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Lou Dobbs Tonight

Sticker Shock Over Iraq War Cost; Cheaper Tunes Ahead; NFL Kicks Off New Season With Concert On National Mall

Aired September 04, 2003 - 18:00   ET

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

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


JOHN KING, CNN ANCHOR: Sticker shock on Capitol Hill over the cost of war in Iraq. President Bush wants at least $60 billion more. How much is enough? Kitty Pilgrim will have our report.
It's a tough sell on Iraq overseas as well. The Europeans who opposed the president over the war say no again. Jim Bittermann will report from Paris.

Cheaper music could be on the way. One big entertainment company cuts back the price of cds to win back customers who download their music. Will the strategy work?

And, are you ready for some football? The NFL kicks off the new season with a huge party on the National Mall. NFL Commissioner Paul Tagliabue will join us live.

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, September 4. Sitting in for the vacationing Lou Dobbs, John King.

KING: Good evening.

Tonight: the massive and growing cost to taxpayers of the war in Iraq. The White House is about to ask Congress for at least $60 billion more to help pay for the war and the cost of peacekeeping and reconstruction. There is little doubt that, in the end, the president will get the money. But first, the White House has to answer some tough questions on Capitol Hill about the direction of U.S. policy.

For more on that, White House correspondent Dana Bash joins us now -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, John.

Well, the president was actually in Missouri today talking up the economy. It was his second of three stops in Midwest states to talk about the economy in just one week this week. He talked about, of course, his tax cut plan, vigorously defended that, saying that that helped to blunt the blow of the recession and really was sort of a suggestion that his Democratic critics were wrong in saying that that tax cut should be repealed.

But he also gave some prescriptions for helping the economy in the future, talked about his signature call to hold down congressional spending. And he said that just as the White House is preparing, as you said, to send to Congress a request for a lot of money to help pay for Iraq, perhaps in the ballpark of $60 billion to $65 billion, although White House officials say that all of the numbers are still being worked out.

And Republicans on Capitol Hill and Democrats are saying that, surely, they understand that the war effort needs to be supported by whatever money it does take, but that the White House is going to have to justify that. And Paul Wolfowitz, the president's deputy defense secretary, was on the Hill today. He was talking to members of Congress. And he was defending the whole idea of the postwar planning in Iraq, saying that it was OK.

(BEGIN VIDEO CLIP)

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: Look, there's been a lot of planning for all phases of this war. And many aspects of the plan, I think, have been spectacularly successful. Any plan has got to adjust to realities you find on the ground. And this plan has been adjusting steadily.

(END VIDEO CLIP)

BASH: Meanwhile, of course, the administration is turning to the United Nations, trying to get a resolution passed there in order to get more help with the cost of rebuilding and the military in Iraq. Democrats are saying that that is certainly welcome. They wanted the president to go to the U.N. for some time. But they're also saying it's proof that the administration's prewar planning for what is going on right now just wasn't justified.

And the top Democrat in the House attacked the whole idea of the president going out in the near future and talking up the situation in Iraq in kind of a P.R. campaign that might be to come.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The president is accountable. And if he thinks the answer, if he thinks the answer to his misguided policies in Iraq is to have a P.R. campaign to sugarcoat it, I think he is going to -- he insults the intelligence of the American people.

(END VIDEO CLIP)

BASH: And, John, as we get closer and closer to the election, that is the kind of rhetoric we're sure we'll hear more from Democrats, certainly very different from what we were hearing from Democrats on Capitol Hill this time last year, when the whole discussion of going to war in Iraq was being had -- John.

KING: Dana Bash at the White House, thank you.

Now, the president's policy on Iraq is not only a tough sell on Capitol Hill. It's also facing strong opposition in Europe. France and Germany, of course, opposed the war against Saddam Hussein. They are now saying no to the president's plan for United Nations help in Iraq, no at least for now.

Jim Bittermann reports from Paris. (BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN CORRESPONDENT (voice-over): The French president and German chancellor chewed over Washington's proposal at lunch during their summit in Dresden, Germany, and found it difficult to digest.

JACQUES CHIRAC, FRENCH PRESIDENT (through translator): It does appear to be really rather far from the main objective, which is that of transferring political responsibility to an Iraqi government as soon as possible.

GERHARD SCHROEDER, GERMAN CHANCELLOR (through translator): I would agree with the president. He says it's not dynamic enough, it doesn't go far enough. Hence, it doesn't make sense to talk about the details at this stage.

BITTERMANN: Both leaders opposed the U.S. war in Iraq and seem again in agreement on postwar reconstruction, saying the United Nations has to be in charge of the political transition in Iraq.

U.S. Secretary of State Colin Powell insists, that's not on the table and that Washington should retain political and military control. But under the draft resolution, the U.S. would periodically report to the U.N. Security Council.

COLIN POWELL, SECRETARY OF STATE: I think the resolution is drafted in a way that deals with the concerns that leaders such as President Chirac and Chancellor Schroeder have raised in the past. And if they have suggestions, we would be more than happy to listen to their suggestions.

BITTERMANN (on camera): While there seemed good intent on both sides to avoid another bruising trans-Atlantic collision over Iraq, one fundamental has not changed since before the war. France and other countries will resist U.S. domination of world affairs, if it's not through the United Nations.

Jim Bittermann, CNN, Paris.

(END VIDEOTAPE)

KING: Now, the new war budget being drawn up BY the White House is just the latest installment. And as the price tag grows, Congress is asking more and more questions. By some estimates, the war costs could be hundreds of billions of dollars. Those are numbers the administration once dismissed as misguided speculation.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT: (voice-over): During the heavy fighting phase of the Iraq war, experts say the burn rate on money was more than $1 billion a week, $4 billion a month. Now, during occupation, with more than 140,000 troops still there, the Department of Defense estimates, the costs are not that much lower, $3.9 billion a month. That includes military operations, transportation, and supplies -- President Bush today unapologetic about the money.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My attitude is, any time we put one our soldiers in harm's way, we're going to spend what is ever necessary to make sure they have the best training, the best support, and the best possible equipment.

PILGRIM: War is expensive.

STEVEN KOSIAK, CENTER FOR STRATEGIC BUDGETARY ASSESSMENTS: It is certainly difficult to estimate the costs of a war before you fight it, because you don't know how long it's going to last. You don't know how many casualties there are going to be. You don't know how much equipment equipment's going to be lost. But I think the administration probably could have done a better job in anticipating that there would be some substantial costs related to occupation duties after the war.

PILGRIM: Even before the war, the estimates on its costs were burdened with controversy. Last September, economic adviser to the president Larry Lindsey estimated the cost at between $100 billion to $200 billion, a shocking number at the time. Now reconstruction costs are routinely cited in that range.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: So $100 billion seems about right, maybe even low. There have been estimates now as high as $200 billion. It actually make sense that, in a country the size of Iraq with the amount of infrastructure that Iraq has, when you piece together all the infrastructural needs, you could easily reach $100 billion.

(END VIDEOTAPE)

PILGRIM: Now, the Pentagon is expected to ask for about $60 billion more for fiscal 2004. That would also include operations in Afghanistan. That's about a million a month. Nobody is willing to go too far out on the cost projections, because there's really no idea when the troops will come home -- John.

KING: Kitty Pilgrim, thank you very much.

Another reminder today of the dangers facing U.S. troops in Iraq. Soldiers from the 4th Infantry Division fought a fierce battle with suspected Saddam Hussein loyalists in Tikrit, the former Iraqi leader's hometown -- attacked a patrol with smalls-arms fire and rocket-propelled grenades. The patrol was in the area after a U.S. base came under mortar fire. At least one house caught fire during the battle. After the fire subsided, the soldiers rounded up suspects and found a cache of weapons.

Military leaders say they have enough troops in Iraq to deal with terrorists who are attacking coalition forces and setting off car bombs. That view is expressed most forcefully and most frequently by Defense Secretary Donald Rumsfeld. He arrived in Baghdad today, saying Iraqis need to play a bigger role in security. Ben Wedeman has our report from Baghdad.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): A march in the streets of Baghdad, Shiites mourning the leader killed in a car bombing in the holy city of Najaf last week, his death and the tensions it sparked just the latest in a long list of woes that has plagued the U.S.-led coalition as it tries to rebuild this battered country.

Iraqis have a lot on their minds these days, rising ethnic and sectarian tensions, rampant crime, terrorism, economic disorder, for an unexpected visitor, an awful lot to contemplate.

(on camera): Secretary Rumsfeld comes to a country that has been shaken by four massive car bombings and the assassination of a senior Shiite cleric, all the while attacks against U.S. forces show no sign of stopping.

(voice-over): It all looks much more placid from the air. Before touching down, Secretary Rumsfeld took a turn over the city. The view from below is a bit different. Security is still a major headache for most Baghdadis.

"The Americans haven't given us what we wanted," says this Shiite activist. "They promised us security. Where is it?"

Rumsfeld's prescription: more Iraqi responsibility for security on the ground, including more Iraqi police, border guards, and a reconstituted Iraqi army. Slowly, that force is emerging. To the sound of bagpipes, a group of Iraqi policemen marked completion of a three-week training program aimed at raising their awareness about human rights.

DONALD RUMSFELD, SECRETARY OF DEFENSE: There are important steps yet ahead. And they really are pretty much in the hands of the Iraqi people.

WEDEMAN: More than 50,000 Iraqis are already involved in security duties. But many more will be needed to stabilize the country.

Ben Wedeman, CNN, Baghdad.

(END VIDEOTAPE)

KING: While the Pentagon insists there are enough U.S. troops in Iraq, its coalition ally, Britain, is launching a review of the number of British forces in that country.

The British Defense Ministry says it has made no decision to change troop levels. But published reports in London say as many as 5,000 additional British soldiers could be sent to Iraq. There are currently about 11,000 British troops in southern Iraq. Elsewhere in the Middle East today, a blunt message from Palestinian Prime Minister Mahmoud Abbas. He told Palestinian leaders they should fire him if they are not prepared to fully support him. Abbas faces strong opposition to his support of the U.S.-led road map to peace with Israel.

Michael Holmes has that report from Ramallah on the West Bank.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (voice-over): The Palestinian prime minister arrived to a scene as chaotic as the political landscape he's having to navigate, outside the Palestinian Legislative Council, demonstrators, not many, but loud and at times dramatic.

Inside the council, strong words from the prime minister that Israel caused the breakdown of the Hamas and Islamic Jihad cease-fire with its military actions, criticism, too, of the U.S. position on isolating President Yasser Arafat, and acknowledgement, though, of what everyone already knew, that there are problems between he and Arafat, problems he said could be healed through legal means.

MAHMOUD ABBAS, PALESTINIAN PRIME MINISTER (through translator): It should never turn in any case whatsoever into an incentive in recruiting camps and serving private interests, where they will create a big rift.

HOLMES: Certainly, a sidelined Arafat is not content with that role and has the power to ignore it, Israel saying he cannot and will not be in the picture.

RAANAN GISSIN, ISRAELI SPOKESMAN: Arafat does not want the road map to peace. He does not want to move in that direction. And he's proven it time and again. He's the big spoiler.

HOLMES: And so, from a beleaguered prime minister, a warning. "I don't need this job," he said. "Trust me. Back me or fire me."

ABBAS (through translator): This is the trust you have given me. Either you provide me with all the strength and support, so I can be loyal to this trust, or take this trust back.

HOLMES: The speech also highlighted reforms undertaken by the Cabinet, some legislators, however, already painting a bleak future for the prime minister.

HANAN ASHRAWI, PALESTINIAN LEGISLATURE: This government I would say doesn't have a great deal of longevity.

HOLMES (on camera): Despite the prime minister's calls for unity, there is little doubt he is a long way from achieving it; 15 members of the Palestinian Legislative Council tabled a motion today, a motion of no-confidence in the prime minister and his government.

Now, if that motion is not withdrawn, it will be voted on behind closed doors by the council next week. Even those who proposed the vote say they realize that, if it passes and the prime minister is forced to resign, it will mean chaos in Palestinian politics.

Michael Holmes, CNN, Ramallah.

(END VIDEOTAPE)

KING: Coming up: "Grange on Point," keeping America's military the best in the world, while increasing its role around the world. General David Grange will join us.

Then: A two-year controversy over a judicial nominee is finally over. We'll have that story.

And thousands take to the National Mall in Washington, D.C. for a double celebration, honoring the country's troops and celebrating football. NFL commissioner Paul Tagliabue will be our guest.

(COMMERCIAL BREAK)

KING: Coming up: A major record company is slashing prices on your favorite C.D.s. It's a desperate move to win listeners away from the Internet and back into stores. Lisa Sylvester will have the report.

(COMMERCIAL BREAK)

KING: Returning now to one of our top stories,the cost of war in Iraq and the debate over whether U.S. forces are stretched too thin.

Tonight, in "Grange on Point," General David Grange examines the many challenges U.S. troops face in Iraq and around the world. General Grange is joining us from Washington.

Good evening, General.

In the past few days, we have seen this debate now spill out. One of your top concerns always is keeping the quality and the morale up in the U.S. military. How do you do that? They have plans to rotate these troops, but everyone says the military is stretched too thin. What do you believe will be the price to be paid if they don't get some reinforcements in?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, the key thing is, they may have enough forces to conduct the operation right now, but how do you maintain it? How do you sustain this commitment in Iraq and elsewhere around the world?

There's quite a hefty load put on the U.S. armed forces. And they're actually at a level from post-Cold War time; 1989-'90, when the Berlin Wall fell, they were reduced, at least the Army, almost 40 percent. Yet that has not changed with all the ongoing operations right now, like Afghanistan, Iraq, and in over 120 countries. So how do you maintain that? That's the big question.

KING: How do you keep them in, General? Obviously, these young men and women signed up to serve their country. But I don't think they envisioned being overseas all the time. Many, like you, have worn the uniform, been in command positions, say they worry that, when this is over or even in the middle, the lieutenants are going to leave and not re-up, others are going to leave and not re-up, because this is not what they signed up for, too much of a strain on their families.

What would the domino effect be and what can the administration do to stop it?

GRANGE: Well, first of all, to keep the morale up of the armed forces, you have to have a sense of purpose.

The soldier, the airman, the Marine, the sailor, they need to have a sense of purpose of mission accomplishment. I think that that's happening. The next is that they have to know that the American people are behind them, behind the missions they perform, behind -- caring for them. There are benefits in that. And the next thing is good leaders, commanders that not only are tough in battle and on these operations, but are compassionate, care about their welfare, care about having some type of rotation schedule that gives them a break, puts them back with their families, since over half of them are married now, compared, let's say, to the Vietnam days.

And then the last thing is that they have appropriate benefits, benefits right now, pay, time off, health benefits, and then those benefits also when they become veterans in retirement.

KING: What's your sense on the question facing the Congress now? Yes, it will give President Bush the money he needs for Iraq in the short term. Some say, though, that this lesson, one big lesson is, you need to add another division, perhaps two divisions, to the Army, if you want to keep this role in the world for the military. Do you share that view?

GRANGE: I do share that view.

You either have to increase the size of the military or reduce the tasks that they're given. The Army, for an example, the example you just used, I think at least two divisions. And it's not just the combat divisions. It's all the support troops that go along, the training base that goes along with those two divisions. And if you're going to maintain this type of commitment, which I believe the United States has to as a leader, with the commitments of our national interest abroad, that they have to raise the size of the United States military.

KING: You spoke earlier about a sense of mission, General. No disrespect intended at all for the brave young men and women over there, but some of the pictures we see coming back from Iraq, you see these troops walking the street like cops on the beat here in New York City, you see, in some cases, directing traffic.

Should those troops, in your view, be doing that, nation- building, if you will, nation-securing, anyway? And as they do that, does it detract from other training and experience that they should be getting?

GRANGE: Well, let me talk about the training.

You have to rotate the units, the troop units, so they get the maneuver training they need for combat, in case they're deployed to another war. Right now, they're in what's known as stability and support operations. And a lot of that is police-type work, peacekeeping-type work, with periods of combat. So it's really a mixture of all three that I mentioned. And you have to be ready for all three, which puts a lot of stress on the troops.

Now, they're ready for that, I believe, but it takes a lot of leadership from the sergeants, the lieutenants, the captains, the young officers that, by the way, have to keep -- stay with them that entire time that they're deployed on these missions.

KING: One of the big debates now, General, is trying to broaden the international cooperation with this force. You know how this works. Let's assume the administration, in the end, gets a resolution from the United Nations. That would take a period of weeks, perhaps even a couple of months. Let's say it happened six, eight weeks from now. How long would it take, conceivably, to get actual, real numbers of more international troops to come in, get transitioned into leadership at the point at which the Pentagon could say, we're comfortable now to bring some of our troops home?

GRANGE: Well, John, I do agree that they have to get the coalition forces in there, beef it up a bit with other nationalities.

It's going to take a while. I've waited on different missions quite a while for allies to show up. A lot of them just don't have the robustness that our armed forces has for a lot of these missions. And then you have to go ahead and assign those different nationalities the certain tasks that they can handle. They can't all handle the same type of missions. But in the meanwhile, the U.S. military handles the brunt of the missions.

KING: General David Grange, thank you for joining us, sir, tonight from Washington for your thoughts on this very critical issue.

(CROSSTALK)

KING: And coming up: the "State of the States." Tonight, in our series of special reports: New Mexico is one state that is investing in itself and its people. Governor Bill Richardson will join us.

Then: House Majority Whip Congressman Roy Blunt on charitable giving, the cost of war in Iraq, and much more. Congressman Blunt will be our guest.

And one music company takes a drastic step to draw customers back into stores and off the Internet. Lisa Sylvester has that report.

(COMMERCIAL BREAK)

KING: A bitter partisan battle over one of President Bush's judicial nominees is over. Miguel Estrada today asked the White House to withdraw his name from consideration. President Bush nominated Estrada two years ago to a seat on the federal court of appeals, but Senate Democrats filibustered the nomination, saying Estrada refused to answer questions on key issues like abortion and affirmative action.

In a letter to the president, Estrada said the time had come for him to return his attention to his law practice and his family.

It pays to be in politics. The House of Representatives has approved a congressional pay raise, the fifth in as many years. The 2.2 percent increase would boost the average salary of senators and representatives to $158,000. Congressional pay already ranks within the top 5 percent of the nation. That raise is included in a spending bill which has yet to reach the Senate floor.

This has been a big week for the music industry: the MTV Video Awards last Thursday, the Latin Grammys last night. But make no mistake about it. Record companies are in trouble. C.D. sales are down. Internet music downloading is up. And some say the talent pool has been drained. Now Universal Music is trying to boost its bottom line by slashing cd prices.

Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Instead of a cd costing $18 to $20, starting in October, you may be able to find your favorite artist for as little as 10 bucks. Universal Music Group, which makes about a third of all albums, is lowering its prices to lure consumers back to the stores.

JIM URIE, UNIVERSITY MUSIC & VIDEO DISTRIBUTION: This is a sweet-spot retail price for the consumer. We've done a lot of research, and we know that this is where the consumer lives and what the consumer wants.

SYLVESTER: Industry sales have fallen 10 percent this year alone, as more people have opted to download music. Universal's decision puts pressure on the other major record companies to lower their prices. But, so far, no one else has followed. Record companies say there are not many areas left to cut costs. For an $18 cd, nearly $7 pays for retail overhead; $4 goes to the record company, a little over $2 for distribution, just over $1.60 for artists' royalties, and the balance for other royalties, production, and packaging.

But it's not clear if cutting cd prices alone will make a difference with younger fans, who seem unfazed by Universal's news.

UNIDENTIFIED FEMALE: Why buy a cd when you can download it for free?

SYLVESTER: Another uncertainty is whether the retailers will pass on the full savings to the consumer. As part of the changes, Universal will no longer give discounts to stores to get prime positioning on shelves. That means less revenue for retailers. But it could balance out if stores are able to sell more cds at the lower prices.

ALAN LIGHT, MUSIC CRITIC: Retailers are so scared that they're just going to completely see the bottom drop out of their business, that, if their profit margin cuts down, cuts down is still better than disappears completely. So it'll take some readjustment.

(END VIDEOTAPE)

SYLVESTER: The Recording Industry of America is continuing its crackdown on music piracy. Beginning next week, the trade organization will file hundreds of lawsuits against individuals who have been illegally downloading music for free -- John.

KING: Lisa Sylvester in Washington -- thank you, Lisa.

And we want to hear your opinion tonight on one of our top stories about the military. Our poll question: What do you think the U.S. military needs to do to maintain its status as the world's finest, increase the number of service men and women, scale back missions around the world, both, or neither? Vote at CNN.com/Lou. We'll bring you the results later in the show.

Now the final results of yesterday's poll. We asked, who needs to do more in Iraq? Forty percent of you said the United Nations; 27 percent said the United States; 29 percent said Iraqis. And 4 percent said France and Germany.

Coming up: the "State of the States." Very few are in good financial shape. New Mexico is one of them. Tonight, New Mexico Governor Bill Richardson will be our guest.

Then: kicking off the football season in style. The NFL throws a party on the National Mall in Washington. NFL commissioner Paul Tagliabue will join us.

And it would be a high point in any climber's life, but for Keegan Reilly, it's just one stop on a very inspirational ride.

We'll have his remarkable story coming up.

(COMMERCIAL BREAK)

KING: Now more of our series of special reports on the "State of the States." We're looking at states that have managed to keep their finances in order.

New Mexico is one of the poorest states in the country, but the money it does have goes a long way.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNNfn CORRESPONDENT (voice-over): New Mexico's capital city, Santa Fe, is preparing an annual ritual, the burning of the zozobra. The giant paper marionette symbolizes leaving past troubles behind. It's an appropriate metaphor for a state mired near the bottom of national rankings in poverty and education.

But those conditions are improving, thanks largely to a fiscally responsible state government.

RICK HOMANS, NEW MEXICO ECONOMIC DEV. SECY.: We're in the black financially. We're the only state in the country that has just cut taxes by 40 percent. We just gave our teachers a 6 percent raise. We're investing in the state, compared to other states which have budgets that are hemorrhaging.

WIAN: While many states talk about investing in economic development, New Mexico is doing it literally. The state recently took a $10 million equity position in Eclipse Aviation, an Albuquerque company developing a low-cost private jet it hopes will spawn a national air taxi service.

VERN RABURN, PRES. & CEO., ECLIPSE AVIATION: It takes a lot of political courage to make an at-risk investment using state money.

WIAN: New Mexico plans to invest $200 million in other businesses creating high-paying jobs.

How can a state do that and still afford to cut taxes, raise teacher pay, and boost per-pupil spending by a third?

MICHAEL DAVIS, NEW MEXICO PUBLIO EDUCATION SUPT.: One thing we do is we live within our means, and we have had governors for a long time that have helped the legislature stay within the limits of spending.

WIAN: Such as former Republican Governor Gary Johnson.

GARY JOHNSON (R), FORMER GOVERNOR: I'd like to think it had -- it had everything to do with my last eight years as governor, and that had to do with vetoing 750 bills while I was in office, and that had to do with government was not going to spend more than what it took in.

WIAN: His successor, Democrat Bill Richardson, has identified more than 90 ways to save taxpayers about $380 million over the next five years.

(on camera): They range from big ideas such as collecting tens of millions of dollars a year in delinquent taxes to little ones such as requiring that government documents be copied on both sides of a piece of paper. Estimated annual savings, $500,000.

(voice-over): New Mexico also benefits from stable revenue streams from the energy industry and from Los Alamos and other federal research facilities. The state has added more than 12,000 jobs this year.

One company, contact lens maker Ocular Sciences, is bucking a national trend by cutting manufacturing jobs overseas and expanding in New Mexico.

Casey Wian, CNN, Santa Fe, New Mexico.

(END VIDEOTAPE)

KING: And joining me now is the governor of New Mexico and the former energy secretary, Bill Richardson. He joins us live from Albuquerque.

Governor, nice to see you.

I want to start with a lesson from Casey Wian's report right there. You have cut taxes recently in your state. You are hosting a debate tonight in your state. The Democratic candidates for president are out there. All of them would repeal some or all of the Bush tax cuts. Is that a dangerous message for the Democratic Party nationally? You're cutting taxes. They would, in effect, raise taxes.

GOV. BILL RICHARDSON (D), NEW MEXICO: It's important that the Democratic Party stand for economic growth issues, for entrepreneurship, for home ownership, and for cutting taxes. I cut taxes for the middle class. We went 40 percent from 8.2 percent in personal income to 4.9. Capital gains cut in half to attract business.

This is a tax so that we're competitive with our surrounding states that have been beating us for high-tech and industry and teachers and scientists. It's not trickle-down economics. It's simple economic growth messages that I think the Democrats need to develop. Talk about being the party of hope and opportunity, invest in our own resources and our own entrepreneurs. New Mexico is becoming...

KING: Let me jump in, governor. You're also a former ambassador to the United Nations, and you're being very diplomatic there.

Should you -- will you tell those nine Democrats there today you might want to rethink this. We do not want to be running nationally next year on a message that says we need to raise taxes.

RICHARDSON: Well, at the same time, John, in your report we have a balanced budget. We have a budget surplus because we've cut a lot of spending and a lot of waste. I think Democrats have a good message, a message of balancing the budget like President Clinton did, having a surplus, but at the same time targeted tax cuts for the middle class.

Yes, I have said to the national party and to my fellow candidates let's not have reflexive opposition to tax cuts. And they haven't done that. I think what we need is an economic growth message that connects with the American voter. The American voter, like Hispanics here in New Mexico, want jobs, want technology, want a stronger education system, and here in New Mexico we're proving that by not just cutting taxes but by balancing the budget. You can't have a cut in taxes without also being fiscally responsible. And here in New Mexico we're doing both.

KING: You served in the House of Representatives. You served in the Clinton cabinet. You are now a governor. Any surprise to you and any lesson, do you believe, in the early success of governor, former Governor Howard Dean running against these other major candidates who are from Washington?

RICHARDSON: Well, I have found, John, this is the best job I've ever had because as a governor you have to balance budgets. You actually set the agenda, you can fix potholes, you can create jobs, you can give health care, you can improve schools. I think those that are governors have advantages because they have actually managed budgets and set agendas, and I think this is why so many governors are elected president. It's not surprising that Governor Dean is ahead right now.

But the race is far from over. And here in New Mexico we're very proud to host the first debate. We're a battleground state with a large Hispanic population. And the presidential election, as far as we're concerned, starts here today.

KING: I think I've got this right, governor. All nine of these candidates are from the Midwest to the East. You've got them hostage tonight in New Mexico. One of these nine -- unless someone else gets into the race -- one of these nine is going to have to pick a running mate about a year or so from now. Are you going to tap them on the shoulder maybe say, Hey, here I am? What about me?

RICHARDSON: No, I've already been through that, John. Very happy being governor. I made a commitment to New Mexicans that I would stay, run for re-election, finish the job here. I've had plenty of Washington and New York. I love you guys over there, but I'm very happy here in New Mexico being a governor.

KING: Governor Bill Richardson, we may revisit this down the road, but we thank you for your time tonight, and good luck with the debate tonight, sir.

RICHARDSON: Thank you.

KING: Take care, Governor.

Coming up, House majority whip, Congressman Roy Blunt joins us to discuss his efforts to make charity more rewarding. He's the co- sponsor of the Charitable Giving Act, and he joins us next.

(COMMERCIAL BREAK)

KING: Missouri Congressman Roy Blunt has proposed new legislation that would help inject more money into the nation's charities. The House majority whip is also a point man for the Bush White House and a defining moment in the debate over war in Iraq.

Congressman Blunt joins us now from Washington.

Thank you for joining us, sir. I want to start with this question -- the administration is about to ask Congress for 60 billion, maybe $70 billion to keep paying for the war in Iraq. You are the whip. You count the votes. You're also just back from the August recess, where you got to talk to your constituents. What is the mood in the House, and what is the mood back home?

REP. BOY BLUNT, R-MISSOURI: I think both the mood back home where I live in southwest Missouri and in the two or three congressional districts I was in for other members is we've started a job here, we need to finish it, we need to be very aware of what the job is. It's clearly now more of an anti-terrorism policing job than a war fighting job. We need to transition to that new work.

In terms of the money necessary, I suppose there's a reasonable number that we have to keep in mind here, but members are committed to do this job, and we'll have a healthy debate certainly about the money that the president asked for. I don't know what that amount was going to be. I was at the White House yesterday. And the specific amount I saw in the press today was not mentioned.

In fact, the president said that they were still working on the right number, but the number that they proposed will be the number it took to get the job done and ensure stability and freedom for Iraq.

KING: Well, before the break there was a great deal of frustration from both Democrats and Republicans that the administration was not being more forthcoming about how much this would cost. You say the president didn't mention a specific number. I'm talking to people in the White House who are mentioning that number. Shouldn't they be telling you if they're telling me?

BLUNT: Well, they probably should. In fact, they shouldn't be telling you without telling us. Maybe they're telling you just to see how we react to that number when you mention it, whether it's the real number or not, I don't know. But obviously, if people in the White House are talking to you, we need to begin to get a sense of that number.

But we've got lots of other work to do. The important conferences on Medicare and prescription drugs, energy, finishing the appropriations process, irrespective of what happens in that supplemental. And then the Charitable Giving Act that Harold Ford and I have co-sponsored that you mentioned earlier, among the many things we still want to get done this year, John.

KING: Let's talk about that now. This program has explored that issue before. You mentioned Harold Ford, a Democrat you're co- sponsoring that with. The legislation would allow 86 million Americans who do not currently itemize to deduct charitable contributions. It also would allow to you give a tax-deductible charitable contribution from your IRA or 401(k). Soon to reach the president?

BLUNT: Soon to reach the president, I believe. We expect to see the bill on the floor in the couple of weeks. You mentioned what I've always felt were the two biggest items in this bill. 86 million Americans who don't itemize their taxes, many of them give to church and charity and do that without credit, without a tax incentive. We're trying to create that for those people that give to church and charity.

And there's $2 1/2 trillion in IRAs today. Many people barely have what they need in their IRAs. Many other people find out when they get to be 65 or 70 that really there's no way they're ever going to exhaust their IRA or need to, and they begin to think about how they could give it. We're trying to figure out how they could give that money without negative tax consequences.

KING: Hard to argue with your motive there, sir. Any worries at all that in this time of record deficits that people will say nice idea, sir, but we just can't afford that?

BLUNT: I don't think so. There is some cost the federal government certainly, when people give money to charity they don't pay tax on that money, and we're expecting this bill over ten years that they'd give about 50 billion more dollars to charity. I think most of the members on both sides of the aisle believe that charities, when they're focused, almost always do a better job delivering services than government does and do it so much more cost effectively.

And want to see our charities continue to be encouraged and continue to do good work. I believe we'll see this bill have easy success on the floor, in conference with the Senate. The Senate's already passed a similar bill and on the president's desk hopefully this year, John.

KING: Congressman Roy Blunt of Missouri, the House Majority Whip. Thank you for your time tonight, sir.

BLUNT: Good to be with you.

KING; Thank you.

And a reminder now to weigh in on tonight's poll. We want to know what do you think the U.S. military needs to do to maintain its status as the world's finest? Increase the number of servicemen and women? Scale back missions around the world? Both? or Neither? Cast your vote at CNN.com/lou. And we'll have the results for you a little later in the show.

And coming up -- the NFL kicks off its 2003 season in style in Washington, D.C. tonight as thousands gather on the National Mall to celebrate football in honor of the troops. NFL commissioner Paul Tagliabue joins us from Washington next.

(COMMERCIAL BREAK)

KING: The National Football League kicks off its new season tonight and for the second year in a row the event is being marked with a live concert. This time on the National Mall in Washington. Mary J. Blige, Britney Spears, Aerosmith, and others will entertain 20,000 U.S. troops, all in advance of a game tonight featuring the New York Jets and the Washington Redskins.

The NFL rides into this season as the professional league of arguably the most popular sport in America. NFL commissioner Paul Tagliabue joins us now from that concert scene in Washington.

Thank you for joining us, sir. I want to ask you first, as the season begins tonight, one of the preseason controversies has been injuries. The Jets, who will play the Redskins, will be without their starting quarterback. Michael Vick, one of the marquee players in the league, somebody fans around the country buy tickets to see, is out for a period of weeks. Some critics, some owners even within your league saying show the preseason, others saying this isn't tiddlywinks, this is what comes with the territory. Should the preseason be changed, sir?

PAUL TAGLIABUE, COMMISSIONER OF NFL: Well, I don't think there's any kind of a consensus to do that now. And you know, our sport is a sport that involves injuries. So whether it's the preseason or the regular season you're going to have unfortunately some players get hurt. But I don't think that alone is the reason for changing the preseason.

KING: We are week away from the second anniversary of September 11. You have put forward the idea of perhaps having the Super Bowl in New York or in Washington or both in memory of those events. Some others have said those are cold cities, you don't want to have the Super Bowl there. Any movement in that debate, sir? Any closer to a decision?

TAGLIAGUE: Well, we'll be making a decision on that in late October at our league meeting. Washington and New York will both be making presentations in competition with Arizona and Tampa Bay, and I think there's a pretty wide consensus among the owners that the right time we should have a game in one of those northern cities, New York or Washington, Nation's capital or the nation's commercial capital, and whether we get there this fall or not remains to be seen.

KING: An attorney for the family of Maurice Clarett, he's the suspended Ohio State running back, of course, the family attorney saying today that they're considering suing the NFL. Your rules currently would prohibit him from leaving college and coming into the NFL. You have been quite forceful on this issue. If such a suit were coming down the pike, sir, would you fight it?

TAGLIABUE: Yes, we would. We've made that clear. I think that our rule is very well crafted, and it's served everyone in sports, including the players very well. So we would defend it.

KING: There's a new show on ESPN which happens to be one of the networks that broadcasts NFL games, and it talks about players using drugs. It shows a football team, in one case an owner of a team, gives a heads-up to a player that he will be drug tested. Have you had any conversations at all with ESPN about that program, which certainly casts football in a not so favorable light, to say the least, sir? TAGLIABUE: Yes, we have. And our Players Association has spoken with ESPN. And everyone feels that it's a rather gross mischaracterization of our sport.

KING: You're sitting on the mall tonight. You have Britney Spears. You will have Aerosmith. Tell us about the importance, in your view, of events like this. Football has a pretty solid fan base, but obviously through something like this you're trying to reach out to unconventional audiences perhaps. Tell us about the strategy.

TAGLIABUE: Well, it really starts with the size of our fan base and the respect that the fans have for what our players do and what our teams do. On the field we feel like we're a meritocracy. There's great competition, culminating obviously in the Super Bowl.

Off the field our teams for decades have taken pride in being a big part of community and setting the mood and helping set the agenda in the not for profit sector. The last few years we've been trying to come up with new ways of doing that, supporting the military, paying tribute to those men and women in law enforcement and in public services that become so critical, not only in the defense of our nation from threats overseas, but threats internally here from potential terrorism and so on.

And tonight we're paying tribute to the military, to civilians who serve the public, and many, many of them are here. We've talked to the Defense Department about this, and I think it's a great way of giving back, saying thanks, and letting the fans have a lot of fun, including right here tonight, some of those members of the units that worked their way up into Baghdad during the military effort in Iraq.

KING: You have been commissioner, sir, since 1989. You also have said your dream job would be to be Secretary of State. The president's National Security Adviser, Condoleezza Rice, says she'd like your job. She'd like to be NFL commissioner. My day job, I work at the White House. Anything I can do to maybe help arrange a job swap here?

TAGLIABUE: Well, I don't know if we're ready for a job swap. Dr. Rice is a great football fan. I met her years ago out at Stanford at a Stanford-Notre Dame game. And we talk from time to time about football. But she's got much bigger, bigger priorities that she's responsible for, and she does a great job. We're just very pleased she's a fan.

KING: Commissioner Paul Tagliabue joining us today from the Washington Mall. Enjoy the concert, sir, and enjoy the game tonight.

TAGLIABUE: Thank you.

KING: Thank you, sir.

And coming up, the results of tonight's poll and Christine Romans will have the market. And we'll share some of your thoughts on last night's poll question. Many of you wrote in with suggestions about who needs to do more in Iraq. Your e-mails up next.

(COMMERCIAL BREAK)

KING: Now the results of tonight's poll question. What do you think the U.S. military needs to do to maintain its status as the world's best? 13 percent of you said increase the number of servicemen and women, 41 percent said scale back missions around the world, 32 percent said both, and 13 percent neither.

Turning to stocks, the Nasdaq today scored its seventh straight winning session. The Dow also rose, adding 19 points. The Nasdaq 16. The S&P added nearly two. Christine Romans has more on the markets -- Christine.

CHISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well, John, the rally today wasn't that huge, but when you look at the winning streak it's been pretty good. Take a look at this longest winning streak for the Nasdaq since 2000. And five consecutive days in a row now it's hit 52-week highs. That's something that hasn't happened Since February 1999, remember back then?

Meanwhile, the S&P 500 is up eight straight days, its best streak since this March. Today's gains come despite disappointing jobs data. The number of people filing for unemployment benefits rose unexpectedly last week, and the prior week's jobless claims were revised higher.

Now, many brushed off that bad news in favor of good news on productivity. As worker efficiency surges, employers can put off hiring workers. That's good news for profits, bad news for the unemployed. But enthusiasm for stocks continues.

In the latest week more than $3 billion was put to work in stock mutual funds. That's almost double the prior week's take. And look at bond funds. Another 2.7 billion. This current rally has been broad-based. Volume's been improving. The overall view continues to be, John, the economy is improving and jobs will eventually follow.

KING: Christine Romans, thank you. We'll see if we keep the streak alive tomorrow.

And now for a look at some of your thoughts. Tim Shoreman from Baltimore wrote about our poll question, asking who needs to do more in Iraq. He said, "I voted for the United States. The administration dragged us into Iraq, despite world opinion. It is no ones mess to clean up, but our own.

Frank from Elcorn, Kentucky said, "It would really help if the people of Iraq would actually lend a hand in the process of rebuilding their country, don't you think?"

William Hamilton from Holliday, Florida wrote about the United States request to the United Nations for help in Iraq, "France and Germany want to get their fingers into the Iraq pie," he wrote, "That is the real reason behind asking the United Nations to join the fray." Michael Mason of Queens, New York said, "Thank god George W. Bush is our president. If we waited for the United Nations or France or Johnny Weasel Depp to give us approval, I am sure more of my brother firefighters would be dead by now. If they aren't mortified by not helping us in the first place, or offering us any assistance, they can give us now, then they really are irrelevant."

We love hearing from you. Please send those emails and other thoughts to us at loudobbs@cnn.com.

And finally tonight, a story of extraordinary challenge and courage from the top of Japan. American Keigan Riley today, because the first paraplegic to climb Japan's Mt. Fuji. The 22 year-old Oregon State University student lost the use of his legs in a car accident 6 years ago. He climbed all 12,385 feet using an arm powered, 4 wheel cycle.

Here's how he described the challenge and the reward.

(BEGIN VIDEOTAPE)

KEIGAN RILEY, CLIMBED MT. FUJI: After all this hard work and finally getting up here is the best thing in the world. My heart's pounding. I'm so excited to be here. I feel the joy. I can't believe we made it.

I just kind of want to show people what's out there. And maybe they can see what I'm doing and maybe it would encourage them too to do it, even to just get out into a park or something, or anything. It's just -- there's opportunity out there to -- even some of the mountains.

I'm just king of showing people the technology is out there.

I couldn't make it without my team and I'm just very honored to be here. And on top of Mt. Fuji. It's the greatest feeling in the world pretty much.

(END VIDEOTAPE)

KING: Remarkable. That's our show tonight. Thanks for joining us.

Tomorrow in our "State of the State" series, a look at Minnesota with Governor Tim Pawlenty. Country music legend Willy Nealson joins us. And editors from "Fortune", "Forbes" and "Businessweek" join us in our "Editor's Circle".

For all of us here, good night from New York. "LIVE FROM THE HEADLINES" with Daryn Kagan is next.

END

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Kicks Off New Season With Concert On National Mall>


Aired September 4, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Sticker shock on Capitol Hill over the cost of war in Iraq. President Bush wants at least $60 billion more. How much is enough? Kitty Pilgrim will have our report.
It's a tough sell on Iraq overseas as well. The Europeans who opposed the president over the war say no again. Jim Bittermann will report from Paris.

Cheaper music could be on the way. One big entertainment company cuts back the price of cds to win back customers who download their music. Will the strategy work?

And, are you ready for some football? The NFL kicks off the new season with a huge party on the National Mall. NFL Commissioner Paul Tagliabue will join us live.

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, September 4. Sitting in for the vacationing Lou Dobbs, John King.

KING: Good evening.

Tonight: the massive and growing cost to taxpayers of the war in Iraq. The White House is about to ask Congress for at least $60 billion more to help pay for the war and the cost of peacekeeping and reconstruction. There is little doubt that, in the end, the president will get the money. But first, the White House has to answer some tough questions on Capitol Hill about the direction of U.S. policy.

For more on that, White House correspondent Dana Bash joins us now -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Hi, John.

Well, the president was actually in Missouri today talking up the economy. It was his second of three stops in Midwest states to talk about the economy in just one week this week. He talked about, of course, his tax cut plan, vigorously defended that, saying that that helped to blunt the blow of the recession and really was sort of a suggestion that his Democratic critics were wrong in saying that that tax cut should be repealed.

But he also gave some prescriptions for helping the economy in the future, talked about his signature call to hold down congressional spending. And he said that just as the White House is preparing, as you said, to send to Congress a request for a lot of money to help pay for Iraq, perhaps in the ballpark of $60 billion to $65 billion, although White House officials say that all of the numbers are still being worked out.

And Republicans on Capitol Hill and Democrats are saying that, surely, they understand that the war effort needs to be supported by whatever money it does take, but that the White House is going to have to justify that. And Paul Wolfowitz, the president's deputy defense secretary, was on the Hill today. He was talking to members of Congress. And he was defending the whole idea of the postwar planning in Iraq, saying that it was OK.

(BEGIN VIDEO CLIP)

PAUL WOLFOWITZ, DEPUTY DEFENSE SECRETARY: Look, there's been a lot of planning for all phases of this war. And many aspects of the plan, I think, have been spectacularly successful. Any plan has got to adjust to realities you find on the ground. And this plan has been adjusting steadily.

(END VIDEO CLIP)

BASH: Meanwhile, of course, the administration is turning to the United Nations, trying to get a resolution passed there in order to get more help with the cost of rebuilding and the military in Iraq. Democrats are saying that that is certainly welcome. They wanted the president to go to the U.N. for some time. But they're also saying it's proof that the administration's prewar planning for what is going on right now just wasn't justified.

And the top Democrat in the House attacked the whole idea of the president going out in the near future and talking up the situation in Iraq in kind of a P.R. campaign that might be to come.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), MINORITY LEADER: The president is accountable. And if he thinks the answer, if he thinks the answer to his misguided policies in Iraq is to have a P.R. campaign to sugarcoat it, I think he is going to -- he insults the intelligence of the American people.

(END VIDEO CLIP)

BASH: And, John, as we get closer and closer to the election, that is the kind of rhetoric we're sure we'll hear more from Democrats, certainly very different from what we were hearing from Democrats on Capitol Hill this time last year, when the whole discussion of going to war in Iraq was being had -- John.

KING: Dana Bash at the White House, thank you.

Now, the president's policy on Iraq is not only a tough sell on Capitol Hill. It's also facing strong opposition in Europe. France and Germany, of course, opposed the war against Saddam Hussein. They are now saying no to the president's plan for United Nations help in Iraq, no at least for now.

Jim Bittermann reports from Paris. (BEGIN VIDEOTAPE)

JIM BITTERMANN, CNN CORRESPONDENT (voice-over): The French president and German chancellor chewed over Washington's proposal at lunch during their summit in Dresden, Germany, and found it difficult to digest.

JACQUES CHIRAC, FRENCH PRESIDENT (through translator): It does appear to be really rather far from the main objective, which is that of transferring political responsibility to an Iraqi government as soon as possible.

GERHARD SCHROEDER, GERMAN CHANCELLOR (through translator): I would agree with the president. He says it's not dynamic enough, it doesn't go far enough. Hence, it doesn't make sense to talk about the details at this stage.

BITTERMANN: Both leaders opposed the U.S. war in Iraq and seem again in agreement on postwar reconstruction, saying the United Nations has to be in charge of the political transition in Iraq.

U.S. Secretary of State Colin Powell insists, that's not on the table and that Washington should retain political and military control. But under the draft resolution, the U.S. would periodically report to the U.N. Security Council.

COLIN POWELL, SECRETARY OF STATE: I think the resolution is drafted in a way that deals with the concerns that leaders such as President Chirac and Chancellor Schroeder have raised in the past. And if they have suggestions, we would be more than happy to listen to their suggestions.

BITTERMANN (on camera): While there seemed good intent on both sides to avoid another bruising trans-Atlantic collision over Iraq, one fundamental has not changed since before the war. France and other countries will resist U.S. domination of world affairs, if it's not through the United Nations.

Jim Bittermann, CNN, Paris.

(END VIDEOTAPE)

KING: Now, the new war budget being drawn up BY the White House is just the latest installment. And as the price tag grows, Congress is asking more and more questions. By some estimates, the war costs could be hundreds of billions of dollars. Those are numbers the administration once dismissed as misguided speculation.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT: (voice-over): During the heavy fighting phase of the Iraq war, experts say the burn rate on money was more than $1 billion a week, $4 billion a month. Now, during occupation, with more than 140,000 troops still there, the Department of Defense estimates, the costs are not that much lower, $3.9 billion a month. That includes military operations, transportation, and supplies -- President Bush today unapologetic about the money.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My attitude is, any time we put one our soldiers in harm's way, we're going to spend what is ever necessary to make sure they have the best training, the best support, and the best possible equipment.

PILGRIM: War is expensive.

STEVEN KOSIAK, CENTER FOR STRATEGIC BUDGETARY ASSESSMENTS: It is certainly difficult to estimate the costs of a war before you fight it, because you don't know how long it's going to last. You don't know how many casualties there are going to be. You don't know how much equipment equipment's going to be lost. But I think the administration probably could have done a better job in anticipating that there would be some substantial costs related to occupation duties after the war.

PILGRIM: Even before the war, the estimates on its costs were burdened with controversy. Last September, economic adviser to the president Larry Lindsey estimated the cost at between $100 billion to $200 billion, a shocking number at the time. Now reconstruction costs are routinely cited in that range.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: So $100 billion seems about right, maybe even low. There have been estimates now as high as $200 billion. It actually make sense that, in a country the size of Iraq with the amount of infrastructure that Iraq has, when you piece together all the infrastructural needs, you could easily reach $100 billion.

(END VIDEOTAPE)

PILGRIM: Now, the Pentagon is expected to ask for about $60 billion more for fiscal 2004. That would also include operations in Afghanistan. That's about a million a month. Nobody is willing to go too far out on the cost projections, because there's really no idea when the troops will come home -- John.

KING: Kitty Pilgrim, thank you very much.

Another reminder today of the dangers facing U.S. troops in Iraq. Soldiers from the 4th Infantry Division fought a fierce battle with suspected Saddam Hussein loyalists in Tikrit, the former Iraqi leader's hometown -- attacked a patrol with smalls-arms fire and rocket-propelled grenades. The patrol was in the area after a U.S. base came under mortar fire. At least one house caught fire during the battle. After the fire subsided, the soldiers rounded up suspects and found a cache of weapons.

Military leaders say they have enough troops in Iraq to deal with terrorists who are attacking coalition forces and setting off car bombs. That view is expressed most forcefully and most frequently by Defense Secretary Donald Rumsfeld. He arrived in Baghdad today, saying Iraqis need to play a bigger role in security. Ben Wedeman has our report from Baghdad.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): A march in the streets of Baghdad, Shiites mourning the leader killed in a car bombing in the holy city of Najaf last week, his death and the tensions it sparked just the latest in a long list of woes that has plagued the U.S.-led coalition as it tries to rebuild this battered country.

Iraqis have a lot on their minds these days, rising ethnic and sectarian tensions, rampant crime, terrorism, economic disorder, for an unexpected visitor, an awful lot to contemplate.

(on camera): Secretary Rumsfeld comes to a country that has been shaken by four massive car bombings and the assassination of a senior Shiite cleric, all the while attacks against U.S. forces show no sign of stopping.

(voice-over): It all looks much more placid from the air. Before touching down, Secretary Rumsfeld took a turn over the city. The view from below is a bit different. Security is still a major headache for most Baghdadis.

"The Americans haven't given us what we wanted," says this Shiite activist. "They promised us security. Where is it?"

Rumsfeld's prescription: more Iraqi responsibility for security on the ground, including more Iraqi police, border guards, and a reconstituted Iraqi army. Slowly, that force is emerging. To the sound of bagpipes, a group of Iraqi policemen marked completion of a three-week training program aimed at raising their awareness about human rights.

DONALD RUMSFELD, SECRETARY OF DEFENSE: There are important steps yet ahead. And they really are pretty much in the hands of the Iraqi people.

WEDEMAN: More than 50,000 Iraqis are already involved in security duties. But many more will be needed to stabilize the country.

Ben Wedeman, CNN, Baghdad.

(END VIDEOTAPE)

KING: While the Pentagon insists there are enough U.S. troops in Iraq, its coalition ally, Britain, is launching a review of the number of British forces in that country.

The British Defense Ministry says it has made no decision to change troop levels. But published reports in London say as many as 5,000 additional British soldiers could be sent to Iraq. There are currently about 11,000 British troops in southern Iraq. Elsewhere in the Middle East today, a blunt message from Palestinian Prime Minister Mahmoud Abbas. He told Palestinian leaders they should fire him if they are not prepared to fully support him. Abbas faces strong opposition to his support of the U.S.-led road map to peace with Israel.

Michael Holmes has that report from Ramallah on the West Bank.

(BEGIN VIDEOTAPE)

MICHAEL HOLMES, CNN CORRESPONDENT (voice-over): The Palestinian prime minister arrived to a scene as chaotic as the political landscape he's having to navigate, outside the Palestinian Legislative Council, demonstrators, not many, but loud and at times dramatic.

Inside the council, strong words from the prime minister that Israel caused the breakdown of the Hamas and Islamic Jihad cease-fire with its military actions, criticism, too, of the U.S. position on isolating President Yasser Arafat, and acknowledgement, though, of what everyone already knew, that there are problems between he and Arafat, problems he said could be healed through legal means.

MAHMOUD ABBAS, PALESTINIAN PRIME MINISTER (through translator): It should never turn in any case whatsoever into an incentive in recruiting camps and serving private interests, where they will create a big rift.

HOLMES: Certainly, a sidelined Arafat is not content with that role and has the power to ignore it, Israel saying he cannot and will not be in the picture.

RAANAN GISSIN, ISRAELI SPOKESMAN: Arafat does not want the road map to peace. He does not want to move in that direction. And he's proven it time and again. He's the big spoiler.

HOLMES: And so, from a beleaguered prime minister, a warning. "I don't need this job," he said. "Trust me. Back me or fire me."

ABBAS (through translator): This is the trust you have given me. Either you provide me with all the strength and support, so I can be loyal to this trust, or take this trust back.

HOLMES: The speech also highlighted reforms undertaken by the Cabinet, some legislators, however, already painting a bleak future for the prime minister.

HANAN ASHRAWI, PALESTINIAN LEGISLATURE: This government I would say doesn't have a great deal of longevity.

HOLMES (on camera): Despite the prime minister's calls for unity, there is little doubt he is a long way from achieving it; 15 members of the Palestinian Legislative Council tabled a motion today, a motion of no-confidence in the prime minister and his government.

Now, if that motion is not withdrawn, it will be voted on behind closed doors by the council next week. Even those who proposed the vote say they realize that, if it passes and the prime minister is forced to resign, it will mean chaos in Palestinian politics.

Michael Holmes, CNN, Ramallah.

(END VIDEOTAPE)

KING: Coming up: "Grange on Point," keeping America's military the best in the world, while increasing its role around the world. General David Grange will join us.

Then: A two-year controversy over a judicial nominee is finally over. We'll have that story.

And thousands take to the National Mall in Washington, D.C. for a double celebration, honoring the country's troops and celebrating football. NFL commissioner Paul Tagliabue will be our guest.

(COMMERCIAL BREAK)

KING: Coming up: A major record company is slashing prices on your favorite C.D.s. It's a desperate move to win listeners away from the Internet and back into stores. Lisa Sylvester will have the report.

(COMMERCIAL BREAK)

KING: Returning now to one of our top stories,the cost of war in Iraq and the debate over whether U.S. forces are stretched too thin.

Tonight, in "Grange on Point," General David Grange examines the many challenges U.S. troops face in Iraq and around the world. General Grange is joining us from Washington.

Good evening, General.

In the past few days, we have seen this debate now spill out. One of your top concerns always is keeping the quality and the morale up in the U.S. military. How do you do that? They have plans to rotate these troops, but everyone says the military is stretched too thin. What do you believe will be the price to be paid if they don't get some reinforcements in?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, the key thing is, they may have enough forces to conduct the operation right now, but how do you maintain it? How do you sustain this commitment in Iraq and elsewhere around the world?

There's quite a hefty load put on the U.S. armed forces. And they're actually at a level from post-Cold War time; 1989-'90, when the Berlin Wall fell, they were reduced, at least the Army, almost 40 percent. Yet that has not changed with all the ongoing operations right now, like Afghanistan, Iraq, and in over 120 countries. So how do you maintain that? That's the big question.

KING: How do you keep them in, General? Obviously, these young men and women signed up to serve their country. But I don't think they envisioned being overseas all the time. Many, like you, have worn the uniform, been in command positions, say they worry that, when this is over or even in the middle, the lieutenants are going to leave and not re-up, others are going to leave and not re-up, because this is not what they signed up for, too much of a strain on their families.

What would the domino effect be and what can the administration do to stop it?

GRANGE: Well, first of all, to keep the morale up of the armed forces, you have to have a sense of purpose.

The soldier, the airman, the Marine, the sailor, they need to have a sense of purpose of mission accomplishment. I think that that's happening. The next is that they have to know that the American people are behind them, behind the missions they perform, behind -- caring for them. There are benefits in that. And the next thing is good leaders, commanders that not only are tough in battle and on these operations, but are compassionate, care about their welfare, care about having some type of rotation schedule that gives them a break, puts them back with their families, since over half of them are married now, compared, let's say, to the Vietnam days.

And then the last thing is that they have appropriate benefits, benefits right now, pay, time off, health benefits, and then those benefits also when they become veterans in retirement.

KING: What's your sense on the question facing the Congress now? Yes, it will give President Bush the money he needs for Iraq in the short term. Some say, though, that this lesson, one big lesson is, you need to add another division, perhaps two divisions, to the Army, if you want to keep this role in the world for the military. Do you share that view?

GRANGE: I do share that view.

You either have to increase the size of the military or reduce the tasks that they're given. The Army, for an example, the example you just used, I think at least two divisions. And it's not just the combat divisions. It's all the support troops that go along, the training base that goes along with those two divisions. And if you're going to maintain this type of commitment, which I believe the United States has to as a leader, with the commitments of our national interest abroad, that they have to raise the size of the United States military.

KING: You spoke earlier about a sense of mission, General. No disrespect intended at all for the brave young men and women over there, but some of the pictures we see coming back from Iraq, you see these troops walking the street like cops on the beat here in New York City, you see, in some cases, directing traffic.

Should those troops, in your view, be doing that, nation- building, if you will, nation-securing, anyway? And as they do that, does it detract from other training and experience that they should be getting?

GRANGE: Well, let me talk about the training.

You have to rotate the units, the troop units, so they get the maneuver training they need for combat, in case they're deployed to another war. Right now, they're in what's known as stability and support operations. And a lot of that is police-type work, peacekeeping-type work, with periods of combat. So it's really a mixture of all three that I mentioned. And you have to be ready for all three, which puts a lot of stress on the troops.

Now, they're ready for that, I believe, but it takes a lot of leadership from the sergeants, the lieutenants, the captains, the young officers that, by the way, have to keep -- stay with them that entire time that they're deployed on these missions.

KING: One of the big debates now, General, is trying to broaden the international cooperation with this force. You know how this works. Let's assume the administration, in the end, gets a resolution from the United Nations. That would take a period of weeks, perhaps even a couple of months. Let's say it happened six, eight weeks from now. How long would it take, conceivably, to get actual, real numbers of more international troops to come in, get transitioned into leadership at the point at which the Pentagon could say, we're comfortable now to bring some of our troops home?

GRANGE: Well, John, I do agree that they have to get the coalition forces in there, beef it up a bit with other nationalities.

It's going to take a while. I've waited on different missions quite a while for allies to show up. A lot of them just don't have the robustness that our armed forces has for a lot of these missions. And then you have to go ahead and assign those different nationalities the certain tasks that they can handle. They can't all handle the same type of missions. But in the meanwhile, the U.S. military handles the brunt of the missions.

KING: General David Grange, thank you for joining us, sir, tonight from Washington for your thoughts on this very critical issue.

(CROSSTALK)

KING: And coming up: the "State of the States." Tonight, in our series of special reports: New Mexico is one state that is investing in itself and its people. Governor Bill Richardson will join us.

Then: House Majority Whip Congressman Roy Blunt on charitable giving, the cost of war in Iraq, and much more. Congressman Blunt will be our guest.

And one music company takes a drastic step to draw customers back into stores and off the Internet. Lisa Sylvester has that report.

(COMMERCIAL BREAK)

KING: A bitter partisan battle over one of President Bush's judicial nominees is over. Miguel Estrada today asked the White House to withdraw his name from consideration. President Bush nominated Estrada two years ago to a seat on the federal court of appeals, but Senate Democrats filibustered the nomination, saying Estrada refused to answer questions on key issues like abortion and affirmative action.

In a letter to the president, Estrada said the time had come for him to return his attention to his law practice and his family.

It pays to be in politics. The House of Representatives has approved a congressional pay raise, the fifth in as many years. The 2.2 percent increase would boost the average salary of senators and representatives to $158,000. Congressional pay already ranks within the top 5 percent of the nation. That raise is included in a spending bill which has yet to reach the Senate floor.

This has been a big week for the music industry: the MTV Video Awards last Thursday, the Latin Grammys last night. But make no mistake about it. Record companies are in trouble. C.D. sales are down. Internet music downloading is up. And some say the talent pool has been drained. Now Universal Music is trying to boost its bottom line by slashing cd prices.

Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Instead of a cd costing $18 to $20, starting in October, you may be able to find your favorite artist for as little as 10 bucks. Universal Music Group, which makes about a third of all albums, is lowering its prices to lure consumers back to the stores.

JIM URIE, UNIVERSITY MUSIC & VIDEO DISTRIBUTION: This is a sweet-spot retail price for the consumer. We've done a lot of research, and we know that this is where the consumer lives and what the consumer wants.

SYLVESTER: Industry sales have fallen 10 percent this year alone, as more people have opted to download music. Universal's decision puts pressure on the other major record companies to lower their prices. But, so far, no one else has followed. Record companies say there are not many areas left to cut costs. For an $18 cd, nearly $7 pays for retail overhead; $4 goes to the record company, a little over $2 for distribution, just over $1.60 for artists' royalties, and the balance for other royalties, production, and packaging.

But it's not clear if cutting cd prices alone will make a difference with younger fans, who seem unfazed by Universal's news.

UNIDENTIFIED FEMALE: Why buy a cd when you can download it for free?

SYLVESTER: Another uncertainty is whether the retailers will pass on the full savings to the consumer. As part of the changes, Universal will no longer give discounts to stores to get prime positioning on shelves. That means less revenue for retailers. But it could balance out if stores are able to sell more cds at the lower prices.

ALAN LIGHT, MUSIC CRITIC: Retailers are so scared that they're just going to completely see the bottom drop out of their business, that, if their profit margin cuts down, cuts down is still better than disappears completely. So it'll take some readjustment.

(END VIDEOTAPE)

SYLVESTER: The Recording Industry of America is continuing its crackdown on music piracy. Beginning next week, the trade organization will file hundreds of lawsuits against individuals who have been illegally downloading music for free -- John.

KING: Lisa Sylvester in Washington -- thank you, Lisa.

And we want to hear your opinion tonight on one of our top stories about the military. Our poll question: What do you think the U.S. military needs to do to maintain its status as the world's finest, increase the number of service men and women, scale back missions around the world, both, or neither? Vote at CNN.com/Lou. We'll bring you the results later in the show.

Now the final results of yesterday's poll. We asked, who needs to do more in Iraq? Forty percent of you said the United Nations; 27 percent said the United States; 29 percent said Iraqis. And 4 percent said France and Germany.

Coming up: the "State of the States." Very few are in good financial shape. New Mexico is one of them. Tonight, New Mexico Governor Bill Richardson will be our guest.

Then: kicking off the football season in style. The NFL throws a party on the National Mall in Washington. NFL commissioner Paul Tagliabue will join us.

And it would be a high point in any climber's life, but for Keegan Reilly, it's just one stop on a very inspirational ride.

We'll have his remarkable story coming up.

(COMMERCIAL BREAK)

KING: Now more of our series of special reports on the "State of the States." We're looking at states that have managed to keep their finances in order.

New Mexico is one of the poorest states in the country, but the money it does have goes a long way.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNNfn CORRESPONDENT (voice-over): New Mexico's capital city, Santa Fe, is preparing an annual ritual, the burning of the zozobra. The giant paper marionette symbolizes leaving past troubles behind. It's an appropriate metaphor for a state mired near the bottom of national rankings in poverty and education.

But those conditions are improving, thanks largely to a fiscally responsible state government.

RICK HOMANS, NEW MEXICO ECONOMIC DEV. SECY.: We're in the black financially. We're the only state in the country that has just cut taxes by 40 percent. We just gave our teachers a 6 percent raise. We're investing in the state, compared to other states which have budgets that are hemorrhaging.

WIAN: While many states talk about investing in economic development, New Mexico is doing it literally. The state recently took a $10 million equity position in Eclipse Aviation, an Albuquerque company developing a low-cost private jet it hopes will spawn a national air taxi service.

VERN RABURN, PRES. & CEO., ECLIPSE AVIATION: It takes a lot of political courage to make an at-risk investment using state money.

WIAN: New Mexico plans to invest $200 million in other businesses creating high-paying jobs.

How can a state do that and still afford to cut taxes, raise teacher pay, and boost per-pupil spending by a third?

MICHAEL DAVIS, NEW MEXICO PUBLIO EDUCATION SUPT.: One thing we do is we live within our means, and we have had governors for a long time that have helped the legislature stay within the limits of spending.

WIAN: Such as former Republican Governor Gary Johnson.

GARY JOHNSON (R), FORMER GOVERNOR: I'd like to think it had -- it had everything to do with my last eight years as governor, and that had to do with vetoing 750 bills while I was in office, and that had to do with government was not going to spend more than what it took in.

WIAN: His successor, Democrat Bill Richardson, has identified more than 90 ways to save taxpayers about $380 million over the next five years.

(on camera): They range from big ideas such as collecting tens of millions of dollars a year in delinquent taxes to little ones such as requiring that government documents be copied on both sides of a piece of paper. Estimated annual savings, $500,000.

(voice-over): New Mexico also benefits from stable revenue streams from the energy industry and from Los Alamos and other federal research facilities. The state has added more than 12,000 jobs this year.

One company, contact lens maker Ocular Sciences, is bucking a national trend by cutting manufacturing jobs overseas and expanding in New Mexico.

Casey Wian, CNN, Santa Fe, New Mexico.

(END VIDEOTAPE)

KING: And joining me now is the governor of New Mexico and the former energy secretary, Bill Richardson. He joins us live from Albuquerque.

Governor, nice to see you.

I want to start with a lesson from Casey Wian's report right there. You have cut taxes recently in your state. You are hosting a debate tonight in your state. The Democratic candidates for president are out there. All of them would repeal some or all of the Bush tax cuts. Is that a dangerous message for the Democratic Party nationally? You're cutting taxes. They would, in effect, raise taxes.

GOV. BILL RICHARDSON (D), NEW MEXICO: It's important that the Democratic Party stand for economic growth issues, for entrepreneurship, for home ownership, and for cutting taxes. I cut taxes for the middle class. We went 40 percent from 8.2 percent in personal income to 4.9. Capital gains cut in half to attract business.

This is a tax so that we're competitive with our surrounding states that have been beating us for high-tech and industry and teachers and scientists. It's not trickle-down economics. It's simple economic growth messages that I think the Democrats need to develop. Talk about being the party of hope and opportunity, invest in our own resources and our own entrepreneurs. New Mexico is becoming...

KING: Let me jump in, governor. You're also a former ambassador to the United Nations, and you're being very diplomatic there.

Should you -- will you tell those nine Democrats there today you might want to rethink this. We do not want to be running nationally next year on a message that says we need to raise taxes.

RICHARDSON: Well, at the same time, John, in your report we have a balanced budget. We have a budget surplus because we've cut a lot of spending and a lot of waste. I think Democrats have a good message, a message of balancing the budget like President Clinton did, having a surplus, but at the same time targeted tax cuts for the middle class.

Yes, I have said to the national party and to my fellow candidates let's not have reflexive opposition to tax cuts. And they haven't done that. I think what we need is an economic growth message that connects with the American voter. The American voter, like Hispanics here in New Mexico, want jobs, want technology, want a stronger education system, and here in New Mexico we're proving that by not just cutting taxes but by balancing the budget. You can't have a cut in taxes without also being fiscally responsible. And here in New Mexico we're doing both.

KING: You served in the House of Representatives. You served in the Clinton cabinet. You are now a governor. Any surprise to you and any lesson, do you believe, in the early success of governor, former Governor Howard Dean running against these other major candidates who are from Washington?

RICHARDSON: Well, I have found, John, this is the best job I've ever had because as a governor you have to balance budgets. You actually set the agenda, you can fix potholes, you can create jobs, you can give health care, you can improve schools. I think those that are governors have advantages because they have actually managed budgets and set agendas, and I think this is why so many governors are elected president. It's not surprising that Governor Dean is ahead right now.

But the race is far from over. And here in New Mexico we're very proud to host the first debate. We're a battleground state with a large Hispanic population. And the presidential election, as far as we're concerned, starts here today.

KING: I think I've got this right, governor. All nine of these candidates are from the Midwest to the East. You've got them hostage tonight in New Mexico. One of these nine -- unless someone else gets into the race -- one of these nine is going to have to pick a running mate about a year or so from now. Are you going to tap them on the shoulder maybe say, Hey, here I am? What about me?

RICHARDSON: No, I've already been through that, John. Very happy being governor. I made a commitment to New Mexicans that I would stay, run for re-election, finish the job here. I've had plenty of Washington and New York. I love you guys over there, but I'm very happy here in New Mexico being a governor.

KING: Governor Bill Richardson, we may revisit this down the road, but we thank you for your time tonight, and good luck with the debate tonight, sir.

RICHARDSON: Thank you.

KING: Take care, Governor.

Coming up, House majority whip, Congressman Roy Blunt joins us to discuss his efforts to make charity more rewarding. He's the co- sponsor of the Charitable Giving Act, and he joins us next.

(COMMERCIAL BREAK)

KING: Missouri Congressman Roy Blunt has proposed new legislation that would help inject more money into the nation's charities. The House majority whip is also a point man for the Bush White House and a defining moment in the debate over war in Iraq.

Congressman Blunt joins us now from Washington.

Thank you for joining us, sir. I want to start with this question -- the administration is about to ask Congress for 60 billion, maybe $70 billion to keep paying for the war in Iraq. You are the whip. You count the votes. You're also just back from the August recess, where you got to talk to your constituents. What is the mood in the House, and what is the mood back home?

REP. BOY BLUNT, R-MISSOURI: I think both the mood back home where I live in southwest Missouri and in the two or three congressional districts I was in for other members is we've started a job here, we need to finish it, we need to be very aware of what the job is. It's clearly now more of an anti-terrorism policing job than a war fighting job. We need to transition to that new work.

In terms of the money necessary, I suppose there's a reasonable number that we have to keep in mind here, but members are committed to do this job, and we'll have a healthy debate certainly about the money that the president asked for. I don't know what that amount was going to be. I was at the White House yesterday. And the specific amount I saw in the press today was not mentioned.

In fact, the president said that they were still working on the right number, but the number that they proposed will be the number it took to get the job done and ensure stability and freedom for Iraq.

KING: Well, before the break there was a great deal of frustration from both Democrats and Republicans that the administration was not being more forthcoming about how much this would cost. You say the president didn't mention a specific number. I'm talking to people in the White House who are mentioning that number. Shouldn't they be telling you if they're telling me?

BLUNT: Well, they probably should. In fact, they shouldn't be telling you without telling us. Maybe they're telling you just to see how we react to that number when you mention it, whether it's the real number or not, I don't know. But obviously, if people in the White House are talking to you, we need to begin to get a sense of that number.

But we've got lots of other work to do. The important conferences on Medicare and prescription drugs, energy, finishing the appropriations process, irrespective of what happens in that supplemental. And then the Charitable Giving Act that Harold Ford and I have co-sponsored that you mentioned earlier, among the many things we still want to get done this year, John.

KING: Let's talk about that now. This program has explored that issue before. You mentioned Harold Ford, a Democrat you're co- sponsoring that with. The legislation would allow 86 million Americans who do not currently itemize to deduct charitable contributions. It also would allow to you give a tax-deductible charitable contribution from your IRA or 401(k). Soon to reach the president?

BLUNT: Soon to reach the president, I believe. We expect to see the bill on the floor in the couple of weeks. You mentioned what I've always felt were the two biggest items in this bill. 86 million Americans who don't itemize their taxes, many of them give to church and charity and do that without credit, without a tax incentive. We're trying to create that for those people that give to church and charity.

And there's $2 1/2 trillion in IRAs today. Many people barely have what they need in their IRAs. Many other people find out when they get to be 65 or 70 that really there's no way they're ever going to exhaust their IRA or need to, and they begin to think about how they could give it. We're trying to figure out how they could give that money without negative tax consequences.

KING: Hard to argue with your motive there, sir. Any worries at all that in this time of record deficits that people will say nice idea, sir, but we just can't afford that?

BLUNT: I don't think so. There is some cost the federal government certainly, when people give money to charity they don't pay tax on that money, and we're expecting this bill over ten years that they'd give about 50 billion more dollars to charity. I think most of the members on both sides of the aisle believe that charities, when they're focused, almost always do a better job delivering services than government does and do it so much more cost effectively.

And want to see our charities continue to be encouraged and continue to do good work. I believe we'll see this bill have easy success on the floor, in conference with the Senate. The Senate's already passed a similar bill and on the president's desk hopefully this year, John.

KING: Congressman Roy Blunt of Missouri, the House Majority Whip. Thank you for your time tonight, sir.

BLUNT: Good to be with you.

KING; Thank you.

And a reminder now to weigh in on tonight's poll. We want to know what do you think the U.S. military needs to do to maintain its status as the world's finest? Increase the number of servicemen and women? Scale back missions around the world? Both? or Neither? Cast your vote at CNN.com/lou. And we'll have the results for you a little later in the show.

And coming up -- the NFL kicks off its 2003 season in style in Washington, D.C. tonight as thousands gather on the National Mall to celebrate football in honor of the troops. NFL commissioner Paul Tagliabue joins us from Washington next.

(COMMERCIAL BREAK)

KING: The National Football League kicks off its new season tonight and for the second year in a row the event is being marked with a live concert. This time on the National Mall in Washington. Mary J. Blige, Britney Spears, Aerosmith, and others will entertain 20,000 U.S. troops, all in advance of a game tonight featuring the New York Jets and the Washington Redskins.

The NFL rides into this season as the professional league of arguably the most popular sport in America. NFL commissioner Paul Tagliabue joins us now from that concert scene in Washington.

Thank you for joining us, sir. I want to ask you first, as the season begins tonight, one of the preseason controversies has been injuries. The Jets, who will play the Redskins, will be without their starting quarterback. Michael Vick, one of the marquee players in the league, somebody fans around the country buy tickets to see, is out for a period of weeks. Some critics, some owners even within your league saying show the preseason, others saying this isn't tiddlywinks, this is what comes with the territory. Should the preseason be changed, sir?

PAUL TAGLIABUE, COMMISSIONER OF NFL: Well, I don't think there's any kind of a consensus to do that now. And you know, our sport is a sport that involves injuries. So whether it's the preseason or the regular season you're going to have unfortunately some players get hurt. But I don't think that alone is the reason for changing the preseason.

KING: We are week away from the second anniversary of September 11. You have put forward the idea of perhaps having the Super Bowl in New York or in Washington or both in memory of those events. Some others have said those are cold cities, you don't want to have the Super Bowl there. Any movement in that debate, sir? Any closer to a decision?

TAGLIAGUE: Well, we'll be making a decision on that in late October at our league meeting. Washington and New York will both be making presentations in competition with Arizona and Tampa Bay, and I think there's a pretty wide consensus among the owners that the right time we should have a game in one of those northern cities, New York or Washington, Nation's capital or the nation's commercial capital, and whether we get there this fall or not remains to be seen.

KING: An attorney for the family of Maurice Clarett, he's the suspended Ohio State running back, of course, the family attorney saying today that they're considering suing the NFL. Your rules currently would prohibit him from leaving college and coming into the NFL. You have been quite forceful on this issue. If such a suit were coming down the pike, sir, would you fight it?

TAGLIABUE: Yes, we would. We've made that clear. I think that our rule is very well crafted, and it's served everyone in sports, including the players very well. So we would defend it.

KING: There's a new show on ESPN which happens to be one of the networks that broadcasts NFL games, and it talks about players using drugs. It shows a football team, in one case an owner of a team, gives a heads-up to a player that he will be drug tested. Have you had any conversations at all with ESPN about that program, which certainly casts football in a not so favorable light, to say the least, sir? TAGLIABUE: Yes, we have. And our Players Association has spoken with ESPN. And everyone feels that it's a rather gross mischaracterization of our sport.

KING: You're sitting on the mall tonight. You have Britney Spears. You will have Aerosmith. Tell us about the importance, in your view, of events like this. Football has a pretty solid fan base, but obviously through something like this you're trying to reach out to unconventional audiences perhaps. Tell us about the strategy.

TAGLIABUE: Well, it really starts with the size of our fan base and the respect that the fans have for what our players do and what our teams do. On the field we feel like we're a meritocracy. There's great competition, culminating obviously in the Super Bowl.

Off the field our teams for decades have taken pride in being a big part of community and setting the mood and helping set the agenda in the not for profit sector. The last few years we've been trying to come up with new ways of doing that, supporting the military, paying tribute to those men and women in law enforcement and in public services that become so critical, not only in the defense of our nation from threats overseas, but threats internally here from potential terrorism and so on.

And tonight we're paying tribute to the military, to civilians who serve the public, and many, many of them are here. We've talked to the Defense Department about this, and I think it's a great way of giving back, saying thanks, and letting the fans have a lot of fun, including right here tonight, some of those members of the units that worked their way up into Baghdad during the military effort in Iraq.

KING: You have been commissioner, sir, since 1989. You also have said your dream job would be to be Secretary of State. The president's National Security Adviser, Condoleezza Rice, says she'd like your job. She'd like to be NFL commissioner. My day job, I work at the White House. Anything I can do to maybe help arrange a job swap here?

TAGLIABUE: Well, I don't know if we're ready for a job swap. Dr. Rice is a great football fan. I met her years ago out at Stanford at a Stanford-Notre Dame game. And we talk from time to time about football. But she's got much bigger, bigger priorities that she's responsible for, and she does a great job. We're just very pleased she's a fan.

KING: Commissioner Paul Tagliabue joining us today from the Washington Mall. Enjoy the concert, sir, and enjoy the game tonight.

TAGLIABUE: Thank you.

KING: Thank you, sir.

And coming up, the results of tonight's poll and Christine Romans will have the market. And we'll share some of your thoughts on last night's poll question. Many of you wrote in with suggestions about who needs to do more in Iraq. Your e-mails up next.

(COMMERCIAL BREAK)

KING: Now the results of tonight's poll question. What do you think the U.S. military needs to do to maintain its status as the world's best? 13 percent of you said increase the number of servicemen and women, 41 percent said scale back missions around the world, 32 percent said both, and 13 percent neither.

Turning to stocks, the Nasdaq today scored its seventh straight winning session. The Dow also rose, adding 19 points. The Nasdaq 16. The S&P added nearly two. Christine Romans has more on the markets -- Christine.

CHISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well, John, the rally today wasn't that huge, but when you look at the winning streak it's been pretty good. Take a look at this longest winning streak for the Nasdaq since 2000. And five consecutive days in a row now it's hit 52-week highs. That's something that hasn't happened Since February 1999, remember back then?

Meanwhile, the S&P 500 is up eight straight days, its best streak since this March. Today's gains come despite disappointing jobs data. The number of people filing for unemployment benefits rose unexpectedly last week, and the prior week's jobless claims were revised higher.

Now, many brushed off that bad news in favor of good news on productivity. As worker efficiency surges, employers can put off hiring workers. That's good news for profits, bad news for the unemployed. But enthusiasm for stocks continues.

In the latest week more than $3 billion was put to work in stock mutual funds. That's almost double the prior week's take. And look at bond funds. Another 2.7 billion. This current rally has been broad-based. Volume's been improving. The overall view continues to be, John, the economy is improving and jobs will eventually follow.

KING: Christine Romans, thank you. We'll see if we keep the streak alive tomorrow.

And now for a look at some of your thoughts. Tim Shoreman from Baltimore wrote about our poll question, asking who needs to do more in Iraq. He said, "I voted for the United States. The administration dragged us into Iraq, despite world opinion. It is no ones mess to clean up, but our own.

Frank from Elcorn, Kentucky said, "It would really help if the people of Iraq would actually lend a hand in the process of rebuilding their country, don't you think?"

William Hamilton from Holliday, Florida wrote about the United States request to the United Nations for help in Iraq, "France and Germany want to get their fingers into the Iraq pie," he wrote, "That is the real reason behind asking the United Nations to join the fray." Michael Mason of Queens, New York said, "Thank god George W. Bush is our president. If we waited for the United Nations or France or Johnny Weasel Depp to give us approval, I am sure more of my brother firefighters would be dead by now. If they aren't mortified by not helping us in the first place, or offering us any assistance, they can give us now, then they really are irrelevant."

We love hearing from you. Please send those emails and other thoughts to us at loudobbs@cnn.com.

And finally tonight, a story of extraordinary challenge and courage from the top of Japan. American Keigan Riley today, because the first paraplegic to climb Japan's Mt. Fuji. The 22 year-old Oregon State University student lost the use of his legs in a car accident 6 years ago. He climbed all 12,385 feet using an arm powered, 4 wheel cycle.

Here's how he described the challenge and the reward.

(BEGIN VIDEOTAPE)

KEIGAN RILEY, CLIMBED MT. FUJI: After all this hard work and finally getting up here is the best thing in the world. My heart's pounding. I'm so excited to be here. I feel the joy. I can't believe we made it.

I just kind of want to show people what's out there. And maybe they can see what I'm doing and maybe it would encourage them too to do it, even to just get out into a park or something, or anything. It's just -- there's opportunity out there to -- even some of the mountains.

I'm just king of showing people the technology is out there.

I couldn't make it without my team and I'm just very honored to be here. And on top of Mt. Fuji. It's the greatest feeling in the world pretty much.

(END VIDEOTAPE)

KING: Remarkable. That's our show tonight. Thanks for joining us.

Tomorrow in our "State of the State" series, a look at Minnesota with Governor Tim Pawlenty. Country music legend Willy Nealson joins us. And editors from "Fortune", "Forbes" and "Businessweek" join us in our "Editor's Circle".

For all of us here, good night from New York. "LIVE FROM THE HEADLINES" with Daryn Kagan is next.

END

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Kicks Off New Season With Concert On National Mall>