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Lou Dobbs Tonight

President Bush Delivers Mixed Report on Iraq; Senate Prepares For Hearings on Imprisoned Border Patrol Agents

Aired July 12, 2007 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Tonight: The federal government is slashing homeland security grants to one of this country's most vulnerable states, Arizona. The state has the highest number of illegal alien border crossings, the largest amount of illegal drug smuggling across our border with Mexico. We will have that special report.
Also, a disturbing new warning about the export of middle-class American jobs to cheap overseas labor markets. Tens of millions more American jobs are now at risk.

And the Senate is preparing for the first hearings on imprisoned Border Patrol agents Ramos and Compean, the agents given harsh prison sentences for shooting and wounding an illegal alien Mexican drug smuggler who was given immunity by the Justice Department to testify against the agents. One of those agent's top supporters is Congressman Dana Rohrabacher. He joins us here -- all of that, all the day's news, and much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, July 12.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

President Bush today declared that Congress has no business trying to run the war in Iraq. President Bush blasted Democratic and some Republican senators who are now demanding a quick change of course on American strategy.

The president's remarks came as an interim report said the Iraqi government has failed to meet key economic and political targets. But the report also showing that Iraq is making satisfactory progress on achievement of most military goals.

We begin our coverage tonight with Suzanne Malveaux at the White House -- Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, it was new digs in this briefing room, but an old message from the president. He is under tremendous pressure to prove that his Iraq policy is actually working.

Now, that Iraq progress report showing that they have got a long way to go here -- President Bush really under fire and under pressure to explain why.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: The president of the United States.

MALVEAUX: President Bush laid out plenty of reasons why his Iraq strategy must continue.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm not making excuses. But it is hard.

MALVEAUX: Whatever you call them, Mr. Bush offered many, starting with the Iraqi progress report sent to Congress. While a 50/50 report card usually constitutes a failing grade, not so for this administration.

BUSH: The bottom line is that this is a preliminary report.

MALVEAUX: Mr. Bush excused the Iraqi government's failure to meet key political benchmarks.

BUSH: It's hard work for them to get law passed. And it's sometimes -- it's hard work for people to get law passed here.

MALVEAUX: Here, lawmakers, both Democrats and a growing number of Republicans, are urging Mr. Bush to change course. The president accused them of crossing into his lane.

BUSH: I don't think Congress ought to be running the war. I think they ought to be funding our troops.

MALVEAUX: The troops, Mr. Bush says, must now stay in Iraq to fight al Qaeda, the terrorist group that was largely absent there before the U.S. invaded.

BUSH: The same folks that are bombing innocent people in Iraq were the ones who attacked us in America on September the 11th.

MALVEAUX: And, as for who is responsible for keeping U.S. troops in Iraq, Mr. Bush stressed several times his reliance on his military command and their belief that now is not the time to pull out forces.

BUSH: If that were to happen, we would then have to go back in with greater force in order to protect ourselves.

MALVEAUX: Mr. Bush offered this explanation for Americans' discontent.

BUSH: There's war fatigue in America. It's affecting our psychology.

MALVEAUX: And as for the president's own psychology:

BUSH: You know, I'm guess I'm like any other political figure. Everybody wants to be loved.

(END VIDEOTAPE)

MALVEAUX: Now, the president, Lou, says that he looks at himself in the mirror and he believes that he made the right decision. It's these kind of statements as you know that fuel the perception of his critics that he's out of touch -- Lou.

DOBBS: Suzanne, thank you very much -- Suzanne Malveaux from the White House.

Top congressional Democrats today said it is time for President Bush to admit that his Iraq policy has failed. Senate Majority Leader Senator Harry Reid said the United States should refocus its efforts to defeat al Qaeda. Republican critics of the president's conduct of this war are standing firm, after the president's speech. House Minority Leader Congressman John Boehner today called those GOP critics wimps.

Dana Bash reports from Capitol Hill.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Democrats rushed to the cameras to declare the Iraq progress report proof it's time for troops to come home.

SEN. RICHARD DURBIN (D), ILLINOIS: President Bush is out of touch. He's out of touch with the reality of the war in Iraq. He's out of touch with the American people. This benchmark assessment report which we have received doesn't give us much hope.

BASH: Not so, said supporters of the president's policy, who argued, the strategy is working and jumped to defend it.

SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: There is nothing in this report that should justify anyone who has not already made up their minds that they want to retreat from Iraq to vote to mandate a retreat from Iraq.

BASH: The mixed results in the president's report are unlikely to lure more GOP senators to support the Democrats' demand that troops come home by May 1 of next year, a measure that does not have enough votes to pass. But the report also did nothing to calm the concerns of an increasing number of Republicans.

SEN. LAMAR ALEXANDER (R), TENNESSEE: We need a new policy in Iraq. I think the president would be wise to accept that new policy now.

BASH: Lamar Alexander is one of half-a-dozen GOP senators pushing legislation to adopt recommendations of Iraq Study Groups, which calls for troop withdrawal starting next spring.

ALEXANDER: The president can't sustain an Iraq policy with the support he has today. And I do not want us to get to September and be faced with a question of all the way in or all the way out. BASH: Senator John Warner, the Republican who pushed the president to issue this report, found no silver lining in it, saying in a statement he was "disappointed That the Iraqi government has not met critical political benchmarks, and this has to change immediately."

Warner and fellow Republican Richard Lugar will unveil legislation as early as Friday aimed at changing strategy in Iraq.

(END VIDEOTAPE)

BASH: Meanwhile, the House is responding by scheduling yet another vote on troop withdrawal, a deadline for troop withdrawal by spring of next year. And, Lou, that vote is actually going on as we speak on the House floor.

Unlike in the Senate, Democrats over in the House do have enough votes to pass this. The only question is, how many Republicans will break ranks? Last time, it was only two -- Lou.

DOBBS: Dana Bash, thank you very much -- Dana Bash from Capitol Hill.

President Bush today cited progress in Al Anbar Province and Diyala Province as examples of what can be achieved. The president also said he believes Iraqi Prime Minister al-Maliki understands the need for political reconciliation.

But the prospects for such reconciliation remain uncertain at best, as Michael Ware now reports from Baghdad.

(BEGIN VIDEOTAPE)

MICHAEL WARE, CNN CORRESPONDENT: Lou, with the interim report on the war delivered to Congress and President Bush's remarks, the big picture or state of play of the war has been brought into sharp focus.

Despite what Congress is being told, the truth that emerges is that essentially Iraq is a failing state, riven by sectarian and other agendas, with many powerful factions within this government not sharing American interests and indeed opposed to them. That's why many of the congressional benchmarks that have been set either have not been met or most likely not going to be met.

That has left the administration with few successes to highlight. Indeed, the president pointed to Anbar Province and the work of the tribes in combating al Qaeda. This has nothing to do with the Iraqi government and more to do with an American deal with the Sunni Baath insurgency.

This is a deal which, while successful against al Qaeda, is deeply troubling for the Shia-dominated government, which America accuses of having links to Iran. Very much, this is a mixed bag. And it's very clear that, whatever is being said in D.C., there's still a long, long way to go before there's any kind of victory -- Lou.

(END VIDEOTAPE)

DOBBS: Michael Ware reporting from Baghdad.

A new warning tonight about the threat from al Qaeda. Government officials say al Qaeda is stepping up its efforts to send terrorists into this country. Those officials also say al Qaeda has rebuilt most of its capabilities required to strike targets within the United States. This new assessment comes in a draft of the national intelligence estimate. The draft is being circulated to our intelligence agencies for approval.

Insurgents in Iraq killed another of our troops. The soldier was killed in an attack east of Baghdad; 31 of our troops have been killed so far this month, 3,610 of our troops killed since the war began, 26,695 troops wounded, more than 12,000 of them seriously.

Joining me now for more on the progress and the direction of the war, General David Grange, one of the country's most decorated former military commanders.

General, your take from this interim report, if you will, early report, on the effectiveness of the surge strategy.

BRIGADIER GENERAL DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, early report, I think it involves more than just the surge strategy. I think they went back a little bit further.

But I believe, since the surge really is only in full effect for one month, since that's when the last troops actually arrived in the country, that there are small pockets of success. I think Michael's comments that it's going to be a long time is correct.

But, in dialogue with commanders on the ground that -- that command not only locations within Baghdad, but the belts to the north, the west and the south, that progress is in fact being made, at least militarily.

DOBBS: Militarily.

And are we not in a devilish, if you will, conundrum, in that this administration, and the generals in Iraq, particularly General David Petraeus, has said that military progress is not sufficient, that there has to be political success; yet, this report makes it clear that the successes, if they are to be judged that, are at the margin; they are military, and almost none of the economic and political benchmarks have been met?

GRANGE: Well, for sure, Lou.

And the political process, strategically, the grand strategy is the key to the success in Iraq. However, some of the political accomplishments cannot take place unless a secure environment is established. See, a lot of these people, I believe, are on the fence. And they are betting on a com-net, OK, who is going to be in charge of Iraq when this mess is over?

And some will not commit to the loyalty of their nation. And they are still committed to the factions, indeed, as Mike Ware said.

DOBBS: Well, we have just received this word here at CNN. The House of Representatives has just passed legislation requiring and defying at the same time the threat of a presidential veto requiring that withdrawal of our troops begin by April of next year.

And we will have more details as they are coming in from our correspondents on Capitol Hill, but that vote just taking place.

General, this is a very significant development today. Your reaction?

GRANGE: Well, if a timeline is established, it's established with conditions as we know of now. And, as you know, in war, everything is uncertain, and things change.

And I'm hoping that the timeline provides the forces the chance and the other elements, economic, political and social, to in fact take hold in time that, if we start departing, we do so in a favorable way to this nation and as well as the region and Iraq itself.

DOBBS: General David Grange, thank you.

Coming up next here: the federal government failing to secure our borders and even cutting grants to one of our border states that must deal with the most severe illegal immigration crisis in the nation. We will have that report.

And the illegal alien lobby, they are at it again, trying to stop local communities and states from dealing with the illegal immigration crisis. We will have the story.

And tens of millions more American jobs could be at risk from the exported jobs, middle-class American jobs, to cheap overseas labor markets -- that report and more straight ahead.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Homeland Security Secretary Michael Chertoff this week warned that he had a gut feeling that we would be hit by a terrorist attack this summer, this as a new intelligence assessment shows al Qaeda is strengthening.

So, you would think it inconceivable that the federal government would cut off anti-terror money to some states. But that is exactly what is happening to the state of Arizona. Arizona is frequently cited as a terrorist target, the Hoover Dam on the border with Nevada, also home to the largest nuclear power plant in the nation, not to mention its 370 miles of broken border with Mexico.

But, incredibly, tonight, after 30 requests, Arizona is still waiting to hear back from the federal government about millions and millions of dollars that it desperately needs.

Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The president likes to talk about border security. And the president likes to say he's delivered.

BUSH: It's one thing to hear people come down here and talk. It's another thing for people to come down and do what they say they are going to do.

TUCKER: Yet, when it comes to actually walking the walk, for the last three years, federal funding for the Arizona Department of Homeland Security has been slashed by 60 percent, from $58.4 million in 2004 to 423.4 million in 2006.

The director of the Arizona Department of Homeland Security brought her message to Washington.

LEESA MORRISON, DIRECTOR, ARIZONA DEPARTMENT OF HOMELAND SECURITY: The obvious is, is that Mexico is on the south of our border. But the other part is not so obvious, is that, that border is also a point of entry for anybody outside of Mexico potentially. If our border is that porous, anybody can potentially get into Arizona and, therefore, into the United States.

TUCKER: Congress wants to add funding, but the president is threatening a veto if they do, in defiance of calls for more border security and ignoring the gut feelings from his own homeland security secretary that we are at risk for a terrorist attack.

DAVID SCHANZER, PROFESSOR, DUKE UNIVERSITY: I don't think saying at one point we are going to veto a spending bill because it has too much security for our states and localities on the one hand and then saying al Qaeda is at its most dangerous on the other makes much sense.

TUCKER: Currently 40 percent of the marijuana seized coming across the Mexican border and half of the apprehensions of illegal aliens crossing the southern border are in Arizona.

(END VIDEOTAPE)

TUCKER: Now, a spokesman for the Department of Homeland Security today said that decisions on money are expected to be made next week.

But, Lou, he gave no indication of whether Arizona would receive its full funding for the request that it has pending or not.

DOBBS: This story is -- as I said at the outset, it's inconceivable that at a time when the government, our national intelligence estimate, at least in draft form, is talking about the strength of al Qaeda, at a time when the war on drugs with absolute clarity and certainty, we know that Mexico is the principal source of methamphetamines, heroin, cocaine and marijuana, and we still, with two states, New Mexico and Arizona, declaring a border security emergency, are not receiving the help from the federal government they require. It's amazing.

TUCKER: It makes no sense, and it defies all the priorities they say are important.

DOBBS: As do so much that is happening in this nation these days.

Bill Tucker, thank you very much.

Communities all across the country are dealing with the consequences of the federal government's failure to secure our borders. Cities are trying to crack down on illegal alien day laborers, but the illegal alien open borders lobby trying to block those efforts at every turn in court.

As Casey Wian reports from Redondo Beach, California, the cities are fighting back.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): It's illegal in Redondo Beach to solicit work on the street, but law enforcement officers here must turn a blind eye to that crime happening right in front of him. A judge has blocked the city from enforcing its two- decades-old law restricting day laborers and the people who hire them.

The city is appealing, not because studies show 75 percent of day laborers are illegal aliens, but because day laborers present a public safety nightmare.

MIKE WEBB, REDONDO BEACH CITY ATTORNEY: You have people stopping in traffic during rush hour. It's not safe either for the day laborers or for the people who are driving. And then you had other related concerns that had to do with issues regarding littering. We had public urination. We had fights, vandalism.

WIAN: For nearly 20 years, Redondo Beach controlled the problem with period law enforcement crackdowns. But in 2004, MALDEF and others sued to stop the city from enforcing its law.

Even though an almost identical law in Phoenix was upheld by the 9th Circuit Court of Appeals, a judge granted MALDEF's request. And the dispute now returns to the 9th Circuit. The advocacy group Judicial Watch this week filed a brief in support of Redondo Beach's law enforcement efforts.

TOM FITTON, PRESIDENT, JUDICIAL WATCH: Our view is that the lower federal court judge got it wrong in saying that illegal aliens or anyone else affected by this anti-solicitation statute have a First Amendment right to seek work. And we say, no, no, no, they applied -- the court applied the wrong standard here. This is commercial speech. It's not political speech. And commercial speech can be regulated by the government. Certainly, commercial speech that involves illegal activity can be regulated by the government as well.

WIAN: Judicial Watch is supporting dozens of cities nationwide trying to crack down on day laborers. It's also suing to force Los Angeles to repeal Special Order 40, which prohibits police from asking about the immigration status of criminal suspects.

(BEGIN VIDEOTAPE)

WIAN: But illegal alien advocates won a victory in that case this week, when a judge ruled the ACLU can represent them in their efforts to uphold those sanctuary laws -- Lou.

DOBBS: Casey, thank you very much -- Casey Wian from Redondo Beach.

That brings us to the subject of tonight's poll: When the federal government refuses to enforce our immigration laws and to secure our borders and ports, is it appropriate, in your judgment, for state and local governments to enact and enforce their own laws, yes or no? Please cast your vote at LouDobbs.com, the results upcoming.

There's harsh new criticism tonight of this country's efforts at tougher security along our southern border from, as you might imagine, the government of Mexico. The Mexican government says increased numbers of U.S. Border Patrol agents and patrols are to blame for what it claims will be a record number of deaths in the desert this year.

A Mexican congressional report predicts 500 of what it calls migrant workers will die this year, saying those illegal aliens are being forced to take riskier routes to avoid detection by the Border Patrol. The Border Patrol says, illegal alien smugglers are the ones to blame for the higher number of deaths. The Mexican government report does not site any fault by the government of Mexico for its failed policies and attitudes, policies that are forcing illegal aliens to cross the border in the first place, and attitudes that in Mexico regard illegal aliens crossing into this country as heroes.

Time now to look at some of your thoughts.

Gene, a Lou Dobbs Democrat, as he describes himself: "Lou, if there's a terrorist attack this summer, we better get out of Iraq now and start putting some of your plans to secure the borders and secure our ports in place. Give us pure food and water, clean air. Then let's get on with education, health care, and jobs, to name a few."

Doreen in Washington: "'Assembled in America' is the newest code used by international corporations. It means grown in China, made in China, shipped by Chinese ships, but the label applied in America."

Richard in Maryland: "Lou, have you gone shopping lately?"

And, yes, I have.

"You will find you have a choice of products made in China or products made in China."

We will have more of your thoughts and your e-mails here later in the broadcast.

Up next: The war on the middle class is escalating -- tens of millions more American jobs now vulnerable to overseas outsourcing.

And the war in Iraq draining resources from the war against drugs at the moment that drug cartels are finding new ways to ship their narcotics into this country.

A congressional panel hears disturbing testimony about just how easy it is to have nuclear material shipped to anyone's home in this country.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

DOBBS: A disturbing new report tonight about how our government is bungling homeland security. That's on top of the government failing to manage basic security issues.

For example, it still takes several months to obtain a passport. Also, airport security continues taking away the bottles of water of ordinary folks trying to get on an aircraft. But in a recent investigation, government agencies with concealed fake bomb components were allowed to board. They did confiscate the water. They just missed the bomb components.

And, incredibly, barely six years after 9/11, it took only 28 days for a team of undercover investigators to receive a license allowing them to buy nuclear material.

Christine Romans reports on your government at work.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Nothing but the truth.

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Government investigators tell a Senate panel how they used aliases and a dummy company to easily acquire a nuclear license, altering it and soliciting radioactive material from two suppliers, enough material, they say, for a dirty bomb.

GREGORY KUTZ, GAO FORENSIC AUDITS AND SPECIAL INVESTIGATIONS: More importantly, with patience and money, we could have accumulated substantially more radioactive material from other suppliers.

ROMANS: In the sting by the Government Accountability Office, a fake company acquired a legitimate license from the Nuclear Regulatory Commission in just 28 days and then quickly and easily counterfeited that license to seek unlimited amounts of nuclear material.

An official at the nuclear agency said it was important not to hype the risk of a dirty bomb attack, but assured senators:

EDWARD MCGAFFIGAN, NUCLEAR REGULATORY COMMISSION: GAO did find a flaw in our system. And we, as soon as we understood it, dealt with it.

ROMANS: Security expert says even a small dirty bomb attack could have devastating results and is a stated goal of al Qaeda.

EUGENE ALOISE, GAO NATURAL RESOURCES & ENVIRONMENT: No one knows what the impact is. That's why it's so important to prevent it.

SEN. NORM COLEMAN (R), MINNESOTA: The issue is not the amount of lives that would be lost in the explosion itself or even the amount of radiological material. It is the psychological and the economic impact of having radiological material thrown about perhaps in a place like Wall Street or in the halls of Congress.

ROMANS: When the Nuclear Regulatory Commission was told of the string last month, it temporarily halted all new licenses.

(END VIDEOTAPE)

ROMANS: Investigators said suppliers of the material were never suspicious, more concerned with their credit check than security. Investigators said they were convinced they could have easily acquired the radiological material for a dirty bomb -- Lou.

DOBBS: So, let me get this right, three to four months for an American citizen to get his or her passport application approved and a passport back, three to four months, if you're lucky, 28 days for someone to get a sham license permitting them to buy radioactive material?

ROMANS: In this case, all it took was a P.O. box and filing an application.

DOBBS: Well, I have said for some time that Homeland Security, that department, is a sham. It is pitifully managed by Michael Chertoff. This president should absolutely replace him, and I mean right now, and get serious about the mission of protecting the people of this country.

These -- I cannot believe that this Congress, that everyone in it, is not demanding that this department be straightened out, for the good, the protection of the American people.

ROMANS: The GAO here has revealed that, at the Nuclear Regulatory Commission, at least, there are some loopholes here. And from agency to agency, report after report, we have seen these loopholes for some time now.

DOBBS: Right. It is a disaster. It is a sham.

Christine Romans, thank you.

The federal government's failure to security our borders has enabled Mexico to continue to be the principal source of illegal drugs coming into the United States. Even with a promised crackdown on both sides of the border, drug smugglers are already finding new ways to bring drugs here. And there's some argument Mexico is doing a far better job than the United States in the war against drugs.

Last night we reported the Drug Enforcement Administration is trying to stop a new drug route from Colombia to the Dominican Republic. Now it appears there's an even easier route in this country, and this one can be more difficult to shut down.

Kelli Arena has our exclusive report from Puerto Rico.

(BEGIN VIDEO TAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT:. (voice-over):. Cat and mouse on the high seas. U.S. Drug agents in boats trying to stop a surging wave of South American cocaine from reaching U.S. Shores. But the mice have the advantage.

JUAN BERRIOS, DRUG ENFORCEMENT ADMINISTRATION:. Now they got smart, you know? They say hey, why am I going to just send one ship or one vessel with 500 kis when I can send five?

ARENA:. From these waters, it's 70 miles from Hispaniola, the new transit point for drugs heading to the United States.

BERRIOS:. That's a lot of water to cover. And today is daylight. But at night, you won't see them. So if we catch one, then the other four get in.

ARENA:. If drugs make it to the U.S. Territory of Puerto Rico, officials says there are few barriers to keep them from the continental United States. So Puerto Rico, which agents refer to as the third U.S. Border, is being bombarded. Smugglers use everything from container ships to small fishing boats like this one, stopped just a few days ago, filled with 130 kilos of cocaine.

(on camera):. And so this is

BERRIOS:. As we -- as we lift that up --

ARENA:. Ah!

BERRIOS:. There we find --

ARENA:. Surprise, right?

BERRIOS:. There we find.

ARENA:. That's where you have --

BERRIOS:. There we find all the cocaine in kilos, in small packages --

ARENA:. OK.

BERRIOS:. -- similar to the one that you see in this picture here.

ARENA:. (voice-over):. The surge in drugs going through Hispaniola signals a strategic shift in the drug war. While a vast majority of Colombian cocaine still travels through Central America, Mexico and then to the United States, officials say 10 percent of the cocaine headed to the U.S. Now flows through Hispaniola.

BERRIOS:. It's like trying to find a needle in a haystack, as these small single engine aircraft transit hundreds of miles to a location that we have no idea where they're going.

ARENA:. And officials admit the percent of drugs getting into Puerto Rico is remarkably high.

JEROME M. HARRIS, DRUG ENFORCEMENT ADMINISTRATION:. We thought maybe about 20 percent of the actual drugs coming into -- into --

ARENA:. (on camera):. That still leaves 80 percent getting in?

HARRIS:. Yes.

ARENA:. (voice-over):. That's despite the Feds using all they got -- patrol votes, Blackhawk helicopters, high tech planes, sophisticated radar, even jet skis. But it's not enough. One big factor -- help the DEA used to get from other agencies like the Coast Guard is now often diverted elsewhere.

HARRIS:. You know, we've lost a tremendous resources as a result of the war, OK?

So we have to work a lot smaller and smarter.

ARENA:. The war in Iraq is eclipsing the war on drugs, just as the battle of Hispaniola is heating up.

BERRIOS:. It's a lot of them against a few of us.

ARENA:. Kelli Arena on Yauco, Puerto Rico.

(END VIDEO TAPE)

DOBBS:. The federal government itself acknowledges that Puerto Rico needs far more help to fight drug traffickers effectively. The Office of National Drug Control Policy says that because of increased shipping after the implementation of the Central American Free Trade Agreement "the smuggling of illicit drugs into Puerto Rico in maritime cargo is expected to increase over the next four years."

More evidence tonight of the disastrous conditions in communist China's food industry. An undercover investigation by a Chinese state television reporter found cardboard in dumplings being sold on Beijing's street. The reporter asked how the dumplings were made. The dumpling vendor picked up cardboard from the ground, soaked it in chemicals usually used to make soap -- not soup, and then added fatty pork and seasoning.

Unbelievably, the reporter sampled the dumpling, said it tasted tough, with not much taste. The street vendor said most people cannot taste the difference.

Chinese police eventually arrived. They did shut down the cardboard vendor. Up next, approval ratings for the Democratically-led Congress lower than ratings for President Bush.

And what are the prospects for the Democratic candidates for their party's presidential nomination?

What are the issues confronting the Democrats?

Next week, we talk about Republicans. Tonight we talk about Democrats.

Former Governor Mario Cuomo, former Senator George Mitchell join me to talk about the direction of the Democratic Party.

And next week may prove pivotal for two Border Patrol agents imprisoned for shooting and wounding an illegal alien drug smugger given immunity to testify against the imprisoned agents. We'll tell what you happens then.

Stay with us.

(COMMERCIAL BREAK)

DOBBS:. Imprisoned former Border Patrol agents Ignacio Ramos and Jose Compean will finally -- finally have a Congressional hearing on their prosecution. Senate and House committees will hold hearings on their prosecution. The Senate hearings will begin next week, led by Senator Dianne Feinstein. Former Agents Ramos and Compean have spent now 167 days in prison for shooting and wounding an illegal alien drug smuggler given immunity to testify by those agents by the Justice Department.

A hundred members of the Congress, 95 Republicans and only five Democrats, cosponsoring Congressman Duncan Hunter's legislation calling for a Congressional pardon for these agents.

One of the agents' top supporters is Congressman Dana Rohrabacher of California.

He joins us here tonight. Congressman, good to have you with us.

REP. DANA RORHABACHER (R), CALIFORNIA:. Thank you.

DOBBS:. You have got to be -- well, I would hope -- gratified, if not outright thrilled that at least the Senate is moving on -- in an investigation, a hearing, of their prosecution.

RORHABACHER:. Well, I'm very happy that not only the Senate is moving, but Senator Feinstein is a Democrat leader in the Senate and we have had just a little bit of help from the Democrats -- Bart Gordon from Tennessee and a few other Democrats. Most of the people acting in this have been Republicans.

But now that Senator Feinstein is joining up, I think out of a sincere concern for justice in this case, this gives a great deal of momentum to the case of Ramos and Compean. DOBBS:. The House Foreign Affairs Subcommittee that you sit on will also be holding hearings on the 31st of this month, correct?

RORHABACHER:. That's correct. We will be holding hearings on the 31st. And I understand that the prosecutor, Mr. Sutton, has agreed to go to Senator Feinstein's hearing.

DOBBS:. Correct.

RORHABACHER:. We invited him to our hearing. Although he's been on television spouting off and smearing the two Border Patrol agents, we haven't received word yet whether he's willing to come and testify under oath to our hearing on the 31st.

DOBBS:. Well, I'm pleased to tell you, Congressman, that U.S. Attorney, Johnny Sutton, the prosecutor of this case, has agreed to be on our broadcast Tuesday evening. So we'll inquire as to --

RORHABACHER:. Well, I hope he --

DOBBS:. -- as to what his plans are on the 31st of July.

RORHABACHER:. Well, I hope -- I hope that you'll hold him accountable. Do we -- what we have here --

DOBBS:. We tend to do that here, Congressman.

RORHABACHER:. Yes, you do.

But I'll tell you, this -- we have a -- we have a prosecutor out smearing these two people. We have -- he's saying over and over again that they shot an unarmed man in the back who is -- and lied about it. And the fact is, we don't know if this man was unarmed. And this wasn't a man, this was a drug dealer who was in the process of smuggling drugs into our country. They didn't shoot him in the back, which has been indicated by the report on the wound that the man received.

So I want to know why Mr. Sutton is lying about these two Border Patrol agents, calling them corrupt.

Anyway, I'm upset by this guy's conduct as a prosecutor.

DOBBS:. Well, there's another aspect of this that your committee and, obviously, the Judiciary Committee, next Tuesday on -- that Senator Feinstein will be leading. There's another important question and that's why federal officials, including the inspector general of the Department of Homeland Security, lied to members of Congress about these men and about the -- and their records and what they did and what they said.

It's remarkable. And Democrats and Republicans alike substantiated the lies of the inspector general.

RORHABACHER:. We need to put people on the record answering why that sort of thing happened in this case. We also need to know, if it was not important that they lie about this, who were they responding to?

Our hearing on the 31st will focus mainly on whether Mexico, as a government, is having an undue influence on our decisions to prosecute people, especially those people who are securing our borders. And we're going to delve into that. We need serious answers. And let me note, this administration has stonewalled all of our requests to try to track down what type of communications that the Mexican government had in determining whether these two men should be prosecuted.

DOBBS:. And we appreciate your being here, Congressman.

And we look forward to your hearing and the -- Senator Feinstein's hearing. It begins -- the Judiciary Committee's hearing begins Tuesday.

We will be there.

And we thank you for being here tonight.

RORHABACHER:. Thank you, Lou.

All the patriots in this country ought to be grateful to you for making sure we're focusing on Ramos and Compean and their terrible situation.

DOBBS:. Well, thank you, sir.

And we appreciate everything you're doing for them. And I know their families are deeply grateful.

Congressman Dana Rohrabacher, thank you.

Up next, what the future holds for the Democratic Party. I'll be talking with two of the party's leading figures.

Stay with us.

(COMMERCIAL BREAK)

DOBBS:. Over the next two weeks, we're going to be talking about the principle of political parties in this country, the Republicans and the Democrats. Next week, the Republicans.

But tonight, the Democrats, the future of the Democratic Party.

And I'm joined tonight by former Senator George Mitchell, majority leader from 1989 until 1995; also leading the Northern Ireland peace process as U.S. Special envoy.

Joining him with us here tonight, three time New York governor, Mario Cuomo.

Two of the nation's leading Democratic figures.

We thank you both for being here.

Let me begin, if I may, with you, Senator.

We are watching a contest on Iraq between the Democratic Congress and this Republican president.

Is it -- is it a contest that is going to result in a meaningful debate, in your judgment, in offering a presentation of the Democratic vision, presentation on the view of U.S. Foreign policy in the Middle East or are we going to see partisan politics and loggerhead confrontations?

GEORGE MITCHELL (D), FORMER SENATE MAJORITY LEADER:. I think you're likely to see both in any debate of this magnitude. But I think, in the end, Lou, it will be decided by the Republicans in the Congress, primarily in the Senate. They're already starting to leave the president. That will accelerate. And there will come a tipping point in which they will be the decisive factor.

There aren't enough Democrats in the Senate to force a change in policy. It will take some Republicans who are for it. I think that's on the way.

DOBBS:. Governor, do you concur?

MARIO CUOMO (D), FORMER NEW YORK GOVERNOR:. Yes. Let me put a slightly finer point on it. I think you're not going to be able to resolve this as long as you don't have the president on your side, for this reason. Let's assume you've got 100 percent of the Congress, literally 100 percent -- all the Democrats and all the Republicans voting, Mr. President, our boys and our girls, our women and men are dying, you know?

He could still say, I'm the commander-in-chief. You can't tell me -- not even 100 percent of the Congress can tell me how to fight the war.

Then you go to the Supreme Court. The Supreme Court says this is a political question and sends it back.

And so, in the end, you can't resolve it unless the president is with you. And I think the president will be with the Democrats because, as Senator Mitchell has pointed out, he's losing Republicans. In the end, his terrible legacy is going to be capped with he brought down the Republican Party. And that's what will change his mind at the end.

DOBBS:. The Democrats and the Democratic label in Congress are facing the lowest approval rating, with only six months in power, the lowest approval rating in the 35 years that the Gallup poll has been asking the question on the performance of the Congress.

MITCHELL:. Yes.

DOBBS:. How do you -- is that going to have an implication, first of all, for the Democratic primaries and for the candidates seeking the presidential nomination and the 2008 presidential election? MITCHELL:. I don't think it will have any effect on the presidential election. That will focus on the candidates who are chosen by the two parties and the issues which exist at the time. But the reality is it's unavoidable when you get into the kind of difficult issues that you're now dealing with in Iraq, where the country is divided and, therefore, the Congress is divided. And the result is an inability to meet the expectations that were created by the election of 2006.

It was a decisive election, but I think the expectation was that was Democrats are now in the majority, they're going to go in, they're going to end the war --

CUOMO:. Right.

MITCHELL:. -- they're going to do this, they're going to do that. But you know very well, Lou, unless you have 60 votes in the Senate, you can't do anything.

DOBBS:. Right.

MITCHELL:. And the Democrats have 50 votes in the Senate.

DOBBS:. To paraphrase Governor Cuomo, however, to put -- not to put a finer point on it, the Democrats running in November of 2006 made it very clear they were going to change the direction of U.S. Policy and they did not, perhaps, consider the finer point of 60 votes required in the Senate.

MITCHELL:. Well --

CUOMO:. Yes, they made it even harder on themselves than that. They said we are going to get our people back. We're going to pull our soldiers out. They didn't have to say that. They could have said we're going to get our soldiers out of harm's way. That would have allowed for the

Murtha type of situation, where it's going to wind up anyway.

You're not going to pull them all out. You're going to leave some in the vicinity in the end.

So, we made it very hard on ourselves. We won by saying we're going to get them out. And I said before, you can't get them out, even if you got everybody, unless you get the president. And you will get the president because you're winning away Republicans and that will change the president's mind.

DOBBS:. The issue of illegal immigration and border security, the defeat by the procedural cloture vote, it's interesting that six of the 10 freshmen senators voted against it. And pivotal in that were the freshmen Democratic senators, certainly, four of them, critically important to rejecting that.

A change of direction on the part of the Democratic Party. Every one of them could be fairly described as populous. They could be described as fair traders.

Are we seeing a change in the direction of the Democratic Party that will be profound and are we going to see simply that view of the world, that philosophy, remain at the margin in the Democratic Party?

MITCHELL:. Well, my hope is that we'll see a return to the fundamental Democratic principle of economic opportunity. I think Democrats have done well when they have stressed opportunity for Americans. If I can sum it up in a single sentence, the Democrats stand for nobody in America should be guaranteed success, everyone should be guaranteed a fair chance.

When Democrats began to concentrate on dividing up the pie as opposed to making the pie larger, I think that's where they lost their way.

So I think the guiding principle on all domestic issues ought to be how to improve economic growth, job creation and opportunity for every American.

DOBBS:. Governor?

CUOMO:. You started by pointing to immigration. I think that's a bad example to try to divide Democrats from Republicans. The approach to immigration was so unreasonable, given the history of Simpson- Mazzoli. If you've looked at the law and Senator Mitchell --

DOBBS:. I was actually --

CUOMO:. (INAUDIBLE) --

DOBBS:. I was actually bringing it up to -- to talk about a new impulse within the Democratic Party, it seemed to me, not as a difference between Republicans and Democrats.

CUOMO:. Well, I don't think --

DOBBS:. I think, as, you know, I think there's remarkably little difference between the two parties (INAUDIBLE).

CUOMO:. The immigration bill came from Kennedy, a Democrat, McCain, a Republican.

DOBBS:. Right.

CUOMO:. So it wasn't -- it wasn't an ideological thing.

DOBBS:. Right.

CUOMO:. And it was -- it was impossible because, as the Senator pointed out, on Simpson-Mazzoli in '86 -- 1986, you were begging for another amnesty when you did Simpson-Mazzoli.

DOBBS:. Right.

CUOMO:. And much worse, you didn't even following Simpson- Mazzoli.

I think where the Democrats will come out beyond immigration is on the economy. You have a middle class now that's sinking. Here, let me do it very simply.

We left -- the Democrats left, in the Clinton administration, a $5.4 trillion surplus. We are now at a $250 deficit billion deficit and the president is cheering it, Bush. He gave up a $5.4 trillion surplus. That's what he did to the economy with his supply side. That economy has been very good for corporations and big owners of stock. It's been lousy for the middle class, that's sinking.

The cost of everything they need is going up higher than their wages. The poor population has grown over the -- that's perfect for Democrats. They're going to have to respond to that and change that, and they will.

DOBBS:. The Democratic candidates in 2008 -- and we're getting short on time here -- are they going to have the political courage and the directness and the honesty to say to the American people, we have great needs -- public education. We need to drive this economy. We need to build our infrastructure.

Are these candidates, any one of them, any two of them, given your best assessment, going to have the guts to say we've got to raise taxes in this country and we've got to deal with the deficit?

MITCHELL:. Well, some of them have already said that. But I think the tax increases will be limited to those at the very top of the income scale, just as the Clinton economic package did. It was not an accident or a coincidence that we developed this surplus. Clinton did raise taxes on the top 1 percent of income earners. And I think that's where you'll see the --

DOBBS:. You know, this is the point at which I can say but Clinton isn't running, but, of course, Clinton is.

MITCHELL:. The other one.

CUOMO:. Once again, the Senator is absolutely right. Obama and Edwards have already said today they're going to tax hedge funds if they get to be president.

MITCHELL:. Right.

CUOMO:. Hillary is not -- if the Democrats are not precise and bold and honest in dealing with those issues, then they don't deserve to win. They will. They're dealing with the tax issue right now. They're admitting that they will raise taxes at the top and they're making it clear it's not on the middle class. The middle class are going to help. They're going to help the top by taxing them and improving the economy.

DOBBS:. Governor Mario Cuomo, Senator George Mitchell, we thank you both for being here and sharing your thoughts.

And I hope it will be a continuing conversation and I hope you'll come back soon.

MITCHELL:. Thanks, Lou.

DOBBS:. Thank you both.

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

WOLF BLITZER, HOST, "THE SITUATION ROOM":. Thanks, Lou.

A very good discussion.

Coming up, material to make a dirty bomb. We're going to have more on that issue. A lot of people didn't ask any questions whatsoever in terms of getting that material.

Who is to blame?

We're going to have details of that disturbing undercover sting operation.

Also, President Bush defending the latest Iraq report card. Tonight, the outspoken war critic, Congressman John Murtha, he fires back. He'll be here in "THE SITUATION ROOM".

And surprise pictures threatening to dethrone a beauty queen. But this scandal has a twist. Our own Jeanne Moos takes a most unusual look.

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

DOBBS:. Coming up next, the results of our poll.

Stay with us.

(COMMERCIAL BREAK)

DOBBS:. The results of tonight's poll -- 99 percent of you responding that when the federal government refuses to enforce immigration laws and secure our borders and ports, it is appropriate for state and local governments to enact and enforce their own laws.

Let's take a look at a few more of your thoughts.

Maggie in North Carolina said:. "Hey, Lou, maybe if President Bush asks the government of Mexico for permission to pardon the Border Patrol agents and they agreed, maybe then he would let them out of prison. What do you think?"

You don't want to know what I think.

Pam in New York:. "I don't know or understand why the illegal aliens are so interested in becoming U.S. Citizens. Don't they realize that they would lose all their rights?"

Please send us your thoughts anytime at loudobbs.com. We appreciate hearing from you.

We thank you for being with us tonight.

Please join us here tomorrow.

For all of us, thank you for watching and good night from New York.

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

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