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LOU DOBBS TONIGHT

Political Progress Stalls in Iraq; Barack Obama Outlines Terrorism Strategy

Aired August 1, 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: new efforts in Congress to stop communist China from manipulation of its currency. And it would put even more Americans out of work -- many lawmakers now saying the Bush administration is putting U.S. relations with communist China ahead of the interests of middle-class working Americans. We will have that special report.
Also, concerns tonight about dangerous food imports from communist China. Those imports are soaring. And what is the Bush administration doing about that? Well, they're actually allowing a large increase in those food exports from China to the United States. We will have that story.

The government of Mexico has found an astonishing new reason to oppose construction of a fence along or border. Not surprisingly, Mexico refusing to acknowledge its own responsibility for our own illegal immigration crisis. Among my guests here tonight, Phil Kent, author a provocative new book, "Foundations of Betrayal: How the Super-Rich Undermine America."

We will have 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 Wednesday, August 1.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

We begin tonight with a double blow to the hopes of military and political success in Iraq. Insurgents today killed more than 70 people in a wave of bomb attacks across Baghdad. At the same time, the most powerful Sunni group in Prime Minister al-Maliki's government declared that it is withdrawing from the government.

The withdrawal of the Sunni Arab bloc ends any immediate prospect of political reconciliation in Iraq.

Dan Rivers has our report from Baghdad -- Dan.

(BEGIN VIDEOTAPE)

DAN RIVERS, CNN CORRESPONDENT: Lou, a terrible beginning for the month of August here in Baghdad, with fresh car bombings across the capital that's left dozens dead and wounded, and also a fresh political crisis.

(voice-over): The fuel that could make this country rich was used as a weapon to kill its people in Baghdad, a tanker full of gasoline turned into a devastating truck bomb. It ripped apart a gas station in the western area of Mansour. Dozens of people were lining up to fill their cars.

Firefighters braved searing heat to extinguish the flames. Earlier, in Karada in central Baghdad, there was another car bomb near a popular ice cream shop, pools of blood soaking into the street, where 150 died and 20 were injured.

And, politically, it was also grim news. Iraq's fragile government, led by Prime Minister Nouri al-Maliki, was plunged into fresh crisis. The largest Sunni bloc in its coalition, the Accord Front, will resign, effectively ending the charade that Maliki's Shiite party leads a unity government.

The Sunni Accord Front had six ministers working in Maliki's government. They had been demanding that no more Shiite militia be integrated into Iraqi armed forces, a demand they felt was ignored. Once they depart, it will further frustrate efforts to pass benchmark reforms demanded by the U.S.

It prompted President Bush to hold a videoconference with Maliki to discuss the crisis.

(on camera): The government has been dealt a crippling blow by the loss of its key Sunni coalition partners. It will further paralyze an already beleaguered administration, which seems unable or unwilling to stop the daily violence here -- Lou.

(END VIDEOTAPE)

DOBBS: Dan Rivers reporting from Baghdad.

Insurgents in Iraq have killed four more of our troops. The soldiers were killed yesterday in two attacks in Baghdad; 77 of our troops killed in the month of July. That is the lowest monthly total of American deaths in eight months; 3,656 of our troops have been killed since the war began, 27,104 of our troops wounded, 12,180 of them seriously.

A new congressional report says the wars in Iraq and Afghanistan could cost American taxpayers more than $1 trillion. But that is a lower estimate than some unofficial estimates of the cost of war in Iraq alone. Some independent, private analysts saying the war in Iraq could eventually cost as much as $2 trillion.

Ed Henry reports from the White House.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): To portray the president as a fiscal conservative, spokesman Tony Snow says the White House will not give in to Democratic demands for an extra $22 billion in the federal budget.

TONY SNOW, WHITE HOUSE PRESS SECRETARY: For most Americans $22 billion is a pretty considerable chunk of change.

HENRY: Try multiplying that $22 billion by 45. That's how much the war on terror is now projected to cost, $1 trillion dollars.

In a new report, the nonpartisan Congressional Budget Office says the war in Iraq and Afghanistan have already cost $602 billion. And the report conservatively estimates the wars will cost at least another $481 billion. And maybe even more if U.S. troops stay in Iraq for a longer period, bringing the total tab to above $1 trillion.

SNOW: Well, if you take a look at what happened on September 11, 2001, it's estimated that the aftershocks of that could have cost up to $1 trillion. And we understand that there is a real commitment in the war on terror, but also, you have to think what the countervailing costs are.

HENRY: But, if you add up the net worths of "Forbes" magazine's top 10 richest people, starting with Bill Gates at $51 billion, you only reach $230 billion. So, the war on terror is costing four times that sum. As for a reasonable estimate on how much the war will cost, Snow said that's impossible.

SNOW: But you're assuming that wars move in neat, tidy and predictable arcs. And unfortunately, they're not activities that lend themselves to the normal ebb and flow of a budget process.

(END VIDEOTAPE)

HENRY: But, in fact, it was former Pentagon official Paul Wolfowitz who predicted it would be neat and tidy costs. He said that no U.S. taxpayer money would be used. He said that back in 2003, because he thought oil revenue could cover the cost of the war.

Also, Larry Lindsey, the president's former chief economic adviser, was fired several years ago because he predicted the war in Iraq would cost up to $200 billion -- Lou.

DOBBS: There was great skepticism. And, as -- you may recall when Nobel Prize-winning economist Joseph Stiglitz estimated the cost of the war two years ago at $1 trillion and perhaps more over the course of time.

These estimates are absolutely disastrous to the United States and those who are concerned about its budgets. And that does not even begin to consider the most important part, the cost in terms of human life.

Thank you very much, Ed Henry, from the White House.

A supposed American ally in the war on terror, Saudi Arabia, today said it's astounded at U.S. criticism of its policy toward Iraq. Last month the U.S. ambassador to the United Nations said Saudi Arabia is undermining American efforts to stabilize Iraq. At a news conference in Jeddah with Secretary of State Condoleezza Rice and Defense Secretary Robert Gates, the Saudi Arabia foreign minister rejected that U.S. criticism, the Saudi foreign minister dismissing suggestions Saudi Arabia should do more to stop insurgent Sunni sympathizers crossing its borders into Iraq.

Well, the United States and Saudi Arabia have agreed that Iran is a dangerous threat to the stability of the Persian Gulf region, at least. But it turns out that bungling by our Pentagon may have allowed Iran to obtain spare parts for F-14 Tomcat fighter aircraft. Government investigators say the Pentagon sold the public more than 1,000 parts that could be used in those F-14s.

Tomcat fighters are no longer in service in this country but the Iranian air force still flies a couple dozen of those aircraft, and Tehran is on the market, the world market, buying those spare parts for the aircraft.

Democratic presidential candidate Senator Barack Obama today outlined his strategy to defeat terrorism. Senator Obama said he would redeploy troops from Iraq to Afghanistan and he might order U.S. troops to fight terrorists as well in Pakistan.

Senator Obama's speech came amid rising criticism from other Democratic candidates of Senator Obama's national security policy and expertise.

Candy Crowley has our report.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): In a muscular speech on the war against terrorism, presidential candidate Barack Obama promised U. S. -led assaults into Pakistan if necessary.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: There are terrorists holed up in those mountains who murdered 3,000 Americans. If we have actionable intelligence about high-value terrorist targets and President Musharraf will not act, we will.

CROWLEY: In the rarest of moments, this puts Obama basically in sync with the Bush administration and Hillary Clinton, interviewed on Urban Radio.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: ... if we had actionable intelligence that Osama bin Laden or other high- value targets were in Pakistan, I would ensure that they were targeted and killed or captured.

CROWLEY: Obama's speech was aimed at establishing tough-on- terrorism credentials, after a couple of rocky debate answers which critics found weak and meandering.

It also follows a week in which he and Clinton had a nasty clash over his statement that, as president, he would meet with leaders of nation like Iran and Cuba and North Korea. Clinton called Obama naive and irresponsible, saying there should be lower-level diplomacy first, to be avoid being used for propaganda.

No names mentioned today, but Obama returned to the subject.

OBAMA: It's time to turn the page on Washington's conventional wisdom that agreement must be reached before you meet, that talking to other countries is some kind of reward and that presidents can only meet with people who will tell them what they want to hear.

CROWLEY: The Obama campaign declined to call anything in the speech an attack on Clinton. Obviously, said an aide, there are some differences here.

This would include his continued discussion on congressional authorization of the war in Iraq, a vote in which Clinton was among the ayes.

OBAMA: With that vote, Congress became co-author of a catastrophic war.

CROWLEY: Obama's speech outlined a series of five diplomatic and military steps to redirect the war on terror, including taking the fight out of Iraq and putting it in Afghanistan and Pakistan.

(END VIDEOTAPE)

CROWLEY: The '08s were out in force critiquing Obama.

On Pakistan, Chris Dodd called it dangerous to leave even the impression that the United States would needlessly and publicly provoke a nuclear power. On the broader speech, the Biden and Richardson campaign said they were glad Obama agreed with their plans for the war on terrorism.

But beyond her comment on Pakistan, the Clinton campaign had nothing else to say. No sense giving Obama more play, when she is sitting on a hefty double-digit lead in the national polls -- Lou.

DOBBS: A lead that has risen dramatically. We are talking about almost double...

CROWLEY: Yes.

DOBBS: ... the poll ratings of those of Senator Obama. A direct reflection, do you suppose, Candy, of what many consider to be the outright misstep by Senator Obama during the Democratic YouTube debate here on CNN?

CROWLEY: Well, they don't think that in the Obama campaign. What they will point out to you is that in fact this is a national poll and that the polls in those early states, which really do matter, are closer.

Nonetheless, when you look inside those polls, Lou, and you ask who is more ready to lead the nation, who has more experience, that always comes out Hillary Clinton. DOBBS: Always, to this point, and concerning about that to many people who are concerned about working men and women in this country is the senators embrace of the -- of Indian outsourcing corporations, companies and the fund-raising that has been taking place, some $3 million worth, amongst Indian Americans, while she continues to support outsourcing.

Is this likely to become a very big problem for Senator Clinton?

CROWLEY: I think, you know, as we move forward, some of these things that you're talking about I think definitely do get play further down the line. None of these candidates, honestly, have come under that same kind of really heavy scrutiny that they will get as we march towards January.

DOBBS: Aww, heck, Candy, let's just start early.

CROWLEY: OK. It's a deal.

DOBBS: Make it a little -- make it real interesting for everybody.

CROWLEY: OK. All right.

DOBBS: Candy, thank you very much -- Candy Crowley, reporting from Washington.

Coming up here next: Senator Hillary Clinton faces charges she's trying to create a new political dynasty at the White House.

Also, lawmakers furious with President Bush and his administration for failing to protect U.S. business from artificially cheap imports from China.

And new concerns that our government may ignore food safety concerns, allow China to raise its food exports to this country, irrespective of the interests of American consumers.

Stay with us. We're going to have those reports and a lot more. We will be right back.

(COMMERCIAL BREAK)

DOBBS: The Bush administration opposing congressional efforts to put pressure on communist China over its so-called free trade and currency policies, policies that have cost thousands and thousands of Americans their jobs.

As Lisa Sylvester now reports, this is an issue being closely watched by American industry trying to find a way to sell its products to China.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): In Billings, Montana, at the PAYS auction yard, ranchers bid on cattle. Here, beef is the way of life. But that could be jeopardized by actions taking place thousands of miles away. Like other U.S. industries, cattle producers are feeling the heat from China.

BILL BULLARD, R-CALF USA: Because their currency is devalued, China can export that beef for far less than what we can afford to produce it. And as a result it gives the Chinese cattle industry a tremendous advantage over U.S. cattle producers.

SYLVESTER: In addition to currency manipulation, China has been subsidizing its cattle farmers, hoping to become a player on the world market. The U.S. Treasury Department has been gently nudging China to level the trade field. But patience is wearing thin on Capitol Hill.

SEN. EVAN BAYH (D), INDIANA: It's a little bit like the government saying, yes, American workers and businesses are being cheated, but we don't yet have the backbone to actually do what it takes to make it stop.

SYLVESTER: The Senate Banking Committee passed a bill Wednesday that would make it easier to target countries that manipulate their currency and seek remedies. A bill in the House calls for countervailing duties.

Free trade advocates, fearing congressional action, are running ads in national newspapers as part of a lobbying campaign. They warn the anti-China measures could tip the United States into a depression.

DICK ARMEY, FORMER REPUBLICAN HOUSE MAJORITY LEADER: It's one thing to argue the argument with undergraduates who have been misguided, but quite another to have to argue this argument with people who seek the mature, adult responsibilities of being a member of the United States Senate.

SYLVESTER: But the bill's proponents say when China hands out subsidies and manipulates its currency, that's not free trade, just the opposite. The proposed offsets are designed to help U.S. workers, producers and farmers correct the imbalance.

(END VIDEOTAPE)

SYLVESTER: A Senate staffer said that, unlike in the past months, where there's been a lot of luster and talk, this time the train is moving. Congress is intent on pushing a bill to address this issue that could end up on the president's desk -- Lou.

DOBBS: What exactly what Congressman Armey trying to say there?

SYLVESTER: He was essentially taking a dig, essentially taking a hit at some of the senators there. Armey, who was an economist before he got to Congress...

DOBBS: Right, right.

SYLVESTER: ... is saying free trade, and he's beating that drum of the free trade mantra, saying it's one thing to argue with college kids, but he thinks the senators should know better. DOBBS: Well, they should know better, but so should he. The fact of the matter is, 31 consecutive years of trade deficits, a trade debt for this country that is rising faster than an already astronomical $9 trillion national debt.

And what I can't quite figure out amongst these geniuses who are so-called free traders is, why do they think that about a 35 percent to 40 percent undervaluation of the Chinese yuan to the dollar is free trade? Why do they think 25 percent duties in tariffs on American products entering China is free trade?

I'm a little confused by these geniuses. And I hope that maybe they will be glad to explain that to us over the course of these weeks ahead here, so that we can catch up with their brilliance.

SYLVESTER: You know, that's a very good question, Lou, because they say that it's free trade when the United States is getting hammered. But when it comes to correcting the imbalance, suddenly, that's not free trade.

DOBBS: Basically, I think people are starting to realize, and certainly a lot of people in Congress, to their credit, that this nonsense, this mantra that has been drummed up by corporate America and Wall Street is pure poppycock and really, really bad economics.

And to blame the Chinese for the idiocy of our own policies is completely incompetent on the part of our national leaders, whether Republican or Democrat or in the White House or Congress, or even like Dick Armey, an employee, if you will, of Wall Street.

Thank you very much, Lisa Sylvester.

Rising concerns tonight that there may be an increase in food imports from communist China, despite the surge of all of the contaminated food that we brought in.

As Kitty Pilgrim now reports, the USDA wants to push ahead, aggressively, with new rules that would permit massive amounts of Chinese poultry to be shipped to the good old USA.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): China is not allowed to ship its chicken to the United States. But a USDA rule allows U.S.-raised chickens to be shipped to China, processed there, and shipped back to the United States as chicken products. Some of in Congress think that's an outrage after multiple contaminated food reports from China.

REP. VIRGIL GOODE JR. (R), VIRGINIA: Processed chicken would be another food product coming in from China. And I think we need to be reducing, not increasing, food products from China.

PILGRIM: The USDA rule is a gift to Chinese President Hu Jintao jammed through the approval process in a matter of days before his visit last year. It also serves as a door opener for wider chicken exports from China.

The USDA is now working on new regulations which would allow products of chicken raised and processed in China into the U.S. market.

Congresswoman Rosa DeLauro has written to the secretary of agriculture -- quote -- "to strongly urge you to remove the People's Republic of China as a country eligible to export processed poultry products to the United States."

Some in Congress are trying to stop China's chicken exports. The current House Agriculture appropriations bill has a clause that bars the use of agriculture funds for any poultry imports from China. But President Bush has vowed to veto that bill.

TONY CORBO, FOOD & WATER WATCH: He issued a letter to the Congress yesterday indicating that he intends to veto the House version of the agriculture appropriations bill, and this is one of the reasons he is citing for a veto. The bill would prohibit the import of processed Chinese poultry.

PILGRIM: The USDA poultry inspection reports on Chinese operations in 2005 and 2005 found multiple problems with slaughter and processing of chickens in China.

(END VIDEOTAPE)

PILGRIM: Now, the USDA continues to insist that China's inspection of poultry plants meets U.S. standards.

Also, China been the site of several avian flu outbreaks. And even though the virus is killed during the cooking process, food watchdogs say they are no guarantees that the cooking process will be monitored properly in China, Lou. There's big safety issues here.

DOBBS: You think?

(CROSSTALK)

DOBBS: They have done such a good job with fish, seafood. Why wouldn't the Bush administration want to bring in a lot of chickens? I mean...

PILGRIM: It makes absolutely no sense.

DOBBS: I have to say -- and I want to say this with all of the kindness I can muster. Does this White House, does this federal government think that the American people, the American consumer, are -- that we are all a complete bunch of utter morons?

I mean, they are basically dismissing every kind of safety concern, dismissing the intelligence of the American consumer, fighting against origin-of-country labels -- country-of-origin labels. And now they want more chicken? And they are saying that food safety standards in China are the equivalent of the U.S. food safety standards? PILGRIM: And they absolutely are not. There were two studies done at the poultry plants in China, multiple, multiple problems with them.

DOBBS: Multiple problems.

PILGRIM: That's the ones they noticed.

DOBBS: You know what? I got to thinking, though, you know, they may -- as these politicians are apt to do, there may be a little nuanced parsing going here. They may have the same standards as the United States, but their ability to adhere to those standards may be somewhat similar to what we are doing here in the United States, because we are not inspecting the food. We are not guaranteeing the safety of the American consumer.

So, maybe it makes sense, after all. Maybe I'm completely misguided on this issue.

PILGRIM: I don't think so, Lou. I think you have got it right.

DOBBS: All right, Kitty. Well, I appreciate the vote of support. Thank you.

Well, coming up here next, the dynasty issue hitting the race for 2008. We have had Bushes. We have had Clintons. Are we talking about maybe another eight years of Clintons and Bushes? We will have the story.

And a GOP presidential candidate blasting the Bush administration over the issue of a total lack of border security. We will have that report.

And some people caught entering this country illegally -- we often refer to them here as illegal aliens -- are going to be permitted to stay here. Some, however, will be sent home. What's the difference? What sense does our immigration policy make? What sense does this administration make? We will try to deal with the answers here in just a moment.

Stay with us. We will be right back.

(COMMERCIAL BREAK)

DOBBS: Senator Clinton's run for the White House is leading to inevitable comparisons with the career of her husband, former President Clinton. Her opponents say Senator Clinton is part of the old political guard.

Bill Schneider reports on whether voters are concerned. Well, we know her candidates are, but whether voters are concerned about another political dynasty.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): (AUDIO GAP) Illinois in the CNN/YouTube debate.

UNIDENTIFIED MALE: With Bush, Clinton, and Bush again serving as the last three presidents, how would electing you, a Clinton, constitute the type of change in Washington so many people in the heartland are yearning for, and what your campaign has been talking about? SCHNEIDER: Senator Clinton started her answer with a clever quip.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Well, I think it is a problem that Bush was elected in 2000. And I...

(LAUGHTER)

(CHEERING AND APPLAUSE)

SCHNEIDER: And then defended herself.

CLINTON: Obviously, I am running on my own merits, but I am very proud of my husband's record as president of the United States.

(CHEERING AND APPLAUSE)

SCHNEIDER: Is it a problem for voters?

A new national poll asks, if Hillary Clinton were elected president, some people say this would be a problem because it would mean at least 24 years of having a member of the Clinton family or the Bush family as president. Is that a serious consideration for you in voting for president? Apparently not. Only 12 percent said it was. A majority said it was not a consideration at all.

The poll also shows Clinton with a nearly 2-1 national lead over Barack Obama. He is trying to close the gap by depicting himself as the candidate of fundamental change and Clinton as too tied to the past. But experience is her big advantage. Most Americans say Clinton's experience and competence are a positive attribute.

The public also feels more positive than negative about the fact that Bill Clinton is her husband.

(END VIDEOTAPE)

SCHNEIDER: The voters clearly want change.

But, for a lot of voters, and particularly Democrats, a change from a Bush to a Clinton may be the kind of change that they want. Is it a big enough change? Well, the first woman president, that sounds like a pretty dramatic change -- Lou.

DOBBS: Not in my house, it doesn't.

(LAUGHTER)

DOBBS: The idea that there's some concern about a Bush or a Clinton in the White House, I guess it would amount if she were to elected and reelected, 28 years. SCHNEIDER: Yes.

DOBBS: You know, there's another dynasty that I think is troubling to many of us that is not talked about here. It would also be 28 years of a Yale graduate in the Oval Office.

SCHNEIDER: Oh...

DOBBS: Now that's got to be troubling to -- to lots of people.

SCHNEIDER: Well, certainly to people who went to Harvard. I think that would be you and some other people I know. (LAUGHTER)

DOBBS: Like you?

SCHNEIDER: Yes.

DOBBS: The fact of the matter is, it is bizarre that in a nation of 300 million people, we continue to look out into, you know, this field of candidates and we keep coming up with families of privilege. We keep coming up with people who are -- go to the same schools. I mean for 2004, I mean it was almost mirror images of one another, except for their partisan politics.

SCHNEIDER: Well, a lot of politics is name recognition. And that's hard to achieve. You're talking about 300 million people. To be well known in that big a country, you have to have a big name. And that's what people like Clinton and Bush already do.

I'll tell you another name...

DOBBS: Do you remember the old days...

SCHNEIDER: Yes?

Well, not so old.

DOBBS: ...the good old days -- well, they're pretty distant, actually -- when you didn't have to have a big name, you had to have a big idea. You had you to have some big performance.

Do you think we'll ever get those days back?

SCHNEIDER: Well, Rudy Giuliani is running on that. He had a big performance after 9/11 and he's running on that, he hopes, right to the finish line.

DOBBS: Well, I can't wait to hear more thoughts on your idea of a big idea for these candidates.

SCHNEIDER: OK.

DOBBS: Thanks very much, Bill Schneider.

SCHNEIDER: Sure.

DOBBS: appreciate it.

Republican presidential candidate Mitt Romney is taking a hard line against illegal immigration with a new commercial that's hitting the airwaves now in Iowa.

Today the governor campaigned in New Hampshire, where he blasted the Bush administration for creating a department of homeland security he described as one big bureaucracy.

Romney's campaign ad focuses on one of Iowa's biggest issues -- illegal immigration.

(BEGIN VIDEO CLIP FROM MITT ROMNEY CAMPAIGN AD)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: ...you're going to have to get in line with everybody else with no special pathway to becoming citizens. Legal immigration is great. But illegal immigration, that we've got to end.

Thank you.

And amnesty is not the way to do it.

(END VIDEO CLIP)

DOBBS: Romney will join fellow Republicans in Iowa, where there will be a great big debate on the 5th of August.

Time now for some of your thoughts.

Many of you are writing in about yesterday's House hearing on former Border Patrol Agents Ramos and Compean and their prosecution and the involvement of the Mexican government.

Crista in Kansas said: "The Sentences of Ramos and Compean should not only be commuted, they should be pardoned outright and get their jobs back, though I don't know why they would want to work for a government that betrayed them."

Maryanne in California: "Lou, anything except a full pardon is unacceptable in the case of Ramos and Compean. I've never seen a greater miscarriage of justice other than the commutation of Mr. Libby."

Bill in Texas said: "Thanks for supporting the Border Patrol agents. Your courage in the face of criticisms is to be admired. I still can't believe this happened."

Well, most of us can't and we all hope that it is rectified quickly.

We'll have more of your thoughts later in the broadcast.

Now our poll. Tonight's question, considering Governor Romney's comments on the campaign trail today, do you believe the Department of Homeland Security should be completely restructured? Yes or no?

Cast your vote at loudobbs.com.

We'll have the results for you coming up here in just a moment.

Up next, the government of Mexico has found a surprising new reason to complain about border security.

And new proposals in Congress to make America more competitive. How exciting.

We'll have that and much more next.

We'll be right back.

(COMMERCIAL BREAK)

DOBBS: The Mexican government is adamantly opposed to the idea of the United States insisting upon border security along our border with Mexico.

the Mexican government says that would threaten endangered species and the environment.

Tonight, Casey Wian reports on the devastating impact that illegal immigration has had on wildlife and the environment along our southern border with Mexico.

(BEGIN VIDEO TAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexico is a persistent critic of the fence now being constructed along parts of its northern border. Now the Mexican government threatens to file a complaint with the International Court at the Hague, because it claims a new report warns the fence is a threat to ecosystems and wildlife.

STEVE ELLIOT, GRASSFIRE.ORG: The source of the report is environmentalists groups in the United States and the Mexican government, both who have a very strong open borders agenda and don't want to see the fence built.

WIAN: Mexico's environmental secretary says the eventual construction of this barrier would place at risk the various ecosystems that we share.

Border security advocates call that claim outrageous given the damage caused by illegal immigration. These photographs, taken last month near the Mexican border in Arizona, show river beds overflowing with trash, backpacks, water bottles, human waste -- all signs of an illegal alien lay-up site.

San Diego Congressman Brian Bilbray grew up surfing near the Mexican border. Before that area was double fenced, he says illegal aliens would eat eggs from the endangered California Least Tern. Even now, pollution from Mexico is a problem for U.S. beaches near the border.

REP. BRIAN BILBRAY (R), CALIFORNIA: For the gall of Mexico to talk about cross border problems to the environment, they've been polluting San Diego County for 50 years with their sewage and their trash. And, frankly, maybe we should have brought them to the Hague. Maybe we ought to close our -- our port of entry for every day they pollute our beaches in San Diego and maybe they would be sensitized then about how they're impacting the environment.

WIAN: The Bureau of Land Management says illegal aliens dumped at least 25 millions pounds of trash in the Arizona desert alone since 2000. A Department of Homeland Security spokeswoman says: "We are not going to stop projects because of one concern," adding, "the ongoing border fence construction includes environmental assessments."

(END VIDEO TAPE)

WIAN: Now, concern about the fence was also expressed by the president of Argentina. Nestor Kirchner traveled to Mexico this week and said, Lou, the border fence is an insult to all of the nations of Latin America.

DOBBS: Well, you know, he really should worry about other issues more proximate to Argentina. But let's assume that there is concern about that fence.

Why -- I mean let's just look empirically at this for a moment.

Of those 25 million pounds of trash over the past year that was left as a result of illegal immigration, how much of it has been cleaned up?

WIAN: About 1 percent of it was cleaned up by the Bureau of Land Management as of 2005.

DOBBS: (INAUDIBLE).

WIAN: We don't have the -- the latest numbers, but not much...

DOBBS: I'm sure they've been very busy in the year-and-a-half since then.

WIAN: Right.

DOBBS: And the idea that this government of Mexico would make such a statement about the environment, the fact is that deaths of those trying to cross our borders this year are up about 20 percent from a year ago. Just about 155 deaths to this point. And those people are dying because the government of Mexico is encouraging what they call heroes to go the north, to the United States, to enter this country illegally. And the government of Mexico -- what are they doing to stop that -- to stop their people from -- physically from crossing our border?

I'm just curious.

WIAN: Absolutely nothing, Lou.

And, also, we have to point out that there's some responsibility on the part of the government of the United States, which has failed to secure the border. If that border was secure, it wasn't so easy to cross, not that many people would be dying trying to do it.

DOBBS: Well, absolutely. There's just another issue I'm just kind of curious about on the part of the government of Mexico, because you're reporting on this and following it very closely these days.

Just exactly what is the government of Felipe Calderon?

We know he's doing a lot about the drug cartels and he should receive great credit for it.

But with, however, half of his country living in absolute poverty, what is the government of Mexico doing to improve the lives of its citizens?

WIAN: I haven't seen anything specific, Lou, I've got to honest with you. I haven't followed the economic policies of Mexico that closely. But it sure hasn't stopped people from coming across the border.

DOBBS: No, it hasn't. And while the wealth of Mexico is growing astronomically, it is still in the hands of the few and the people of Mexico are living in deprivation. And that is the fact. And this government does not have a foreign policy to deal with any of those issues in terms of investment, in terms of the relationship with Mexico that would be amongst -- would be one between partners trying to deal with a common border issue and the issue of illegal immigration and economic prosperity for Mexico.

Fascinating.

And while the hypocrites at the environmental ministry of the government of Mexico, I'm sure, will be sending us all love notes, thank you very much.

Casey Wian.

WIAN: OK.

DOBBS: Still ahead here, Congress says it has a new plan to keep jobs in the United States -- presumably for American citizens. We'll have that report.

And are this country's liberal elites destroying America?

The author of "Foundations of Betrayal,," the book, "How The Liberal Super Rich Undermine America" joins me. We'll have a discussion how the liberal elites do that and a few thoughts, also, about conservative elites do that. And I'll have a few thoughts, also, for Mr. Kent about those conservative elites, as well.

Stay with us. We continue in one minute.

(COMMERCIAL BREAK)

DOBBS: Congress appears to be on the verge of passing legislation that would raise funding for mathematics and science education. Supporters say that funding would keep the United States competitive within the global marketplace and American jobs from being shipped overseas.

Bill Tucker reports now on what this new legislation could mean for American students and workers.

(BEGIN VIDEO TAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Members of the House and Senate believe America needs to be more competitive. A bill that they believe will do that is likely to pass Congress before the week's end.

The reason?

SEN. LAMAR ALEXANDER (R), TENNESSEE: Well, the need is to keep our jobs. I mean if we really want to think of the way to keep our jobs from going to China and India and other countries overseas, we need to keep our brain power advantage.

TUCKER: The Competitiveness Bill would nearly double the funding for the National Science Foundation and authorize $43 billion for science, technology, engineering and mathematics, research and education programs at the federal level for the next three years. It creates grant programs for low and middle income students. And while putting more money into education and national research labs is welcome, critics point out two problems.

First, the problem is a presumed lack of kids with degrees in the field.

VIVEK WADHWA, DUKE UNIVERSITY: And the problem isn't the supply, it's the demand. That we have enough engineers and scientists. The problem is that the salaries aren't there.

TUCKER: And that's the second problem. The salaries don't reflect a shortage and the bill doesn't fix the underlying fundamental policy problem, where it's cheaper for companies to outsource the jobs overseas.

In February of last year, the head of the Federal Reserve testified...

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Simply producing more engineers and scientists may not be the answer because the labor market for those workers will simply reflect lower wages or, perhaps, greater unemployment for those -- for those workers.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: If you don't have the jobs here because the industries aren't here, because they have been sent overseas by our outsourcing-focused trade policies, it doesn't matter how highly skilled our workers are. They'll still be unemployed.

TUCKER: Not a single organization or leader who represents American workers was a part of the process of forming this legislation.

(END VIDEO TAPE)

TUCKER: Now, there's no question this bill will create jobs at research institutions and on university campuses. The bigger question is will corporations react by investing more in its U.S. workforces instead of doing as IBM is doing, for example, Lou, and that is outsourcing its work to India?

DOBBS: IBM and hundreds of other corporations.

TUCKER: As well. Right. Exactly.

DOBBS: You know, it -- I love to see the enthusiasm for this legislation based on it'll make it -- it'll America more competitive. It will -- we will have a better educated workforce.

What happened in this country to the idea of education for its own sake, with the millions and millions of brilliant students, bright people we have in this country, who don't have an opportunity to go to school?

Why not make certain that those students who have an aptitude and a talent, a gift in mathematics and science, are guaranteed their education by the federal government, whether it be through state programs, grants for state programs, whatever?

The idea of this government reinforcing -- for the sake of just educating our people, not because of global competitiveness or all of this nonsense. And to listen to Ben Bernanke, the Federal Reserve chairman, I mean that's scurrilous and disgusting, the words that he uttered there.

TUCKER: But he does make a point. You can -- you've got to create jobs for these people so that when they come out -- the Vacaduar (ph), for example, says 40 percent of the engineers at Duke end up not going into engineering because the salaries aren't there when they graduate. They go into investment banking.

DOBBS: The salaries aren't there because of public policy...

TUCKER: Right.

DOBBS: ...and business corporate practice that is devastating. I wish I would have written a book about that in 2004.

(LAUGHTER)

DOBBS: All right, Bill Tucker, thank you very much. TUCKER: Sure.

DOBBS: I'm joined now by the chairman of the House Committee On Science and Technology, Congressman Bart Gordon.

Congressman Gordon joining us tonight from Capitol Hill.

Gordon, good to have you with us, Congressman.

REP. BART GORDON (D-TN), HOUSE COMMITTEE ON SCIENCE & TECHNOLOGY: Thank you, Lou.

DOBBS: The idea that this government would get behind a program to incentivize, to support science and mathematics, engineering, is exciting.

What -- what -- how do you respond to the claim, though, that even this legislation would not be supportive of American jobs and higher pay in the private marketplace of jobs, which is where most folks live?

GORDON: Well, I think it's a misunderstanding to think that this bill is only for producing a few great scientists or engineers. It's much broader than that.

If you look at the problem that we in this country, there are about seven billion people in the world, half of which make less than $2 a day. We can't compete and we don't want to compete on that level, which means that we've got to be making 50 widgets for every one widget they're making in China. We've got to be innovating and developing the widget maker and manufacturing that widget maker here.

So whether you are a high school graduate, whether you are a junior college graduate or a college graduate, no matter what it is, you're going to have to work at a higher skill level. You're going to have to have a better proficiency in math and science so that we can be more efficient and more productive. And that's what we're trying to do, in addition to investing in research, so that we are in the lead in those areas.

DOBBS: The National Academy has issued a report in 2005 that two thirds of all fourth and eighth graders in this country are testing below the proficient level in mathematics.

Will your legislation move to that level of education?

GORDON: Absolutely. It's K to 12. And the problem, Lou, is, it's not the our kids aren't smart. But when you look at scores around the world, only Cypress and South Africa have lower math and science scores than our kids.

DOBBS: Yes.

GORDON: The reason is that -- and, again, we have good teachers, but our teachers aren't proficient in the material.

DOBBS: Oh, Congressman, if I may interrupt you.

GORDON: Yes?

DOBBS: Look, we've got some wonderful teachers. But we've -- we've got to acknowledge some realities. We -- we have teachers who don't even -- who have not -- that's not their main -- the subjects they're teaching wasn't their major.

GORDON: Well, that's the reality...

DOBBS: You know...

GORDON: That's what I'm talking about.

DOBBS: Yes.

GORDON: Right now, there's something like 67 percent of the middle school math teachers don't have a certificate or a major in that area. Eighty-seven percent of the science teachers. And we're going to do something about that.

We're going to do two things. One, we're going to bring those teachers in for the summer, provide them stipends to get their certification, A.P. Courses and whatever might be necessary. We're going to set up a scholarship program for those students that want to go into math, science and education, and agree to teach for five years.

So it's really focused on getting the teachers up to teach and inspire.

DOBBS: Right.

Well, I'm inspired that we're -- we have you thinking about this and your colleagues, to move it forward. It's certainly something the country needs -- a focus, an incentive and inspiration for our young people and to make certain that every kid in this country, irrespective of his or her economic or social circumstance, can get an education, certainly in mathematics, engineering and science.

GORDON: And if we don't...

DOBBS: So my hat is off to you.

GORDON: If we don't do that, I'm very afraid that my daughter and this next generation could be the first generations of Americans that inherit a national standard of living less than their parents.

DOBBS: Well, you know, as you were saying, it isn't that our students are dumb. But, man, have we got some dumb people leading this country to get us in this kind of mess. And I'm talking about -- I'm not talking about simply politicians. I'm talking about the business leaders who talk out of one side of their mouth about education and then do nothing to improve the opportunities for education for all Americans.

We thank you for doing so.

GORDON: Thank you.

DOBBS: Good to have you with us.

Congressman Gordon has got to get off to a vote.

We appreciate your time.

Up next here, is an elite group of wealthy liberals undermining this country?

My next guest says so.

We'll hear from author Phil Kent.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: This just in from the White House.

Our White House correspondent, Ed Henry, reporting that President Bush has asserted executive privilege. The White House will refuse and is refusing to allow White House Adviser Karl Rove and Political Affairs Director Scott Jennings to give testimony and documents to the United States Congress over the issue of the firing of the U.S. attorneys.

Again, President Bush is refusing to allow White House advisers Karl Rove and Scott Jennings to give testimony.

President Bush asserting executive privilege after subpoenas were issued. The Senate saying that they wanted them there. We'll see what happens.

We'll have much more here later on CNN.

The author of a provocative new book says wealthy liberal elites are destroying this country through their power -- their control of powerful tax-exempt foundations.

Phil Kent, author of the book, "Foundations of Betrayal: How the Liberal Super Rich Undermine America."

Phil Kent joins me now.

Phil, good to have you here.

PHIL KENT, AUTHOR, "FOUNDATIONS OF BETRAYAL": Thanks, Lou.

Good to be here.

DOBBS: This is a -- this is a subject that I find fascinating and most people are not aware of, the role of foundations, the tax- exempts, in influencing policy and the government. KENT: Absolutely. You've got about 16,000 of these private tax- exempt foundations. You've got $500 billion in assets. And a lot of this, Lou, they're not just benign liberal think tanks that are for big taxes and big government. They are out there actively with an agenda, under the guise of charity, to change America.

DOBBS: Under the guise of charity, set up under the tax code 503, 504.

KENT: Right.

DOBBS: I mean we've got a number of them. But the idea that these foundations can -- who are the worst offenders, in your opinion?

KENT: In my book, I say the Ford Foundation is the most radical, un-American foundation. I'll explain that in a minute.

And number two and trying harder is George Soros and his Open Society Institute. Absolutely trying to undermine America at every turn.

DOBBS: How so?

How so?

KENT: A couple of quick examples.

Both of them give to these radical Islamic charities. Ford Foundation, the Al-Mezan Center for Human Rights, which supports suicide bombers over in Palestine.

DOBBS: Wow!

KENT: That's a recipient of Ford largesse. The same with Soros, funding radical Muslims.

DOBBS: Well, the idea that -- that this is going on -- there are also a lot of conservative foundations out there and a lot of super rich conservatives.

Why didn't you -- why didn't you mess with them?

KENT: You know, it's a good question, but they're not undermining America. They're out there doing their policy discussions, as are a lot of the liberal foundations.

These are the most radical, and, as the subtitle of my new book indicates, these are the ones that are undermining America, whether it's through a radical open borders agenda, whether it's through a radical green Al Gore type agenda or...

DOBBS: How about the ACLU?

We've been having a lot of fun here lately with them on a number of issues.

What -- how about them?

They're supported by a lot of these foundations.

KENT: They absolutely are. They're a favorite of all of these foundations -- Ford, Rockefeller, Tides.

DOBBS: Right.

We appreciate you being with us.

Phil Kent.

The book is "The Foundations of Betrayal."

Good luck with it, Phil.

Thank you.

Fascinating reading, a fascinating subject.

Come back.

We'll talk more.

KENT: Appreciate you.

DOBBS: We'll talk about some of those conservative super rich, too.

Coming up at the top of the hour, "THE SITUATION ROOM" with Wolf Blitzer, who is neither rich nor conservative.

Is that correct, Wolf?

WOLF BLITZER, HOST, "THE SITUATION ROOM": I think so. Or something like that.

Who knows?

Thanks very much, Lou.

Is Saudi Arabia doing enough to earn the big $20 billion arms deal the U.S. is offering?

Secretary of State Condoleezza Rice, doing some arm twisting right now.

But is she getting anything in return?

Plus, the first Muslim Congressman. He's just back from Iraq. Find out what Congressman Keith Ellison is now saying really happened on the ground. He's here in the "THE SITUATION ROOM".

And the race to reach a potentially big new source of oil is on. Black gold beneath the Arctic -- is the U.S. losing out?

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

DOBBS: Well, thank you very much.

Coming up here next, the result of our poll.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now, the results of our poll -- 98 percent of you saying the Department of Homeland Security should be completely restructured, as Governor Mitt Romney has suggested.

Thanks for being with us tonight.

Join us here tomorrow.

Thanks for watching. Good night from New York.

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

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