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LOU DOBBS TONIGHT

Democrats Continuing Conflict over Do-Over; Clinton Defends Stance on NAFTA; Shelby Steele Speaks on Obama's Race Problems; Declining Job Market; Race Issue Gains More Steam

Aired March 20, 2008 - 19:00   ET

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


LOU DOBBS, HOST, LOU DOBBS TONIGHT: Wolf, thank you.
Tonight Senator Barack Obama's poll numbers are declining. New controversy on race and politics on the campaign trail. The author of a provocative book on Senator Obama, Shelby Steele is among my guest.

And rising pressure to overturn a Pentagon contract for European, not American, tanker aircrafts. A powerful congressional opponent of the contract, Congressman Duncan Hunter, among our guests here.

And a victory for commonsense. A rare victory, and a defeat for ethnocentric special interests, political correctness and assorted nonsense in Philadelphia, where a cheese steak shop owner won his fight to use English only signs and the proud owner of that shop, Joe Vento, will be among my guests, all of that, all the day's news and much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, March 20. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Senator Hillary Clinton's presidential campaign today suffered a major setback. The state Senate in Michigan in effect killing efforts to hold a new primary, disenfranchising Michigan Democratic voters, following the state of Florida's refusal to redo its primary.

Meanwhile, there are growing signs that Senator Obama's campaign is losing momentum as a result of the controversy over his former pastor. The latest opinion poll showing a significant decline in voter support for Senator Obama.

We have extensive coverage tonight, and we begin with Candy Crowley with the Obama campaign in Beckley, West Virginia -- Candy.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Well, you know, Lou, if you're going to add up the plus and minuses for Barack Obama over the past couple of weeks, Michigan's decision probably is a plus for him. The Obama campaign didn't like the setup. The primary plan for Michigan and today it fell dead.

(BEGIN VIDEOTAPE)

CROWLEY (voice-over): The campaign action this day is the inaction in Michigan where a plan to hold a primary do-over was left for dead, Michigan now looks like Florida, which also stalemated (ph) in its efforts to put on a second primary. It's a double-barrel blow in camp Clinton and she's raised the stakes.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I do not see how two of our largest and most significant states can be disenfranchised and left out of the process of picking our nominee without raising serious questions about the legitimacy of that nominee.

CROWLEY: Just prior to the Michigan meltdown, the Obama camp was touting a press release by supporter and Senator Chris Dodd, suggesting the best idea would be an arrangement where the delegates are apportioned fairly between Senators Obama and Clinton.

Her best case scenario is seating Michigan delegates in accordance with the first primary results, but he wasn't on the ballot then, so she has focused on a redo and she blames him for its death spiral.

H. CLINTON: I do not understand what Senator Obama is afraid of.

CROWLEY: A revote would advantage her, but he says the argument is about fairness in part because it bars people who may have voted Republican in the first primary because they knew a Democratic contest wouldn't count. No revote means she loses her best chance to overtake his leads in pledged delegates and the popular vote. But she says it's about disenfranchisement.

He says baloney.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: As soon as she got into trouble politically, and it looked like she would have no prospects of winning the nomination without having them count, suddenly, she's extraordinarily concerned with the voters there.

CROWLEY: Michigan is likely to end up with no input at all.

UNIDENTIFIED FEMALE: I would like to see us resolve this. I think the fairest way to resolve it is by having a vote. I think it would bring a huge amount of excitement to Michigan. Our issues would be raised on a national level.

CROWLEY: And the Democratic National Committee may end up with one huge fight at this summer's convention in Denver.

(END VIDEOTAPE)

CROWLEY: But there is one overriding fact in all of this, the DNC does not want a big fight in Denver this August. It wants, in fact, to show a united front in this country in the Democratic Party. Options are running out but somewhere in what is left, the DNC hopes to find an answer -- Lou.

DOBBS: With Senator Clinton saying point blank, the legitimacy of the nominee will be in question if Florida and if Michigan do not enfranchise their Democratic voters, I mean, you're talking about hardly a united front. You're talking about the potential for disaster here.

CROWLEY: Absolutely. And it's only ratcheted up. I mean this whole thing about let's all get together, the state parties, the governors, both campaigns, the DNC, it just hasn't happened. The stakes are enormous here. Michigan and Florida, if they were to have revotes may hold the key to who's going to be the nominee.

It certainly can change the texture of what's going on in this race right now. So you are just seeing Senator Clinton ratcheting up the rhetoric and you know Barack Obama digging in his heels.

DOBBS: And this fight getting increasingly nasty. Thank you very much, Candy Crowley.

Just when we thought it couldn't get any nastier, well efforts to reach a compromise over the Florida primary have stalled as well, as Candy just reported. Two state senators there proposing a compromise that would allow members of the Florida delegation to be seated at the convention, but the Clinton and Obama campaigns have refused to even begin negotiations over that proposal.

Senator Clinton tonight is vigorously defending herself against charges she once strongly backed NAFTA, the North American Free Trade Agreement. Senator Clinton said she's been frequently criticized the way the NAFTA trade deal was implemented, but the Obama campaign says Clinton is simply not telling the truth about her position on the so- called free trade deal.

Jessica Yellin with the Clinton campaign has our report from Anderson, Indiana.

(BEGIN VIDEOTAPE)

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): This was Hillary Clinton lashing out at Barack Obama for suggesting she once championed NAFTA.

H. CLINTON: Shame on you, Barack Obama.

YELLIN: Now, the Obama campaign is calling her a hypocrite, saying new evidence shows she was a vocal backer of the trade deal. Their smoking gun -- just released White House schedules showing that as first lady, Clinton attended NAFTA strategy meetings before it passed Congress.

Top Obama strategist David Axlerod insists she owes an apology to the people of this country and questions how she would treat the truth as president. Clinton maintains the schedule proved nothing.

H. CLINTON: I have spoken consistently against NAFTA and the way it's been implemented.

YELLIN: And she's hitting back, resurrecting the controversy that erupted when an Obama adviser discussed NAFTA with a Canadian official. H. CLINTON: I have been consistent, unlike Senator Obama who has not been. He tells the people of Ohio one thing, and his economic advisers tell the government of Canada something else.

YELLIN: It's hardly news that Clinton publicly promoted NAFTA as first lady.

H. CLINTON: Oh, I think that everybody is in favor of fair of free and fair trade and I think that NAFTA is proving its worth.

YELLIN: A former Clinton White House official who ran one of those NAFTA meetings Clinton attended says privately she objected to the bill.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: I must tell you, Hillary Clinton was extremely unenthusiastic about NAFTA. She -- and I think that's putting it mildly. I'm not sure how she objected to all of the provisions of it. She just didn't see why her husband and why that White House had to go do that fight.

YELLIN: The Obama campaign insists whatever her private opinions, Clinton is not being truthful about the role she played making NAFTA law. A political he said/she said.

(END VIDEOTAPE)

YELLIN: Now, Lou, the Clinton campaign maintains that as first lady, Senator Clinton did consistently oppose NAFTA in private. But you know with these upcoming contests in Pennsylvania and right here in Indiana, where the economy is so important, even a perceived inconsistency on NAFTA could hurt Senator Clinton -- Lou.

DOBBS: Well, I think we may have a rare opportunity here as journalists, Jessica, to talk about the objective, nonpartisan truth and reality. The fact is you've just reported David Gergen substantiating precisely what Senator Clinton said.

YELLIN: And I spoke to another Clinton official who worked in the Clinton White House who said the same, that Senator Clinton as first lady consistently raised questions and concerns about NAFTA because she thought primarily that it would distract from promoting healthcare reform which was her primary focus -- Lou.

DOBBS: Well, it appears that Senator Clinton on every substantive point is borne out and corroborated by others then, is she not?

YELLIN: The people we're talking to, we have to keep in mind, are people that worked for Bill Clinton and worked for the Clinton White House, so they may have a point of view in all of this, but they do maintain that Senator Clinton is as she said consistently opposed to NAFTA, though she did publicly support it at times.

DOBBS: As first lady?

YELLIN: As first lady. DOBBS: Jessica, thank you very much. I think that's about as close as we can come to definitive on this issue -- Jessica Yellin reporting.

The latest opinion poll showing Senator Clinton is now leading Senator Obama nationally and in the critical primary state of Pennsylvania. Senator Obama losing support as the controversy over his relationship with his former pastor intensifies. A new Gallup tracking poll shows Clinton with 48 percent support nationally, compared with 43 percent for Senator Obama.

In a new CNN poll of polls shows Clinton with a commanding lead now in the state of Pennsylvania. Senator Clinton has 52 percent support and Obama 39 percent. That Pennsylvania primary will be held of course on April 22 and meanwhile, little doubt which candidate liberal activists are supporting.

Senator Obama defeating Senator Clinton by an amazing percentage, more than 50 percent in a straw poll released at the so-called "Take Back America" contest. Obama had 72 percent; Clinton 16.

The McCain campaign today suspended one of its staffers who released an online video questioning Senator Obama's patriotism. The video mixes Obama statements with sound from his controversial former pastor, Reverend Jeremiah Wright.

A McCain spokeswoman said the staffer, Soren Dayton, violated the campaign's policy against personal attacks against Democrats. The campaign insists Dayton is a low-level staffer who works as a, "political coordinator".

Elsewhere on the presidential campaign trail, politics as usual for both Senator McCain and Senator Obama. Senator McCain today declared Obama once said he was looking forward to meeting the president of Canada. That, after, of course, Senator Obama had taken on Senator McCain over confusing Shia and Sunni, and al Qaeda and extremists. Yesterday Obama accusing McCain of failing to understand the nature of the insurgency in Iraq.

Obama's attack coming after McCain had mistakenly told those reporters in Jordan that Iran is supporting Sunni insurgents in Iraq. McCain quickly corrected himself from a little help from Senator Joe Lieberman. McCain today said all politicians make mistakes and it's time to move on. He did so with a smile on his face, after pointing out of course that Canada has a prime minister and not a president as Senator Obama had said.

Senator McCain in London today declared al Qaeda on the run in Iraq but certainly not defeated. The United States is now entering the sixth year of the war in Iraq. LOU DOBBS TONIGHT military analyst General David Grange joins me now.

General, the past history of this war, now lasting longer than World War II, will we see whether we attribute it to the surge strategy, whether we attribute it to some new approach -- will the United States be able to point to significant success in the next six months in Iraq?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Lou, I believe so. And it all depends on whether we keep the momentum up with the successes to date. And if we add to the surge, the diplomatic, informational and economic power that goes along with the military success that's already been demonstrated the last half of 2007 and the beginning of 2008.

DOBBS: Since the advent of the surge strategy and the loss of American life in Iraq has declined, remarkably, substantially, is that level of loss going to be improved upon? Will we see even lower casualties, American casualties, in the months ahead?

GRANGE: Lou, I believe so. Though there will be spikes throughout the year. There will be certain times where the enemy gains an advantage, though, slight. If we withdraw troops too rapidly, before conditions in certain areas are sufficient to ensure that we have dominance in those areas then there could be more casualties.

DOBBS: And with tours of three and four for National Guardsmen and Reserves and an army described by various of its leaders as broken, are we going to see the U.S. Army, in particular, be able to mend itself, while carrying out its mission in Iraq?

GRANGE: Well, the U.S. Army in particular has a lot of rebuilding, refitting to accomplish. Equipment is worn out. Troops are tired, and it's tough. And it's this balance between accomplishing your mission and taking care of your troops.

And I think this is the toughest challenge a commander has. But if you ask the troops, I think the majority will say, accomplish the mission; it comes first, as long as we have good leadership and the will of the American people.

DOBBS: Thank you very much, General David Grange.

Still ahead here, troubling new questions about the Bush administration's economic policy as our crisis is apparently worsening.

Kitty Pilgrim will have the report -- Kitty.

KITTY PILGRIM, CNN CORRESPONDENT: Lou, the Bush administration keeps talking about job growth, but the only thing growing is the government -- Lou.

DOBBS: Remarkable statistics on job growth and where they're growing, we look forward to that report, Kitty.

Also rising fury in Congress after Europe, not the United States wins a huge U.S. Air Force tanker aircraft contract. I'll be talking with a leading outspoken opponent of the deal, Congressman Duncan Hunter.

And is Senator Obama manipulating white voters to win this election? Is he sincere? The author of a thought-provoking new book on Obama, Shelby Steele, is among our guests. We'll be talking to him next.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: New controversial comments today on race from Senator Barack Obama. This morning, during a speech on race earlier in the week, Obama had commented there was a time his white grandmother feared black men and made stereotypical comments about African- Americans. This morning, during an interview with a Philadelphia radio station, Senator Obama tried to explain those comments but he appeared to be doing some stereotyping of his own.

(BEGIN AUDIO CLIP)

OBAMA: The point I was making was not that my grandmother harbors any racial animosity. She doesn't. But she is a typical white person who, you know, if she sees somebody on the street that she doesn't know, you know, there's a reaction that's been bred into our experiences that don't go away. And that sometimes come out in the wrong way. And that's just the nature of race in our society. We have to break through it.

(END AUDIO CLIP)

DOBBS: Well, indeed, we've got a lot to break through. Senator Obama's campaign issued this statement, apparently trying to clarify what the senator had said. Saying, "Barack Obama said specifically that he didn't believe his grandmother harbored any racial animosity, but that her fears were understandable and typical of those often shared by her generation."

Well, whatever that may be, it is creating some problems for the senator without question.

I'm joined now by Shelby Steele. Shelby Steele is senior research fellow at the Hoover Institution at Stanford University. He's written a number of very important books on race on our society, a provocative book on Senator Obama "A Bound Man: Why we are excited about Obama and why he can't win."

Shelby Steele joins us live from Monterey, California tonight -- Shelby, good to have you with us.

SHELBY STEELE, AUTHOR, "A BOUND MAN: WHY WE ARE EXCITED ABOUT OBAMA AND WHY HE CAN'T WIN": Good to be here.

DOBBS: You wrote a fascinating piece in the op-ed section in "The Wall Street Journal". Your observations are provocative. I want to begin, if I may, by asking what your reaction is to what Senator Obama said on that radio show in Philadelphia this morning.

STEELE: Well, he showed how easy it is to slip up, among other things because actually Jesse Jackson, interestingly, has confessed to walking to the other side of the street when he sees young black men as well. It's not a response that's exclusive to whites.

DOBBS: Right. And the idea of talking about this typical white person, that kind of language, I have to tell you I am struck by some of the missteps and what I consider to be missteps and misstatements of this senator. I honestly am not sure how fully formed and how mature Senator Obama's views and thinking and emotions are on the issue of race himself, as he challenges the entire nation on the issue. What's your reaction?

STEELE: Right. Well, he stayed away from race throughout his -- I mean scrupulously throughout his entire campaign, but now he's gotten into trouble with Jeremiah Wright, his pastor, so now we're going to have a national discussion of race. And that may not be a good thing. It -- you know President Clinton had a national discussion on race that went nowhere. So one wonders if this is sincere or just a way to sort of change the subject from his minister.

DOBBS: Well, I'll tell you one thing. Shelby, I don't know how you feel about it, but on this -- on my broadcast, we're going to be talking about race. We're going to do so because I think it's important. I mean, there are all sorts of issues to take up, but amongst them, whether it's the war on drugs, whether it's the fact that one in nine young black men in this country are in prison, whether it is the discrepancy between incomes amongst racial groups in this society. And certainly, the impact of that disparity in income, and the influence it has on opportunity within this society of ours. It's a fundamental it seems to me to the American dream for all Americans.

STEELE: I absolutely agree. I just -- I hope it will be a -- there is no issue around which political correctness is more oppressive than the issue of race.

DOBBS: Right.

STEELE: And so I'm all for dialogue, but I hope we'll be -- I hope we'll all say politely, but say what we really think and feel about it.

DOBBS: Well, let me ask you, what do you think and feel about the relationship between black Americans, white Americans and other races in 2008 America?

STEELE: I think it's never been better. I grew up in segregation. I can remember a drastically different America than the one I live in today. Today, my experience is that most whites are willing to give me the benefit of the doubt, and I'm willing to give them the benefit of the doubt. And I've just found an enormous amount of openness, a willingness to look at this thing, this issue in an honest way. That's been my actual experience.

DOBBS: I want to ask you, also, before I go to the next question, and that is Jeremiah Wright and his -- the bile that he was spewing, whatever the reason, whatever the context, whatever else he did say, whatever else his words, that kind of language, a number of people on this broadcast, in fact, have said that some of his comments, some of the more hateful comments, in fact, are typical of the traditional black church in this country.

And I've got black friends who are saying that is absolutely untrue. There's a contest over that. What role does a black church play in both resolving and perpetuating racial tension in this society of ours?

STEELE: Well, the black church has always been an extremely important institution in black America. Certainly, the civil rights movement evolved out of the black church. But that's a long way from Reverend Wright who it seems to me is rather demagogic and actually preaches hate almost as a kind of consolation for his flock. And that is not normal in a black American church today. That's not the norm.

DOBBS: And that being the case, this is going to be, I would assume, you think a problem that's going to continue for some time for Senator Obama then to explain that relationship?

STEELE: Yes, Senator Obama is what I call a bargainer. Bargainers are blacks who enter the mainstream and give whites the benefit of the doubt, trust them, not to be racists. Whites respond to bargainers very warmly with a lot of gratitude.

Challenges are people like Reverend Wright who never give whites the benefit of the doubt, who want to hold their feet to the fire, see that as black power. Well, America likes Barack Obama because he is a bargainer, precisely because he is not an Al Sharpton or a Jesse Jackson or a Reverend Wright, so when they see that he has fellow traveled with someone like that, gone to his church for over 20 years, it confuses most Americans.

Are you a bargainer or are you a challenger? Do you trust us or don't you trust us? And so it's worrisome. It bothers people to see that kind of connection.

DOBBS: And we're running out of time. I hope, Shelby, you'll come back here as we continue this discussion on this broadcast. It just seems at a time when Americans have less trust than ever in their elected officials and government, it's more critical than ever for us to start in this society, irrespective of race or religion, whatever, start giving one another, as you put it and I love the expression, the benefit of the doubt.

If we can start trusting each other, maybe we can get this government back to where we need it so that we can start delivering on the promise made to everybody, all Americans, some 200 years ago. Shelby Steele, it's great to read your books.

(CROSSTALK)

DOBBS: It's great to talk to you. I hope you'll come back soon.

STEELE: I'd be happy to anytime.

DOBBS: Time now for our poll question: Do you believe that Senator Kerry's and Senator Obama's remarks today on race damaged the Obama campaign? We'd like to hear from you on that. Yes or no. Cast your vote at loudobbs.com. We'll have the results here later in the broadcast. And we'll be talking a lot more about race and politics ahead here.

Also, the truth about the job market and what people aren't telling you. What a lot of people don't want to you know about jobs created in this country over the past year.

And we're bracing for the worst in the Midwest. Deadly floodwaters there have left a trail of devastation. The worst, we're told, is yet to come. We'll be back in just a moment with more news. You don't want to miss any of it.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: The Bush administration says our economy is going through a rough patch, while President Bush continues to tout what he calls record job growth. Well, we took a look at job growth and as Kitty Pilgrim now reports the realities of the job market are somewhat different than the views of the Bush administration.

(BEGIN VIDEOTAPE)

PILGRIM (voice-over): For the last three months, jobs have been drying up in this country and fast. The nation's businesses lost 14,000 jobs in December, 26,000 in January and 101,000 in February.

NIGEL GAULT, GLOBAL INSIGHTS: Each monthly decline has been bigger than the last. So loss of jobs in the private sector of the economy, which is where we really generate the wealth in the economy, that's a signal that the economy is slipping into recession.

PILGRIM: Yet, President Bush is still talking about job growth, touting his administration's track record of job creation.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There will be ups and downs. And after 52 consecutive months of job growth, which is a record, our economy obviously is going through a tough time.

PILGRIM: But that's an understatement. The only jobs growing right now are government jobs. So far, in 2008, private industry cut 127,000 jobs in January and February. The federal government cut 9,000 jobs. The only job creation was in state and local government, 42,000 jobs paid for by taxes. Even last year fully a quarter of one million jobs created were government jobs and economists say private jobs will be cut further.

HARM BANDHOLZ, UNICREDIT: And the job market will be weak. We expect ongoing declines in payrolls. And a big factor is again the housing sector, so all sectors are now cutting jobs as we think it will continue.

PILGRIM: Manufacturing is still laying off workers, the auto industry and heavy industry, real estate, construction, furniture manufacturers and now financial service jobs appear to be the next at risk.

(END VIDEOTAPE)

PILGRIM: And the economic slowdown and the housing crisis is cutting into tax revenues. So states that have to balance their budgets will be unable to add new jobs -- Lou.

DOBBS: What percentage of all of the jobs created, last year, more than one million created, what percentage were created in state, local and federal government?

PILGRIM: One quarter. One quarter.

DOBBS: Actually, I think it's about two-thirds, isn't it?

PILGRIM: I believe it's a quarter.

DOBBS: Well, we'll have to figure that out. Can we check that out?

PILGRIM: Yes.

DOBBS: All right. Thank you.

Time for some of your thoughts.

Bill in Utah: "Lou, my wife and ire now independents, thank you, and we plan to buy you a new big screen TV with our stimulus check just as soon as we can buy one that is made in America. Until then, no new TV to watch you on, sorry."

So am I.

And Myoung in Illinois: "Lou, I came here illegally" -- whoa, whoa, "I came here legally, and I'm now a United States citizen. Because of you, I'm now a proud independent. If I had to follow all of the rules and laws of this great country that I love so much, then why doesn't everyone else?"

And that is a terrific question. I'm glad you're an Independent, and we're delighted to have America growing.

Beth in California: "Lou, love your book 'Independents Day' and have passed on to our friends. It should be required reading for every voter in this country. Independents rule."

We wish. With luck we will.

And John Texas writes simply: "Ralph Nader's looking good."

We'll have more of your thoughts later. Each of you whose e-mail is read here receives a copy of my book, "Independents Day: Awakening the American Spirit."

And please if I may ask you to join me on the radio Monday through Friday afternoons, for "The Lou Dobbs Show," a new three-hour radio show. Go to loudobbs.com to find local listings for "The Lou Dobbs Show" on the radio.

Well, at least 12 people are dead tonight after violent storms left a flood of devastation across the Midwest. The worst flooding is still to come. The National Weather Service is warning of record flood levels across Missouri as rivers crest over the next 48 hours. Rivers from Ohio and Arkansas are already at above flood stage.

President Bush has declared a major disaster in Missouri where five people are confirmed dead. In the St. Louis area, at least 10 inches of rain fell. Forecasters are predicting the Merrimac River has crest at a record 43 feet by Saturday.

A winter storm warning in effect for Chicago on this, the first day of spring, the National Weather Service predicting up to eight inches of snow by Saturday. This just the latest in the cold start to 2008.

The average temperature -- you probably have been wondering if global warming has an effect or something different? The average temperature in January, 0.3 degree below the average in the century. The National Snow and Ice Data Center says sea ice in the Northern Hemisphere is refreezing to levels not seen in at least four years.

Up next here -- Congressman Duncan Hunter fighting to overcome a huge U.S. tanker aircraft contract that went to Airbus. He is our guest. And Senator John Kerry speaks out on the controversy over Senator Obama's former pastor. He doesn't do the senator a lot of good in all likelihood.

And a victory over the English language in a battle over signs at a Philadelphia steakhouse. I'll be talking with the owner of that steakhouse. Here next. Stay with us. We'll be talking about English only and the fact that the American spirit is alive and well in the place -- the birth place of freedom itself.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: A deal that could have given communist China a stake to an American company with close ties to our Pentagon finally killed today. Bain Capital withdrawing from the deal to buy 3Com with the Chinese company Huwaei (ph) Technologies -- 3com providing computer security for the Pentagon.

Bain Capital finally said it withdrew from the deal because the U.S. Committee on Foreign Investments said it will not approve the transactions. Our compliments to Bain Capital for being forced to do the right thing. I'm sure Bain Capital is very proud of itself.

For years we've reported on the dangers of out sourcing. Especially the maintenance of our aircraft. Now, United Airlines says it temporary is grounding several of its Boeing 747 jumbo jets being maintained in South Korea. The FAA ordering those aircraft be grounded after test equipment used at the maintenance facility was faulty. This comes two days after the FAA ordered a check on inspection records at all U.S. airlines.

Well, some members of Congress are fighting to block another deal threatening our national security. The U.S. Air Force Awarded a $35 billion contract to the European consortium that builds Airbus instead of Boeing. Congressman Duncan Hunter is working to overturn the contract and to strengthen buy American regulations to start the outsourcing of jobs and the offshoring, if you will, of national security.

Congressman Hunter joins me, he's the ranking Republican on the Armed Services Committee, tonight from San Diego.

Congressman, are you going to be successful, do you think? Is this effort to review and overturn this contract going to be successful?

REP. DUNCAN HUNTER, (R) C.A.: Lou, I think we will be. You know, this is a provision that I put in the bill a couple years ago that the White House objected to violently. And that was the legislation that I put in on the House side. It passed the House defense bill that said that foreign companies which were government subsidized which describes Airbus well, because it is subsidized by those countries can't have a piece of American defense contracts.

But in this contract, I think it's important for Americans to know that we are looking at the impact of about 100,000 jobs being created in Europe with American taxpayer dollars. That's a massive economic stimulus program for Europe.

DOBBS: OK. Now, we learn that. But what in the world have you people in Congress been doing? What in the world has this Republican administration been doing to outsource the president's helicopter to an offshore general contractor? The light attack helicopters and now this tanker aircraft? This isn't an accident, as they say. I'm starting to see a pattern here, congressman.

HUNTER: Well, Lou, what you can ask me, what I've been doing, I put in over the last two years, before this tanker deal was ever consummated. A provision that would block Airbus from having a chance to compete on the tanker.

DOBBS: Congressman, let me be clear. I wasn't talking about what you were doing -- when you chaired the House Armed Services committee were at the forefront of this fight. But I don't understand how your party and this Democratically led Congress, this president, how anybody can sleep at night doing this?

HUNTER: Listen, I think it's a massive mistake, because the one thing you never outsource, first, from my perspective, you don't outsource anything if you don't have to. But the one thing you should never outsource is national security.

DOBBS: You'll never make it in corporate America, congressman.

HUNTER: Well, let me tell you, this is important, Lou. Because you know, the aerospace industry in this country is an important part of what we all the arsenal democracy. That's our ability to project the American air power around the world in time of crises. And if we give away big pieces of it, it's not going to be here when we need it.

DOBBS: Let me ask you, what is the president of the United States, what his administration saying to Congressman Duncan Hunter, the ranking Republican on this committee?

HUNTER: We'll get that when we send my provision in this bill when it goes up to the Senate in conference. The president's people will issue a statement. I hope at this point they've been pretty well bludgeoned by thousands of messages from the American people saying don't give those 100,000 jobs to Europe. If so, they won't object to it and we'll get this provision through.

DOBBS: Tell me how the geniuses at the United States Air Force, at the Pentagon, the Department of Defense and this administration managed to but Northrop Grumman into competition with Boeing, to put American contractors in competition with one another, and then turn it over to Airbus against whom we have charge in the World Trade Organization for subsidizing that business?

HUNTER: It's an old pattern, Lou. And what you do is if you're an American company, you partner up with a European company, just as they did on several other aircraft. And you go in as so-called partners where there's going to be some jobs created in America. But thousands and thousands of jobs created offshore, all with American dollars, all with American taxpayer money.

DOBBS: Does this White House ever call up one of you Republicans on Capitol Hill and say, is this too stupid, too irresponsible even for they're administration?

HUNTER: Lou, I would say this, there's not a lot of us that believe in buy American with on the American defense -- with defense contracts. I'm one of them. Every provision that's been put in the bill over the last three or four years with respect to forcing buy American provisions have been put in because I put it in. The administration is not interested in --

DOBBS: That really wasn't the question I asked. Do any of those dumb so-and-sos ever call you and say, have they gone too far?

HUNTER: No. The answer is, everybody's drank the Kool-Aid on free trade except for a few folks, Lou. And that's a tragedy for our country and the defense industrial base.

DOBBS: Absolutely. Congressman Duncan Hunter, fighting a very lonely battle there on Capitol Hill. We thank you very much. Duncan Hunter, thank you.

HUNTER: Sure.

DOBBS: Up next -- a major victory for a small major business owner and a fight over a sign about please speak English only in Philadelphia. It only took two years to resolve it. So we'll be telling you about this. Senator Clinton taking the lead over Senator Obama in the State of Pennsylvania. Three of the best analysts join me for that and a great deal more.

Stay with us. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well, a major legal victory for the owner than of a famous cheese steak shop in Philadelphia, the City of Philadelphia finally ruling that Joe Vento did not discriminate when he posted English only signs in his shop. Two years ago -- it took two years for the City of Philadelphia to figure it out. By the way, that sign "Please speak English when ordering."

Mr. Vento posted those signs. And Mr. Vento says he never refused service to anyone because they couldn't speak English. He joins me live now from Geno's Cheese Steak Shop in Philadelphia.

Joe, good to have you with us. Congratulations on the victory.

JOE VENTO, CHEESE STEAK PROPRIETOR: Thank you, Lou. It's an honor to be on your show.

DOBBS: It's great to have you. It's a battle for common sense in local government, I guess. How in the world, if you never had a complaint, if you never had a problem with a customer, how did this end up being a big deal in the City of Philadelphia, going to the Human Relations Commission?

VENTO: Well, like I said, earlier, I put that sign up in October of 2005, possibly even sooner than that, but I can document that. And it was a political statement I was making. This was, like I said, in October '05. May of '06, for some reason, Washington starts to debate speaking English and immigration. All of the sudden, a local councilman who has been a regular customer here decided my sign was offensive.

DOBBS: Who is that councilman? Jim Kenney? Councilman Jim Kenney?

VENTO: Yes. That's right.

DOBBS: And so he took it to the government, huh?

VENTO: Right. He ran like a little wimp over there.

DOBBS: Did he talk to you about it? Did he complain to you?

VENTO: No, he's never talked -- never, ever ...

DOBBS: How long have you guys known each other?

VENTO: We practically grew up together. Same neighborhood. He was a regular customer here at the time. My question was, why in nine months that it was up, it didn't bother anybody, including Mr. Kenney. Like I said, the immigration problem and discussion in Washington, he decides, I guess to bring up some points. For what reason, I don't know because we're talking about illegals here. So I don't know what they could possibly do for him. Anyway, he came after me. And I was told to counsel people, take the sign down. And I said, no, the sign's not coming down.

DOBBS: They thought you were going to roll over you, didn't they, Joe?

VENTO: That's right. They might have crossed the wrong person. This is one guy you don't tell what to do. I put my money where my mouth was. The sign stays. And they were shocked. They were not used to having somebody say no, especially when what you say is not politically correct.

And especially since I know I didn't put it up there to discourage people from coming here because the biggest concern that they said for discrimination was, Joey, you're discriminating against non-speaking English people. Excuse me, if you don't speak English, you can't read the sign, so what does that sign say? And if you do speak it -- I mean, it's a no-brainer. If you do speak English, how is that offensive? And last I understood, you still have to speak English to become a citizen.

DOBBS: Joe, you're making -- wait a minute, you're making way too much sense. The city government of Philadelphia is going to have to stay away from you. You make too much sense, there is too much common sense, you got too much guts, you're not rolling over for political correct namby-pambies like this councilman you were talking about.

VENTO: Right, they interviewed councilman yesterday. From what I understand he said, even though I was vindicated, he still thinks it's black mark on the city, could you imagine that? I'd like to ask Mr. Kenney, how about the murder rate? Do you think that might possibly be a little black mark on Philadelphia, how about the muggings, the rapings, the burglars. Give me a break here.

DOBBS: Not like a precious genius like Councilman Kenney, obviously. Joe Vento, we want to say congratulations. We thank you very much for being with us. You're our kind of guy. You're this country's kind of guy. And I hope you have just nothing but great success. All best wishes.

VENTO: Thank you very much. And God bless America.

DOBBS: Amen.

The Obama campaign feeling the impact of his pastor's anti- American comments, but is this campaign doing more damage than damage control? I'll be talking about three of the best political find minds about that. Stay with us, we'll be right back.

(COMMERCIAL BREAK)

DOBBS: The "ELECTION CENTER" with Campbell Brown coming up -- Campbell, what are you working on? CAMPBELL BROWN, CNN ANCHOR: Thanks, Lou, well, Michigan, as you know, missed today as deadline to reschedule its primary so now what? I'm going to talk to two top supporters of both the Clinton and Obama campaigns and try to find out if there is a realistic way out of this mess.

Then John McCain is wrapping up a week overseas, was that trip good politics? Plus we've got a married couple, they're both ministers. He supports Obama, she supports Clinton. The sparks will fly at the top of the hour -- Lou.

DOBBS: A lot of fun. Thanks very much, Campbell.

Joining me now, three of the best political analysts. Mark Halperin, senior political analyst, "Time" magazine. Mark also co- author of "The Way to Win, Taking the White House in 2008." Three U.S. senators re-reading and re-reading that book as we speak.

Michael Goodwin, Pulitzer Prize winning columnist, "New York Daily News." Democratic strategist, Hillary Clinton supporter, Robert Zimmerman, also superdelegate who apparently is going to be stubborn about it all and continue to support Hillary Clinton.

Good to have you all here.

Senator Obama -- if we have that clip, let's play that. From the -- from the radio, as they say.

(BEGIN AUDIO CLIP)

OBAMA: The point I was making was not that my grandmother harbors any racial animosity, she doesn't. But she is a typical white person who, you know, if she sees somebody on the street that she doesn't know, you know, there's a reaction that's been bred into our experiences that don't go away. And that sometimes come out in the wrong way. And that's just the nature of race in our society. We have to break through it.

(END VIDEO CLIP)

DOBBS: Mark, your thoughts? Is he digging a deeper hole here?

MARK HALPERIN, "TIME" MAGAZINE: Some of my best friends are typical white people. And I think some of them may be troubled with that. The campaign clarified what he meant was his grandmother was typical of her generation.

DOBBS: Just insulting an entire generation.

HALPERIN: Look, this discussion has become pretty raw. And I think all of us have to recognize, that when we're analyzing politics or in the midst of campaign, people are going to make misstatements. The problem now is, because of what's happened leading up to this, things are very raw.

And I think the Democratic Party is in a lot of trouble. Whichever one of these people is the nominee, they're going to have a race problem, a racial problem in the general election.

DOBBS: But the idea, that Senator Obama is the one creating the, quote, unquote, race problem, is mind-boggling to me.

HALPERIN: Well, I think although the speech was -- people are correct to say, one of the best speeches on race relations in this generation. Although he has been a great figure symbolically ...

DOBBS: Would that be the best out of three?

HALPERIN: Look, I think it was a better speech than almost anyone we know has given on the topic. I still think his failure to come forward and explain what he heard Reverend Wright say is bothering a lot of people.

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": I think for most white voters in Pennsylvania and the general election, Reverend Wright say yes or no question. And Obama has tried to kind of straddle it by explaining it, making it the moral equivalent of his grandmother, Geraldine Ferraro, whites who resent busing, that's just not working. And I think if that's all he was going to say, it was probably a mistake to even have the speech in the first place.

ROBERT ZIMMERMAN, CLINTON SUPPORTER: I think part of the problem was the trap that was created when the candidates and the campaigns started looking at this race and this election in terms of racial issues, in terms of gender, and started breaking it down that way instead of looking at it in terms of issues.

DOBBS: Let's be candid about this, we're going to be talking about race a lot on this broadcast.

GOODWIN: Race is an issue.

DOBBS: Is it an issue. It's time for this country to have an adult conversation about race. But one of the things we got to be clear about, what the Clinton campaign did leading into South Carolina, you can interpret it in any number of ways you what, but it was unfortunate.

You can say that what Senator Obama did this morning was unfortunate. I'm being kind to both campaigns. But the reality is, that's not the way mature, adult, sophisticated people talk about race and engage the issue of race in this day and age, Bob.

ZIMMERMAN: I think Barack Obama elevated the debate and discussion with his speech. I think it was helpful in that process. But the speech is only the first step. What concerns me, is one of the reasons we're in this problem is because he was so delayed in discussing Reverend Wright.

DOBBS: Let me -- since you want to discuss this with such eagerness, let's listen to Senator John Kerry help out his friend Senator Barack Obama.

(BEGIN VIDEO CLIP) SEN. JOHN KERRY, (D) FORMER PRESIDENTIAL CANDIDATE: I think in the end, he has the ability to help us bridge this divide of religious extremism. To maybe even give power to moderate Islam, to be able to stand up against this radical misinterpretation of a legitimate religion.

QUESTION: Why would you say that? What gives him credibility on that score particularly?

KERRY: Because he's African-American; because he's a black man.

(END VIDEO CLIP)

DOBBS: Because he's an African-American, because he's black man. This is a man who describes himself as rather worldly, sophisticated, educated, enlightened, in touch, with what is the question now?

ZIMMERMAN: Look, John Kerry is my friend. I certainly supported him. But that statement is so disturbing because it reflects the basic problem in our society in the way we look at resolving issues. And I think it's antiquated political issues.

DOBBS: It's puerile in my opinion. Mark, your thoughts?

HALPERIN: Politics is not conducive to having the kind of discussion that Barack Obama wanted to tee up with his speech on Tuesday. This is just not a great environment to do it.

You see people like Senator Kerry and Geraldine Ferraro and others making statements which in a long dinner conversation with a limited amount of wine could be explained in a linear way that would represent the highest and best of America. But in the context of this campaign, things are now way hot.

DOBBS: That nonsense, you don't get the dessert in my house.

We'll be right back with my panel in just a moment. Reminder to vote in our poll: Do you believe that Senator Kerry's and Senator Obama's remarks today on race damaged the Obama campaign?

We'd like to hear from you on this. Yes or no. Cast your vote at loudobbs.com. We'll have the results here in a few minutes.

Back with our panel. We'll get to dessert in a few minutes. Stay with us.

(COMMERCIAL BREAK)

DOBBS: We're under the constraints of the clock.

Robert Zimmerman, per Senator Clinton today, she's not engaged in the race campaign. Senator Obama seems to be digging holes, she's trying to stay out to of his way to let him continue his good work.

(CROSSTALK) ZIMMERMAN: It's an old maxim (ph) of American politics, no matter what side you're you try to stay focused on what your message and let the other -- let your opposition deal with their own issues. But I think what she was saying today, which is critical, and I think something that is beyond either one of them, is the need to have a revote in Florida and Michigan.

Not to have a revote is not just. Going to disenfranchise a Democratic nominee. It's scandalous. It's a scandal that's -- born in the states and effects the national parties.

DOBBS: Well the national committee you sit on better take up emergency action.

GOODWIN: Look, Obama's trying to get off the topic, but he can't. And I think it's been now over a week, so Clinton is right to stay out of his way, to focus on the things that help her, which would be a revote. It may not happen, but at least she's on something that people can get behind.

HALPERIN: She would not deny a "New York Times" report today that her advocates are going to superdelegates, and saying, look at this right -- think about it in terms of general election electability.

That is toxic. But they'd be committing malpractice if they didn't point it out. The fight for the superdelegates is about electability, and this is his greatest vulnerability right now.

DOBBS: Gentlemen, thank you very much. Appreciate it.

On our poll -- 62 percent of you say that Senator Kerry's and Senator Obama's remarks today on race damage the Obama campaign. We thank you for voting.

Thank you for being with us tonight. Good night from New York.

The "ELECTION CENTER" with Campbell Brown begins right now -- Campbell.

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