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LOU DOBBS TONIGHT

Senator Obama States Intended Toughness on Iran; President Bush Drops Threat to Veto Housing Bill; Healthcare for Illegal Aliens; FDA's Secret Police

Aired July 23, 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: Thank you.
Tonight, Senator Obama tells Israel he will be tough on Iran, declaring he will have a policy of big sticks and big carrots. We'll have complete coverage of the senator's efforts to look presidential in the Middle East.

And, tonight, it turns out the same FDA that can't find the source of our nationwide salmonella outbreak has its own secret police department. We'll have that exclusive report.

And the growing scandal over San Francisco Mayor Gavin Newsom's sanctuary policy for illegal aliens. A suspected criminal illegal alien protected from deportation appearing today in court, accused of a triple homicide. We'll have all of that, all the day's news, and much more from the presidential campaign trail with an independent perspective, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Wednesday, July 23rd. Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Senator Obama today presenting a new plan to deal with Iran's rising nuclear threat. Called, quote, "big sticks and big carrots," end quote. Senator Obama said he wants what he calls a more serious regime of sanctions. Senator Obama, clearly failing to notice that the Bush administration has been trying for literally years to step up international sanctions against Iran, but without success.

As Obama tried to look presidential while in the Middle East, Senator McCain focused on the number one issue for voters in this country, the economy and rising gasoline prices, Senator McCain again demanding an end to the congressional ban on offshore oil drilling.

We have extensive coverage tonight, beginning with Candy Crowley with Senator Obama, reporting from Jerusalem.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT (voice-over): Yet another picture postcard home. Barack Obama, in front of the remnants of rockets launched from Gaza into Israel, navigating the land mines of Middle East diplomacy by saying as little as possible.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: America must always stand up for Israel's right to defend itself.

CROWLEY: But it begs the question whether the U.S. would back an Israeli attack on Iran to prevent it from developing a nuclear weapon; Obama side-steps.

OBAMA: I will take no options off the table in dealing with this potential Iranian threat.

CROWLEY: A nuclear Iran is a top concern for Israeli officials and political leaders.

BENJAMIN NETANYAHU, LIKUD PARTY CHAIRMAN: The main focal point of our conversation, the need to stop Iran from developing nuclear weapons.

CROWLEY: Like some American Jewish voters, Israelis were uneasy a year ago when they heard this.

UNIDENTIFIED MALE: Would you be willing to meet separately, without precondition, during the first year of your administration, in Washington or anywhere else, with the leaders of Iran, Syria, Venezuela, Cuba and North Korea, in order to bridge the gap that divides our countries?

UNIDENTIFIED MALE: Senator Obama?

OBAMA: I would.

CROWLEY: There were no caveats to that statement and Obama has been trying to finesse it ever since.

OBAMA: But I think that what I said in response is -- was that I would, at my time and choosing, be willing to meet with any leader if I thought it would promote the national security interests of the United States of America.

CROWLEY: Obama's picturesque news conference was part of a jam- packed day intermingling photo-ops with private meetings, which often took on the feel of virtual reality, a kind of almost state meeting. A man who wants to be U.S. president meeting with a string of prime minister wannabes in Israel.

Obama's itinerary also took him past the security checkpoint into the West Bank city of Ramallah, for a meeting with an obviously pleased Palestinian president Mahmoud Abbas. Four months ago when John McCain passed through Israel, there was no visit with Palestinian leaders, a point Obama is happy to make with another picture postcard.

(on camera): More picture postcards Thursday when Obama moved to the European continent and an open air speech in Berlin. They expect this to be the highlight of this particular trip, although they say it is not a campaign event. Nonetheless, they are talking about thousands of people they expect to show up to hear this speech. We are told it is about transatlantic relationships.

Candy Crowley, CNN, Jerusalem. (END VIDEOTAPE)

DOBBS: Senator McCain today strongly criticized Senator Obama for supporting a congressional ban on offshore oil drilling. McCain said crude oil prices dropped sharply after Bush ended the executive ban on offshore drilling and Senator McCain is absolutely correct. And crude oil prices have plunged more than $20 a barrel since the president lifted that ban on the 14th of July. Crude oil prices today closing just below $125 a barrel.

Dana Bash reports tonight on McCain's counteroffensive against Senator Obama.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Call this counter programming.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We know that Americans are sitting around the kitchen table tonight, figuring out whether they can keep their home or not.

BASH: While Barack Obama is overseas, John McCain is trying to convince voters back home he's working to ease their pain. He staged a photo-op, food shopping with a Pennsylvania family, going out of his way to show and tell he gets it.

MCCAIN: The price of a gallon of milk just went over $4 a gallon. Renee said that that was the highest that she had ever seen it.

BASH: At a town hall he even suggested the price of oil is down because of a controversial White House decision he supported, lifting the federal ban on offshore drilling.

MCCAIN: The president of the United States announced that we would be, a week or so ago, that we would be lifting the moratorium on offshore drilling. The price of oil dropped $10. We need to drill off shore.

BASH: But talking pocketbook politics is only half of McCain's double barreled strategy while Obama is abroad. The other, trying to keep Obama from bolstering his foreign policy credentials this week, by pounding away on his Iraq plans.

MCCAIN: He is in favor of an unconditional withdrawal. An unconditional withdrawal, my friends, without paying attention to the facts on the ground, could lead to our failure.

BASH: Republicans, frustrated with Obama's overseas spotlight, are trying to be clever in getting their message out. The Republican National Committee will run these radio ads in Berlin while Obama is there.

UNIDENTIFIED MALE: When our military needed necessary resources Barack Obama failed to stand up. BASH: But not that Berlin, the towns of Berlin in three battleground states, Wisconsin, New Hampshire, and Pennsylvania. And the McCain campaign is resorting to sarcasm to get attention, handing out fake French press passes, dubbing the McCain media the JV squad, left behind to report in America.

(on camera): Another way McCain advisers know they'll get attention is to tease the media on McCain's search for a running mate. The plan was to do that by going to New Orleans to meet with someone on the VP buzz list, Louisiana Governor Bobby Jindal, but it didn't happen. The trip was canceled because of bad weather -- Lou.

(END VIDEOTAPE)

DOBBS: Dana, thank you -- Dana Bash reporting.

Both Senators McCain and Obama supporting a surge in the number of our troops in Afghanistan as quickly as possible. But it seems the Pentagon won't be able to send any major reinforcements to Afghanistan until sometime next year. The Pentagon says it will be up to the next president to decide how many combat brigades to send. Senator Obama wants to deploy two additional brigades. That's at least 7,000 troops. Senator McCain wants least three more brigades in Afghanistan. That's more than 10,000 troops.

A major retreat by President Bush today in the battle to deal with our worsening housing crisis and the plan to rescue those homeowners. President Bush backed down from his threat to veto a massive housing bill. But the president still fails to understand the full-scale of this crisis. He's even apparently been making jokes about the crisis. Jokes caught on tape.

Ed Henry has our report from the White House.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): In a rare move, the president backed down, dropping his veto threat of a $300 billion housing rescue bill.

UNIDENTIFIED FEMALE: We had to make a hard choice.

HENRY: Spokeswoman Dana Perino said the president still opposes $4 billion to local communities that may prompt lenders to foreclose on more families. But with Congress about to leave town for August, Mr. Bush saw the window closing on provisions he likes, such as reforming mortgage giants Fannie Mae and Freddie Mac.

DANA PERINO, WHITE HOUSE PRESS SECRETARY: If we were in a prolonged veto fight, we wouldn't have enough time to actually get it done.

HENRY: But the housing bill still could get blocked in the Senate by some of the president's fellow Republicans. Senator Jim DeMint is planning to filibuster the legislation, unless a provision is added banning political contributions by Fannie Mae and Freddie Mac.

SEN. JIM DEMINT (R), SOUTH CAROLINA: The president has decided he wants this bailout more than he wants to stand by his original position that he would veto it.

HENRY: The president's shift came at an awkward moment, coincidentally a tape emerged Tuesday of the president briefly joking about the housing crisis at a Republican fund-raiser last week. News cameras were banned from the event in Houston, but someone with a personal camera secretly recorded the president's remarks, now posted on YouTube.

BUSH: And then we got a housing issue, not in Houston, and evidently not in Dallas because Laura was over there trying to buy a house today.

(LAUGHTER)

HENRY: White House officials say the tape had absolutely nothing to do with the veto reversal. They say there was a collective shrug at the White House about the video, because the president's comments such as declaring that Wall Street got drunk and now has a hangover are similar to what he said publicly during other crises.

PERINO: I don't think the criticism is any different. It's just that it's a little bit more candor and more bluntly.

(END VIDEOTAPE)

HENRY: Now this legislation easily passed the House tonight and White House officials say the president will sign it because he realizes people are hurting. And while this legislation is not perfect, it's the best deal he thought he could get with Congress right now. Neither party could afford to wait any longer, Lou, with up to 1,000 foreclosures a day in California alone -- Lou.

DOBBS: Eight thousand a day across the country, 2.5 million people facing foreclosure. Welcome pragmatism by this president in the waning hours of his presidency. By the way, that is about -- that's as embarrassing as a private videotape of a president gets at a fund-raiser. It's pretty remarkable, don't you think, Ed?

HENRY: Well you know he was obviously doing a little bit of joking...

DOBBS: Yes.

HENRY: ... certainly behind closed doors. All kinds of things could be said, so if that was the worst, it's obviously not that bad, Lou.

DOBBS: Obviously. Thank you very much, Ed.

Appreciate it -- Ed Henry from the White House.

HENRY: Thank you. DOBBS: Coming up here next, should every American have health care, whether they're here illegally or not? One powerful Democrat says yes. We'll be talking about that.

And the Food and Drug Administration has a secret police department and if anybody needs a secret police department, it's the Food and Drug Administration. They still can't find the origin of our nationwide salmonella outbreak. We'll have a report, an exclusive report here next.

And Hurricane Dolly slamming into Texas, wind gusts of up to 120 miles an hour. We'll have the very latest for you live from the Texas coast. We'll be right back.

(COMMERCIAL BREAK)

DOBBS: Well, tonight, a political action committee called Progressive Democrats of America, PDA, is pushing a major new plank for the Democratic Party. PDA wants what it calls health care for all, including illegal aliens. One leading member of Congress has already signed on.

Lisa Sylvester has our report from Washington, D.C.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The group Progressive Democrats of America wants to end the Iraq war and plow the war funding into setting up a system of universal health care.

TIM CARPENTER, PROGRESSIVE DEMOCRATS OF AMERICA: We believe in health care for all. We make it very clear Progressive Democrats of America our goal fundamentally is to make sure that all of us have health care, all of us within the U.S. borders have health care.

SYLVESTER: And by all in U.S. borders, he says that includes everyone in the United States, including upwards of 12 million illegal aliens. The group is urging the Democratic Party to adopt a plank at the party's convention in Denver, guaranteeing accessible health care for all.

Congressman John Conyers from Michigan, a leading pro amnesty advocate in Congress, is the first top Democratic delegate to sign up for the Progressive Democrat's platform on universal health care. Critics charge that offering health care to millions of illegal aliens will encourage even more illegal immigration and is an attack on the concept of U.S. citizenship.

REP. TOM TANCREDO (R), COLORADO: There's plenty of government subsidized health care to go around. Now we're adding another dimension to that, people who are here who are not even supposed to be here, people who are not citizens.

SYLVESTER: Senator Barack Obama's position on extending health care to illegal aliens has been less than clear. When asked during a CNN debate in January if his health care plan includes extending health care to those here illegally, Obama said no.

UNIDENTIFIED MALE: Does your plan cover the estimated 12 million or so illegal immigrants in the country?

OBAMA: It does not.

UNIDENTIFIED MALE: Why not?

OBAMA: Well, because I think we've got limited resources.

SYLVESTER: But Obama has spoken many times of extending health insurance to the estimated 47 million uninsured in America, and that number includes illegal aliens.

(END VIDEOTAPE)

SYLVESTER: And this is not the first time that top Democrats in Congress have tried to give health care to illegal aliens. Last year, Democratic leaders tried and failed to expand a state insurance program to give taxpayer funded health care to illegal aliens -- Lou.

DOBBS: I mean this is utterly and completely outrageous and we should point out we're not talking about 12 million illegal aliens. No one knows the exact number. But that range is from 12 to 20 million illegal aliens in this country. And of the 47 million estimated people in this country without health care that represents just about 40 percent of the total.

SYLVESTER: It is a very large group, about 47 million who are believed to be illegal aliens and you're absolutely right. They use that number, 12 million. But it is more likely to be closer to 20 million, perhaps even more illegal aliens than that. So you could see this is -- this is certainly a budget-buster at the very least, Lou.

DOBBS: And part of the issue that we should be very clear about, here, is they talk about health care in this country, and it is a critically important issue, without question. In no way am I minimizing the import of making health care available to every American, but of that 47 million, as we said, about 40 percent could well be illegal aliens, another huge number there are the number of young people who do not have health care insurance as a result.

We're talking about a much smaller number than the first blush of that 47 million might appear. Lisa, thank you very much. Lisa Sylvester. It is -- it's got to strike -- I'll just speak for myself, I mean, it is unbelievable that any elected representative of the people would provide that level of benefit to citizens -- to people who are not even citizens of this country. We've reached a new level of absurdity and outrageousness in this country.

Lisa, thank you very much -- Lisa Sylvester.

Let's take a look now at some of your thoughts.

Diane in Florida said: "I have been a Democrat my whole life, but I can truly say I am ashamed by the way the media is fawning over Obama. I thought that the media was supposed to be unbiased."

That was from a different age. It's a new time.

And Richard in Washington: "Lou, I'm 83 years old so I've seen a lot of the dog and pony shows but this is the worst one-sided coverage I have ever seen."

Well you and me both.

And Lorraine in Florida asks simply: "When did the media elect Obama?"

I would guess it was sometime in February.

We'll have more of your thoughts here later in the broadcast. And a reminder to join me on the radio, "The Lou Dobbs Show" Monday through Friday, tomorrow's guests include the Perry Jefferies, the founding member of Iraq and Afghanistan Veterans of America, Brian Crosby, a veteran high school teacher and the author of "Smart Kids, Bad Schools: 38 Ways to Save America's Future." For all of that and our local listings for "The Lou Dobbs Show", go to loudobbsradio.com.

Up next, the FDA still can't determine apparently the source of our salmonella outbreak, but it's spending millions of taxpayer dollars on a secret police force. We'll have the exclusive report.

And outrage tonight after San Francisco's illegal alien sanctuary policy leads to a triple homicide, now the victim's family is demanding answers. We'll hear from a member of that family.

And Hurricane Dolly slamming into Texas, we'll have the latest for you on the violent weather there. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Tonight, another outrageous example of our government at work. The Food and Drug Administration, the very same agency that's failed to find the source of this country's widening salmonella outbreak, is spending millions of dollars, taxpayer dollars, on a secret police force. Now congressional investigators want to know what this secret police force is all about, what it does and whether it's really necessary.

Louise Schiavone has our exclusive report.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): In the face of public health emergencies ranging from tainted blood thinner to a major salmonella outbreak, the Food and Drug Administration this spring appealed to Congress for $275 million in additional funds. On Capitol Hill, the suggestion is made that FDA could squeeze some savings out by rethinking its office of criminal investigations.

REP. JOE BARTON (R), ENERGY AND COMMERCE COMMITTEE: I don't think the Office of Criminal Investigations or OCI has been forthcoming in justifying their continued existence.

SCHIAVONE: Created 16 years ago in the wake of a generic drug scandal, OCI has grown dramatically. From 2000 to 2006, its budget grew 70 percent to more than $36 million. But House Energy and Commerce Committee Republicans noted in a letter to FDA Commissioner Andrew von Eschenbach, quote, "421 arrests and 353 convictions in fiscal 2000, only 341 arrests and 279 convictions for fiscal 2006, the cost per conviction has more than doubled from 51,000 in fiscal 2000 to 130,000 in fiscal 2006."

OCI responded 2007 was a better year, agents having played a part in 501 arrests and 350 convictions. But Congressman Barton suspects a culture of excess beginning with the man at the top of OCI, Terrell Vermillion, a former Secret Service agent. Not including his Secret Service pension, Vermillion's total pay in calendar year 2007 was $210,000.

BARTON: He certainly doesn't deserve a bonus. He probably deserves a kick in the pants and told to get out the door and start investigating.

SCHIAVONE: Included in Vermillion's total pay OCI records show he got the only retention bonus, $30,240, and the largest cash award in OCI, $11,760. The FDA tells LOU DOBBS TONIGHT that it's, quote, "getting its money's worth and more" from Vermillion. Barton and Shimkus asked OCI to explain what they were accomplishing with their larger budget. Their reaction:

REP. JOHN SHIMKUS (R), ENERGY AND COMMERCE CMTE.: They cite 11 cases. If you look at those cases, two, you might be able to say oh, that's an OCI case. The other nine were all multi-jurisdiction. The rest they were partners with and probably not the major partner.

SCHIAVONE: OCI has been on the radar screen in the Senate, too, where top Finance Committee Republican Charles Grassley has requested a GAO report on the little known and congressional investigators say secretive OCI.

SEN. CHARLES GRASSLEY (R), IOWA: There shouldn't this be sort of suspicion about what goes on in this agency, who's involved, how much money they're spending. There has been too many questions that have been answered.

SCHIAVONE: For its part, OCI told Congress that, quote, "OCI's performance is best measured by the positive impact that its efforts have had on FDA's important public health mission."

In defense of OCI the FDA tells LOU DOBBS TONIGHT OCI uniquely protects the American public in two ways, quote, "by conserving the resources of regulatory personnel and by ensuring that FDA's criminal investigations are handled by appropriately trained and equipped federal law enforcement agents."

(END VIDEOTAPE)

SCHIAVONE: Lou, lawmakers asking the questions aren't convinced that the function that OCI plays can't be handled just as well by other federal agencies like the FBI. And they suggest that the money spent on these secretive FDA police would be better spent on FDA field inspectors -- Lou.

DOBBS: You know, it's the FDA what can you say? This is just one absurdity compounded by another that makes up this agency. Louise, as always, thank you very much for that outstanding reporting.

The Centers for Disease Control tonight has new information about the salmonella outbreak. The CDC is now reporting five new cases since Monday. It's been three months since the first case of salmonella poisoning was reported. There are now 1,256 confirmed salmonella cases across 43 states, Washington, D.C. and parts of Canada. So far no federal agency has identified the source of this outbreak and earlier this week the FDA reported it has found the Saintpaul strain of the virus on exactly one jalapeno pepper from Mexico.

Up next, the rising scandal over San Francisco Mayor Gavin Newsom's sanctuary policy, the consequences of the sanctuary policy for the family of three murder victims here next.

And Senator Obama stepping up his efforts to look presidential overseas with the help of a fawning liberal media elite. Three of the best political analysts join me to assess all of that and what's next on the image tour of one Senator Obama. We'll be right back.

(COMMERCIAL BREAK)

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate and opinion. Here, again, Mr. Independent, Lou Dobbs.

DOBBS: Welcome back.

Senator Obama today visiting Israel promising to be tough on Iran. Obama proposed a policy as well of what he called quote, "big sticks and big carrots." It's to stop Iran's nuclear program. Senator Obama insists he's not naive about Iran.

We'll have much more on our -- on the subject with our political panel here in a moment.

Also in the news tonight, the House of Representatives, today, passing a $300 billion bill to tackle our worsening housing crisis. The House passed that bill after President Bush dropped his veto threat. The Senate takes up the bill now.

And Hurricane Dolly charging into Texas. Wind gusts up to 120 miles an hour. Residents along the coast of Texas and Mexico are fleeing. Meteorologists say that hurricane is weakening now. It's moving inland. The storm has turned off roofs, flooded low-lying areas, but there are, most importantly, no reports of any casualties.

The illegal alien charged in the triple homicide of a father and his two sons in San Francisco last month today pleaded not guilty to three counts of murder. The city of San Francisco had shielded that suspect from deportation, under the city's juvenile sanctuary law. Now the victim's family is demanding a federal investigation.

Casey Wian has our report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Edwin Ramos pleaded not guilty to three counts of murder and two lesser charges in San Francisco Federal Court Wednesday.

Prosecutors say Ramos is an illegal alien gang member who shot and killed Tony Bologna and his two sons after a minor traffic dispute last month.

Ramos has a long criminal record. Four years ago at age 17, he was protected from deportation by San Francisco's policy of not turning over juvenile illegal alien felons to federal immigration authorities.

Ramos's attorney says his client is not a gang member and wants a gag order on the case, saying the Salvadorian national has been portrayed unfairly by the media.

ROBERT AMPARAN, DEFENSE ATTORNEY: I sense a vigilantism as I look in the comments, phone messages, e-mails that I've received in my office.

WIAN: The victim's family opposes the request and blames San Francisco's sanctuary policy for the murder.

FRANK KENNEDY, VICTIM'S BROTHER-IN-LAW: Our family didn't deserve this. And because of political aspirations from these politicians to gain votes in this and that and to shield illegal aliens and for illegal aliens to have more rights than taxpayers of the city and county of San Francisco is ridiculous.

WIAN: Kennedy wants an investigation into Ramos's release from San Francisco's Sheriff's Department custody in an unrelated case in April. A spokesman for Mayor Gavin Newsom says the sheriff's department notified Immigration and Customs Enforcement that Ramos was in custody by fax, and he was released because ICE failed to request an immigration hold.

But an ICE spokeswoman flatly denies that, saying the agency received no such fax and, in fact, was never notified Ramos was in custody until more than an hour after San Francisco let him out of jail.

Wednesday, ICE assistant secretary Julie Myers wrote Newsom, asking him to overturn the sanctuary policy to, quote, "better protect the citizens of San Francisco through the removal of criminals from the community."

(END VIDEOTAPE)

WIAN: Now Mayor Newsom recently overturned one part of the city's sanctuary policy, the part protecting juvenile illegal aliens convicted of felonies from deportation. But "The San Francisco Chronicle" reports that another juvenile defender previously sent to a group home, instead of to ICE for deportation, escaped Monday by simply walking away.

That brings the number of illegal alien juvenile drug dealer from San Francisco who fled group homes in the past month to 12. Ten are still at large -- Lou.

DOBBS: And those illegal aliens, also believed to be members, most of them at least, members of gang, including MS-13.

WIAN: Absolutely, one of the most violent gangs in the world. It controls much of the drug trade in California and it's just another example of this failed sanctuary policy and the implications it has for the community of San Francisco, law enforcement there, but the mayor seems to be sticking behind, at least most, of the sanctuary policy, Lou.

DOBBS: Yes, well, he is -- he is quite an example to his community and to the rest of the country.

Thank you very much, Casey Wian.

Well, joining me now from San Francisco is Frank Kennedy, a member of the victim's family.

And we appreciate your -- we know how tough this is, Frank, for you to be with us. But we appreciate you being here so that we can try to, at least, illuminate some of what's going on in the city of San Francisco.

KENNEDY: Well, thank you for having me this afternoon, Lou. I appreciate it.

DOBBS: First, our condolences to you, to all of the members of your family.

What has been the response of the mayor to you, to other members of the family, in regard to this tragedy?

KENNEDY: There really hasn't been any response at all from Gavin Newsom. He did make one phone call the day of the tragedy to my mother-in-law. But -- and made a quick appearance at the funeral -- the day of the funeral. But we haven't had any contact from Mr. Newsom at all.

DOBBS: And what is the police department telling you? I mean, this -- this sanctuary policy, to what degree do you hold the mayor of the city of San Francisco responsible for this tragic triple murder?

KENNEDY: Well, you know, Lou, as far as I'm concerned, you know, there's federal laws put in place for a reason. And to have individual cities make up their own laws and make the city of San Francisco a sanctuary for illegal aliens is just -- it's absurd. It's -- you know, it's wrong. And to allow these illegal aliens to come in here with no background checks and -- I mean, that's why we have immigration laws. And I do hold the city and county of San Francisco fully responsible for the deaths, the murders, the brutal murders, of my brother-in-law and my two nephews.

DOBBS: What is your reaction when you think about the fact that Mayor Newsom has, rather with great, I think, with complete sanctimonious arrogance, defended the sanctuary policy of the city, he has, in point of fact, proved money for the advertising of the sanctuary status of San Francisco to illegal aliens? How do you feel about that?

KENNEDY: Well, you know, the way I feel about it is, why does illegal aliens get all this preferential treatment over the taxpayers of the city and county of San Francisco when they're not even citizens of the United States?

And, you know, this, here, is, you know, it's totally wrong. And they went against the federal laws of the United States government. And we need to stop this. And we need to overturn these sanctuaries and send all these illegal immigrants back to their own countries.

DOBBS: Now I understand that you and your family have asked the district attorney to pursue the death penalty in this case, is that correct?

KENNEDY: Yes, I have. My family and myself have asked the district attorney's office to pursue...

DOBBS: What's been the reaction?

KENNEDY: You know, there hasn't been too much said about it, Lou, to be honest with you, yet. If the city is behind us, they will go for the death penalty...

DOBBS: What is your sense -- because there's -- what is your sense of the mood of the community? Are the people of San Francisco at a point which they're willing to talk about the responsibility of citizenship, the responsibility of government, the responsibility of citizens to take care of their fellow citizens?

KENNEDY: Yes. The public is outraged by this triple homicide of my family. We're getting calls from all over the United States. We've had calls from outside the country. We have relatives from Italy and Australia that have been following the story.

And, yes, the general public is outraged by this. And these politicians need to understand that you just don't implement the sanctuary laws and allow illegal people to come in and do whatever they want.

DOBBS: Until -- excuse me, until this happened, as you point out, talking about the aspirations -- the political aspirations, there's no question, Governor Newsom -- Mayor Newsom was seeking the governorship of the state of California precisely the time that it broke that his city, San Francisco, was pursuing the sanctuary policies and shielding these illegal alien gang members.

The idea that a man would try to build a political future on the backs of sanctuary policy -- what is your reaction?

KENNEDY: Well, you know, I just think -- you know, I just can't believe that he would even do something like that. But, you know, every politician, you know, is trying to grab votes any way they can get them.

DOBBS: Yes, yes, of course, that's true.

KENNEDY: And you know -- and to be honest with you, you know, as far as I'm concerned, the city and county of San Francisco was aiding and abetting Mr. Ramos when he was a juvenile and sending him out of San Francisco to another facility to protect him from the federal authorities. And...

DOBBS: And Frank...

KENNEDY: And the city and county is responsible for that. And I'm tired of the finger-pointing. Mr. Newsom and his people are pointing the fingers at the federal government and -- you know -- go ahead, Lou, I'm sorry.

DOBBS: No, I'm sorry, we're out of time here, Frank. I just want to say, again, thank you, and I know it's a difficult time, again. We extend our condolences and our best wishes to you and to your family, Frank Kennedy.

KENNEDY: Thank you very much, Lou.

DOBBS: Thank you for being here.

Let's take a look at our poll tonight and the question tonight is: do you believe the federal government should withhold tax dollars from cities that declare themselves to be sanctuaries for illegal aliens? Yes or no? Cast your vote at loudobbs.com.

We'll have the results here later in the broadcast.

New developments tonight in the case against the suspected drug smuggler accused in the murder of a Border Patrol agent Luis Aguilar in January.

Congressman Brian Bilbray writing a second letter to President Bush and Attorney General Michael Mukasey. Congressman Bilbray demanding, again, an explanation why that suspect in the murder, Jesus Navarro Montes, was released from a Mexican prison last month without condition.

The Bush administration responding to Congressman Bilbray's first letter, saying he couldn't discuss an ongoing investigation now. Congressman Bilbray asking the president and the attorney general straight forwardly, has the United States government issued an arrest warrant for Montes? Has the U.S. government contacted Mexican authorities regarding extradition of Montes? And if the U.S. Justice Department failed to contact Mexican authorities, who was responsible for that failure?

The White House and the Justice Department telling LOU DOBBS TONIGHT they can't comment on the details -- you guessed it -- of an ongoing investigation.

We'll continue, of course, to follow this story and report to you all developments. And we will also be following the case of Border Patrol agent -- former Border Patrol agents, Ramos and Compean, who remain in prison nearly eight months after their appellate court hearing. Ramos and Compean have been in prison now for more than 16 months.

Up next, did Senator Barack Obama's swing through the Middle East help or hurt his presidential campaign? I'll be joined by three of the country's leading political analysts.

And what is Congress' answer to the economic and housing crisis? Well, so far not much but there is hope. It's not so audacious but there is hope. We'll have a special report, next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Joining me now, three of the best political analysts in the country. CNN contributor, Republican strategist Ed Rollins. Ed, formerly White House political director, recently the chairman of Mike Huckabee's presidential campaign, and CNN contributor, "New York Daily News" columnist, member of the editorial board of "The Daily News," Errol Louis.

He's also the host of the morning show on WWRL in New York City, where else. And CNN contributor, Democratic strategist Robert Zimmerman, National Democratic committeeman, superdelegate.

Good to have you all here.

So how's it going for your candidate in the Middle East? He only has three network anchors, 300 press in tow, and he's managing every inch of the news all of the way. How did you...

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: And John McCain...

DOBBS: How did you manage this?

ZIMMERMAN: I can't take credit for this. But, of course, the way John McCain's reacting to Barack Obama's trip, you can tell it's been a great week for Barack Obama.

DOBBS: Do you think?

ZIMMERMAN: I would think. I saw George Bush Sr. and John McCain standing there in Maine doing a political rendition of "Grumpy Old Men."

DOBBS: Ageism from a Democrat, how unseemly.

ZIMMERMAN: I think that it was -- no, not ageism, it's not -- just a political commentary.

DOBBS: My gosh, what's next?

ZIMMERMAN: Well, we're just going to talk about the issues.

DOBBS: That's terrible.

Errol, your thoughts?

ERROL LOUIS, "NEW YORK DAILY NEWS": We're getting down to the wire...

DOBBS: Robert Zimmerman, I think, when did Dobbs become politically correct?

LOUIS: Anyway, coming down to the wire, there are 104 days until election day. Every news cycle is critical. Obama's strung together four, five, six of them in a row, and that's not a small thing. He closed a -- or he answered questions about his stature. He looked presidential. He...

DOBBS: He started to say he closed the questions. I like that.

LOUIS: Well, I mean, he...

DOBBS: That's quite a few days, I mean...

LOUIS: He closed the gap.

DOBBS: ... three days in the Middle East...

LOUIS: He closed the statute gap is what I was going to say...

DOBBS: OK.

LOUIS: ... on foreign policy. He really did. I mean if anybody had any lingering doubts. Now understand that, you know, not everybody in the country is watching this. A lot of people are on vacation and so forth, but...

DOBBS: Well, they are when they're watching LOU DOBBS TONIGHT. Everybody's watching LOU DOBBS TONIGHT.

LOUIS: He did what he wanted to do, he did what he needed to do, and he had a lot of help, and he had a lot of luck.

DOBBS: All right.

ED ROLLINS, REPUBLICAN STRATEGIST: Well, the luck is probably the most important thing he did all week was that 40 foot shot for that three-pointer when he was playing basketball. That was something pretty...

LOUIS: That was leadership.

DOBBS: Just ask the Knicks.

ROLLINS: I think symbolically he's had a great week. Whether the substance is there or not, we have to wait and see.

The critical thing is that John McCain had a terrible week. John McCain should have disappeared this week and not tried to compete. And if he thinks his campaign is going to be, I was there first, I was right, he was wrong, that's not going to work.

It's -- people don't want to talk about past, don't want to talk about the future, how do we move forward, how do we deal with very significant problem in Afghanistan, how do we get our troops out, whatever the timetable might be, and how do we lead this country out of economic crisis, is far more severe for most Americans than the war.

ZIMMERMAN: You see, Ed's point is absolutely (INAUDIBLE), because this is a situation...

DOBBS: Well, I thought you might say so.

ZIMMERMAN: Well, because both parties are wrong. Democrats can't make -- can't make this campaign about, you were wrong about Iraq, and John McCain can't make the case, you were wrong about the surge.

The issue is how do we move forward? And the best strategy to remove our troops from Iraq and refocus on fighting terrorism, that's got to be the objective.

DOBBS: I feel like I'm falling down some sort of Orwellian crevice here. What I'm hearing Obama say right now, Errol, is basically what the Bush administration has been saying, we'll open up those discussions based on the conditions on the grounds, and we'll listen to the commanders, never allow them to dictate.

I can't find a -- I cannot find a fraction's difference between the Bush strategy -- or lack of it -- and the Obama strategy -- or lack of it.

LOUIS: Not only are they starting to converge, but this interesting new force has popped up, which is called the government of Iraq. And Maliki who is also running for re-election, and as McCain found...

DOBBS: A doubly dangerous situation, two...

LOUIS: Very much so. He found out, much to his chagrin, that it's in Maliki's best interest-- or so he believes -- to distance himself a little bit and sort of stand up to the Bush administration and sort of embrace Obama a little bit or at least the notion of withdrawal.

That's how he's going to try to get re-elected. And it's not something anybody really thought what's going to happen, and yet, this is what everyone said that they wanted -- an independent sovereign government in Iraq.

DOBBS: Yes, and by the way, I say, you know, three cheers. But what's confounding as well in this sort of Orwellian crevice in which we find ourselves, now Obama saying the strategy -- the surge strategy didn't work in Iraq, but he wants a surge strategy in Afghanistan, i.e., more troops.

What in the world -- and the national media doesn't even look at this as...

ROLLINS: Before we put more troops into Afghanistan, which is...

DOBBS: Wait, wait. Before we go to the substance of that, I'd just like to understand what the heck's going on in the conflict between the two approaches.

ROLLINS: Well, there aren't -- first of all, there is no approach yet to Afghanistan. Afghanistan was the tough battle that we basically didn't have sufficient troops to go there. We asked NATO to go in there. NATO has failed miserably. And they're now -- no one's talking about more NATO troops. They're talking about 20,000 more American troops going in there.

DOBBS: Right.

ROLLINS: This is very tough sledding and the lessons of Afghanistan -- or the lessons the Russians found out a long time ago, that this is a very tough group. They're getting enabled by the activity in Iraq and, I think, long term, before we go there and make a commitment of lots and lots of men for a long, long period of time, we better have a very serious discussion of what the American public wants...

DOBBS: Great, we can't get a serious discussion. We got one man saying -- Obama says he wants -- the surge doesn't work in Iraq, yet -- obviously has, and he wants a surge in Afghanistan.

ROLLINS: There's not going to be any discussion in the course of this campaign about -- and equally as important, the decision is not going to be made until there's a new president and a new Congress.

And I think at that point in time the American public has to understand this is a long-term, drawn-out battle. And if we think we're done with Iraq, all we have to do is get into Afghanistan and...

DOBBS: And what is this election going to be decided upon then? Help me out here.

ROLLINS: I'm sorry, I don't mean to dominate. This election's going to be decided by independents who, at the end of the day, are going to basically decide that Obama meets the test or doesn't meet test, unless John McCain can somehow put forward a campaign that basically articulates his vision, and so far, that's not occurred. ZIMMERMAN: The strategy simply is that Obama took major steps this week to do it, to try to neutralize this experience issue in foreign affairs.

DOBBS: In three days?

ZIMMERMAN: In four days, and the visuals -- but the visuals...

DOBBS: Look, if my colleagues in the national media are dumb enough and craven enough to stamp some imprimatur on this man for four days in the Middle East, then, I mean, we might as well just throw up our hands and turn over the keys to whoever wants it.

ZIMMERMAN: Even though your colleagues may think it's up to me, it's really not going to be up to them. It's going to be up...

DOBBS: Who's going to give him that imprimatur?

ZIMMERMAN: The American people will if they choose to on election day. And I think what's most intriguing to watch is the fact that, ultimately, this is an economy...

DOBBS: What will you think of the American people if on the basis of four days in the Middle East they decide the man is obviously stamped and sealed as ready to take on the Middle East...

ZIMMERMAN: No, they're not -- no, that's not way -- you know it's not going to work that way.

DOBBS: Well, I don't know how it's going to work.

(CROSSTALK)

ZIMMERMAN: They're going to see a man who actually showed, he looked presidential. He...

DOBBS: He looked presidential?

ZIMMERMAN: ... and conducted himself in a dignified, proper fashion. And he articulated a vision for the future in foreign policy.

DOBBS: You're wrong.

ZIMMERMAN: And that's what it's going to be about. Who's vision...

DOBBS: Doesn't McCain look presidential?

ZIMMERMAN: Well, not the way he's conducted himself this week. And what is his vision for the future? I mean you talk about the Orwellian issue. John McCain who supported the surge in Iraq opposed the surge in Afghanistan and now he supports the Obama position of increasing troops in Afghanistan.

LOUIS: Lou, looks count for something as... DOBBS: You have got to be kidding.

(CROSSTALK)

ZIMMERMAN: And those are the facts, Lou.

DOBBS: I'm not even going to respond -- those are the facts?

ZIMMERMAN: Yes, John McCain opposed increasing troops in Afghanistan. Obama advocated it. Now he's on board in that position.

LOUIS: I wanted to say, Lou, as...

DOBBS: Go ahead.

LOUIS: As Ed taught the nation a generation ago with Ronald Reagan, how you look does count. It can translate into political capital. So it's not -- I don't think it's something to be pooh poohed.

On the other hand, you know, proper journalism, we should ask those 300 foreign policy advisers who are with him what they think about the notion of charging into Afghanistan, the graveyard of empires that has brought one major power after another to its knees.

DOBBS: This is somebody else's issue. The fact is that here is the so-called candidate who would end U.S. involvement in Iraq rather arbitrarily and send troops into Afghanistan pursuing what? I don't know.

How you reconcile anything here is beyond me. But that, of course, is the privy of the national press or, excuse me, the American people.

ZIMMERMAN: You taught me that.

DOBBS: Robert, thank you very much. Errol, thank you. Ed, thank you.

ROLLINS: Thank you. Thank you.

DOBBS: Up next, America's middle class. Guess who's bearing the brunt of this economic slowdown? What, if anything, is Congress doing about it? What is the president doing about it? Don't bother asking that last one. We'll have the report for you next.

Stay with us.

(COMMERCIAL BREAK)

CAMPBELL BROWN, CNN ANCHOR: I'm Campbell Brown.

Coming up tonight in the "ELECTION CENTER," Barack Obama in the Middle East, John McCain in middle America, and both seem to be having some trouble getting their stories straight. We're going to check the facts tonight. No bias, no bull. Also, a live update on Hurricane Dolly. Plus a special preview of something you won't want to miss, CNN presents "Black in America."

Lou Dobbs is going to be right back.

(COMMERCIAL BREAK)

DOBBS: Today, the Senate heard testimony on how our middle class is bearing the brunt of this slowing economy. Imagine that, they needed experts.

Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): A year of congressional hearings and, still, nothing has been done.

SEN. BERNIE SANDERS (I), VERMONT: The title of this hearing is "The Squeeze of the Middle Class," I don't think it's a squeeze, I think it's a collapse.

PILGRIM: In the last seven year, costs of the average family are up more than $4,000 a year for basics like food, gas, housing and health insurance. The cost of the average commute is up more than $2,000. Harvard Law professor Elizabeth Warren who's an informal adviser to Senator Obama's presidential campaign, compiled the data and she says the annual budget gap for middle class Americans is now $5,830 a year.

PROF. ELIZABETH WARREN, HARVARD LAW SCHOOL: Families are not laying down the credit cards because it's fun. They're laying down the credit cards because it's the only way to put food on the table.

PILGRIM: Warren's figures show median household income has dropped by $1,175 since the year 2000, even while the economy was growing.

SEN. CHARLES SCHUMER (D), JOINT ECON. CMTE. CHMN.: Middle class families are the engine of our economy, but their earning power and economic security has declined significantly in the last seven years.

PILGRIM: Some see the solution in a second stimulus plan that would include funding for infrastructure to generate jobs.

REP. CAROLYN MALONEY (D), JOINT ECONOMIC CMTE.: The president should work with Congress to enact a second stimulus package of aid to the states and infrastructure investment, to get the economy back on track.

PILGRIM: But the Senate dropped that debate until September.

(END VIDEOTAPE)

PILGRIM: Meanwhile, legislation to help American families facing foreclosure is crawling through Congress. The House voted to pass the housing bill late today. Now it goes to the Senate, but it could be months before Americans see any relief because of that bill.

DOBBS: Well I applaud the idea of investing in infrastructure, whether you call it a stimulus package or not. It certainly would be one that -- it would be wise and prudent and even enlightened for the next generation of Americans because that infrastructure investment has been all but absent for the course of the past quarter century.

Thank you very much, Kitty Pilgrim. Appreciate it.

Well the federal government is increasing the minimum wage over the next two years. Beginning tomorrow, the minimum wage goes from $5.85 an hour to $6.55. It goes up again next year to $7.25. Twenty- three states, by the way, and Washington, D.C., already have a higher minimum wage than the federal government.

Well, tonight's poll results -- 98 percent of you say the federal government should withhold tax dollars from cities that declare themselves sanctuaries for illegal aliens.

Hallelujah, America lives.

Thanks for being with us tonight. Join us here tomorrow.

For all of us, we thank you for watching. Good night from New York.

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