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LOU DOBBS TONIGHT

Senators Obama and McCain Square off on the Energy Policy; New Outrage over San Francisco's Sanctuary Policy for Illegal Aliens; The World Court Tries to Intervene in a U.S. Case; Reckless Action Taken by the Feds

Aired August 4, 2008 - 19:00   ET

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


KITTY PILGRIM, CNN CORRESPONDENT: Thanks, Wolf.
Tonight Senators Obama and McCain square off on the most important issue for voters, our energy and gasoline crisis, and we'll tell you what Independent voters need to know.

Also, new outrage over San Francisco's sanctuary policy for illegal aliens. Did San Francisco Mayor Gavin Newsom break federal laws?

Also, the Beijing Olympics begin in just a few days. We'll examine communist China's increased repression and other disregard for basic human rights. We'll have all that, the day's news, much more straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Monday, August 4th. Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening everybody.

A new flip-flop by Senator Obama today in the battle over gasoline prices. Now, Senator Obama today called on the government to tap into the strategic petroleum reserve. This just days after Obama said he could now support some off shore drilling.

The McCain campaign said Obama's shift is about politics, not sound policy. McCain challenged Obama to demand that Congress end its summer vacation and tackle our energy crisis.

We will have extensive coverage. We begin with Jessica Yellin in Washington.

(BEGIN VIDEOTAPE)

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

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT (voice-over): From Barack Obama, a change of heart. Just a few weeks ago he was against swapping oil out of the nation's emergency oil reserve, but today he told a crowd in Michigan...

OBAMA: We should sell 70 million barrels of oil from our strategic petroleum reserve for less expensive crude, which in the past has lowered gas prices within two weeks.

YELLIN: The campaign explains the switch saying that current high gas prices constitute a crisis for many Americans, and that is just one piece of what they call a comprehensive long-term plan to reduce America's use of foreign oil. The reversal comes just as Obama is launching a stepped up attack on John McCain accusing him of having a do-nothing track record on energy.

OBAMA: I could not degree more with the explanation that Senator McCain offered a few weeks ago. He said, and I quote, "our dangerous dependence on foreign oil has been 30 years in the making and was caused by the failure of politicians in Washington to think long-term about the future of the country." What Senator McCain neglected to mention was during those 30 years he was in Washington for 26 of them. And in all that time he did little to reduce our dependence on foreign oil.

YELLIN: He charges McCain supports more off shore drilling because he is putting big oil ahead of American consumers. It's a line of attack Obama highlights in a new ad out today.

UNIDENTIFIED MALE, CAMPAIGN COMMERCIAL: Now big oil is selling John McCain's campaign with $2 million in contributions.

YELLIN: But the McCain campaign points out Obama also received money from oil and gas company employees. More than $300,000 this year alone. Obama outlined his energy proposals, including giving consumers and energy rebates up to $1,000 per family paid for with oil company profits, and to put one million plug-in hybrids on the road within six years, in part by giving American automakers $4 billion to develop the cars and giving consumers a $7,000 tax credit to buy them. His 10-year goal?

OBAMA: In 10 years, we will eliminate the need for oil from the entire Middle East and Venezuela.

(END VIDEOTAPE)

YELLIN: And, Kitty, that's a message well suited to the audience he was addressing. Obama gave today's speech in Lansing, Michigan, where voters are all too happy to hear about plans to reinvest in the hard-hit American auto industry -- Kitty.

PILGRIM: Thanks very much. Jessica Yellin -- thanks, Jessica.

Well, Senator Obama's flip-flop on off shore oil drilling came two weeks after Lou challenged top Democrats to reverse course on the issue. Here's what Lou said on July 14th. That's the day after President Bush lifted the executive ban on off shore oil drilling.

(BEGIN VIDEO CLIP)

LOU DOBBS, CNN ANCHOR: It looks like we're going to see, I would guess -- I will put forward, I will hazard a political forecast -- we will see Congress and Senator Obama reverse themselves on this issue very quickly. (END VIDEO CLIP)

PILGRIM: Well, we are still waiting for Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi to change their policies. We should point out that more than two-thirds of voters believe we should expand off shore drilling.

Well, Senator McCain today said Obama's change of direction on the issue of off shore oil drilling is nothing less than a political stunt. McCain declaring that Obama's energy policies would lead to even higher fuel costs for working men and women and their families. Ed Henry reports.

(BEGIN VIDEOTAPE)

(APPLAUSE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): Campaigning in Pennsylvania, John McCain demanded Barack Obama get his fellow Democrats to end Congress' five-week vacation and deal with high gas prices immediately.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Congress should come back into session, and I'm willing to come off the campaign trail. I call on Senator Obama to call on Congress to come back into town and come back to work.

HENRY: Of course, McCain himself has hardly been around Capitol Hill this year missing at least 150 Senate floor votes. But the McCain campaign believes it's gaining traction on the issue. The latest CNN poll showing 69 percent of Americans back more off shore oil and gas drilling.

(APPLAUSE)

OBAMA: Thank you.

HENRY: After once calling such drilling a gimmick, Obama has now hedged, saying he might support it as part of a larger compromise. That uncertainty from the Democrats sparked this new mantra from McCain.

MCCAIN: We have to drill here and drill now. Not wait and see whether there's areas to explore, not wait and see whether there's a package that needs to be put together, but drill here and drill now.

HENRY: The McCain camp is also pushing back aggressively against a new Obama ad charging he is in the pocket of big oil.

UNIDENTIFIED MALE, CAMPAIGN COMMERCIAL: McCain wants to give them another four billion in tax breaks.

HENRY: False, said the McCain campaign, noting the senator wants to boost the overall economy with a 10 percent tax cut for all American corporations, not oil companies in particular. And back in 2005, McCain voted against President Bush's energy Bill full of oil and gas tax breaks, while Obama actually voted for the bill.

MITT ROMNEY (R), FORMER MASSACHUSETTS GOV.: I didn't know that Barack Obama had stooped to dishonesty, you know pointing out weaknesses in other people's campaigns and positions is also fair game, but that's dishonest.

(END VIDEOTAPE)

HENRY: Now, Republicans who attended Obama's energy speech today handed out tire gauges to crowd to try and mock the Democrats' call last week for Americans to inflate their tires as a way to save energy, but Obama may have gotten the last laugh. His campaign put out some research showing that actually various Republicans, including supporters of McCain, like Governor Arnold Schwarzenegger in California have issued similar calls -- Kitty.

PILGRIM: Well, Ed, so does everybody's dad. You know I mean it's not an unusual thing to say. But it is not the ultimate solution, as you are pointing out.

HENRY: Absolutely.

PILGRIM: You know the McCain camp has put a lot of pressure on the Obama campaign last week and now this week. It looks like there's still continued pressure. What is McCain's next move to keep the pressure on Obama on this issue particularly?

HENRY: It comes tomorrow. On Tuesday McCain is going to Michigan. He's going to go to a nuclear power plant, and that's to issue a full court press on Obama and say, look, you have to do what McCain calls and all of the above approach. You need more nuclear power. You need more off shore oil and gas drilling, and you also need renewables that Democrats and Republicans talk about, but McCain is trying to contrast and show that rather than nibbling around the edges, he wants a full court press here, Kitty.

PILGRIM: All right. Thanks very much, Ed Henry. Thanks, Ed. Henry reporting from the White House.

As the political debate over off shore oil drilling intensifies, crude oil prices, they continue to plummet. Oil prices today fell nearly $4. Closed at just over $121 a barrel. At one point oil dipped below $120 a barrel. That was the lowest close for crude oil in three months.

Well, some members of Congress are trying to end the partisan blather and reach a compromised energy policy. And five Democrats, five Republican senators are proposing to expand drilling off the East Coast and Gulf of Mexico, which pleases the Republicans, but maintain a ban on drilling in the Arctic National Wildlife Refuge which pleases Democrats.

Now, two senators also want to repeal a tax break for oil companies, and in the House of Representatives Republicans today continued their protest on energy policy as Republicans demanding that Speaker Pelosi recall Congress from vacation as soon as possible to vote on off shore oil and gas drilling.

Now, turning to another issue in presidential politics is the war in Iraq, and three more of our troops have been killed in Iraq. Two of them in a roadside bomb attack in Baghdad today. Three of our troops have been killed in Iraq so far this month; 11 troops were killed in July.

Now, that was the lowest monthly total of the entire war; 4,130 of our troops have been killed in Iraq since this war began; 30,464 troops wounded; 13,514 of them seriously. And meanwhile, important news tonight in the war in Afghanistan.

Now, the Pentagon today extended the deployment of 1,200 Marines there for another 30 days. Those Marines will now come home at the end of November.

Rising anger over San Francisco's sanctuary policy for illegal aliens, now did San Francisco Mayor Gavin Newsom break the law on harboring illegal aliens? We'll have that story next.

(COMMERCIAL BREAK)

PILGRIM: New outrage tonight over the scope of San Francisco's sanctuary policies. Now, the city's latest action to protect illegal aliens could be in direct violation of federal immigration law. Casey Wian has our report.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): In May San Francisco's mayor acknowledged the city had been using taxpayer money to fly illegal aliens with criminal convictions directly to their home countries instead of reporting them to federal immigration authorities. The city also was found to be protecting juvenile illegal aliens convicted of felonies by sending them to group homes outside the city where many escaped.

Mayor Gavin Newsom rescinded those programs, and the city has since reported three dozen juvenile felons to Immigration and Customs Enforcement. But in June an illegal alien who was twice protected from the feds by San Francisco's juvenile sanctuary policy allegedly shot and killed a father and his two sons. He has pleaded not guilty. Now the "San Francisco Chronicle" reports San Francisco has spent more than $650,000 on a variety of programs to help juveniles avoid deportation.

GAVIN NEWSOM, MAYOR, SAN FRANCISCO, CA: To the extent that it's been used as a shield for juveniles against criminal prosecution that policy has ended.

(AUDIO GAP)

(END VIDEOTAPE)

PILGRIM: We apologize. We're having some audio issues. Let's continue. That was Casey Wian reporting. Let's bring us to the subject of tonight's poll, and we're asking are you outraged that the city of San Francisco is spending taxpayer dollars to protect illegal aliens and to circumvent federal law? That's a yes or no vote tonight. Cast your vote at loudobbs.com. We'll bring you the results a little bit later in the broadcast.

Now, Hartford, Connecticut, the state's capital, could become the latest city to formalize a sanctuary policy. It's considering an ordinance that would bar most city agencies from asking about a person's immigration status. A vote is expected next Monday. Hartford would join more than 120 cities and towns across the country said to have sanctuary policies either formal or informal.

Venezuela's leftist President Hugo Chavez now funding a U.S.- based open border advocacy group. Citgo Petroleum, a subsidiary of Venezuela's national oil company, is donating $1.5 million to Cassia Demaryland (ph). It's a pro-amnesty advocacy group. Cassia Demaryland also receives funds from the state of Maryland, but the Venezuelan donation will make up almost 25 percent of the group's entire annual budget.

A test of American sovereignty taking place tonight in the state of Texas. A Mexican national convicted of murder in Texas is scheduled to be executed tomorrow. Now, the World Court backed by the Bush administration has demanded Texas not go through with the execution. Texas says the international body has no jurisdiction in this case. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Jose Mediene (ph) has less than 24 hours until he is to die by lethal injection. Mediene's Lawyers say he was denied his right under the Vienna Convention to contact the Mexican consulate when he was arrested for the rape and murder of Jennifer (INAUDIBLE) and Elizabeth Pena. The World Court at The Hague agreed and said the execution should be stayed until new hearings could be held for Mediene (ph) and 50 other Mexican nationals on death row.

But the state of Texas says it's not bound by international court rulings, only by the U.S. Supreme Court. A point reiterated by Richard Samp who represents the family of one of the murdered Texas girls.

RICHARD SAMP, WASH. LEGAL FOUNDATION: The World Court has never before this case tried to interfere with an individual criminal case going on within some country around the world, and there's no reason under United States law to make this the first case.

SYLVESTER: The Texas Board of Pardons and Parole unanimously voted against clemency for Mediene. The Texas Criminal Court also denied a petition for a stay of execution and a U.S. Supreme Court ruling in March said international treaties are not binding on state courts, and the president cannot direct state courts to hold new trials in such cases without Congressional action. Still, one international law expert argues the United States should live up to its treaty obligations.

RICHARD ATKINS, INTERNATIONAL LAWYER: If the U.S. does not follow the Vienna Convention on consular relations, other countries will do the same to U.S. citizens, and it could be a catastrophe.

SYLVESTER: Mediene's lawyers are now making last minute appeals to the U.S. Supreme Court and Texas Governor Rick Perry.

(END VIDEOTAPE)

SYLVESTER: And Mediene's lawyers say they are deeply disappointed with the recommendation that came down just this afternoon from the Texas Board of Pardons and Parole for no clemency, but the attorneys representing the victims say it's been 15 years of this case winding through the criminal legal system and the families have waited a very long time for justice -- Kitty.

PILGRIM: Thanks very much. Lisa Sylvester.

Well in addition to Mediene, there are some 50 other Mexicans on death rows across the country. The World Court says those Mexicans should have new hearings to determine if they were denied the protections of the Vienna Convention. Now, at least six Mexican nationals have been executed in Texas since 1982.

An action by the Bush administration that many are calling reckless. Now, there are concerns that it will increase the risk on our highways and threaten our national security. We'll have that story.

(COMMERCIAL BREAK)

PILGRIM: Communist China and the Beijing Olympics, now will the Games help the fight for freedom in China or will they hurt it? That story next.

(COMMERCIAL BREAK)

PILGRIM: A reckless action by the Bush administration could put American lives at risk. Now the administration took advantage of the Congressional recess and today extended the program allowing Mexican truckers unlimited access to U.S. highways. There has been opposition to this in Congress, and many see it as an assault on our sovereignty and our threat to our national security. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The Bush administration has changed the rules on the program allowing Mexican trucks and truckers on American roads. The program originally a pilot one, scheduled for one year, now becomes a three-year program. In December Congress passed a measure cutting off funds for such cross- border projects, but the DOT says it found a loophole. The rule change announced just two days after Congress left town for its August recess. Opponents were outraged. LEIGH STROPE, TEAMSTERS UNION: The drivers don't have the same standards as our drivers. We don't know who these drivers are. They aren't drug tested. They aren't checked. They aren't even checked all of them as they come across the border. It's scary.

TUCKER: The announcement was made in a quiet press release from the Federal Motor Carrier Safety Administration. An extension was needed, the agency said, because participation by trucking companies in Mexico and the United States had been too small.

Quote, "The extension will insure that the demonstration project can be reviewed and evaluated on a basis of a more comprehensive body of data." One congressman who steadfastly opposed the program responded to the announcement by calling it a bad program because it hurts American truckers.

REP. DUNCAN HUNTER (R-CA), HOUSE ARMED SERVICES COMMITTEE CHAIRMAN: The idea that a guy sitting at his kitchen table, he looks down at the cost of fuel that he is going to have to pay for an American truck to make that cross-country run and then he sees that the good old administration is bringing in more trucks from Mexico to compete against him, I think that's bad news.

TUCKER: Just last week the House Committee on Transportation and Infrastructure passed a bill that would prohibit the secretary of transportation from doing exactly what the department just did unless authorized by Congress, but the full House never voted on the bill before the recess.

(END VIDEOTAPE)

TUCKER: Now, one of the sponsors of that bill, Congressman James Oberstar, chairman of the committee, issued a statement today accusing Secretary of Transportation Mary Peters (ph) of flouting the will of Congress. He promises that when Congress returns in September the program will be shut down for good, at least in the words of Oberstar they will be.

PILGRIM: These are absolutely outrageous tactics.

TUCKER: It's crazy. There wasn't a news conference. There was no announcement of this, Kitty. It was a press release put on the Web site in hopes, I guess, that nobody was going to notice. We asked the Department of Transportation for a spokesman so we could ask them how they felt about this, what did they think in the face of the expression of the will of Congress so many times over and over again, and they said no, there's our statement.

PILGRIM: In the dead of August they just...

TUCKER: In the dead of August hoping well maybe nobody will notice.

PILGRIM: We noticed. Thanks very much, Bill Tucker.

Well government watchdog Public Citizen says the administration's action is unlawful and reckless and should not be allowed to stand. Public Citizen, the Teamsters Union and other groups argued against the program earlier this year in federal appeals court, and they claim the trucking plan violates Congressional mandates. Now, Public Citizen says a final ruling on the matter is expected soon.

We do have time now for some of your thoughts.

So Bob in Massachusetts wrote to us: "I can't help but notice how both presidential candidates are trying to figure out how to get the Independents to vote for them. I think it's pretty simple. English as a national language, send people back who are here illegally, and start looking out for our own people instead of China and Mexico. It's that simple, but not to these knuckleheads."

And Camille in Arizona wrote to us: "Who says Congress has done nothing? They've managed to take vacations, five-day holiday breaks, numerous recesses, and are planning to work another 14 days this year. Oh, yes. The average American must still work another 100 days this year."

And Mike in Alabama wrote to us: "I have joined your ranks as an Independent. There are no words to express my outrage of the incompetency of our Congress. We need to have a vote the incumbents out of office election. Rookies could not be any worse."

And we will have more e-mails later in the broadcast.

There are more important new developments in the anthrax investigation after the suicide of government scientist Bruce Ivins. We'll have the details next.

(COMMERCIAL BREAK)

ANNOUNCER: This is LOU DOBBS TONIGHT; news, debate and opinion, an independent view. Here again, Kitty Pilgrim.

PILGRIM: Urgent preparations tonight along the Gulf Coast to fend off the growing tropical storm called Edouard. Now, forecasters warn that the region's second named storm in just two weeks could strengthen to a near hurricane before making landfall. That could happen as early as tomorrow morning.

Edouard is now moving at about five miles an hour off the coast of Louisiana, generating winds of more than 50 miles an hour. The big question is where will it hit? Now the most likely location at this hour is either north or Galveston, so the state of Texas has begun mobilizing emergency teams along the coast and well inland, and residents meantime are filling up their vehicles with gasoline as a preparation for the worst.

Now tonight Edouard seems to be causing few problems for the thousands of oil platforms operating in the Gulf. Nonetheless, some companies have reported small scale evacuations, and as we reported earlier, the price of oil has continued to plummet in spite of the storm in the Gulf. We also have a huge wildfire burning out of control. It's threatening homes in Colorado at this hour. The grass fire broke out on Green Mountain in Jefferson County around noon today. Authorities there have been driving through the neighborhoods announcing evacuations as the flames continue to move closer to the homes. Residents say the fire might have been caused by a lightning storm.

We're learning more about the 2001 anthrax attacks after the recent suicide of scientist Bruce Ivins, the key suspect. Tonight, after seven years of investigation, thousands of interviews, people who knew Ivins remain extremely skeptical of the government's case, but federal investigators are in a rush to close the books on this case, possibly as early as tomorrow. Now, homeland security correspondent Jeanne Meserve reports.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: DNA evidence links the strain of anthrax used in the 2001 attacks to a flask in suspect's Bruce Ivins' office, according to sources who would not be identified because the investigation is ongoing. Ivins is the Fort Detrick anthrax researcher who took his life last week.

Another source knowledgeable about the investigation confirms that Ivins bought three stamped envelopes, like those used to mail the deadly pathogen, and computers that Ivins may have used were removed from a Frederick Maryland library last week.

Meanwhile, an audiotape of a court hearing last month in which a social worker seeks a protective order against Ivins raises more questions about his mental health. Jean Duley had treated Ivins in group therapy.

JEAN DULEY, IVINS' THERAPIST: He plots and actually tried to carry out revenge killings. He has been forensically diagnosed by several top psychiatrists as a sociopathic, homicidal killer.

MESERVE: CNN has want been able to confirm those diagnoses. But a former prosecutor believes given what is already known, the government has a strong case.

UNIDENTIFIED MALE: I think there is enough there right now to convince a jury beyond a reasonable doubt.

MESERVE: Ivins' attorney says his client is innocent. In a statement, Paul Kemp says, "There is absolutely no proof that Dr. Ivins was ever in Princeton, traveled to or from there, or even left Frederick on the dates in question." The anthrax letters were postmarked from near Princeton.

Ivins friends say he didn't have the know-how, the motivation or the personality to commit the crimes.

JEFFREY ADAMOVICZ, FMR. IVINS' COLLEAGUE: All of us that know him are really, really interested in seeing what there is in terms of evidence to support these allegations because simply, all of us that know him don't believe that it's true.

(END VIDEOTAPE)

MESERVE: Ivins' suicide in the botched case against another government anthrax researcher, Steven Hatfield, is putting the government under considerable pressure to lay out its complete case. That could happen later this week after the anthrax victims and their families are briefed -- Kitty?

PILGRIM: Jeanne, the worry is are they pin this on Ivins to wrap up the case?

MESERVE: Well you know there are some members of Congress and other critics, friends of Ivins, who absolutely believe that's the case. They're just trying to pin it on somebody to close it out. The Justice Department, the FBI aren't responding directly, but they're going to be putting out all of their evidence, all in one swoop so everyone can look at it and make their judgment.

PILGRIM: I'm sure you will be following closely. Thank you very much, Jeanne Meserve.

Coming up, President Bush headed for communist China tonight, but controversy remains over whether he should attend the Olympic opening ceremonies in Beijing on Friday.

(COMMERCIAL BREAK)

PILGRIM: President Bush is headed for communist China tonight to attend the opening Olympic ceremonies in just four days, but the sport has almost become a side bar to the controversy surrounding the games. So much so that it's difficult to know where to start.

Now, the pollution hanging over Beijing, a health threat to competitors and spectators alike; China's emphasis on winning at all cost as harsh training practices are seen as a potential hazard to China's own athletes; Internet censorship and media restrictions are raising an international outcry and this year's crackdown on Tibetan activists and here in this country debate over whether President Bush should attend the opening ceremonies at all. So how are Americans responding to all this?

Bill Schneider has our report.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN CORRESPONDENT: In February, President Bush made this announcement.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I have made it very clear I'm going to the Olympics because it's a sporting event.

SCHNEIDER: The decision met with criticism from other politicians.

SEN. HILLARY CLINTON (D), NEW YORK: I said the other day that the president should not attend the opening ceremonies of the Olympics in Beijing unless the Chinese government -- I had somebody from China here who doesn't like this, but that's OK. We have free speech here, unlike China.

SCHNEIDER: And from Chinese dissidents.

ASIA T. KUMAR, FMR. CHINESE POLITICAL PRISONER: Even a single word from President Bush about human rights abuses in China, that's why we are here, to tell him to speak up on human rights.

SCHNEIDER: President Bush says he will.

BUSH: But that will not preclude me from meeting with the Chinese president, expressing my deep concerns about a variety of issues.

SCHNEIDER: Do Americans approve of President Bush attending the opening ceremonies of the Olympic Games? Yes, 63 to 35 percent. Both Democrats and Republicans support his decision to go.

But there is evidence of growing concern about China. The public is divided over whether China is a military threat to the United States, but 70 percent see China as an economic threat.

According to a new study by the Chicago Council on Global Affairs, a growing number of Americans believe China's economy will one day be larger than that of the United States and that China will become America's chief competitor for power.

On human rights issues Americans are critical of China. An overwhelming majority of Americans believes Tibet should be an independent country.

(END VIDEOTAPE)

SCHNEIDER: The Chicago Council survey asked Americans whether they considered each of America's six major trading partners to be an unfair trader. The numbers ranged from 12 percent who called Canada an unfair trading partner, to 45 percent who called Mexico and Japan unfair. One country stood out. 67 percent of Americans believe China is guilty of unfair trading practices with the U.S. -- Kitty?

PILGRIM: Bill, you know, President Bush has said it's not about politics. It's about the Olympics. It's about supporting the athletes, but in some way to the American public it has a political tone to it, doesn't it?

SCHNEIDER: Well, there is a political tone, of course, to any Olympics. Always has been. Ever since the boycotts of the 1980s over with the Soviet Union. They -- we boycotted them. They boycotted us. There's always a political overtone to this.

After all, these games are all about nationalism. They're all about national pride and competition between countries. Certainly, the United States knows that China is attempting to put its reputation on display here and there will be a lot of political controversies that are going to be aired during and around the Olympics.

PILGRIM: Thanks very much, Bill Schneider. Thanks, Bill.

Well, joining me to discuss the Olympic controversies of 2008, Gordon Chang, author of the provocative book, "The Coming Collapse of China." And Professor Andrew Nathan, chairman of political science at Columbia University, and editor of the soon to be released book "How Ease Asians View Democracy."

Gentlemen, with this kind of a panel, I know we'll cover a good bit of ground. Thank you for being here.

Gordon, I would like to start with you. You know we haven't even had the opening ceremonies and yet there's evidence of extreme paranoid sort of totalitarian communist government clamping down on society in China in advance of these games. What's the legacy of these games, and it's funny to ask what the legacy is before they've even started, but in some respects they're creating it now, aren't they?

GORDON CHANG, AUTHOR, "THE COMING COLLAPSE OF CHINA": The legacy is going to be a police state. I mean all they've put these measures into place to clamp down on society. I don't think that they're all going to be lifted once the athletes go home and the Olympic flame has been doused. We're going to still see all those security cameras. We're going to see probably checkpoints still in place. This is going to be a very different and worse society than it was before the games. The Olympics were supposed to open up China, but they're having the opposite affect.

PILGRIM: Well Andrew, I would like to get your thoughts. There were lots of promises made by China when they were awarded these games to the International Olympic Committee. They haven't lived up to these promises, have they?

PROF. ANDREW NATHAN, EDITOR, "HOW EAST ASIANS VIEW DEMOCRACY": No, they really haven't. A lot of the promises are still secret. The contract host city contract has never been published, but a lot of hints were made and maybe with the fingers crossed behind the back or a wink about what the Chinese mean by some of these things. So when the Chinese said, well, you give us the Olympics, the situation will improve, people will have press freedom. That's in their sense of press freedom, which is not really the same as ours because they have a controlled press.

PILGRIM: You're a renowned expert on this country. When you heard that China was making a lot of promises about press freedoms, about civil liberties and in advance of these games, did you believe it? Are you surprised by anything that's happening now?

NATHAN: I wasn't -- I didn't expect China to really change fundamentally because this regime is all about staying in power. One of the things I had written about called authoritarian resilience is their skill at staying in power and part of it is through economic growth. Part of it is through controlling information that the public gets. An important part of it is that the regime knows how to crack down when it feels that it's under threat. That's what we're seeing now. Security is the number one issue for them. They have said so.

PILGRIM: You know, as they've tightened up security and clamped down on human rights, many people think you have to take a position and not change it about these Olympics, but it is an actual shifting landscape, isn't it, Gordon?

CHANG: Well, it certainly is. A lot of things that people expected about these games just haven't come true, and there were all sorts of hopes that China would become much more humane, but it's violated every single human rights pledge that has been made public, and that's a problem in itself, but more important it's a warning to us about China's trustworthiness.

We have signed hundreds of agreement on trade, security, inspection of medicine, and China's compliance has been poor, but people say that this is sort of like a coming out party for China. Well, if it is, they're going to even be worse afterward, and if we can't trust them now, how can we trust them in the future?

PILGRIM: There have been a few terrorist attacks. Today, terrorists attacked a border police division. How worried should Americans be about the terrorist attacks in Beijing, and it may have been swept under the rug and underreported too. Are you worried about this activity?

NATHAN: No, I'm not. In the sense of Americans being safe in Beijing, I believe they'll be safe. Of course, it's impossible to ever totally predict, but the clampdown in Beijing is very complete. They've been preparing for that for a long, long time.

The attacks that you are referring to -- and we don't know much about what really went on -- are far away from Beijing. I think Beijing is going to be all too safe really.

PILGRIM: Let me ask you both the question I asked Bill Schneider. President Bush says it's not about politics. It's about supporting the athletes. In one respect, it is a very honorable thing and the Olympics are supposed to be above politics. That's in their charter. But, in fact, they are not. How do you deal with that? Why shouldn't we talk about politics at this point when we're faced with this kind of a country?

CHANG: Well, China's official media has pointed to President Bush's attendance at the opening ceremony and said that the world now accepts China. It specifically pointed to Bush. So I don't think that he can now maintain that his going there is nonpolitical, because like it or not, the Chinese have made it so.

You know, by the way, you know, President Bush didn't go to the Summer Games in Athens in 2004, which is the birthplace of democracy, but is he going to the home of authoritarianism, which is Beijing. You know something is wrong with this picture.

PILGRIM: We understand that Treasury Secretary Henry Paulson is also going to be traveling for what is called a family vacation, although he will be holding some private meetings. We have a good solid U.S. presence of officials in Beijing for these events.

NATHAN: You know, the China relationship is very important to the U.S., economically, politically, and strategically, and I think the Chinese people will see that our officials not only now, but for a long time, have been paying tribute to China, paying court to China, and the fact is Chinese is really important, so you can't just wish that it were not there. It is there.

PILGRIM: Would you wish for a stronger statement from the president?

NATHAN: Yes. The president met with these five dissidents a few days ago in the White House, and I'm sure that although the Chinese protested about it, I think they probably got the message. He does it in the White House to show the American people that, you know, his head is in the right place.

He goes China and tells us I'll meet with the leaders, which is a very quiet thing to do. The leaders don't mind hearing the president tell them such things as how god changed his life, how important religious freedom is. They don't mind hearing those things. They hear all kinds of things from people from other cultures. It doesn't mean much.

PILGRIM: Gordon, last word on this, President Bush.

CHANG: Well you know I think President Bush should have met those five dissidents in the Oval Office instead of his private residence. I think that was a little bit weak. He has also met with "People's Daily," which is not really a newspaper, but it's sort of a communist party mouth piece, as it describes itself. So President Bush needs to say more, because he does have the freedom agenda, and he is de-legitimizing it by not speaking out on some very critical issues.

PILGRIM: Gentlemen, this kind of excellent analysis is hard to find. Thank you for joining me this evening for it. Gordon Chang, Andrew Nathan, thank you.

A reminder now to vote in tonight's poll. Are you outraged that the city of San Francisco is spending taxpayer dollars to protect illegal aliens and circumvent federal law? Yes or no? Cast your vote at loudobbs.com. We'll bring you the results in a few minutes.

Coming up at the top of the hour, the "ELECTION CENTER" with Campbell Brown.

Campbell, what are you working on?

CAMPBELL BROWN, CNN ANCHOR: Thanks, Kitty.

Coming up in a few minutes, Barack Obama and John McCain talk up their own energy plans and take shots at what the other guy is proposing.

Also, Kitty, we have called out the Democrats for staging meaningless political theatrics on Capitol Hill. Well, tonight we've got a no biased, no bull look at what the Republicans are up to on Capitol Hill. This week it is just as bad.

We've got all that and more coming up. Kitty?

PILGRIM: We look forward to it, Campbell. Thanks.

Tonight please remember to join Lou on the radio Monday through Friday, the Lou Dobbs Show. Go to loudobbsradio.com to find local listings for the Lou Dobbs Show on the radio.

And coming up Senator Obama, another flip flop on energy policy. Our panel of the best political observers in America will give us their assessment about that.

(COMMERCIAL BREAK)

PILGRIM: As we reported at the top of the program, the battle over energy and how to relieve the financial stress on our middle class figured prominently in the presidential race today.

So joining me now are three of the savviest political observers in America. We have CNN contributor Hank Sheinkopf, a Democratic strategist. We have James Taranto, editor of opinionjournal.com, and CNN contributor Errol Louis, a radio host and columnist for the "New York Daily News."

Gentlemen, thanks for being with me.

We have both candidates today talking about energy. It seems to me with Americans paying this price over this duration of time, seems a little bit too little too late and there's no immediate solution being proposed. Hank, your thoughts on this?

HANK SHEINKOPF, CNN CONTRIBUTOR: Something's being proposed to force John McCain to respond to get a campaign going. Barack Obama has everybody selling his proposal. Remember where he's traveling to next week, the Midwest, where the most economic hurt is going on right now and where people are being hurt at the pump as well.

PILGRIM: Errol?

ERROL LOUIS, CNN CONTRIBUTOR: In his speech today, Barack Obama was mentioning things that I didn't know that the leading place they make materials to put together solar panels comes out of Michigan, a state where he needs to do well in the election coincidentally enough and where he had very nice things to say as well about the auto industry. So we're in full court pander, not the best way for this discussion to go forward but at least we're talking energy.

PILGRIM: This is an absolute critical discussion going on right now. Do you think Americans are satisfied at this point?

JAMES TARANTO, EDITOR, OPINIONJOURNAL.COM: No, although I applaud Obama for finally coming to his senses on domestic drilling. On the other hand, Obama was saying last week he doesn't want short term solutions. He had been criticizing for a long time McCain's gas tax holiday which indeed is a silly gimmick. He was right about that but then today he says, let's open up the strategic petroleum reserve. There's not much more short term solution than that, you know a temporary increase in supply and the most ridiculous idea perhaps this year is this idea that Obama put out last week where he said, I want to put a tax on oil companies to pay an energy rebate to consumers. He's taxing the production of oil and subsidizing the consumption of oil, which is a recipe for higher gas prices.

PILGRIM: I'm glad you said it. Because when I read that proposal, I was flabbergasted at the priorities. Let me just -- Obama's sort of reversed his energy policy. Let me play for you a comment he said about some offshore drilling. Here's what he said.

(BEGIN VIDEO CLIP)

OBAMA: Like all compromises, this one has its drawbacks. It does include a limited amount of new offshore drilling. While I still don't believe that's a particular meaningful short term or long-term solution, what I said was I'm willing to consider it if it's necessary to actually pass a comprehensive plan.

(END VIDEO CLIP)

PILGRIM: That sounds very qualified, James, doesn't it?

TARANTO: Very much so. Obviously, Obama has to appeal to the people who are against the idea of you know despoiling our coast even though we're talking about very far offshore, not within the horizon and people who just don't like the idea of burning oil all together.

PILGRIM: Hank, what are your thoughts on this so-called Obama reversal of position?

SHEINKOPF: Everything in politics is in the 30 second sound byte and in a commercial. So I want to see a sound byte that says Obama, while trying to bring gas prices down, has made an error. Not going to work, not a good television commercial and will force McCain to somehow look anti-dated and old.

PILGRIM: Senator McCain was calling on Senator Obama to get Congress back into Washington to address the energy crisis. Let's listen to what he had to say.

(BEGIN VIDEO CLIP)

MCCAIN: I call on Senator Obama to call on Congress to come back into town and come back to work, come off their recess, come off their vacation and address this energy challenge to America and don't leave until we do; Republican and Democrat joining together.

(END VIDEO CLIP)

PILGRIM: It's dramatic.

LOUIS: Well, you know, it's not quite believable to have John McCain suddenly try to run against the beltway. He's spent too many decades there for it to have any real resonance. Certainly, the idea of asking a junior senator to round them all up. Substantively, it doesn't make a lot of sense.

On the other hand, the shot with him standing with blue collar workers behind him, demanding action out of Washington, it's tried and true. They've been doing it on the Republican side of the aisle since Reagan and before. Maybe it will get him some traction.

PILGRIM: It's funny because Senator Obama has a new ad today about energy and it basically reads, every time you fill your tank, the oil companies fill their pockets, now, big oil is filling John McCain's campaign with 2 million in contributions because instead of taxing their windfall profits to help drivers, McCain wants to give them another $4 million in tax breaks. This whole linkage of big oil, profits, the consumer being hurt, it does resonate with the American public, but some of these linkages, as you point out James, they are a little bit weak, right?

TARANTO: Who does Obama think will pay for higher taxes on oil production? Ultimately, it will be the consumer.

PILGRIM: We have snow ended proposals coming from the wings. Boone Pickens, we have a lot of discussion about energy. Are we getting anywhere? Hank?

SHEINKOPF: We're getting nowhere but we have to win a presidential campaign, someone does and therefore, he who can make the best argument reducing the price at the pump down will be the one people are listening to.

PILGRIM: Any thoughts on who's winning?

LOUIS: Actually, I think there is some progress. I mean some of talk about solar, about wind and alternative is starting to make sense, starting to put tax credits in that direction is making sense for financial reasons because the price of oil and alternative, the ratio is starting to work out. You couldn't have talked about this four years ago or eight years ago. At least it's now begun.

PILGRIM: You know what's driving this discussion. It's not the political season. It's absolutely the necessity of addressing this issue. If we didn't have $4 gas, we wouldn't be talking about this on the political campaign.

Let's take a quick break and we'll be right back in a minute. We'll have much more with our panel and the day's presidential politics when we come back. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: I'm back with our panel; Democratic strategist Hank Sheinkopf, opinionjournal editor James Taranto, and "New York Daily News" columnist Errol Louis.

Let's look at a couple of polls. This is a really interesting time because the polls are so tight. I have to say, every time I look at it, I'm shocked how tight it is. Obama, 47 percent, McCain, 44 percent, unsure, 9 percent. A chunk for unsure, at that's the poll of polls, national general election. What do you think of the tightness of these polls, James?

TARANTO: You would think Obama would be way ahead just because of the Republicans in the White House and people are unhappy with President Bush and have been for a long time. On the other hand, it's the first time since 1952 that neither the sitting president nor the vice president is running so maybe it's just unfamiliar territory.

LOUIS: Yes. I mean also when you break those polls down into the 14 or so swing states and they will really go at it, many states, Pennsylvania, Michigan, Missouri, where McCain is outspending Obama considerably and then conversely Obama is outspending McCain in Georgia and North Carolina. So what's really interesting to me is the efficacy of those ads. There are states Obama is spending heavily and getting nowhere against McCain and the same in the other direction.

PILGRIM: Isn't that interesting, Hank?

SHEINKOPF: The bottom line is no one knows anything about either of them and those that have decided have decided. This will either be a very tight race or distant race, there will be nothing in between here.

PILGRIM: You know some of the discussion now about the vice- presidential picks is that it's more critical than ever, that normally it isn't that critical. Now it's going to be crucial in this race. We have three weeks to the Democratic convention. Obama, where do we stand on this? What are your thoughts on his VP picks, James?

TARANTO: It's really tough. The only thing I'll say for sure is it will not be Hillary Clinton.

PILGRIM: You know there's such pressure in the discussion circles on HIlary Clinton, but you think it's not?

TARANTO: He doesn't want to have three presidents in the White House. Hilary, Bill and himself.

(LAUGHTER)

TARANTO: Hilary has more or less said that she doesn't want to be considered, which is a candidate's way of saying that's she's not a candidate anymore and they've pretty much let her know she's not going to be.

As they're arranging the order of speakers, she's lining up a keynote role, but that's not the same as being the vice presidential candidate. So she's out of it. But, you know, in both cases, the vice presidential candidate -- the pick is intended to sort of bring the party together and so those portions of the party who are still loyal to Hilary Clinton who aren't happy with Obama, he's gonna have to make them happy. If its not going to be with her, it'll have to be somebody that she strongly approves of. PILGRIM: I'll make you jump parties -- McCain now. Apparently, he's reporting doing very thorough vetting of Virginia congressman Eric Cantor (ph) -- there are several names in the mix. What do you think about McCain?

SHEINKOPF: I wouldn't doing with Cantor, I'd be doing someone from the midwest and frankly going back to my Democratic cap (ph), Evan Bayh looks better every day. Why? He's gotta win the midwest. He's gotta win those states.

PILGRIM: Yes. Evan Bayh definitely in the list. And then -- you think it will go straight down to the convention?

SHEINKOPF: It'll be down to the polls before the convention in particular regions. Rest assured, the Obama campaign and the McCain campaign will be polling to find out where they need to win and that's where they'll be trying to get some heft (ph).

PILGRIM: Any surprises you're anticipating or you think it will just follow along in -- in a predictable pattern.

LOUIS: Well, I think what's unpredictable is -- there seems to be some sentiment that the McCain camp is going to wait and see what Obama does and wait until the Democratic convention is over and then -- then make its final choice. So -- in that level of that strategic delay and timing, I think we could be in for some real drama.

PILGRIM: All right. We will be in for drama. Rest assured on that. Errol Louis, Hank Sheinkopf, James Taranto. Thank you.

Tonight's poll question: 97 percent of you are outraged that the city of San Francisco is spending taxpayer dollars to protect illegal aliens and to circumvent federal law.

Thanks for being with us tonight. Please join us tomorrow. For all of us here, thanks for watching. Good night from New York. The ELECTION CENTER with Campbell Brown starts right now -- Campbell?

BROWN: Thanks, Kitty.