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LOU DOBBS TONIGHT

New Recall Issued For Chinese Toys; America's Middle Class on Verge of Collapse?

Aired August 14, 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, a massive new recall of dangerous toys imported from communist China, another recall, another example of our government's failure to protect American consumers from dangerous toys, food, and other imports from China. We will have a special report for you.
Also tonight, a troubling new sign that is what is left of our middle class may be on the verge of collapse. This nation's largest retailer, discount retailer Wal-Mart, saying many of its customers are in deep financial trouble. We will have that report.

And new skepticism about the federal government's promise to crack down on employers of illegal aliens. Some lawmakers say the so- called crackdown is nothing less than political theater. Among my guests tonight, former CIA Director Jim Woolsey, who says the United States may have to bomb Iran.

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 Tuesday, August 14.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

This country's largest toy company, Mattel, today recalled another nine million dangerous toys made in communist China. Those toys contain magnets that can be swallowed by children or lead paint that can cause serious injury or even death. This recall raises new questions about the federal government's system to protect American consumers from dangerous imports.

As we have been reporting extensively here, the government agency responsible for consumer safety is simply stretched to the breaking point.

We begin our coverage with Allan Chernoff here in New York -- Allan.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Lou, you might have guessed, the toys made in China, sure enough. It is a major recall of more than nine million toys in the U.S., double that number worldwide. Most of the toys being recalled have small magnets that can fall out. They include Polly Pocket, Doggie Daycare, Barbie & Tanner, and Batman. Mattel is also recalling Sarge jeeps, which are coated with lead paint, not what Mattel ordered from its Chinese contract manufacturer. That company subcontracted the painting to another Chinese firm by the name of Hong Li Da. And that firm violated Mattel's standards by using lead paint.

(BEGIN VIDEO CLIP)

ROBERT ECKERT, CHAIRMAN & CEO, MATTEL: I'm disappointed. I'm upset, but I can ensure your viewers that we are doing everything we can about the situation. Every production batch of toys is being tested and we will continue to enforce the highest quality standards in the industry.

(END VIDEO CLIP)

CHERNOFF: Mattel says it is now testing every batch of paint used on its toys. The company is offering vouchers to allow consumers to get replacement toys of their choice -- Lou.

DOBBS: Why has the company not been testing these before the recall?

CHERNOFF: They were clearly trusting their contractors out there, perhaps much too much so. They were doing just selective testing but not testing every batch.

DOBBS: Thank you very much, Allan Chernoff.

And we will have all of that information of course on our Web site, those toys that are being recalled, on LouDobbs.com.

The Consumer Product Safety Commission declared that today's huge toy recall proves that it is doing its job. But in point of fact, that commission is facing its biggest crisis ever. It is reeling from staff cuts at the same time as dealing with an explosion of potentially dangerous imports, particularly from China.

Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The acting chair of the Consumer Product Safety Commission sought to downplay its latest announcement of a toy recall.

NANCY NORD, ACTING CHAIRWOMAN, CONSUMER PRODUCT SAFETY COMMISSION: In today's environment, it is easy to take recalls out of proportion. Nine million products is certainly a lot of products, but by no means is it the largest recall this agency has done.

TUCKER: True, but it's also not the first recall. And questions have been raised about the agency's ability to safeguard the American public by none other than one of the two commissioners on the CPSC. Thomas Moore, Clinton appointee, reappointed by President George W. Bush, says -- quote -- "Staffing cuts and other resource reductions have limited the commission's ability to carry out it mission; 80 percent of our toys are now made in China."

And all but two of the toy recalls this year have involved Chinese toymakers.

DON MAYS, "CONSUMER REPORTS": As the number of imports have increased, you would have expected that the staff and the funding for the Consumer Product Safety Commission to make sure those imports are safe have increased at an equal level. That certainly has not happened. If anything, they have decreased the staffing of the agency and kept their budget stagnant.

TUCKER: Since 1980 the staff has been slashed by 59 percent from 978 to just 400 today; 80 of those jobs gone since 2002.

Commissioner Moore says -- quote -- "The clear signal from the administration is that consumer protection is just not that important" and that morale at the agency is -- quote -- "very low."

RACHEL WEINTRAUB, CONSUMER FEDERATION OF AMERICA: Right now the agency does not have what it needs to adequately protect consumers. The agency needs an infusion of funds, resources, staff and improve statutory authority to better protect consumers.

TUCKER: The Consumer Product Safety Commission has currently two commissioners, awaiting the appointment of a third, and roughly 400 employees.

(END VIDEOTAPE)

TUCKER: And those employees are responsible for 15,000 different products. Nancy Nord, who is the acting commission, is currently asking Congress for an expansion of the CPSC's authority to inspect imports at the ports.

But, Lou, we have 320 ports of entry into the United States. And I called the CPSC today to ask how many inspectors they currently have. I know this will shock you, but they wouldn't tell us.

DOBBS: They wouldn't tell you, but we know they have 400 folks entirely at the agency.

TUCKER: Right.

DOBBS: So, they would have 80 people, no matter what their job classification left over, for other responsibilities.

It seems to me this administration owes every American consumer an apology. For that agency to be this absolutely eviscerated is scandalous.

TUCKER: And the consumer activist group generally laud the CPSC, but they say over and over again, it has been, as you put it, eviscerated. Their staffing has been cut. Their budgets have been kept stagnant, and they are supposed to protect us.

DOBBS: Bill Tucker, thank you very much.

One of the reasons for today's massive toy recall is the risk of lead poisoning from contaminated toys. Higher levels of lead can cause serious illness, even death. Another major concern, loose magnets that children may swallow.

Our medical correspondent, Elizabeth Cohen, has our reported -- Elizabeth.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Lou, it is really quite amazing and not in a good way.

The Consumer Product Safety Commission has received more than 500 reports of magnets coming loose from toys, and then they actually have reports of three children who had to have surgery because they swallowed more than one magnet, the magnets attracted each other in the child's intestines and caused intestinal perforations.

Now, there are some warning signs that parents can look out for. If your child develops flu-like symptoms, if they are lethargic, if they're vomiting, and you have noticed that perhaps they have swallowed a magnet, then you should take them and get them immediate medical attention -- Lou.

DOBBS: Elizabeth, thank you very much -- Elizabeth Cohen.

And to help you find the latest information on this latest toy recall, we have provided links to both the Consumer Product Safety Commission and Mattel's Web site. It's on our Web page, LouDobbs.com, as well as a list of the toys being recalled.

Turning now to Iraq, nine more of our troops have been killed. Five troops were killed in a helicopter crash in Al Anbar. The military did not say whether the crash was an accident or the result of hostile fire. Four others of our troops were killed in separate attacks in Baghdad and northern Iraq. Forty-one of our troops have been killed so far this month in Iraq, 3,699 of our troops killed since the beginning of the war, 27,409 of our troops wounded, 12,297 of them seriously.

Meanwhile, insurgents today killed as many as 175 people in a wave of suicide bomb attacks in a town near Mosul in northern Iraq. At least 200 people were wounded in those attacks. U.S. helicopters tonight are airlifting the wounded Iraqis to nearby hospitals.

A troubling new indication of the crisis that faces our nation's middle class.

Christine Romans is here to tell us more -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, Wal-Mart's CEO says that his core customer is simply running out of money by the end of the month. We will have that story after the break.

DOBBS: OK, LEE SCOTT, the CEO of Wal-Mart.

Thank you very much.

Also ahead, rescuers making a new effort to reach those six trapped miners in Utah. We will have a live report for you.

Also, new concerns that the Bush administration may re-launch its amnesty agenda. What a surprise. We will have that special report.

And Republican presidential candidates Rudy Giuliani and Mitt Romney face off over illegal immigration, sanctuary cities and their positions on both issues.

We will be right back. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Retail giant Wal-Mart is blaming this nation's sluggish economy for disappointing sales and profits. Wal-Mart sales rose almost 9 percent in its second quarter, bringing the retailer's total sales to just under $92 billion. Now, while those figures are certainly impressive, they are lower than expected. Wal-Mart says Americans are buying less because their paychecks are stretched too thin.

Christine Romans now on the increasing financial burdens facing middle-class families.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: I'm retired. I know, when I go to the food -- you know, now you need more money for everything.

UNIDENTIFIED MALE: Right.

UNIDENTIFIED MALE: Right. It's like pressure now.

UNIDENTIFIED MALE: Everything has gone up, fuel, the cost of living, housing, taxes -- especially taxes.

ROMANS: These Wal-Mart shoppers reflecting a view also held by the CEO of Wal-Mart, who said millions of his customers are stretched to the limit by gas prices and an increased cost of living.

Wal-Mart's CEO, Lee Scott, said, "It is no secret that many customers are running out of money toward the end of the month."

One hundred and twenty-seven million people a week shop here or at Wal-Mart Sam's Club chain.

CHRISTIAN WELLER, CENTER FOR AMERICAN PROGRESS: This is a reflection of basically the middle class being maxed out. After years of a very weak labor market, and borrowing to the gills, people just simply can no longer shop.

ROMANS: This grim view contrasts sharply with the president's recent assessment of a thriving economy.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our economy prospers when we trust the American people with their own paychecks.

ROMANS: Indeed corporate profits have been spectacular and productivity strong, but at least according to Wal-Mart, millions of Americans are having trouble stretching those paychecks.

Heather Boushey is studying what it costs for Americans to make ends meet.

HEATHER BOUSHEY, CENTER FOR ECONOMIC AND POLICY RESEARCH: Gas prices go up, or energy prices go up, that is going to take a larger chunk out of somebody's paycheck if they are at the low end. And those are the kinds of folks that are shopping at Wal-Mart, who are then going to have less money to be spending. Similarly with food, as we see food prices go up, that is going to take a bigger share out of a low-income family's paycheck.

ROMANS: And Wal-Mart's diagnosis of the economy is worth paying attention to because Wal-Mart is the largest private employer in the world and the largest retailer.

(END VIDEOTAPE)

ROMANS: The Wal-Mart CEO said the payroll cycle is more pronounced today than ever before. That means more and more Americans wait to go to the store until they receive that next paycheck -- Lou.

DOBBS: I understand the focus being on rising expenses, because that's certainly part of the war on the middle class, whether they be energy prices or interest rates. But the big part of the story here are wages that have been stagnant for so many years.

ROMANS: That's absolutely right. These wages here at Wal-Mart, it's interesting, are $10.65 an hour. Wal-Mart's actually kind of replacing some of the jobs in some of these communities because of its huge juggernaut of importing goods from China. So, there's a two- pronged approach here on the war on the middle class.

DOBBS: And China now is ranked -- China -- Wal-Mart is now ranked what as China's export markets among all nations?

ROMANS: Depending on who you talk to, either the fifth or the third. Way up there. One of the top export markets for China...

DOBBS: Among nations

ROMANS: ... among nations is Wal-Mart.

DOBBS: It's incredible. And there is a moral in this story as well. And that is the fact that this major, principally, recipient of Chinese imports, which the Bush administration and the academic orthodox free traders have said will bring low-cost goods to our shores, in point of fact, what we are finding is the truism. If you pay people a living wage, they can live well. And what we are seeing is a reduction, because of lower wages and fewer middle-class jobs, in purchasing power. And that's just a policy that has got to change, and it's got to change soon, even for Wal-Mart's benefit, as one of the principal perpetrators.

Christine, thank you very much -- Christine Romans.

Time now for our poll. After President Bush's glowing review of our economy just last week, are you surprised to hear that the millions of Americans who shop at Wal-Mart are finding it difficult to afford the retailer's low-cost products? We would like to hear from you on this. Cast your vote at LouDobbs.com. We will have the results here later.

Time now for some of your thoughts.

Amy in Kansas said: "I think it's time for the citizens of this country to once again insist on made-in-America products. The Mattel recall should be a wakeup call for all of us."

Eileen in New York said: "Hi, Lou. I took my son back-to-school shopping today, and the only things to leave the store that were made in the USA were my son and myself. Unbelievable."

And Julie in Illinois: "Hi, Lou. I just bought a shirt that says, 'Not made in China.' I will wear it proudly."

We will have more of your thoughts here later in the broadcast.

Right now, many fashionistas -- and there are lots of them around the world -- find it fashionable to be green. Now, for example, take this little number. It's a nifty cotton bag with a hemp-like handle, cleverly adorned with the words -- you can see them there -- "I'm not a plastic bag," apparently useful for blithering idiots who can't tell the difference between cotton and plastic.

And there are lots of those apparently around the world as well. They are brought to you by, as a matter of fact, eminent London designer Anya Hindmarch, a world-class greenie, by the way, who usually charges more than $1,000 for a little handbag.

In fairness, there's good news. These little handbags only cost $15. In London and New York, people stood in line for hours, making a barely discernible distinction between fashion and social statements, using the bags as handbags.

And in Taiwan riots actually broke out among those waiting for these bags. Dozens of people were sent to the hospital. A similar response in Hong Kong forcing police to chose down a shopping mall. And if you weren't able to bag your bag at a store, don't be concerned. They are now selling on eBay for hundreds of dollars each.

There are a couple of problems. This bag was, it turns out, delivered enshrouded in plastic. Oops. Sorry about the fashion statement or the social statement or whatever the statement was. And guess what? This little green treasure of style was made in -- you guessed it -- the world's number-one polluter and world-class labor abuser, communist China.

Golly, don't we all feel better about ourselves now?

I will have more fashion statements in the weeks and months ahead as they unfold, I assure you.

Coming up next, the desperate search for six trapped coal miners is now in its eighth day. We will have the latest for you live from the scene.

And two leading GOP contenders are squaring off over their past policies on illegal immigration. We will have that story. Romney vs. Giuliani.

Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Rescue workers tonight are drilling a third hole in their efforts to reach those six trapped coal miners in Utah. A mine collapse trapped the miners eight days ago.

Brian Todd is at the rescue command center in Huntington, Utah, and joins us now with the very latest -- Brian.

BRIAN TODD, CNN CORRESPONDENT: Lou, the owner of this mine admits that this process is slow. He says it's costly and he says they are running out of options. Right now no sign of the six trapped men. This operation is moving along two different tracks, both of which were captured on videotape by the owner of the mine earlier today.

Robert Murray taking his own crews up to the top of the mountain here where they are drilling holes into the mountain from the top. This -- the video showing them drilling the third hole into this mountain that they hope will reach a chamber where the miners might have retreated to. But to illustrate how slow that is going, they have been at that now for almost a day, and that's -- they are only about halfway in to where they need to go to reach that chamber.

On the second track, which is really the most important at this point as far as getting to the miners, that's where rescue miners are digging through the main tunnel, that also moving along at a real snail's pace. Robert Murray filmed this video that we are going to show you here of them reinforcing the walls, the roof and the floor with so-called water jacks and ribbing that they have to do every couple of feet when they dig here.

Given the deliberate nature of that progress, Murray was pressed on how long it will take them to reach these trapped miners.

(BEGIN VIDEO CLIP)

BOB MURRAY, PRESIDENT AND CEO, MURRAY ENERGY: We are in a third of the way, 700 feet out of 2,000. We have been, since we got mobilized, and got it going maybe seven days. We are going about twice as fast as we were. So, if we are in a third of the way in seven days, but going twice as fast, then another five to seven days, we ought to be there. Now, that's just a mathematical calculation, but we may encounter conditions underground, sir, that would make that longer.

(END VIDEO CLIP)

TODD: Now, the reason he says they are going twice as fast as they have been is because there's been no seismic activity here for a few days. That's really helped them.

But, Lou, he says one of the things that could make this longer is if they have more so-called bumps in this mountain where the earth shifts and sometimes these guys have to retreat out when they have more collapses.

DOBBS: Brian, do we have a good understanding right now of how large a part of this coal mine collapsed?

TODD: It's hard to get at that, because they are moving in and they are finding out a lot of this for the first time. He admits -- Mr. Murray admits when they drill these holes from the top of the mountain, that's trial and error. They are getting into these chambers, where they can see a few feet, they can see tool bags left behind, things like that.

And as far as the digging into the tunnel, they can't see anything. It's just rubble for as far as they can go. And they say that these guys are 2,000 feet in from where the rubble kind of ended near the mine entrance. So, to answer your question, no, there's really not much of a sense how much of this mine collapsed. I think this is all going to come out when they finally get to these gentlemen, dead or alive, start to dig out from the areas that they are, and then they will get a real sense of it.

DOBBS: We will hope still alive.

Brian Todd, thank you very much, reporting for us from Huntington, Utah.

A state of emergency tonight is in effect on the Big Island of Hawaii, where residents are bracing for Hurricane Flossie. Flossie has been downgraded to a Category 2 hurricane, but the storm is still powerful, with winds of about 110 miles an hour.

And, in the Atlantic, Tropical Depression Dean has been upgraded to a tropical storm now. That storm system is expected to become the first Atlantic hurricane of the season by the weekend. But forecasters say it's far too soon to tell whether the storm will make landfall in the United States.

Coming up here next, the Bush administration may have a secret strategy to reintroduce its failed amnesty legislation. We will have a special report. And you thought the people's voices had been heard.

And a showdown between Republican presidential candidates Rudy Giuliani and Mitt Romney over illegal immigration and sanctuary cities.

And former CIA Director Jim Woolsey joins me. He says the United States may have no choice but to bomb Iran. James Woolsey joins us here next.

Stay with us. We are coming right back.

(COMMERCIAL BREAK)

DOBBS: Homeland Security Secretary Michael Chertoff today said he hopes Congress will revisit, as he put it, immigration reform and soon. Since the pro-amnesty legislation failed, Secretary Chertoff said his department has no choice but to enforce existing immigration law. Imagine that.

And, as Lisa Sylvester now reports, the Bush administration is likely to try again to introduce amnesty.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Homeland Security Chief Michael Chertoff says the administration aims to live up to its commitments to enforce existing immigration law. But speaking at a border security conference, he predicted worker shortages in certain industries will put comprehensive immigration reform back in Congress' lap.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: In the long run, we all know the problem is going to have to be tackled comprehensively. It's going to have to be addressed with all dimensions.

SYLVESTER: The Bush administration has clearly not given up plans for an eventual guest-worker and an amnesty program. But in the meantime the focus has shifted to enforcement. DHS outlined more than 20 new rules that include a requirement that employers fire workers with phony Social Security numbers. The construction and farming trades are sounding the warning bell. They will lose workers and consumer prices will rise. But immigration reform groups are not shedding any tears.

BOB DANE, FEDERATION FOR AMERICAN IMMIGRATION REFORM: The only ones who are benefiting from this are the large business concerns and in particular in this instance the agricultural growers. We have to wean them off cheap illegal labor.

SYLVESTER: Skeptics are not certain the crackdown will even work. Representative Zoe Lofgren, who chairs the House Immigration Subcommittee, pointed out DHS does not know the number of high-skilled visa holders in the country, saying -- quote -- "The agency that can't count is now going to go on this enforcement gig."

Others are a bit more optimistic.

REP. BRIAN BILBRAY (R), CALIFORNIA: It's these kind of simple little things that the American people have been wishing for, for a long time, and have been let down. Hopefully what we see now is a true comprehensive plan of enforcement and enforcement first.

SYLVESTER: Congressman Brian Bilbray hopes businesses with an illegal work force will start employing American citizens and wages will start to rise.

(END VIDEOTAPE)

SYLVESTER: Large agribusiness, religious groups and some labor unions are pressing Congress to revisit the immigration issue. And that may be part of the Bush administration's overall strategy -- get tough, hope business and other special interest groups complain loudly and force lawmakers to bring back the comprehensive bill that already failed twice this year -- Lou.

DOBBS: So the thinking is right now in Washington that the people be damned again. This president and these Democratic leaders of both Houses of Congress are going to press ahead again?

SYLVESTER: Well, they are certainly talking enforcement. But at the same time, they are making it very clear that they think the only way you can solve this problem is comprehensively, which, of course, that means the guest worker and the amnesty plan -- Lou.

DOBBS: Well, as we've reported on this broadcast -- let's do something really -- really wild and crazy here tonight, Lisa.

Let's put the facts on the table for the fine, upstanding people who are members of this administration. There are not one, two or three existing guest worker programs. There are, in fact, nine of them, as we've reported. This president keeps saying we need a guest worker program. No one has apparently told him there are already nine existing guest worker programs, Lisa.

SYLVESTER: And we did...

DOBBS: Why won't somebody whisper that to the man?

SYLVESTER: And, indeed, Lou, there is the H-2A program, which specifically is for agriculture workers. So a lot of people are warning. You hear these dire consequences, that a head of lettuce is going to -- that prices are going to increase.

But you're absolutely right, there is a guest worker program to address just that issue.

DOBBS: You know, this administration and its idiotic, just incredibly stupid, so-called free trade at any cost policies, where they want the market to work -- no policies, don't protect the consumer. We just want a free market, except in the case of agriculture, in the case of technology, where they want to be able to bring in workers and, frankly, to have the American taxpayer subsidize the exploitation of these illegal aliens.

It is incredible the mindless, tortured reasoning of these people. SYLVESTER: You know, in fact, that's a point Congressman Bilbray raises, which he says, you know, true Republicans who don't want market interference, he says, while allowing this importation of cheap foreign labor, that is market interference.

DOBBS: Well, and this entire administration and, frankly, this Congress, to put -- I mean I love it when the president of the United States says we can't enforce our boarders without a guest worker program?

You know, I don't know whether the administration is that stupid or this administration just thinks the American people are that stupid.

It is -- and to hear Michael Chertoff, the secretary of the Department of Homeland Security now, almost six years after September 11th, talking about economics and labor dislocation within the economy instead of focusing on border security and port security in preparing this nation for terrorist attacks and preventing them, is talking nonsense at a border conference in El Paso and pandering at the same time -- a magical political feat.

SYLVESTER: That is, indeed, true. And we'll have to see if Chertoff's message -- if they stay on message with this enforcement. But at this point, that's at least what their talking points say to talk about and so that's what they're doing is talking a good game of enforcement -- Lou.

DOBBS: Well, you know, all of those Senators and all of those Congressmen are back in their home districts now, or somewhere. At least they're closer to the constituents. And I think it probably would be a very good idea, folks, if you've got a strong view on this issue to let these people know what you're thinking, because they are determined to ignore the will of the people, the majority, the will of the majority in this country. And they're going to serve their corporate masters. They're going to serve special interests, the socio-ethnic centric interests. And, again, you know, to even raise the issue is basically saying, on the part of this administration, the people be damned.

Lisa Sylvester, thank you very much.

Two Republican presidential frontrunners are blasting one another now on the issue of illegal immigration.

Mitt Romney dealt the first blow. He accused Rudy Giuliani of protecting illegal aliens when he was mayor of New York.

Giuliani defended and amended his position today, then made a new commitment on illegal immigration.

Our senior political analyst, Bill Schneider, has the report.

(BEGIN VIDEO TAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Mitt Romney made this charge against Rudy Giuliani.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: At the same time, Mayor Giuliani made New York City what's known as a sanctuary city, where illegal aliens were allowed to come. And he instructed the leaders of the city not to enforce the law, not to enforce the immigration law there.

SCHNEIDER: Giuliani defends his decision as mayor of New York to continue a policy started by a predecessor to allow illegal immigrants to receive medical attention, send their children to public schools and cooperate with the police without fear of being deported.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: If you came and reported a crime, we weren't going to turn you in.

SCHNEIDER: The idea is to protect public safety first. As mayor, Giuliani was a passionate advocate of immigration, saying in 1994: "If you come here and you work hard and you happen to be in an undocumented status, you're one of the people who we want in this city. You're somebody that we want to protect."

In South Carolina Tuesday, Giuliani proposed tougher border controls and a tamper-proof I.D. card to keep out terrorists and criminals.

GIULIANI: And if even one or two of them are very dangerous criminals -- just one or two out of a thousand -- then we've got a really serious problem.

SCHNEIDER: There's been a shift in emphasis, you might say.

Why?

Two reasons -- 9/11, which highlighted the need to protect public safety; and John McCain, whose support for comprehensive immigration reform cost him dearly in polls of Republicans. Meanwhile, the Giuliani campaign accuses Romney of running away from his own past, asking why should the American people believe Governor Romney has the right kind of executive experience for America when he claims he was powerless to take action against three sanctuary cities in Massachusetts who refused to enforce illegal immigration laws.

Romney's campaign says the governor took action against those cities by deputizing state troopers to enforce immigration laws.

Those kind of things can happen when the former mayor of New York and the former governor of Massachusetts, two very liberal places, run for the Republican nomination.

When a reporter asked the current mayor about Romney's charge that New York is a sanctuary city, he replied...

MAYOR MICHAEL BLOOMBERG (R), NEW YORK: Boyd (ph), let them come.

(END VIDEO TAPE)

SCHNEIDER: Bloomberg is not a Republican anymore. And if he does run for president, you know, he may have some explaining to do -- Lou.

DOBBS: Oh, Mayor Bloomberg has made it perfectly clear -- he is pro-illegal immigration. He doesn't want the U.S. immigration laws enforced. And I think that would require some considerable explaining if he were ever to put his name before the people in an election nationwide.

But let me ask you, this flip-flopping around, good lord, Senator Harry Reid, the Senate majority leader, as you know, Bill, 14 years ago he was adamantly opposed to illegal immigration. Suddenly all of the casinos in Nevada were hiring tens and tens of thousands of illegal aliens and Senator Reid has had a conversion.

We've got a lot of politics here tied to a lot of economics.

SCHNEIDER: Yes, we do. And in the case of Romney and Giuliani, both men, when they were in office, said good things about immigration reform -- comprehensive immigration reform and path to citizenship. But, you know, when the bill came up this year, both of them opposed it.

DOBBS: Well, I think that's a mark to their credit since that bill, according to the Congressional Budget Office, would have only dealt with 25 percent of illegal immigration. The retirement costs for the estimated number of illegal aliens that would have been given amnesty would be over $2 trillion, according to The Heritage Foundation.

So at these those two gentlemen are showing good common sense, paying attention to something called the empirical evidence. Novel in Washington, don't you think?

Well, they're not actually in Washington.

How about novel in politics?

SCHNEIDER: Well, I'd say it's unusual, yes.

DOBBS: Yes.

I would say it's the rarest, to be novel. But we'll take that up later, Bill.

Bill Schneider, thank you very much.

SCHNEIDER: OK.

DOBBS: From Washington.

Coming up next here, three of the most leading radio talk show hosts join me.

They'll have their assessment of today's massive toy recall, Karl Rove's resignation, what is our relationship with China.

And I'll be talking with former CIA director, Jim Woolsey, who says the United States needs to increase pressure on Iran to stop its nuclear weapons program or face the consequences. He'll be our guest here.

Stay with us.

We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now, three of the best talk show radio hosts in the country.

Here in New York, Mark Simone, WABC Radio.

From Chicago, Steve Cochran, WGN Radio. The program also being simulcast over WGN.

Hey, Steve.

STEVE COCHRAN, WGN IN CHICAGO: Hey, my friend, how are you?

DOBBS: Outstanding.

In our Washington bureau, Wilmer Leon of X.M. Radio.

Good to have you with us.

WILMER LEON, X.M. RADIO: Thanks, Lou.

How are you doing?

DOBBS: Great.

Let me ask you, Mark, first of all, Karl Rove leaves the White House, once rumored to be -- both seriously and kidding -- to be Bush's brain.

What's your reaction?

(LAUGHTER)

MARK SIMONE, WABC IN NEW YORK: Well, that's quite a role to fill there.

DOBBS: Yes.

SIMONE: It's bad for Democrats because -- well, maybe it's good for all of us because, you know, they say the Republicans are distracted in the war on terror. They're too busy focused on Iraq. And Democrats are too busy focused on getting Karl Rove for the last couple of years.

Maybe now they'll pay more attention to the war on terror.

DOBBS: Well, what do you think, Will? LEON: Well, I'm not going to miss Karl Rove because I don't think he's really going anywhere. He is really just leaving the West Wing and moving his office to Texas. I don't see how anyone who would be deemed as the -- as Bush's brain would all of a sudden just walk away from the body.

What is this, an administrative lobotomy?

I mean this -- this doesn't make any sense. He's not going anywhere. It's a great preemptive move on his part in anticipation of the Democrats coming out of recess and focusing their attention on him. That now allows Tony Snow to say, well, why are you guys focused on him?

He isn't here anymore.

DOBBS: You Washington folks...

COCHRAN: Maybe he'll be...

DOBBS: Steve, these Washington folks, Wilmer, no offense, man, but that -- that's deep.

(LAUGHTER)

COCHRAN: Well, it would be striking to see the Democrats come back and do anything. So that would be a nice change of pace.

(LAUGHTER)

COCHRAN: But the fact of the matter is, you know, people make up their minds quickly and they change their minds slowly. And Karl Rove maybe ought to go off into the sunset now. And everybody is hosting a game show, maybe host "To Tell The Truth" with other administration officials. That could be a good time.

SIMONE: Right. But it should be pointed out, he was there seven years. That's probably a record for an administration. And there's nothing left for him to go. The immigration reform...

DOBBS: Right. Everything -- everything has been accomplished.

SIMONE: Social Security reform...

DOBBS: Mission accomplished.

(LAUGHTER)

DOBBS: Go home.

(CROSSTALK)

LEON: Well, he's been (INAUDIBLE).

COCHRAN: Yes, but you know what, though? Honestly -- and I mean this -- he took an incredibly rough around the edges George Bush and made him the president of the United States. So, the wheels have come off.

SIMONE: Yes, we see...

COCHRAN: But the guy -- I mean (INAUDIBLE)...

SIMONE: ...we see all the polish.

COCHRAN: No, but I'm telling you, the guy...

(LAUGHTER)

COCHRAN: Listen, the guy got him elected. He obviously knows what he's doing as a political strategist. And I wouldn't be surprised if there's not a couple of very quiet phone calls from the Republican leaders going into '08, how would you might, maybe handle this, Karl?

LEON: But that's -- that's why you don't have strategists and ideologues championing policy or being responsible for policy. Because now we've been living off of this ideology for the last six or seven years. And now what we find out, it was all sizzle and no steak. There was really nothing to this guy.

DOBBS: That's what we usually find out when it comes to ideology over any quarter of the political spectrum.

LEON: Exactly.

DOBBS: Well, we're -- Wilmer, what do you think of this -- you know, as Lisa Sylvester just reported on our broadcast, the administration, the Democratic leadership trying to resurrect another run at amnesty?

LEON: They just -- they -- Lou, it -- it...

COCHRAN: He's speechless!

LEON: Speechless.

It doesn't make any sense at all. I guess they're trying to give Karl Rove one last shot at being able to say he actually accomplished something other than getting George Bush elected.

DOBBS: Good lord. See, now we're talking about Karl Rove's legacy.

COCHRAN: Well, yes, but, you know, here's the thing -- and I want to extend this out to Mayor Bloomberg, who joins the idiot parade here. Oh, I'm sorry, ideology. I'm sorry. You said ideology.

DOBBS: Yes.

COCHRAN: Bloomberg came out talking about in the last 24 to 48 talking about how immigration in New York, a sanctuary city, our biggest city, must be saved and we're for immigrants.

Let me just say this again. Lou, you've said this a million times. This is not about immigrants.

DOBBS: Right.

COCHRAN: This country was built on immigrants. We're all immigrants. This is about law breakers, illegal immigrants.

God bless us for welcoming immigrants, as we have forever.

This wrapping up our illegal immigration problem is not going to stop the cultural greatness that is America.

LEON: And now Michael Chertoff has to...

COCHRAN: We have to secure the...

LEON: ...enforce the law.

COCHRAN: Enforce the law, secure the borders, do the job.

And what an insult to those folks who came here illegally and did their chores to become Americans to now have to listen to this every day.

DOBBS: By the way, and we -- and I just want to keep putting the facts out there, because, ultimately, this administration -- the American people understand the facts. They understand that this is the most diverse society on Earth, that we have so much to be proud of.

SIMONE: Right.

DOBBS: But these idiots -- and I do mean idiots, not ideologues, although they are that, as well -- in both political parties don't want to acknowledge that we have nine guest worker programs, that we bring in more than two million lawful immigrants into this country. We make 700,000 immigrants citizens each year.

Who in the world do they think they're kidding?

SIMONE: Well, you know what's fascinating?

Michael Bloomberg is self-financing in all his campaigns. He's not beholden to these corporate masters.

But it just shows you that there's a psychology now...

DOBBS: No, he's not beholden to them, he's one of them.

SIMONE: No, he's one...

Yes, that's exactly right.

DOBBS: He's a multi-billionaire. Not -- but I do love -- the thing I appreciate about Michael Bloomberg, Wilmer, I'd love to hear all of you guys kind of chime in on this. The excitement that comes with his independence is also sort of a cultural connection. And the fact is that we can cut out the middle men. He doesn't have to go corporate America, to the special interests. He's got the money, so he can just buy the election himself.

SIMONE: But there's still this...

DOBBS: I mean this is where we really are, don't you think?

SIMONE: We've got the psychological conditioning with these politicians that they'd better not speak out against these illegal aliens, that they'd better be politically correct about it.

DOBBS: Yes.

SIMONE: And even Bloomberg has fallen for this.

COCHRAN: You know what?

Here's a crazy idea.

LEON: But Mitt Romney...

COCHRAN: Here's a...

LEON: Mitt Romney has...

COCHRAN: What about the idea of actually telling the truth?

What about the idea of looking into a television camera or on a radio show saying you know what?

Here is the common sense. Here is the deal. We need to secure our borders. We need to respect the law in this country. And if you don't want to elect me because I believe that, great.

Because I'm like you, Lou, I love the idea of a third party. We're desperate for a third party in this country.

DOBBS: Absolutely.

(CROSSTALK)

COCHRAN: But Bloomberg turned into every politician ever with those statements he made yesterday.

DOBBS: Yes, absolutely.

LEON: Steve is absolutely right. We need to stop pandering to the American people and start educating the American people. And, hopefully Bloomberg, with some independence, may do that.

But Romney has his own money, as well. And we see that he's not as independent as we would like him to be.

DOBBS: Yes. Independence, you know, is a -- is a -- is character. LEON: Exactly.

DOBBS: It is a mindset. It is a value. It is a traditional American value. It would sure be nice if it were reflected in our candidates.

Steve Cochran, we thank you very much for being with us. I know you've got to run. WGN.

COCHRAN: Thank you, sir.

I'll talk to you soon.

DOBBS: I look forward to it.

Thank you, Steve.

And we wanted to thank you, Wilmer.

We appreciate your being with us here tonight.

LEON: Oh, thank you, Lou.

DOBBS: And, Mark, thank you very much.

SIMONE: Good night.

DOBBS: Good to see you.

A reminder now to vote in our poll.

After President Bush's glowing review of our economy just last week, are you surprised to hear that millions of Americans who shop at Wal-Mart are finding it difficult to afford the retailer's low cost products, most of them from China?

Cast your vote at loudobbs.com.

We'll have the results here in just a few minutes.

Up next, a warning from former CIA Director Jim Woolsey about Iran's rising threat to this nation's national security. He joins us here next.

We'll be right back.

(COMMERCIAL BREAK)

DOBBS: The use of Iranian-made roadside bombs to kill our troops in Iraq reached an all time high last month according to the U.S. military. At the same time, Iran is using international demands to end its nuclear weapons program.

My guest tonight says the United States can't afford to ignore that threat any longer.

Former CIA director James Woolsey joins us tonight.

Jim, it's good to have you here.

JAMES WOOLSEY, FORMER CIA DIRECTOR: Good to be with you, Lou.

DOBBS: Let's begin with the issue of -- the administration has stated categorically, you know, our generals have stated categorically that as many of the third of the deaths last month, for example, were caused by Iranian support of the insurgency and the provision of those shaped charges killing so many of our troops.

Why is there no reaction by this government and this military?

WOOLSEY: I don't know. The Persians invented chess and the Iranians are doing a pretty good job of moving their pieces -- Muqtada al-Sadr and those explosive devices, and Hamas and Hezbollah around to protect their queen, which is their most lethal piece -- their nuclear weapons program.

And I suppose the administration is focused on that. But the way it's chosen to work on is to, for years, turn it over to the Europeans, who have been stalled by the Iranians and the Iranians continue to work on getting enriched uranium.

I'm afraid within, well, at worst, a few months; at best, a few years; they could have a bomb.

DOBBS: And that bomb should be a concern to everyone -- European, Asian, South American, African, as well as American.

Why is there not more energy behind those international structures against Iran and demands to end that program?

WOOLSEY: I think it's because the administration has put too much confidence in the diplomatic process. They keep using the word engagement. But while they're engaged, I think they're being abused by the Iranians.

The Iranians are playing this game very cleverly. And if they got fissile material from the North Koreans, with whom they effectively have a joint missile development program, they could have a bomb in relatively short order.

DOBBS: And a deepening relationship, of course, with communist China.

WOOLSEY: Yes.

DOBBS: The idea that the United States would be conducting military policy without offering its troops absolute protection against interference and the support of a state government killing our troops, it seems reprehensible to me, Jim, just to put it straightforwardly.

And it seems to me that if we cannot assure force security, which is the minimum this nation should provide those men and women fighting for us, that we ought to withdraw or we should end the murder of our troops by a foreign state.

WOOLSEY: Well, some of these explosive devices clearly have Iranian fingerprints on them. And they're supplying them to Muqtada al-Sadr. They may have been supplying some, also, to al Qaeda, on the Sunni side of the divide within Islam.

So they are a huge problem. And I share your worries, your concerns. I don't know why we can't effectively stop that -- more troops on the border, even strikes on -- at the border. Something to keep that from happening.

DOBBS: You believe that in order to stop the nuclear weapons program, that the United States should, in point of fact, bomb Iran if that program is not halted.

WOOLSEY: If it's not halted. I don't think we've to make that decision yet. My view is the same as John McCain's, which is that using force, air force, presumably, air power, is the worst option for dealing with Iran except for one other, and that's letting them have a nuclear weapon.

Once they get a nuclear weapon, the Sunni states, six of them, including Saudi Arabia and Egypt, have declared they want nuclear programs, too. And everyone who believes -- anyone who believes that those are going to be for electricity, you know, there's a bridge in Brooklyn they ought to put a bid in on.

DOBBS: And, Jim, the conduct of policy -- we are awaiting now next month David Petraeus, General David Petraeus' assessment of the surge and report to Congress, as well as the president.

What do you think of the conduct of the war to this point and, most recently, the surge and its effectiveness?

WOOLSEY: Well, up until Petraeus' takeover, I thought it was not being fought well. It was being fought very much the way Westmoreland fought search and destroy in Vietnam, and for about the same amount of time.

Once Abrams came in, we made some real progress, at least against the Viet Cong in Vietnam.

And now that Petraeus is in, he's fighting this the way Abrams did and he's making substantial progress on the ground in Diyala Province, in Anbar Province, attacking al Qaeda and the rest.

The problem, I think, is more at the national level and the politics of the Iraqis, not being able to come together in a coherent government.

The -- our troops and some of the Iraqi troops are actually doing, I think, considerably better than was the case a few months ago.

DOBBS: Thank you very much.

Jim Woolsey, the former CIA director.

Good to have you here.

WOOLSEY: Good to be with, you Lou.

DOBBS: Coming up next, we'll have the results of our poll. We'll have a few more of your thoughts.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results of our poll tonight -- 86 percent of you say you're not surprised to hear that millions of Americans who shop at Wal-Mart are finding it difficult to afford that retailer's low cost products, even after the president's glowing review of our economy just last week.

Time now for some of your thoughts. Thousands of you e-mailing us about the murders in the sanctuary city of Newark, New Jersey. One of the suspects in the murders a criminal illegal alien.

Janice in Colorado said: "How many more American citizens are going to die at the hands of illegal aliens? New Jersey's governor, Corzine, has a lot of work to do and should encourage his constituents to stop sanctuary cities throughout America. Governor Corzine received much more coverage for not wearing a seatbelt than the three students who were executed. What a country."

And Allen in California: "I've been a law enforcement officer for over 20 years and it disgusts me to see how our immigration laws are completely ignored. It would be nice to enforce the existing laws to rid our country of these criminal aliens."

And Milla in Ohio said: "Lou, if the president and Congress can pick and choose which laws to uphold and which to ignore, then I suggest every working man and woman send their parking tickets to the White House. I choose not to pay mine."

Good luck.

And Greg in Illinois: "Thanks, Lou, for pointing a finger at those 500 economists who see us as unit costs instead of human beings. Please, Lou, these people are not idiots. They are fundamentally inhuman. They willfully ignore a basic factor -- you can't be a consumer in America if you are not making a living wage in America. I agree with your view entirely. I don't think they're inhuman, I don't think they're in touch with the reality of this country or the people who make it so great."

Hopefully that will change.

We love hearing from you.

Send us your thoughts at loudobbs.com.

Thank you for being with us.

Please join us here tomorrow.

We thank you for watching.

Good night from New York.

"THE SITUATION ROOM" begins now with Suzanne Malveaux -- Suzanne.

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