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LOU DOBBS TONIGHT

Hillary's Health Care Plan Unveiled; Former Bush Administration Officials Blast President

Aired September 17, 2007 - 18:00   ET

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


KITTY PILGRIM, CNN ANCHOR: Tonight, new evidence our nation's borders have become a revolving door for tens of thousands of criminal illegal aliens. We will have a special report.
Also, rising outrage over the use of taxpayer money to build day labor centers used by illegal aliens.

And stinging criticism of the Bush presidency, not only from Democrats, but also from former members of the president's own administration.

And three of the best political analysts and strategists will be here to discuss the political impact of Senator Hillary Clinton's new plan for health care reform -- all that, much more, straight ahead tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, September 17.

Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

We begin tonight with some news about Lou. Now, many of you have been asking where Lou is. Well, he's just had a tonsillectomy and he won't be here for the next two to three weeks. We're pleased to report that Lou is doing fine, and we thank you all for your concern.

Tonight, turning to our top story, Democratic presidential candidate Senator Hillary Clinton announced today an ambitious plan to give health care to every American. Now, it comes more than a decade after Senator Clinton's first health care plan collapsed. The senator's political rivals immediately criticized her proposal.

Democrats said her plan is similar to their ideas. Republicans accused Senator Clinton of seeking government-managed health care.

Candy Crowley has our report -- Candy.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Kitty, the last time Hillary Clinton tried her hand at health care, it did not go well. This time around, her campaign believes that times have changed and certainly, so has her approach. (voice-over): At the base of Clinton's $11 billion plan to revamp the health care industry is insurance for every man, woman and child in America.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Much like drivers in most states are required to purchase car insurance, all Americans will have a responsibility to get and keep health insurance in a system where insurance will now be affordable.

CROWLEY: There would be federal subsidies for those who cannot afford premiums and limits on how much a family would have to pay based on household income. Big business would have to provide health care coverage or pay into a government-run pool to defray the costs of those not covered. Insurance companies would be required to give coverage to anyone who applies and barred from charging the sick more than the healthy.

CLINTON: Thank you, Mr. Chairman.

CROWLEY: This is the second go-round for Clinton, whose health care proposal as first lady went down in flames. Critics said it was too complex, amounted to government-run health care and would do away with insurance for those happy with their plan. So, this time, Clinton was specific about what her plan is not.

CLINTON: This is not government-run. There will be no new bureaucracies. You can keep the doctors you know and trust. You keep the insurance you have, if you like it. But this plan expands personal choice and increases competition to keep costs down.

CROWLEY: No sale on the Republican side. Rudy Giuliani called it a scheme that includes more government mandates and more big bureaucracy. Mitt Romney said it was Washington health care born and bred.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: In her plan, we have a government insurance, instead of private insurance. In her plan, it's crafted by Washington. It should be crafted by the states.

CROWLEY: No pass either from her Democratic rivals. Chris Dodd and Barack Obama said they were better suited to form the kind of bipartisan support need to overhaul health care. And John Edwards upped the ante.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: I will submit legislation to the Congress that ends -- stay with me on this -- that ends health care coverage for the president, all members of Congress and all political appointees in both branches of government on July 20, 2009, unless they have passed universal health care for the United States of America.

(CHEERING AND APPLAUSE)

CROWLEY: In truth, most of the candidates talk about universal health care, and Clinton's plan is similar, though not identical, to most of her Democratic rivals. (on camera): As for how her plan deals with illegal immigrants in this country, a Clinton aide said: We haven't gotten to a lot of the details yet. That's one we're going to have to think over.

Candy Crowley, CNN, Des Moines.

(END VIDEOTAPE)

PILGRIM: Now, as Candy reported, Senator Clinton's plan is very similar to health care proposals from other leading Democratic candidates. Senator Barack Obama wants a national health insurance program for individuals without employer-provided health care and who don't qualify for other federal programs.

Former Senator John Edwards wants employers to either provide health coverage for their employees or help pay their insurance costs. And, meanwhile, one leading Republican candidate, Mitt Romney says states should help reform our nation's health care system, a system that he says should be guided by private markets.

We will have much more on the senator's health care plan and its impact on the presidential election campaign later in the broadcast. Three of this country's best political analysts and strategists will join us to discuss that.

In Iraq tonight, a showdown between one of the country's biggest private security contractors and the Iraqi government. Now, the Iraqi government has ordered the North Carolina company Blackwater Security out of Iraq. It's blaming the country for the deaths of eight Iraqis. Blackwater has a high-profile contract in Iraq, providing security for the State Department.

Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Iraq's Interior Ministry says it revoked the license of Blackwater, one of the largest private U.S. security firms in Iraq, after a shooting incident Sunday in western Baghdad. The ministry says the firefight left eight civilians killed and 14 wounded.

The Bush administration relies heavily on private security in Iraq to protect U.S. officials and many key sites. Top officials quickly expressed concern.

ROBERT GATES, SECRETARY OF DEFENSE: It is troubling. And I will leave that issue to the secretary of state.

STARR: The State Department and U.S. military are investigating what happened after this car bombing in an area of ongoing insurgent activity. Blackwater personnel were guarding the State Department convoy moving through the area at the time.

SEAN MCCORMACK, STATE DEPARTMENT SPOKESMAN: It was a chief of mission convoy that was going outside the international zone. And as you know recently there have been some car bomb explosions outside the international zone. So, again, I urge people to keep that in mind.

STARR: A spokesman for Blackwater says its people came under fire, and they defended the convoy.

MARTY STRONG, VICE PRESIDENT, BLACKWATER USA: A convoy with our people protecting a principal, a U.S. citizen, was attacked first by a large explosive device and then by repeated small-arms fire, and to the point where it disabled one of the vehicles and the vehicle had to be towed out of the firefight.

STARR: Company officials believe the car bomb was tied to the attack on its convoy.

Carter Andress heads another security company in Iraq. His employees were in the same area at the same time.

Carter Andress, Iraq Contractor: Our people saw a couple of cars destroyed, people -- dead bodies, wounded people being evacuated. The U.S. military had moved in and secured the area. So, it was not a good scene.

(END VIDEOTAPE)

STARR: Now, Kitty, just one indicator of how seriously the Bush administration takes all this tonight, Secretary of State Condoleezza Rice has already called Prime Minister Nouri al-Maliki expressing U.S. regret over the death of the Iraqi civilians.

For its part, Blackwater says so far it has received no notification formally that it is banned from doing business in Iraq -- Kitty.

PILGRIM: Barbara, are there any estimates on how much the exclusion of Blackwater from Iraq would impact operations there?

STARR: Well, it might be quite serious. There are about 25,000 private security contractors in Iraq. Blackwater says it has about 2,000 employees serving overseas, most of them in Iraq. If they are told to leave the country, the U.S. government will have to find some other way to fill those protection requirements -- Kitty.

PILGRIM: Thanks very much, Barbara Starr.

Insurgents in Iraq killed another one of our troops. The soldier was killed by a roadside bomb. Separately, a Marine died in a noncombat incident in Al Anbar Province west of Baghdad. Forty of our troops have been killed so far this month; 3,782 of our troops have been killed since the war began, 27,848 troop wounded, 12,512 seriously.

President Bush today focused on the war against terrorism in this country. The president nominated former federal Judge Michael Mukasey as attorney general to replace Alberto Gonzales. Judge Mukasey presided over several prominent terrorism cases in New York, but he has maintained a very -- relatively low political profile.

Ed Henry reports from the White House.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Eager to blunt conservative criticism Judge Michael Mukasey is too moderate, President Bush focused nonstop on the war on terror.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The attorney general has an especially vital role to play in a time of war. Some of Judge Mukasey's most important legal experience is in the area of national security.

HENRY: Such as presiding over the trial of the terrorist Omar Abdel Rahman, the blind sheik, who plotted to blow up New York City landmarks.

BUSH: Judge Mukasey's clear-eyed about the threat our nation faces.

HENRY: And Judge Mukasey seemed right on message.

MICHAEL MUKASEY, ATTORNEY GENERAL NOMINEE: Thirty-five years ago, our foreign adversaries saw widespread devastation as a deterrent. Today, our fanatical enemies see it as a divine fulfillment.

HENRY: But Mukasey's record suggests he will not necessarily march in lockstep with Mr. Bush. As a federal judge, he twice ruled terror suspect Jose Padilla was entitled to legal representation, which ran counter to what the Bush Justice Department argued.

BARUCH WEISS, FORMER FEDERAL PROSECUTOR: This is a man of independence and a man of integrity. And the Bush administration knows that, and they want somebody who's confirmable.

HENRY: Key for a president with shrinking political clout, in desperate need to show he's serious about turning the page from the controversial tenure of Alberto Gonzales with Mukasey.

BUSH: He knows what it takes to fight this war effectively and he knows how to do it in a manner that is consistent with our laws and our constitution.

HENRY: To be sure, though, Mr. Bush expressed no regrets about HOW Gonzales handled anti-terror tools, like the domestic surveillance program or the Patriot Act.

BUSH: This honorable and decent man has served with distinction.

(END VIDEOTAPE)

HENRY: Now, Republicans close to the White House say the president just didn't have the stomach for a big brawl with Democrats right now, especially after Senate Majority Leader Harry Reid vowed to block conservative Ted Olson if he was nominated. There are some conservatives who wanted to see the president fight for someone like Olson, but Mr. Bush ultimately calculated a middle-of-the-road nominee like Judge Mukasey could bring along some Democratic votes. In fact, he's already basically gotten the support of Democrat Chuck Schumer, normally a critic of this president. And the White House is confident that Republicans will come along -- Kitty.

PILGRIM: Thanks very much, Ed Henry.

Well, turning overseas, officials in Thailand tonight still trying to determine what caused the deadly crash of a passenger jet yesterday. The Boeing MD-82 crashed into a hillside in the resort of Phuket. At least 88 of the 130 people on board were killed, among them four Americans. Witnesses say the plane skidded off the runway during a storm.

Now, investigators have recovered the plane's flight data recorders. U.S. officials will assist the Thai government to investigate the crash.

Still to come: new evidence our borders are wide open to criminal illegal aliens.

Casey Wian will have the story -- Casey.

CASEY WIAN, CNN CORRESPONDENT: Kitty, federal immigration authorities are deporting more criminal illegal aliens than ever. The problem is tens of thousands of convicted criminals are still streaming back across the border -- Kitty.

PILGRIM: Thanks, Casey.

That report is coming up.

Also, rising anger over publicly funded day labor sites that are used by illegal aliens.

And a rising number of former Bush administration officials are people speaking out against the president. We will have a special report.

(COMMERCIAL BREAK)

PILGRIM: There is disturbing new evidence tonight our nation's borders have become a revolving door for criminal illegal aliens.

According to newly released government figures, the Border Patrol deported thousands of illegal aliens this year. But this seems to have had little impact on the criminal alien population.

As Casey Wian reports, many are simply reentering the country through our porous southern border.

(BEGIN VIDEOTAPE) WIAN (voice-over): Immigration and Customs Enforcement has expanded its efforts to remove criminal illegal aliens from the United States.

JULIE MYERS, ASSISTANT SECRETARY, ICE: Under my leadership, a real transformation of the criminal alien program has been a high priority for me and it's been a high priority as we have sought funding in the president's budget to expand the program.

WIAN: Last year, ICE deported nearly 200,000 illegal aliens. About 45 percent of them, just under 89,000, had criminal records. During the same time period, the Border Patrol caught 69,000 people with previous criminal convictions trying to illegally enter the United States.

Border Patrol agents estimate they apprehend at best one of every four illegal crossers. By that calculation, it's likely as many as 200,000 criminals made it across the border, or about the same number that ICE deported.

One of the more notorious cases involved Demetro Acosta-Uribe. He has four felony convictions, was deported three times, and caught trying to cross the border twice. Now he faces murder charges in Arizona and if convicted, the death penalty. He's pleaded not guilty.

ANDREW THOMAS, MARICOPA COUNTY ATTORNEY: When federal authorities catch somebody who is a known criminal, he needs to be punished for illegally entering the country. And that is by and large not done, which is pretty amazing. And this is a case that shows the dangers that come from the lack of arrest and prosecution of illegal immigrants.

WIAN: Local law enforcement agencies along the borders say the federal government should seek prison time instead of deportation for criminal illegal aliens because it's too easy for them to return to the United States. In the year ended August 31st, the Border Patrol says it caught illegal aliens previously convicted of more than 6,700 violent crimes.

They included 789 robberies, 430 sexual assaults and 286 homicides.

(END VIDEOTAPE)

WIAN: Several ICE jurisdictions have start aggressively prosecuting criminals for immigration law violations in an effort to stop the revolving door. This year in San Diego, for example, ICE says it prosecuted six times as many cases as it did last year -- Kitty.

PILGRIM: Thanks very much, Casey Wian. Thanks, Casey.

Well, pro-illegal alien groups continue their push to bring in more cheap labor into the country. Those are groups are building controversial labor centers to help illegal aliens find work. Now, in Washington, D.C., there are plans to build one center with half-a- million taxpayer dollars.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Protesters gathered outside the Washington, D.C., zoning offices objecting to a proposed day labor center near a Home Depot. D.C. Council Member Harry Thomas wants to use 500,000 taxpayer dollars to fund the project.

According to his proposal, "The core mission of the center would be to provide employment and training services to residents."

But opponents say the center will primarily serve illegal aliens and siphon off jobs from legal residents.

RAYMOND CHANDLER, D.C. ADVISORY NEIGHBORHOOD COMMISSION: We're about citizenship. We're about our citizens. We're about our community. We don't want any more day laborers.

SYLVESTER: The debate over day labor centers is resonating across the country. In Herndon, Virginia, a controversial center shut its doors last week. Town leaders wanted to check workers' documents, so only legal workers could use the job center. But a judge ruled against them so they chose to close down the center.

Now, as one day laborer site shuts its doors, contractors and immigrant groups are pushing to open up new ones, even as day laborers continue to gather at unofficial sites, like this park.

MARCO AMADOR, NATIONAL DAY LABORER ORGANIZING NETWORK: Yesterday, on Sunday we had 13 workers go out to work. So, it was a good day yesterday.

SYLVESTER: In Washington, D.C., the debate is focusing on limited resources. According to the Census Bureau, in Washington, the unemployment rate is 8.5 percent, for African-Americans, 14.5 percent. In the nation's capital, nearly one in five individuals lives below the poverty line.

BETTY MUNGRO, NEIGHBORHOOD RESIDENT: We're not against the people that come from other countries if they come legally. But a lot of the jobs are being given to illegal aliens when we have so many Americans that need jobs as well. And they're not getting them.

SYLVESTER: Critics say the money would be better spent on helping legal residents find work and improving city schools.

(END VIDEOTAPE)

SYLVESTER: Council Member Harry Thomas wasn't available for an interview. The issue is now before the city's zoning commission -- Kitty.

PILGRIM: Thanks very much, Lisa Sylvester. That brings us to the subject of tonight's poll. We would like to ask you, are you outraged that cash-strapped District of Columbia is using $500,000 in taxpayer money to build a day labor center, yes or no? Cast your vote at loudobbs.com. We will bring you the results later in the broadcast.

Time now for some of your thoughts.

And Art in New Jersey wrote to us: "The president said, if we bring our troops home, the terrorists will follow them. Not if we put 50,000 of our troops on the southern border. Wonder if he ever heard about two birds with one stone."

Chris in Indiana wrote: "Wal-Mart's new slogan should be, save money, die younger, because of all the toxic Chinese products they sell."

Cindy in North Carolina wrote to us: "I was appalled at seeing the article whereby the consumer can expect to pay 10 percent more for the toys to have them inspected. Why should we have to pay more for the product a company is to make safe in the first place?"

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

Up next, a warning from France to Iran: Give up your nuclear weapons or we will prepare for the worst. We will have that story.

And with friends like these. President Bush's former friends and associates are now bashing the president -- those stories and more when we come back.

(COMMERCIAL BREAK)

PILGRIM: A stunning warning to Iran, not from the United States, but from France. The French foreign minister said the world should prepare for war if Iran does not give up its nuclear weapons program.

The United States has not ruled out the use of force against Iran. But U.S. officials say diplomacy and economic measures are preferred for now.

Jim Bittermann reports from Paris.

(BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN CORRESPONDENT (voice-over): Bernard Kouchner is known for dramatic statements, but even so reporters were surprised to hear him suggest that if Iran does not rein in its nuclear program, plans must be made for military action.

BERNARD KOUCHNER, FRENCH FOREIGN MINISTER (through translator): We must prepare ourselves for the worst, that means showing...

UNIDENTIFIED MALE (through translator): What does it mean, prepare ourselves for the worst?

KOUCHNER (through translator): That is war, sir.

UNIDENTIFIED MALE (through translator): Yes. And how do you prepare for that?

KOUCHNER (through translator): We prepare ourselves first by trying to set up plans which are the responsibility of the general staff.

BITTERMANN: Kouchner quickly added that he did not think war was imminent, but further sanctions against Iran are. The United Nations already has imposed some sanctions and is considering ways to toughen them up. But Kouchner says Europeans should consider sanctions outside the U.N. framework and that France is beginning to act on its own.

The foreign minister said major French companies, including those in the energy sector, are being told to stop any further investing in Iran. While Kouchner's rhetoric seemed hard-line, President Sarkozy took an equally hard line last month when he told the French diplomatic corps that if Iran constructed a nuclear bomb, it will, as he put it, face bombardment.

NICOLAS SARKOZY, FRENCH PRESIDENT (through translator): For me, an Iran armed with nuclear weapons is not acceptable.

BITTERMANN: Analysts believe the foreign minister has not deviated from the president's line.

DOMINIQUE MOISI, FRENCH INST. ON FOREIGN RELATIONS: Was there an agreement on the fact that he should speak so openly? I don't know. Maybe in terms of style he overdid it. But in terms of content, this is what he meant.

BITTERMANN (on camera): Iranian commentators reacted with hostility, accusing the French government of pandering to the U.S. even as the French prime minister echoed his foreign minister's tone, although he added that at the moment a confrontation with Iran was the last thing any political leader would want.

Jim Bittermann, CNN, Paris.

(END VIDEOTAPE)

PILGRIM: North Korea has agreed to end its nuclear weapons program but the next round of talks on the issue has been postponed. Those talks were expected to begin in China on Wednesday. Beijing didn't give a reason for the delay and did not set a new date for the talks.

Coming up, Mexico on the brink. Could a populist leader with an anti-American agenda become the president of Mexico?

Also, Senator Hillary Clinton has a new plan to reform health care. Will this plan be any more successful than her first proposal?

And the Bush administration faces blistering criticism from some of its own former officials. We will have a special report.

(COMMERCIAL BREAK)

PILGRIM: Well, there's a year-and-a-half left in President Bush's second term, and some former insiders are no longer pulling their punches. Many are writing books intensely critical of this president, calling him stubborn. They also say the Republican Party under his leadership has lost its way.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): With friends like these -- the president blasted in two new books by two men who know him well. Former Fed Chief Alan Greenspan says this president abandoned fiscal discipline and his party has lost its way.

ALAN GREENSPAN, FORMER FEDERAL RESERVE CHAIRMAN: They had originally come to office with major, important policy initiatives, and they went out of office solely seeking power. And, in the end, they achieved neither.

ROMANS: Republicans, Greenspan says, deserved to lose the congressional majority last November -- the criticism stinging, and uncharacteristically frank from a fellow Republican who ultimately served six presidents.

At the same time, a swipe from one of the president's closest diplomatic allies. Mexico's former president, Vicente Fox.

GEORGE BUSH, PRESIDENT OF THE UNITED STATES: And thank you for being a friend to Laura and me.

ROMANS: In his new book, Fox calls his border state friend "stubborn." And on page 140: "The cockiest guy I have ever met in my life." Fox sharply critical of Bush policies on Iraq and illegal immigration.

Insider tell-alls and second term second-guessing are certainly not new.

But Professor John Geer says this time the criticism is louder.

JOHN GEER, VANDERBILT UNIVERSITY: A lot of people are upset, also, because of this concern that the Bush administration has of not worrying necessarily about the evidence, but paying more attention to their ideology.

ROMANS: A complaint heard this summer in testimony from a former surgeon general, who said this administration put politics over science.

RICHARD CARMONA, FORMER U.S. SURGEON GENERAL: This is the most partisan we've ever seen government. ROMANS: Several Republican senators have already broken with the president over the war in Iraq. A former Treasury secretary and CIA chief have already delivered critical accounts of their time in the administration.

(END VIDEO TAPE)

ROMANS: But it is the criticism of the respected Greenspan that garnered the most attention. A man who spent 20 years carefully choosing his words is speaking with great clarity -- Kitty.

PILGRIM: That's pretty ironic.

Thanks very much.

Christine Romans.

Well, the Democrats are courting the union labor vote in major labor events in Washington and Chicago today. Six Democratic candidates, including Hillary Clinton, John Edward Edwards, Barack Obama, all speaking to the Service Employees Union. Now, this union has nearly two million members.

Senator Hillary Clinton told the roaring crowd: "There will be no invisible Americans when I am president."

Senior political analyst Bill Schneider joins me now for more -- Bill, this is a classic affiliation, isn't it?

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Oh, it certainly is. It has been since 1935, when Franklin Roosevelt endorsed the Wagner Act and put the Democrats squarely on the side of organized labor.

For decades after that, labor was first among equals in the Democratic Party. Every Democratic presidential campaign kicked off in Cadillac Square in Detroit on Labor Day.

But now, labor is really one of many voices in the party. Since the 1960s, minorities and liberal activists have become more and more prominent. Nearly all the Democratic candidates went to a bloggers' convention. They participated in a Spanish language debate, as well as this Service Workers convention.

PILGRIM: Bill, you know, the Service Workers Union has about two million numbers. So that's clearly a number of voters that the Democrats would like to tap into, isn't it?

SCHNEIDER: It is. They are the fasters growing union in the country. There's been a big expansion of Service Workers. That's where the growth of employment is.

But they're not just voters. It's also a source of money and a source of workers on the ground -- grassroots organizers for the Democratic Party, particularly important in primaries. They haven't endorsed the candidate yet, the Service Workers. But if they do endorse a candidate, it could be crucially important in a low turnout primary, where labor is a lot of votes.

PILGRIM: Bill, the support for comprehensive immigration reform, how does that play in?

SCHNEIDER: Well, the Service Workers Union supports comprehensive immigration reform and so do all the major Democratic candidates. The issue divides Republicans much more than it does Democrats.

You know, unions used to be hostile to immigration because they saw competition for jobs. But now they see -- most of them see Latino immigrants as a growing constituency open to organizing. Many of these immigrants are familiar with unions, particularly from Mexico. They've given, really, new life to American labor.

Democrats also see union -- rather, Latinos -- as a new opportunity to gain votes. They voted about 40 percent for George Bush last time. So Democrats have gone after them, have embraced them, at some risk to Democrats. It may be hard for them to get votes from people who are angry over illegal immigration. But a lot of Democrats believe those voters wouldn't have voted for them anyway.

PILGRIM: Interesting political dynamic.

Thanks very much.

SCHNEIDER: Sure.

PILGRIM: Bill Schneider.

Coming up next, is Mexico on the brink of massive political change?

And what does that mean for this country?

George Grayson, one of the foremost authorities on Mexico, will tell us.

And some charge that John McCain is playing politics by his declaration of religious affiliation. Three of the nation's top political journalists and strategists will join me.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Mexican President Felipe Calderon tonight is struggling to end the chronic poverty that has driven many of his countrymen into the United States as illegal aliens. Now, Calderon won an important victory last week when the Mexican Congress approved a plan for tax reforms. But Calderon's chief political rival, Andres Manuel Lopez Obrador, insists that he is the legitimate president.

Joining me now is George Grayson, author of an important new book about Lopez Obrador, "Mexican Messiah".

George Grayson is a professor at the College of William and Mary. And thanks for being with us.

All this is critically important because it's right on our border. And we see the effects of the failure of Mexicans' economic policies on our economy every day.

You call Obrador the new messiah. He lost the election by an eyelash, you say, and yet he's still agitating in Mexico.

How much influence does he have?

GEORGE GRAYSON, COLLEGE OF WILLIAM AND MARY: He has about 30 percent popularity in public opinion polls. But he really is the redeemer, the savior for the downtrodden, the so-called jodidios of Mexico -- those who have been exploited. He's barnstorming the country now, hoping that Felipe Calderon will fall on his face and that Lopez Obrador can be lofted to the presidency on the shoulders of the downtrodden in 2012.

PILGRIM: There's a leftist contingent in Latin America and South America. You have Chavez of Venezuela, Evo Morales of Bolivia.

Where does he fit with this group?

Should we worry about him in that context?

GRAYSON: Not in that context. He really has walked the walk and talked the talk of the poor people. He lived for five-and-a-half years with the Shantou Indians -- eating, sleeping, working alongside of them. And so while he's a populist, he has a true commitment to those who are less fortunate, and they make up about half the population in Mexico.

PILGRIM: Let's talk about the economics of Mexico. It's a serious problem. You say that Mexico's wealthy live like little princes. They pay very little taxes. They turn a blind eye to this desperate poverty. And I'd like to quote a passage from your book: "Mexico's elite finds it much less expensive and much more convenient to thrust onto U.S. taxpayers responsibility for the malfeasance by using its northern border as an escape valve for this nation's have-nots."

How will Obrador stop this or not be able to stop it?

What can we expect from Mexico with this kind of official policy?

GRAYSON: Well, Lopez Obrador is haunting Felipe Calderon now. And Calderon knows that he'd better deliver or you could have a second coming by savior Lopez Obrador, or someone of his ilk, in just a few years. And so Calderon has got to raise taxes, increase expenditure on education, improve job training and give more people access to health care or the Mexicans are going to be ready for a sharp turn to the left.

PILGRIM: Professor Grayson, you follow Mexico in depth, I mean to a level beyond anyone that we know.

Do you think that Calderon will begin to turn this country around or will we have this massive migration problem?

GRAYSON: I'm generally an optimist, but I'm pessimistic about Mexico's future. The problems are gigantic. Calderon is doing his best, but he suffers from a good deal of opposition in Congress. It was important that the tax reform was passed last week, but it really is a tax reform lite. And until he does some things like break the back on monopolies, like Telmex, the giant phone company, or open Pemex, the state oil company, to private investment, Mexico, I think, is doomed to sputter along at about 3 or 3.5 percent growth.

PILGRIM: You know, you're such an expert on Mexico, I'd like you to take the flipside. Look at U.S. policy. We've seen Congress attempting to resurrect elements of the so-called comprehensive immigration reform piecemeal in various pieces of legislation.

What do you make of that?

GRAYSON: I think it's irresponsible and reprehensible and really is patronizing toward Mexico. Mexico has incredible resources. If Taiwan could lease Mexico for 20 years, we gringos up here would be talking about the colossus of the south. We'd be buying poles to vault the border to get into Mexico.

PILGRIM: That doesn't seem likely in the immediate future.

GRAYSON: No. But the reforms have to take place. And to the extent we keep that safety valve open, it keeps the pressure off Mexico's elite to do right by their own citizens.

PILGRIM: There's been very disturbing rhetoric out of Mexico. And I point to President Felipe Calderon's state of the union -- state of the nation address earlier this month. Let me quote from that: "I have said that Mexico doesn't end at the border and that there is a -- wherever there is a Mexican, Mexico is there."

That basically impinges on U.S. sovereignty, doesn't it?

GRAYSON: Well, about two-thirds of Mexicans believe they have the right to enter the United States, that there's just a surveyor's line there, there's no legal restriction. And Calderon has an ambitious agenda before his congress. He's trying to find issues that unite the various parties and sticking a sharp stick in Uncle Sam's eye is good way to get unanimity.

PILGRIM: And exporting poverty?

GRAYSON: And exporting poverty takes the burden off Mexico's elite, who live not like small princes, but like Maharajis.

PILGRIM: This is -- it's such a disturbing -- every time we talk to you, I become more disturbed about the situation in Mexico.

George Grayson, thank you very much for being here.

GRAYSON: Thank you, Kitty. PILGRIM: A reminder now to vote in tonight's poll -- are you outraged the cash-strapped District of Columbia is using $500,000 in taxpayer money to build a day labor center -- yes or no?

Cast your vote at loudobbs.com.

We'll bring you the results in just a few minutes.

And coming up, Democratic presidential candidate Senator Hillary Clinton has another go at universal health care. Our political panel joins us for that story and all the day's political news, so stay with us.

(COMMERCIAL BREAK)

PILGRIM: Joining me now, three of the best political strategists and analysts in the country.

Republican strategist former White House political director, Ed Rollins.

And Errol Louis, columnist with the "New York Daily News".

And Democratic strategist and National Committeeman Robert Zimmerman; also, we point out, a supporter of Hillary Clinton's campaign.

So, let me ask...

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I can point that out, too.

PILGRIM: Yes. Of course. Well, in all fairness, you know, I really should start with you.

Today we had big news from the Clinton campaign -- the proposal of a new health care plan that basically calls for individual mandates, which means every single person in the country has to have health care insurance, and it should be purchased like auto insurance.

What do you think of this plan, Robert?

ZIMMERMAN: Well, I think, even though I'm supporting Hillary Clinton, I can still be objective and agree with her, too, you know.

PILGRIM: Of course.

ZIMMERMAN: The point is simply that I think this plan, I think, shows enormous growth from the time she and President Clinton attempted health care reform in '93 and '94. And I think what distinguishes is its simplicity, its cost control and the consumer choice it provides, because whether -- if you like your insurance plan that you presently have, you can stay with it. Otherwise, if you want to have a multitude of choices, you can choose the same type of health insurance members of Congress get. It doesn't require a new bureaucracy, but it also recognizes that, in fact, considering the Republican record that's created this health care crisis in so many ways, that mandating insurance should be required because it impacts everyone's life.

PILGRIM: She was talking about invisible Americans.

What did she mean by invisible Americans?

ZIMMERMAN: Well, I think what she meant -- I can't speak to that particular speech.

PILGRIM: Right.

ZIMMERMAN: But I think when she's talking about health care insurance, I think there's so many people that fall through the cracks. We're dealing with millions of young people, children who aren't getting -- who are severely underinsured. Under seven years of Republican government, we have a record number of Americans without health insurance -- 48 million. So I think she may be talking about that.

PILGRIM: You know, I'd like to quote from her. And she said: "Perhaps, more than anybody else, I know just how hard it is -- this fight will be to get a health plan in place."

She does have her past record. It wasn't a success.

So where does she stand on this?

Is it a plus?

ERROL LOUIS, "NEW YORK DAILY NEWS": Well, I think she's going to have a huge fight. And the reality is, at this stage of the game, she's not the nominee. There's no prospect of having to implement this any time soon. She can stay with a lot of generalities. And I read this, really, as just sort of a statement of principles. And, really, the key is when you see that -- something like $35 billion of the $110 billion that she's claiming it's saving is just efficiency, you know, getting medical records off of paper and into computers, something that would need to happen in any event, and something that the government can't really control.

So she's already sort of cheating as far as a hard core plan. But she'll still be attacked, as if she had laid out some detailed proposal when really she's just talking about principles.

PILGRIM: A hundred and ten billion dollars to help cover the costs. And this is how she said she would pay for it.

Let's listen.

(BEGIN VIDEO CLIP)

SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I won't pay for it by pouring money into a broken system. I won't pay for it by raising taxes on middle class families who are already struggling with rising costs and stagnant wages. Instead, I'll pay for a part of it by implementing the cost saving measures I outlined in May. And I will pay for some of it by rolling back part of President Bush's fiscally irresponsible tax breaks for the highest income Americans.

(END VIDEO CLIP)

PILGRIM: So a $110 billion price tag basically appealing to middle class Americans with this proposal, right?

ED ROLLINS, REPUBLICAN STRATEGIST: Well, she's -- it's -- her plan failed 12 years ago because she locked out many people who were professionals in the industry who knew a lot about the problems -- doctors, pharmaceutical companies, hospitals. She said they were all special interests. And every single one of them can add something to fixing the health care system.

When you mandate something by the federal government -- we mandate nothing other than you have to pay your fair share of taxes -- and all of a sudden we're -- and she's comparing it to auto, and you don't have to have a car. You don't have to drive.

But to say to every American, you have to have health insurance, what are they going to do, put them in jail?

I mean it's just -- it's an absurd process to begin. And I think, to a certain extent, there's it's a long, hard way to go

Before this thing will be -- be very serious planning.

ZIMMERMAN: But I think that's really the critical aspect of this debate. Democrats -- it's not just Hillary Clinton -- but the Democratic candidates do believe there's an urgency -- a health care crisis that requires dramatic reform. And Democrats do believe that health care insurance needs to be provided across-the board because of the burden it places on all of us in terms of spreading disease, the economic burden of people who are underinsured or not insured.

And Republicans are going to run on their record, which has produced a record number of people without health insurance, a record number of children who are underinsured...

ROLLINS: You can't blame the Republicans. The Republicans didn't take away health insurance. They didn't run around there saying you can't have it or you can have it. The truth of the matter is it would be an ideal situation if everybody in America could have a health insurance. And I'm all for that.

But there's an awful lot of these 49 million people who don't want health insurance. They're young people. They don't think they're going to get sick. And if you say to them, pay $500, pay $800, pay $1,000 a month, you can have health insurance, they say no thank you. I'm not going to get sick. I'll pay for my doctor when I go.

It has put a tremendous burden on the system and it's a very complicated thing. And this is not the only way to go. And I think it would be a better debate and I think at the end of the day we may get some (INAUDIBLE)...

ZIMMERMAN: Let's remember, though, the prescription drug program that the Clinton -- the Bush administration put forward -- was an enormous burden on our system and was basically a welfare program for the drug companies.

ROLLINS: The prescription -- well, I must have missed something, because I think the vast majority of Democrats voted for the prescription health program (INAUDIBLE)...

ZIMMERMAN: Actually, no. Too many Democrats, in my opinion, did. But the point is, what the result was of that prescription drug program was individual citizens can't even -- we can't even negotiate lowered drug prices. It was a welfare program for the pharmaceutical industry.

PILGRIM: Gentlemen, we'll have to continue this after a break, and we will.

In the meantime, coming up at the top of the hour is "THE SITUATION ROOM" WITH WOLF BLITZER" -- so, Wolf.

WOLF BLITZER, HOST, "THE SITUATION ROOM": Thanks very much, Kitty.

A former federal judge is tapped to be the next attorney general of the United States.

Did President Bush blink on this high profile nomination?

We're going to show you why some say it shows a new attitude over at the White House.

Also, conspiracy theories flying right now as an actress' anti- war message gets bleeped at the Emmy Awards. We're going to play it for you uncensored.

And he avoided murder charges more than a decade ago. Now felony robbery charges could send O.J. Simpson to prison for years. You're going to find out how strong the case against him really is.

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

Thanks very much, Wolf.

Still ahead, more with our panel. We'll talk about John McCain and his religion. That's quite a topic these days.

We'll have the results of tonight's poll and more of your thoughts. So stay with us.

(COMMERCIAL BREAK)

PILGRIM: We're back with our panel of political experts.

And, you know, today John McCain had some headlines because there was a debate over what religion he is. He was -- says he's Episcopalian. Then he says he's Baptist. It's generated a good bit of debate.

Errol, what's going on here?

LOUIS: Well, you...

PILGRIM: And does it matter?

LOUIS: It does matter. In the Republican primary, it definitely matters. Something -- the active base of the party, something like 40 percent of Republicans, identify themselves as Evangelical Christians. So you tell an Evangelical you're Episcopalian, the Baptists, at least, will tell you, well, you've got to get dunked in the water.

This is not -- this doesn't even count, you know?

And this -- this is real. It's something that people deal with week in and week out. So a party that wants to sort of wear its faith on its sleeve, they're going to find this.

And it's the same problem Giuliani has with his Catholicism. It's the same problem that Mitt Romney is encountering with his Mormonism. That once you get into the substance of these religions and your adherence to it or not adherence to it, this is why the Evangelical base of the party continues to be dissatisfied. It's why Alan Keyes jumped into the presidential race today.

PILGRIM: That's interesting.

Let's move on to President Bush nominating federal Judge Michael Mukasey for attorney general.

Senate Majority Leader Harry Reid issued a statement which I'd like to go to: "A man who spent 18 years on the federal bench surely understands the importance of checks and balances and knows how to say no to the president when he oversteps the constitution."

We see that it's a more moderate candidate than those who have been previously discussed, Mr. Olson, for example.

Do you think this will get through? They want it through by October 8th.

ZIMMERMAN: It's looking encouraging. And, of course, it has to go through the hearing process. But by and large, it's very encouraging. Senator Reid's comments, Senator Schumer's comments. And I think the selection really is the result of having checks and balances in the system. Under the Republican Congress, you had Josh Ashcroft and, of course, Alberto Gonzales -- two buddies and right-wing enthusiasts of the president's agenda.

A more moderate choice speaks to the checks and balances of the system.

PILGRIM: Why do you think this choice, Ed? ROLLINS: I don't think they wanted a fight. I think this is a capable man, obviously, having been chief judge here in New York, having been on the bench for 19 years. I think he'll sail through. And I think at the end of the day, we'd have the Justice Department out of the way for the next 14, 15 months and you can get on to the issues that really matter to Americans, which is the war.

PILGRIM: OK.

Let's talk about Alan Greenspan. And we had a piece earlier in the broadcast that talked about his new book. The memoir, very harsh criticism for President Bush. I'll read a quote: "My biggest frustration remained the president's unwillingness to wield his veto against out of control spending."

The book is "The Age of Turbulence: Adventure in the New World".

The fact that Greenspan is so openly criticizing the president, is this a shock?

ROLLINS: It's not a shock to me. I think -- I think there's some truth to this. The president did not veto any fiscal bill and the Republicans needed to be threatened. And the best way to do that is to veto one or two of their pet projects. They were out of control and I think, to a certain extent, that led to the defeat in the midterm.

LOUIS: I think Greenspan, in a way, tarnishes his role in history as -- after a term as an excellent executive and steward of the monetary system, he's now dabbling in politics. And questions are now going to be raised about his role in helping the subprime crisis come about. And the people are lined up waiting to hurl those criticisms at him. And he now will not be able to step back and say oh, I was just a neutral money man trying to oversee the system.

PILGRIM: Right.

Robert?

ZIMMERMAN: I think they need a separate wing in the Bush Library for all of the former Bush employees who are writing books criticizing this president -- Clark Kent Ervin, of course; Lawrence Lindsey; of course, Alan Greenspan.

What's most significant is his attack upon the Bush administration for their lack of fiscal discipline and his praise for the Clinton era for their fiscal discipline and their focus on policy.

PILGRIM: I would like to just squeak in one more topic. We have a second to do it.

The Iraqi government saying Blackwater can no longer function in Iraq. They'd like them removed.

Is that a problem, Ed?

ROLLINS: I don't think it's a problem. I think if we have 170,000 soldiers there, we can protect our own embassy. I don't think we need private -- if the government doesn't want -- the Iraqi government doesn't want them -- and obviously there was a bad incident this weekend -- we ought to be able to protect our own.

PILGRIM: And what does it mean diplomatically that they're doing this?

ZIMMERMAN: Well, Ed is absolutely right. It was a scandal in the making all along. And they don't need any more scandals in that part of the world. So pulling them back makes all the sense in the world.

LOUIS: Well, I'm more worried about the Iraqi government, in fact, stepping up and providing their own security and defense. Yes, I think their action was appropriate here. But there are much bigger issues about the failure of this government to stand up and fight for themselves and rely upon our soldiers.

PILGRIM: All right, thank you, gentlemen.

Ed Rollins, Robert Zimmerman, Errol Louis.

Thank you.

LOUIS: Thank you.

PILGRIM: Now the results of tonight's poll -- 97 percent of you are outraged that the cash-strapped District of Columbia is using $500,000 in taxpayer money to build a day labor center.

Thanks for being with us tonight.

Please join us tomorrow.

And among our guests will be Senator Jeff Sessions.

For all of us here, thanks for watching.

Good night from New York.

"THE SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.

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