREZ: Because when you speak of one immigrant, you really speak of all of them, Lou. Because the tone and the texture of this debate has been such that you stereotype all of us. You put the blame on the Mexican border and the Mexican border and Mexicans as though they were usurping jobs left and right from American citizens, as though they were tearing at the very fabric of this society. That tone and tenure of the debate speaks ill of them. They have come through...

(CROSSTALK)

DOBBS: ... you have just distorted anything that I've said. And I want to set the record...

GUTIERREZ: But...

DOBBS: No, no. I'm going to set this record straight.

GUTIERREZ: Lou...

DOBBS: No, no. I'm going to set this record straight, Congressman. I have said that an illegal immigrant crossing our border from the south would be a damn fool not to cross it for a better life. What I have said is that the United States' government is absolutely derelict, its Congress and its president in not enforcing the law.

And I have put the blame squarely, squarely, sir, on you, your colleagues in government and this president for its failure to enforce the law of the United States and to secure the borders almost six years after September 11th.

So don't tell me, after your activists and many of the proponents of amnesty and open borders have called me a racist, a xenophobe, an isolationist.

GUTIERREZ: Sorry (ph), Lou, I... DOBBS: OK. Please keep the record straight here.

GUTIERREZ: Lou, the problem here is I haven't said any of those things here on this program or in private or in public conversations. Nor do you have a record of it, so why accuse me of something that I've never uttered? Number one.

What I have said is that immigrant community should organize itself. The more people they have to vote, the more they're engaged in our democratic process. The more beneficial the process and the...

(CROSSTALK)

DOBBS: But that's what I'm asking you.

GUTIERREZ: ... product will be for them.

DOBBS: You said 10 million people who are in this country legally, why...

(CROSSTALK)

GUTIERREZ: Legally. They're here. Because...

(CROSSTALK)

DOBBS: Because why wouldn't they already be doing that?

GUTIERREZ: Let me share with you. Let me share with you. Number one, they are doing it. And we're going to encourage them the same way we encourage people to register to vote, to naturalize to become citizens, and to become much more active in this debate so that they are more empowered, Lou.

Because you see, in my neighborhood, in my community, there are not hordes of people. They sit on the same pew with me on Sunday at church. Their children play with our children. They are an integral part of the fabric of our community.

DOBBS: Please, Congressman. Nobody on this...

GUTIERREZ: And they need to organize themselves and arm themselves with the right to vote. That's the democratic...

:DOBBS: Why in the world have you...

GUTIERREZ: ... way to do it.

DOBBS: Why would a -- I couldn't agree with you more. But what I'm asking is, why in the world would a person who is in this country -- as a legal permanent resident, why would they not already be on that path? And the issue that one immigrant is the same as any other, sir, is an absolute distortion and at the root of much of the obfuscation from your side of the argument.

There is obfuscation on the other side without question. But to say there's no difference between illegal immigrants and legal is a disservice to everyone who goes through the legal process to enter this country.

GUTIERREZ: Lou, we have different points of view, you and I.

DOBBS: Yes, we do.

GUTIERREZ: That's what makes this country so rich and so dynamic and that's what keeps us strong and vibrant, Lou. And what we have to do in this discourse is have respect for each and everyone's point of view.

DOBBS: I've got all the respect. Who invites you on this broadcast? As often as I can.

GUTIERREZ: But, please, number one, you just accused me of a whole bunch of things in your prior intervention that I've never said, either publicly or privately. I've come on this program. You invite me on this program. I look forward to the energetic debate.

DOBBS: All right. Let me ask you this.

GUTIERREZ: Do you think I come on this program because you're going to congratulate me and say, Lu, what a great job, happy we both (INAUDIBLE)...

(CROSSTALK)

DOBBS: Well, let me ask you this.

GUTIERREZ: No, I come because I think it enriches our conversation.

DOBBS: I agree with you and I delight in the fact that you do even though you and I couldn't be much farther apart on the issue.

GUTIERREZ: I know that.

DOBBS: Let me ask this. I have said secure our borders, secure our ports and then we'll deal with the effort of a rational, effective, humane reform, and I mean real reform, not just a name, in our immigration laws, and deal with those 12 million to 20 million illegal aliens.

Why will -- why could we not do that?

GUTIERREZ: I think we can.

DOBBS: Because that's what the American people want.

GUTIERREZ: And you know something, it's what I want, Lou.

DOBBS: Then let's do it. Let's get on the road together. We'll go out and persuade everybody to do it.

GUTIERREZ: Lou, by I'm saying -- Lou... DOBBS: Let's go secure that border.

GUTIERREZ: But I'm for securing -- Lou, when I wrote the STRIVE Act with my colleague Flake that was introduced by McCain and Kennedy in the Senate, it was about enforcement, enforcement, enforcement and making sure our border was secure, and internal enforcement.

Come on, Lou, the same Social Security card that my grandfather got, my grandson just got. It has been 100 years. We need to advance that technology. And at the same time we need to take those that are a critical part of our economy and deal with them in a humane way.

DOBBS: We've given you more time than any guest this week. I hope you're flattered by the fact. I want you to come back. We'll have further discussions.

GUTIERREZ: I look forward to it, Lou.

DOBBS: I appreciate it.

GUTIERREZ: Thank you.

DOBBS: Congressman Gutierrez, thanks. Up next, at the top of the hour, "THE SITUATION ROOM" and Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. Major decisions today from the U.S. Supreme Court. Do voters consider the court on Election Day? We'll ask our senior political analyst Bill Schneider.

And on the heels of one divisive Supreme Court ruling, Democratic presidential candidates are sure to take up the issues of race and affirmative action. Tonight they are returning to the debate stage, our Candy Crowley will have a preview.

Also he's a major asset to some, an easy political target to others. Does Bill Clinton's stature help or hurt his wife's campaign? Carl Bernstein is standing by for that.

And a Fourth of July safety tip for everyone. Officials using human look-alikes to make their point about fireworks. Jeanne Moos takes an "Moost Unusual" look.

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

DOBBS: Thank you, Wolf. Up next, Senator Ben Nelson, we'll be talking about what do we do now? Stay with us.

(COMMERCIAL BREAK)

DOBBS: Senator Ben Nelson, Democrat, voted yes for cloture on the grand compromise Tuesday. Today, he changed his vote and a nation should be grateful. The senator lobbied by the Bush administration and this morning by the president himself. He still voted no. Senator Ben Nelson joins us tonight from Capitol Hill.

Good to have you with us, Senator.

SEN. BEN NELSON (D), NEBRASKA: Thank you, Lou. It is good to be with you.

DOBBS: This vote, it was supposed to be close. It was overwhelming at the end despite intensive lobbying by the administration, business interests principally in the form of the U.S. Chamber of Commerce, by ethnocentric interests obviously, immigration lawyers, the Catholic Church. What happened?

NELSON: Well, I think people began to look at this bill and said, now, it's not good to kill a bill that has had so much time worked on it. But it would have been worse to enact the law than it was to kill the bill. The bill was so bad that by the time they were looking at it, it just -- you couldn't resuscitate it.

DOBBS: You're a Democrat. Does your leadership, Senator Harry Reid, the president of the United States, do they have such low regard for the intellect of U.S. senators that they would actually say that, as they did, it became a mantra, a bad bill is better than no bill?

NELSON: Yes. I...

DOBBS: That was breathtaking. I think Americans had to be nauseated thinking such nonsense.

NELSON: Yes. I think what they meant is that there were some good things in this and there were some bad things. But in my opinion, the bad things just outperformed the good things in this bill and that's why you couldn't enact it. It was about amnesty first instead of border security first.

And it started out that way, and it continued that way. And everything that they tried to do to make it better in many cases just made it worse.

DOBBS: Inadvertently, I think -- and perhaps I'm being unfair to the Senate leadership and certainly this president, I think inadvertently a lot of facts got out to the American people. The fact that it would only constrain 25 percent of illegal immigration. It would double legal immigration into this country. It would be $2.6 trillion in retirement costs when this group of amnesty beneficiaries retired. It was overwhelming.

How in the world can we make it any clearer to our elected representatives, and the American people have over the last number of weeks, that these borders must be secured, these ports must be secured and immigration -- existing immigration laws enforced?

NELSON: Well, that's what -- we've got an opportunity to do that. We need to make sure that people understand, both in Congress and across the country, that we've got to secure the border. You've got to have border enforcement. We can deal with the problem of legal immigration and getting that straightened out.

Right now, the Department of Homeland Security can't even renew passports in time or issue passports for Canada or for Mexico, so.

DOBBS: Our government is, right now, an embarrassment. The U.S. Senate in its vote today, including yours, went a ways in improving that regard and we appreciate you being here, Senator.

NELSON: Well, it's my pleasure, Lou. And keep up the fight. It's a good one. And if I can help you and Congressman Gutierrez, you just let me know.

DOBBS: You have got a deal.

NELSON: All right.

DOBBS: We'll caucus immediately.

NELSON: There you go.

DOBBS: Well, not immediately, we'll wait until you get back from recess.

NELSON: OK.

DOBBS: Senator Ben Nelson, thank you.

NELSON: Thank you.

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

(COMMERCIAL BREAK)

DOBBS: Despite today's vote, 95 percent of you say you doubt border security and enforcement of existing law will be high on the agenda of this administration.

"THE SITUATION ROOM" starts right now with Wolf Blitzer. Good night from New York -- Wolf.

BLITZER: Thanks, Lou.

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