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LOU DOBBS TONIGHT

Obama Blasts President Bush and McCain; Senators Clinton and Obama Fight for Critical Latino Vote; McCain Wins Endorsement from Veteran Republican; Virtual Fence may be Flawed: Border Violence Escalates

Aired February 28, 2008 - 19:00   ET

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


KITTY PILGRIM, CNN CORRESPONDENT: Thanks, Wolf.
Tonight, Senator Barack Obama all but ignores Senator Clinton on the campaign trail. Obama is now focusing his attacks on President Bush and Senator McCain.

We'll have complete coverage of that and the rest of the day's news straight ahead, tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, February 28th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody. Senator Barack Obama tonight appears to be shifting the focus of his presidential campaign. Obama stepping up his attacks against President Bush and Senator McCain and paying less attention to Senator Clinton.

Now, the president and Senator McCain are striking back, President Bush blasting Obama on his plans to meet Cuban and Iranian leaders, McCain hitting Obama on the stance on the war in Iraq. We have extensive coverage tonight.

We begin with Jessica Yellin in Beaumont, Texas -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Kitty, Senator Barack Obama is taking fire on all sides, but so far he is not letting any of his opponents see him sweat.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): While he's courting votes near the president's Texas ranch...

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Thank you. Thank you.

YELLIN: ... a chorus of detractors is fighting to keep him out of the White House, the presumptive Republican nominee on Iraq.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Senator Obama said we shouldn't have gone in, in the first place, well, that's history, that's the past.

YELLIN: The other Democratic contender on his record in the Senate.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: My point is that he never held substantive meetings because he was off running for president, so I don't think he should be touting that as experience.

YELLIN: And the current White House occupant on his offer to meet with tyrants.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It can send chilling signals and messages to our allies; it can send confusion about our foreign policy.

YELLIN: So far, Barack Obama is playing it cool.

OBAMA: I'll give Bush credit. I have enormous respect for Senator Clinton. I revere John McCain's service to this country. He's a genuine American hero.

YELLIN: He's distancing himself from the fight...

OBAMA: It is just that John McCain seems to be talking about me a lot.

YELLIN: And he hits back only on the issues that he wants to highlight.

OBAMA: For the president to say that he doesn't think we're in a recession is consistent with his general attitude towards ordinary workers.

YELLIN: No doubt there will be no incoming fire with Republican opposition already calling him a hypocrite on special interests, challenging his position on public financing and reminding reporters of an IRS investigation into his church.

(END VIDEOTAPE)

YELLIN: Now, Kitty, Senator Obama tells reporters that right now he is focused squarely on winning Ohio and Texas on Tuesday and beating Senator Hillary Clinton, but when you listen to him on the stump, you hear fewer and fewer lines attacking Senator Clinton, and more and more attacking John McCain. It certainly sounds as though Barack Obama is positioning himself as though he's already won the nomination -- Kitty?

PILGRIM: Interesting development. Thanks very much, Jessica Yellin.

New controversy tonight over race and politics on the campaign trail. Senators Clinton and Obama are fighting to win the critically important Latino vote, but that fight is exposing divisions between Latinos and blacks.

Suzanne Malveaux reports from Houston.

(BEGIN VIDEOTAPE)

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): In Texas where black and Hispanic voters are critical to a big win, a dust-off. A prominent Hispanic supporter of Senator Hillary Clinton hurls a loaded charge, that Obama's problem with Hispanics, his race.

ADELFA CAJELLO, HILLARY CLINTON SUPPORTER: Obama simply has a problem that he happens to be black.

MALVEAUX: The 84-year-old Latina activist, Mrs. Adelfa Cajello, says the divisions between blacks and Latinos run deep in Dallas.

CAJELLO: When the blacks were -- had the numbers, they never did anything to support us. They always talked that -- used our numbers to fulfill their goals and their objectives, but they never really supported us, and there's a lot of hurt feelings about that, and I don't think we're going to get over it anytime soon.

MALVEAUX: Before being fully briefed about Cajello's comments, Senator Clinton was asked if she rejected or denounced the leader's support.

CLINTON: People have every reason to express their opinions, I just don't agree with that.

MALVEAUX: But later after Clinton's campaign verified the details, they issued a statement, saying after confirming that they were accurately portrayed, Senator Clinton of course denounces and rejects them.

OBAMA: And I would reject and denounce.

MALVEAUX: Those words denounces and rejects were used by Senator Barack Obama in Tuesday night's debate when he tried to distance himself from past anti-Semitic comments made by the leader of the Nation of Islam, Louis Farrakhan, who has since endorsed Obama, but this controversy under scores the sensitive nature of Texas politics.

PROF. CHRISTINE LEVEAUX-HALEY, UNIV. OF HOUSTON: In Texas, Latinos and African-Americans are the two warring once minority groups.

MALVEAUX: With warring political candidates. Analysts say Hispanics lining up for Clinton, African-Americans for Obama.

UNIDENTIFIED MALE: Pretty much saying that African-American and Hispanic voters would be about even.

MALVEAUX: But while there may be some tension between the groups, Professor Christine Leveaux-Haley says it's being exaggerated to get Hispanic voters to the polls.

LEVEAUX-HALEY: There might be some need to kind of mobilize the Latino vote or galvanize Latinos around some type of issue. That just might be this divide between Latinos and African-American voters.

(END VIDEOTAPE)

MALVEAUX: Now, Kitty, a lot of people who I talked to reject this. They say these are generalities. They do not agree that there is as much tension as they're talking about between Hispanics and black voters. The Obama camp certainly says that Senator Obama would not treat any particular group differently or ignore the needs of the Hispanic community.

And they also point to some examples right here in Texas, the former Dallas mayor, Ron Kirk, did very well in the 2002 Senate run. He beat out a Hispanic candidate, got overwhelming support from the Latino community. They say this is one of those examples where you clearly see there is some support for African-American candidates from Latinos as well -- Kitty?

PILGRIM: Thanks very much, Suzanne Malveaux.

Senator Clinton today increased her criticism of what she says is Senator Obama's lack of experience. Now Clinton again accusing Obama of lacking the experience to be an effective commander in chief.

(BEGIN VIDEO CLIP)

CLINTON: I really believe that we need a president who on day one can be there to try to begin the change, to regain our leadership and our respect. I've served on the Senate Armed Services Committee, and we obviously need a commander in chief who will be able to get our troops out of Iraq, but also make it clear that we will protect and defend our interests in the world.

(END VIDEO CLIP)

PILGRIM: Meanwhile, Senator Clinton is celebrating a record- breaking month of fund-raising. Her campaign says she has raised $35 million so far this month. The Obama campaign says it raised even more, but it refused to give the details.

Senator John McCain is not only fighting Democrats, he's also fighting some of his Republicans. Many conservatives do not believe McCain supports their agenda. Today a Republican who worked on five presidential campaigns declared his support for McCain.

Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): An endorsement from a veteran of Ronald Reagan's White House, John McCain's latest attempt to convince skeptical conservatives he's one of them.

JAMES BAKER, FMR. TREASURY SECRETARY: Like the gipper, John McCain knows that sometimes it's better to take 80 percent of what you want rather than go over the cliff with your flag flying.

BASH: James Baker labeled McCain a principal pragmatist, but the candidate's political pragmatism was on display, McCain knows the debate with Democrats over Iraq will be his biggest challenge and keeps looking for a head start.

MCCAIN: A decision to unilaterally withdraw from Iraq and set a date for withdrawal will lead to chaos.

BASH: Both at this Texas stop and earlier at the Baker Institute of Foreign Policy, McCain kept his long-distance verbal volley with Barack Obama going.

MCCAIN: Yesterday Senator Obama said well we shouldn't have gone in, in the first place, and if we hadn't gone in, in the first place, we wouldn't be facing this problem. Well, that's history, that's the past, that's talking about what happened before. What we should be talking about is what we're going to do now.

BASH: For McCain, that means stay the course.

MCCAIN: Continue this strategy, which is succeeding in Iraq, and we are carrying out the (INAUDIBLE) of the surge. The Iraqi military are taking over more and more responsibilities.

BASH: The likely GOP nominee also jumped into the Democrats' slugfest over NAFTA. They're fighting over who is really against the agreement. McCain call himself a free trader, very much for it, another convenient dividing line.

MCCAIN: I believe in free trade. And I think that that may be one of the many differences between myself and whoever the nominee of the Democratic Party is.

(END VIDEOTAPE)

BASH: Today's campaign day in Texas was a vivid illustration of John McCain in transition, a little bit worried about how Mike Huckabee is going to do in the "Lone Star" state primary, which is next Tuesday. Obviously Texas is a conservative state. For the most part though, Kitty, McCain is very much as you heard trying to test drive his attack lines against a Democratic rival for the White House -- Kitty.

PILGRIM: Thanks very much, Dana Bash, thanks Dana.

New York Mayor Michael Bloomberg today ended speculation that he might join the presidential race as an Independent candidate. Now Bloomberg firmly declared he won't run, but Bloomberg said he might support a candidate who takes an Independent, nonpartisan approach. He did not offer any hints on who that candidate might be.

Still to come, our economic crisis could worsen sharply.

Christine Romans will have that report -- Christine?

CHRISTINE ROMANS, CNN CORRESPONDENT: Kitty, the president at the White House news conference today, caught by surprise by predictions for $4 a gallon gasoline. We take a look at soaring commodity prices and whether it raises the threat of stagflation, that crippling combination of slow growth, rising prices and unemployment -- Kitty.

PILGRIM: Thanks, Christine. We look forward to that.

Also, troubling new evidence of the violence and threats facing our border patrol agents along our southern border, we'll have new video.

Also, new concerns about paperless e-voting in Ohio and Texas, less than one week before the primaries, we'll have a special report.

(COMMERCIAL BREAK)

PILGRIM: New evidence tonight of the federal government's failure to secure our southern border with Mexico and the consequences of that failure. In a moment, Casey Wian will report on the latest violent assaults on border patrol agents by illegal aliens.

But first, Jeanne Meserve reports that the much touted virtual fence may be an actual flaw -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Kitty, the so-called virtual fence, does it work as promised (INAUDIBLE) delayed? The answers to those questions in some dispute this evening.

(BEGIN VIDEOTAPE)

MESERVE (voice-over): Cameras, radars, sensors, all linked by computer to give a comprehensive picture to border patrol agents in their vehicles. That was the promise of "Project 28." The Bowling Built System (ph) is now up and running and the Government Accountability Office says it does not live up to expectations.

RICHARD STANA, GOVT. ACCOUNTABILITY OFFICE: Did they provide the capability to detect aliens crossing the border? Yes, they did. Did they provide it to the performance specification listed in the contract which said 95 percent of aliens, plus or minus 5 percent, they haven't even measured against it, but no one disputes that they did not.

MESERVE: Well Custom and Border Protection disputes it.

UNIDENTIFIED MALE: (INAUDIBLE) requirements...

MESERVE: The Department of Homeland Security took final acceptance of the $20 million project just last week after months of delay and technical glitches.

MICHAEL CHERTOFF, HOMELAND SECURITY SECRETARY: We're convinced at this point all of the defects have either been cured or they're so immaterial we're prepared to take a credit.

MESERVE: But the Government Accountability Office says as of two weeks ago project 28 cameras could only see five kilometers. They were supposed to see almost twice that distance. DHS says the problem has been corrected. GAO also says most of the technology deployed for project 28 will have to be replaced. DHS says only a small portion will. GAO also says a 2007 document laid out a schedule for completing additional segments of virtual fence by the end of 2008, but the problems with the program have pushed those plans back three years. The Department of Homeland Security says there was no such timetable, and the only delay was in their acceptance of the final product.

JAYSON AHERN, CUSTOMS AND BORDER PROTECTION: We were being good stewards of the taxpayers' dollars. We wanted to make sure the deficiencies were fixed before we went to final acceptance.

MESERVE (on camera): The GAO says it showed DHS its report before it was released, but the department did not bring up any of the issues it disputed today. On one point GAO and DHS agree -- a lot has been learned from Project 28, both positive and negative that can be applied elsewhere on the border -- Kitty?

(END VIDEOTAPE)

PILGRIM: Jeanne Meserve reporting, thanks, Jeanne.

Shocking new video tonight of the danger our border patrol agents face from drug and human smugglers along our unsecured border with Mexico. Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): LOU DOBBS TONIGHT obtained surveillance video of a violent confrontation Tuesday between border patrol agents and men they say are alien smugglers. It happened 10 miles west of Calexico (ph), California, when agents spotted this pickup truck on a dirt road on the U.S side of the border.

Realizing they have been discovered, the truck stops. Twenty suspected illegal aliens pour out and flee toward Mexico. The truck's driver also turned south, but becomes stuck in a ravine. Then the border patrol says several lookouts begin hurling large rocks at an approaching border patrol vehicle.

The agent is forced to retreat and the suspects escape. Here's what one of their rocks did to the border patrol vehicle's windshield. An hour later just a few miles away another incident involving two men with ladders on top of a border fence, they begin hurling rocks at an agent driving a caged vehicle known as a war wagon.

He too retreats. Rock attacks are a daily occurrence all along California's border with Mexico.

MICKEY VALDEZ, ASST. CHIEF PATROL AGENT: The criminal organizations are very frustrated at the level that the border patrol has done to gain (INAUDIBLE) control of the border. Typical scenario occurs if there is a rocking (ph), we do report it to our counterparts in Mexico, and sometimes we get a positive, a quick response, unfortunately more often than not, we don't. WIAN: A border patrol spokesman says anti-vehicle barriers and eventually a fence are planned for the area where Tuesday's attack occurred, but that's no panacea. This month near San Diego, smugglers stretched a nearly invisible wire across the sections of the border fence, the clear intent, to decapitate agents on all-terrain vehicles.

(END VIDEOTAPE)

WIAN: The border patrol says assaults against its agents along the eastern California border jumped nearly 700 percent in 2007, and they're rising again this year. The chief patrol agent there says there the violence will not be tolerated and the border patrol in his words will respond with appropriate use of force -- Kitty.

PILGRIM: Casey, that is deeply disturbing video. Thanks very much, Casey Wian.

Still ahead, President Bush says the country is not in a recession despite signs to the contrary. We'll examine whether we are in a recession or what the president calls an economic slowdown.

And the countdown to the March 4th primaries, the most critical contest since Super Tuesday, three of the best political analysts join me for more on that and the day's political news, so stay with us.

(COMMERCIAL BREAK)

PILGRIM: President Bush today said there is no question the economy is in a downturn, but a recession will be avoided. Now, the president made those comments as the economy slows dramatically. There was barely any economic growth in the fourth quarter, and last week applications for jobless benefits jumped sharply. Christine Romans has our report.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): At a White House news conference, the president, surprised by predictions gas prices could reach $4 a gallon.

BUSH: Wait a minute, what did you say? You're predicting $4 a gallon?

ROMANS: The Energy Department expects prices to peak near $3.40 a gallon this spring. Many analysts think prices may reach higher to $4.

BUSH: That's interesting. I hadn't heard that.

ROMANS: Nevertheless, he quickly seized on $4 a gallon gas as another reason to make his tax cuts permanent. The president and the Fed chief say the U.S. economy is fundamentally strong, and Fed Chief Ben Bernanke told the Senate Banking Committee he does not anticipate stagflation, that curse of the 1970s defined as sluggish economic growth coupled with rising inflation and unemployment. BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I don't think we're anywhere near the situation that prevailed in the 1970s. I do expect inflation to come down.

ROMANS: Tell that to the commodities market. Oil prices today soared above $102 a barrel. That traditional inflation alarm bell, gold topped $950 an ounce, gas, food, prescription drugs, rents, tuition, all rising.

PETER MORICI, UNIVERSITY OF MARYLAND: Inflation is bursting out all over except in the mind of those people in Washington. If you listen to Ben Bernanke or the president, things are just fine. Unfortunately stagflation is creeping on us, with the housing market crunching down, unemployment is rising, prices are cresting up. We're in for a perfect storm.

ROMANS: Reflected perhaps in the once mighty dollar, now so weak some stores in New York City are accepting the European currency, the euro. It takes a record $1.51 to buy one euro.

(END VIDEOTAPE)

ROMANS: And the credit crunch caused by the housing crisis is making it harder to get home equity lines of credit, decent terms on credit cards, even, Kitty, student loans.

PILGRIM: You know that's a disturbing thing, this credit crunch and was there anything said about the housing bailout today?

ROMANS: Well it's interesting because the Bush administration has made it clear that they are concerned that any kind of bailout of the housing market could be some sort of reward for speculators or for risky behavior by the banks. At the same time you have some of the people, you know, in the community groups are saying we need -- you know we need some help here.

We need to be talking about writing down some principal and talking about some new solutions. When you're talking about the credit crunch and how much harder it is now to get even borrow for college at a time when the economy is slowing, this is the time people should be able to be borrowing for college and trying to retrain and get more education. It kind of adds insult to injury.

PILGRIM: You know it is very different for businesses and individuals facing this credit limits to actually make ends meet. The Fed seems very intent on the slow growth side of the equation.

ROMANS: And that's exactly right. And that's what the Fed chairman has made very clear in his last two days of testimony before the House and the Senate, that they are fighting the slow growth, and that they are watching inflation. They admit that it's worse now than it was in the 2001 recession, but it is the slow growth they're focusing on, not the inflation fighting part of this equation.

PILGRIM: Thanks very much, Christine Romans. Well time now for tonight's poll: Are you surprised that President Bush and his advisers are so out of touch with the economy that he was unaware of a prospect of $4 a gallon gasoline? Yes or no, cast your vote at LouDobbs.com. We'll bring you the results later in the broadcast.

We do have time now for some of your thoughts.

And Hope in New York wrote to us: "I'm incensed after watching the Bush news conference today. How can he not know that gasoline prices are predicted to reach $4 a gallon by this spring? He is so out of touch with the struggles of the working middle class in this country."

Jan in Utah: "Dear Lou, I understand President Bush says we're not heading into a recession. I agree. We're already in the recession."

And Craig in Pennsylvania wrote to us: "Is the virtual fence on the border with Mexico similar to the virtual fence around Washington? You know, the one that only lets people into Washington as long as they don't bring any virtues with them."

We'll have more of your e-mails later in the broadcast and each of you whose e-mail is read here receives a copy of Lou's book, "Independents Day: Awakening the American Spirit".

Coming up a rising number of states are taking action on their own to tackle our illegal immigration crisis. We'll have a special report on that.

Also new concerns about the integrity of our voting system, just days before the Ohio and Texas primaries, we'll have that story.

And a blunt warning to presidential candidates about the dangers of an abrupt U.S. withdrawal from Iraq and that warning coming from the president's top military adviser, General David Grange will join us.

(COMMERCIAL BREAK)

PILGRIM: Indiana and Kansas, two more states taking the initiative to deal with the illegal immigration crisis. They join a growing number of states fed up with the federal government's failure to solve this crisis.

Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The state of Kansas is struggling with the issue of illegal immigration. There is a comprehensive bill now being debated there which would deny licenses to businesses which hire illegal aliens, require the use of the federal program E-Verify, which matches names with Social Security numbers to verify employment eligibility, make identity theft a state crime, deny state benefits to illegal aliens, and direct state and local police to cooperate with federal immigration enforcement. Supporters say the bill is long overdue.

KRIS KOBACH, IMMIGRATION ATTORNEY: In the last few years, Oklahoma, Nebraska, Missouri have all taken actions to discourage illegal immigration. Kansas is the only one in the region that hasn't done anything. As a result, the population of illegal aliens in Kansas is much higher both in absolute terms and as a percentage of population.

TUCKER: But the Kansas Chamber of Commerce opposes the bill, saying, "Immigration is an issue that can only be truly solved at the federal level. We are not interested in playing political games at the expense of the Kansas economy and its workers."

In Indiana, there's legislation pending that would direct the state police to work in cooperation with the immigration and customs enforcement agents, deny government contracts to employers who hire illegal aliens and forbid the transportation and harboring of illegal aliens. Business groups again oppose it, but the legislation has bipartisan support.

MIKE DELPH (R), INDIANA STATE SENATE: It's one of those things where the people of Indiana want it, the business community doesn't want it. The theory behind the bill is to take the money off the table. If you take the incentive for illegal immigration to exist off the table, you dis-incentivize the activity from taking place.

TUCKER: In Texas next week, Republicans are putting the illegal immigration issue to a vote.

(END VIDEOTAPE)

TUCKER: Now next Tuesday, voters in the Republican primary will be asked if local, state and federal officials should be required to enforce U.S. immigration laws. Kitty, there's not a lot of guessing about which way it should go you, but it's on the ballot nonetheless.

PILGRIM: Thanks very much, Bill Tucker.

Well a victory in federal court today for state laws that hold employers responsible for hiring illegal aliens. A federal judge refused to block Arizona from implementing its law while appeals are being heard. Arizona's law is being challenged by business and special-interest groups. Arizona's employers sanction law is a model for other states, including New Jersey. We will talk with the sponsor of New Jersey's bill later in the program.

Electronic voting continues to pose a threat to our democracy -- 32 states use e-voting systems. This broadcast has made it a priority to bring you the very latest information on which states have moved away from electronic voting a to a paper ballot in the interest of making sure that every vote counts. Now just one week before critical primaries, e-voting is still a concern in Texas and Ohio.

(BEGIN VIDEOTAPE) PILGRIM (voice-over): Ohio and Texas, tight races, flawed voting systems, a potential problem in counting the votes. In Ohio, the secretary of state insisted on running tests that found critical security failures with the electronic voting systems used in that state.

She then urged 57 Ohio counties to switch to paper ballots, but she didn't require it. So many counties still haven't switched and don't plan to.

JOHN BONIFAZ, VOTER ACTION: There is a resistance in the state to making this change, and that's why it's important that she use her power. He name is Jennifer Brunner. She ran in part on the platform to do something about this.

PILGRIM: Computer scientists who specialize in electronic voting systems say because of high expected turnout in Texas, any problems with electronic machines may result in long lines and chaos. They also say the state is vulnerable to massive vote count problems.

PROF. DAVID DILL, STANFORD UNIVERSITY: In the case of Texas, they're still in the dark ages in a number of the big counties, where they're using all electronic voting with no paper trails or paper ballots at all. They also don't do manual audits.

PILGRIM: Concerns about the consequences are rooted in bad experiences elsewhere. For example, the Super Tuesday state of New Jersey, voting machines in six counties recorded inaccurate turnout, sometimes fewer Democratic voters than it should have, sometimes fewer Republican voters.

Tallies did not match up. The state says the election results are not compromised, but the manufacturer has no answers yet about what happened. Issuing the statement, "Sequoia is currently working to isolate and determine the specific cause of an ancillary reporting issue."

(END VIDEOTAPE)

PILGRIM: Deadlines for securing the vote are being missed all over. New Jersey was supposed to have all machines retrofitted with a paper printer by the primary. Now that may not happen in time even for the November election. In Ohio, discussions about what to do in November are now being under way between the governor and legislature, but it's too late to do anything about next week's crucial primary.

Coming up, the military wants a pause in troop reduction in Iraq this summer. We'll discuss that with one of our nation's most respected former military commanders, General David Grange.

Also, John McCain takes on Democratic front runner Barack Obama as the Democratic candidates count down to the crucial March 4th primary. Our distinguished panel of political analysts tackles those issues. Much more, stay with us.

(COMMERCIAL BREAK)

PILGRIM: Democratic presidential candidates are calling for a quick U.S. troop withdrawal from Iraq. The military is warning about the dangers of an abrupt withdrawal. The joint chiefs chairman Admiral Michael Mullen today said a sudden pullout could jeopardize the gains made by our troops.

Joining me now is General David Grange. He's one of the county's most decorated former commanders.

And I would like to ask you, General Grange, about something that Admiral William Fallon said. He's the commander of the American forces in the Middle East. He says that he supports a pause in the troop reductions from Iraq.

What do you think of that?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well I believe he states that because the ground commander had recommended a pause, not to rush this redeployment back out of Iraq, because right now they want to exploit the successes made to date.

It's very dangerous to try to do a premature withdrawal. If they do, the enemy's going to exploit that, I believe, especially in an election year in the United States of America. You don't want to telegraph your troop movement plans anyway, so I think it has to be -- I can assure you there's timelines behind the scenes, but they don't need to be broadcast.

PILGRIM: That makes perfect sense to me. I'd like to go through some of the numbers. There are 19 combat brigades in Iraq. By this July 4th, more brigades are supposed to depart. But this would still put the number of American troops in Iraq at 140,000, that's still more than the number of the American troops before the surge. Why do we need so many troops?

GRANGE: Well if we would have had the troops necessary three years ago, today we probably would not have to have that many troops. But right now, again, to keep the pressure on the adversary, to allow time to get the remaining Iraqi police and security forces trained to standard to replace the American troops, and again to keep the pressure on the adversary to exploit success.

PILGRIM: Admiral Michael Mullen, chairman of the Joint Chiefs of Staff today talked about the presidential candidates calling for timetables for troop withdrawal. Let's hear what he had to say.

(BEGIN VIDEO CLIP)

ADMIRAL MICHAEL MULLEN, JOINT CHIEFS CHAIRMAN: I do worry about a rapid withdrawal that then turns -- that in a situation that wouldn't call for that in terms of the conditions on the ground, which would then turn Iraq -- basically turn around the gains that we have achieved and struggled to achieve and turn them around overnight. That said, what I said earlier today is bedrock for me, you know. When a new president comes in, I'll get my orders and we'll carry them out. (END VIDEO CLIP)

PILGRIM: How do you, in the context of a campaign, you certainly have to discuss what your strategy would be, but how do you do that in a responsible way that would dovetail with what the admiral said?

GRANGE: Sure. Well, first of all, the presidential hopefuls should in fact listen to the ground commanders, that's their business. It's not their final words, it's the civilian leadership's word on what to do, and those admirals and generals will follow those orders unless they totally disagree and decide to retire early.

I think it's important that the people on the ground have the feel, they have the eyes and ears. They hear from many commanders out there in the operational areas of what's going on and it's important not to just make a comment, well, I'm going to withdraw as soon as I come into office.

I mean, what's going to happen if you do that? Are you going to withdraw and in what way? It's very complex. This is a tough unconventional warfare environment that takes a lot of detailed planning and understanding to successfully win this, if that's our goal to win.

PILGRIM: Thanks very much for being with us, General David Grange, thank you.

GRANGE: My pleasure.

PILGRIM: Coming up in a few minutes here, the "Election Center" with John Roberts -- John.

JOHN ROBERTS, CNN ANCHOR: Kitty, thanks very much.

CNN "Election Center" coming up at the top of the hour. President Bush and John McCain ganging up on Barack Obama. Is the real headline here that the Republicans consider his nomination inevitable?

And conservative talk radio is still out for John McCain's political scalp. Bill Cunningham, you remember him from Tuesday? He joins us again tonight with a dire prediction about the harm that a McCain win could do to the Republican Party.

That and a whole lot more coming your way in the "Election Center," tonight 8:00 Eastern -- Kitty.

PILGRIM: We look forward to it, John.

A reminder to vote in tonight's poll. And our question is: Are you surprised that President Bush and his advisers are so out of touch with the economy that he was unaware of the prospect of $4 a gallon gasoline? Yes or no, cast your vote at LouDobbs.com. We'll bring you the results in just a few minutes.

Up next, President Bush blasts Barack Obama on foreign policy. Three of the best political analysts will join me on that and much more, and we'll have Lou's interview with the New Jersey lawmaker on that state's efforts to crack down on the employers of illegal aliens.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Well joining me now are three of the best political analysts in the country. Here in New York we have Democratic strategist Hank Sheinkopf and "New York Daily News" columnist Errol Louis. In Dallas, Texas, Mark Halperin, senior political analyst for "Time" magazine. And Mark is also co-author of "The Way to Win: Taking the White House in 2008."

Gentlemen, thanks for joining us.

You know, we had a comment by New York Mayor Michael Bloomberg. He says he's not going to run for president. This has been hanging as a shadow over both parties. What do you make of today's announcement and how does that change this delicate chemical mix of this campaign?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: It changes nothing. And when didn't announce a little bit earlier or make a decision earlier, it was pretty much a forgoing conclusion that he would not be running. Look, here's a man that's done well in life, has been a very good mayor of the city of New York and made his way based upon facts, statistics and research. Well, he did his research, he checked his facts and he made a decision.

PILGRIM: Well he also said that he might join others in helping a candidate who established an independent view point. He might support that candidate. Mark, any thoughts on that? Is that reading the tea leaves too closely?

MARK HALPERIN, TIME MAGAZINE: I think he thought there might be room if he saw a Romney/Edwards match up or some of the other combinations that were out there. But whether it's Clinton/McCain or Obama/McCain, I don't see him getting involved with an independent expenditure.

I just don't think that's the style. I think he'll talk about issues and try to influence the agenda. And I would not rule out his becoming running mate to either McCain or Obama.

PILGRIM: Interesting. Errol?

ERROL LOUIS, NEW YORK DAILY NEWS: Well, talking about running mates is a little early for that. When asked how he intends to have his influence, was he going to form a 527, an independent political committee to use some of his money to sort of put out ads and so forth? The mayor of the city was not going to do that, and that he would rely on the press, which covers him every day at least on local affairs.

It got kind of a tepid response. I don't know if the New York City press corps is looking forward to sort of being his megaphone. And there will be an open question as to how he stays relevant, despite his desire to be so.

PILGRIM: You know, I'd like to read a quote from an op-ed that he wrote in "The New York Times." And he said, it's important for an independent approach critical to the issues, the economy, the education, the environment, and he wrote, "I believe an independent approach to these issues is essential to governing our nation and that an independent can win the presidency."

But I guess the real question is, aren't the candidates being independent enough in their solutions? Or do you really thing that an independent candidate has to step forward to take on such really basic issue as the economy, education, the environment?

SHEINKOPF: Let's define what independent means in this case. Independent means prepared to take on special interests or prepared to make decisions that may not be popular, or prepared to offend some people in the process of making those decisions and executing them.

If that's what he's talking about, not likely going to happen. Look at congressional performance over the last several years. Not taking big risks, why? Because you want to get re-elected.

PILGRIM: Mark, any thoughts on this?

HALPERIN: I disagree if I understood Hank's point. I think John McCain, who is a friend of Michael Bloomberg and I think one reason Bloomberg decided this is he didn't want to go against John McCain. His only way of winning was to run a lot of negative ads, tens of millions, maybe hundreds of millions of negative ads against the major party nominees.

John McCain has made a career, the record speaks for itself, in standing up exactly the way Michael Bloomberg asked in his op-ed piece in the "New York Times," fighting against the party when that's in the national interest.

Barack Obama talks about that, he doesn't have nearly the record of doing it, but if those two guys end up being the nominees, there's very little room. They're both running against Washington and they're both running against special interests and against their own parties rhetorically. That's exactly what Bloomberg says is needed.

LOUIS: Yes, Bloomberg had the right idea. It turns out that McCain and Obama beat him to the punch. He was - Bloomberg was banking correctly, as it turns out, that there was a tremendous sentiment out among the voters to sort of move towards the center and away from the extremes.

If it had been say, Romney for the Republicans and Kucinich for the Democrats, then there would have been a really logical place for a Bloomberg candidacy. As it turns out the voters and the major parties ended up going to exactly where he was going to go.

PILGRIM: All right, let me - we brought up McCain. Let's get to a comment that he made today saying that his comment about staying in Iraq for 100 years is completely distorted, and that he said he was talking about around an American presence once the war is won.

Let's listen to what he said first.

(BEGIN VIDEO CLIP)

MCCAIN: No American argues against our military presence in Korea or Japan or Germany or Kuwait or other place, or Turkey, because Americans are not receiving casualties there. I believe that once we win, which will be -- and I say win, as I described it to you earlier, that we will decide on the security arrangement after the war is won.

(END VIDEO CLIP)

PILGRIM: OK so two questions, did he quell the controversy completely? And second of all, where do we stand on this war in Iraq? It's not really coming up that much in the campaign, is it, Hank?

SHEINKOPF: Hasn't been significant of late, the economy taking down the nation and frankly the personality of the potential Democratic nominee, Barack Obama being overpowering and kind of taking the air out of the room.

But McCain didn't answer anything, and the problem will be in the fall, if Barack Obama is the nominee or Hillary Clinton. Let's take Barack and he stands, we're the stand, we're out of Iraq, we're leaving, and McCain says we're staying, and that quote and the previous quote gets repeated thousands of time in the media, it's going to be very difficult for him to walk away from it.

PILGRIM: Mark, thoughts on this?

HALPERIN: Kitty, since I'm in Texas, I'll do a little bragging. I think I'm the only reporter in America who in the last two days has covered Barack Obama yesterday and John McCain all today.

And I will tell you, they are very engaged in Iraq. They both want to have that fight. They've been doing it by long distance, both candidates every day bringing up the other one. And the McCain people have come up with a new line. They are saying Obama wants to talk about the past, the mistakes of going into the war, the mistakes of the way the war was conducted. They say this fight should be about the future.

That's a fight that the Obama people are going to have to grapple with. At the same time as Hank correctly said of course, it is still a political loser for the Republican nominee. But I think Iraq is going to be a major issue in the general election whether it's Obama/McCain or Clinton/McCain. Even though it has receded for the last few months, it is going to come back with a vengeance as one of the two or three biggest issues.

PILGRIM: It's absolutely unavoidable. There's no way that it can continue to stay out of it.

LOUIS: And look, frankly, I don't know how much good McCain did himself by citing, say Germany. At a time when American military power is being stretched to the breaking point, and you've got people forced to extend their stays and so forth, pointing to the 25 or 30,000 troops who are sitting around in Germany who have no clearly defined purpose since the fall of Russia and the end of the Cold War, that's not necessarily an argument for setting up another long-term commitment in the Middle East.

PILGRIM: All right, let's focus off the campaign, onto the reality on the ground for the American people and the economy.

We had President Bush today saying he doesn't think the economy is bound for a recession. And he clearly he didn't have any clue about $4 a gallon gasoline as we reported earlier on the broadcast. Let's listen for a moment on what he said.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What's your advice to the average American who is hurting now, facing the prospect of $4 a gallon gasoline, a lot of people facing.

BUSH: Wait a minute, what did you say? You're predicting $4 a gallon?

UNIDENTIFIED MALE: A number of analysts are predicting $4 a gallon this spring when they reformulate.

BUSH: That's interesting, I hadn't heard that.

UNIDENTIFIED MALE: Yes, sir.

BUSH: I know it's high now.

(END VIDEO CLIP)

PILGRIM: We all know it's high. We always check it when we pull up to that pump. Hank, what do you think about this?

SHEINKOPF: It makes George Bush completely more irrelevant and creates more problems for the Republicans both on the congressional side, as well as the presidential side.

PILGRIM: Meanwhile though, we're in this difficult economy, talk of the economic stimulus package basically being dispelled by many economists saying it will not work. What kind of a mess are we in from now until November or even later to get out of it -- Mark?

HALPERIN: I don't think the economy is in as bad a shape overall as some people do, but clearly the American people feel things are bad, a lot of people are hurting. I said for a long time I thought the winner of the Democratic nomination fight would be the one who talked most clearly about what they would do as president about the economy.

Amazingly their debate is basically about NAFTA and basically who is going to more anti-free trade. I still think in the general election, McCain, Obama, Clinton, whichever one finds their voice on the economy will win, because that is a huge issue to the American people. There's so much anxiety about it, and again I don't hear any of them talking clearly about what they would do.

PILGRIM: Yes and you have to take this debate out of the theoretical as people try to balance their bills every month.

LOUIS: Absolutely. In fact, Kitty, the clip you showed reminded me of when President Bush's father, George H.W. Bush had a famous encounter where he had no idea what a supermarket scanner was, it was some new kind of technology.

And it's not that it was - it wasn't critical to his management of the economy, but it underscored the fact that he was just out of touch with where Americans were. When you're running around in New York looking for and happy to find gas at $3.20 a gallon and you're now paying $3.45 or $3.60 where the average price is stabilizing these days, the president should be aware of that. Yes, we're getting up towards $4 a gallon.

PILGRIM: And it's uncomfortably close to $4 a gallon and he now knows that.

Thanks very much, Hank Sheinkopf, Mark Halperin and Errol Louis, thank you.

Still ahead, Lou talks with New Jersey Senate majority leader about that state's effort to punish employers of illegal aliens. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: New Jersey is joining the many states taking action to deal with illegal immigration. The New Jersey legislature is considering a bill to punish the employers of the illegal aliens.

State Senator Majority Leader Stephen Sweeney introduced that bill and he told Lou Dobbs why New Jersey needs this new law.

(BEGIN VIDOETAPE)

STEPHEN SWEENEY (D), NJ SENATE MAJORITY LEADER: Basically it's out of frustration with the federal government not dealing with the serious issue of illegal immigration.

LOU DOBBS, CNN ANCHOR: The idea that there would be a penalty, a sanction against business, what has been the reaction amongst your fellow senators in the state legislature?

SWEENEY: It's actually been a little bit mixed, but I have sponsors coming on the bill. And you know, it's an issue that has to be talked about. You know Lou, the federal government has ignored this issue for too long. Honestly I feel the more states start pushing the issue, the better chance we have of getting the federal government to pay attention to it.

DOBBS: The state of New Jersey is absolutely one of those states which more illegal aliens are moving into having an impact. You've seen firsthand the impact as a business representative of the ironworkers union. Give us a sense of your judgment of the impact of illegal immigration in the state of New Jersey?

SWEENEY: What it's doing is actually suppressing wages now, and it's driving up the cost of government. You know, it's got so many effects on the way we function in the state of New Jersey and our health care costs are going through the roof. We have a charity care program that we really can't afford any longer.

Governor Corzine just announced a very difficult and painful budget, dealing with the fact that we don't have the money to spend on our programs. And again, when you have people that are working, that aren't paying taxes, that are working under -- we have an underground economy in most states now, and it's really damaging the economy of this country.

DOBBS: Most people are unaware that we have a more than $1 trillion underground economy in this country, and much of that labor within that economy obviously provided by illegal aliens. You've been attacked by socioethnocentric interest groups as being anti-Hispanic because you have brought this legislation forward. How are you responding to that? How does it make you feel?

SWEENEY: Well it's actually insulting because Lou, I'm the person in the state of New Jersey to pass the minimum wage bill. It was my legislation. I'm doing paid family leave and fighting for the little guy on that. I'm -- I believe in workers' rights, but I also believe that this country is a country of laws, and that we open with open arms, we welcome immigrants to come this to country legally and live the American dream.

But what's going on now is just completely out of control. Why are people supporting companies that are basically cheating and hurting these illegal immigrants by denying them -- really denying them the American dream? When they come here, they don't get to live it. They're second-class citizens.

DOBBS: When these folks in these ethnocentric, activist organizations come after you like that, does it just make you wonder what in the world is it going to take for get everybody on the same page? Because you really have the liberal left aligning itself with the conservative right that is corporate America, and when their interests are combined, everyone in the middle loses.

SWEENEY: Lou, that's the thing that's very different to understand here. You know, again, what we're talking about in my bill is a company that knowingly is hiring illegal immigrants. If the companies at least make the effort to verify, there's checks and balances in place now.

They're not perfect, but they're in place. And if companies actually make that effort, they're not going to fall under this law. They've done what we've asked them to do. But to just say that we can't do anything about it because it's gotten out of control is wrong. DOBBS: And basically what they're saying to you and to others around the country is we're bigger than the law and it's inconvenient to us to do business according to the law. That's got to change and Senator Sweeney, we're glad you're one of those making certain that that change does occur in this country. It's well overdue.

SWEENEY: Thank you Lou, I really appreciate that.

DOBBS: Senator Stephen Sweeney, thank you very much.

SWEENEY: Thank you.

(END VIDEOTAPE)

PILGRIM: We have tonight's poll - 90 percent of you are not surprised that President Bush and his advisers are so out of touch with the economy that he was unaware of the prospect of $4 a gallon gasoline.

We have time for one last e-mail. Robert in California: "Hi Lou, my wife and I just became Independents. We were Democrats for over 36 years, but after watching your broadcasts for the last six months and then the primary debates, we finally made our choice. Keep up the good work, Lou."

Each of your whose e-mail is read here receives a copy of Lou's new book, "Independents Day: Awakening the American Spirit."

Thanks for being with us tonight. Please join us tomorrow.

The "Election Center" starts with John Roberts, starts right now.

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