Return to Transcripts main page

Lou Dobbs Tonight

White House Backs Off Jobs Forecast; Democrats Focus on International Trade

Aired February 18, 2004 - 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.


(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight: The White House backs off its forecast of 2.6 million new jobs this year, saying the president is focusing on policies, not forecasts.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the economy is growing and I think it's going to get stronger.

DOBBS: The president's Democratic rivals focus on international trade and its effect on American jobs. John Kerry and John Edwards agree on the problem, but not the solution.

UNIDENTIFIED MALE: I now pronounce you spouses for life.

DOBBS: In "Face-Off" tonight: same-sex marriage. Genevieve Wood of the Family Research Council, Ralph Neas of People For the American Way debate gay marriage.

And Martha Stewart, the former top attorney in her company takes the witness stand. The pace of the trial picks up.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, February 18. Here now, Lou Dobbs.

DOBBS: Good evening.

One of the president's top advisers is making economics not only interesting, but controversial. Last week, President Bush distanced himself from his chief economic adviser, Greg Mankiw's statement that outsourcing is good for the American company. And today, the White House distanced itself from Mankiw's forecast that the economy will create 2.6 million new jobs this year.

Senior White House correspondent John King with the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, that prediction, 2.6 million new jobs this year, of course, an election year, is in this report issued just nine days ago sent up to the Congress and carrying the president's signature.

Now, Mr. Bush was asked today in the Oval Office did he stand by the prediction of 2.6 million new jobs. The president would not give a direct answer.

(BEGIN VIDEO CLIP)

BUSH: I think the economy is growing. And I think it's going to get stronger. But I do think there are some things we need to do. We need to make sure the tax cuts are permanent. I look forward to continuing to talk about this issue. Uncertainty in the tax code could affect small-business planning. Uncertainty in the tax code will make it harder for citizens to make rational decisions about spending money.

(END VIDEO CLIP)

KING: Now, in a conversation with CNN just a short time ago, the lead author of this report, Greg Mankiw, says that prediction of 2.6 million new jobs was based on economic data back in December, when this report was being put together to help the president craft his budget.

Mr. Mankiw saying the economy has changed a bit then, so the numbers might be a bit stale. He says, though, he will not give a new prediction, that that is not the White House's business, to be in the forecasting business. The president's press secretary was peppered with questions about all this today. And he said the president will be judged in November based on his performance, not on any predictions.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You know, I think that people can debate the numbers all they want. The president is focused on acting on policies to create as robust an environment for job creation as possible, so that we can help those who are hurting because they are looking for work and cannot find a job.

(END VIDEO CLIP)

KING: Democrats, though, see an immediate political opening. In a letter to the president from six leading Senate Democrats, they ask this question -- quote -- "In light of these broken promises and mixed messages, we urge you to provide a meaningful jobs prediction that all Americans, including your own Cabinet, would find credible."

And, Lou, out on the campaign trail, the Democratic front-runner, John Kerry, also questioning this White House retreat from this prediction, saying, though, it's no surprise to him. He says the administration promised new jobs after each of the first two big Bush tax cuts. Senator Kerry saying those jobs never materialized -- Lou.

DOBBS: John, President Bush is making the economy a key feature of his recent public appearances. Are we likely to see an even greater emphasis on the part of the president on the issue of the economy in the weeks and months ahead?

KING: You certainly will, Lou. You will see the president traveling to promote his economic policy, including his big tax cuts. You will see the president making the case that jobs are coming back.

I will say that some Republicans are getting a bit nervous at the poll numbers and all the controversy about economic predictions and even the questions about going to war in Iraq. Some Republicans say the president should tap into his huge financial advantage, start spending on television ads right now. The Bush-Cheney team, though, says it's going to wait another week, maybe two, to be certain that Senator Kerry is the Democratic nominee. Just in case he stumbles, they don't want to start spending just yet.

DOBBS: Senior White House correspondent John King, thank you.

International trade and its effect on American jobs is rapidly becoming a major issue in the presidential election campaign. The issue has been raised repeatedly in the race now for the Democratic presidential nomination. It has also exposed a key difference between Senators Kerry and Edwards.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): In what's now a two-man race for the Democratic nomination, John Kerry claims there is no quarrel over trade policy.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: We have the same policy on trade, exactly the same policy. He voted for the China trade agreement. So did I. And we, both of us, want to have labor agreements and environment agreements as part of a trade agreement.

VILES: But it takes two to see eye to eye. And John Edwards doesn't see it that way.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: We have legitimate differences about issues like jobs and trade. Senator Kerry supported NAFTA and other trade agreements. I was against NAFTA and some of the trade agreements that he was for. And I think they have cost us millions of jobs.

VILES: For the record, Kerry voted in favor of permanent trade status for China, in favor of fast-track negotiations, in favor of NAFTA. He now wants to review NAFTA and all other trade deals and use the tax code to discourage outsourcing and encourage manufacturing.

Edwards voted in favor of the China bill, but against fast track. He opposed NAFTA and now wants to renegotiate it, and would also use the tax code to discourage outsourcing.

Now, whoever wins that fight will face a president who does not apologize for his free trading ways. His White House says outsourcing makes sense and has continued the Clinton policy of global deal- making. This was September, signing trade deals with Singapore and Chile.

BUSH: We're now negotiating with Australia and Morocco, five nations in Central America, and the Southern African Customs Union. Soon, we'll begin negotiations with Bahrain and the Dominican Republic. We're working with 33 other nations in our hemisphere to create the Free Trade Area of the Americas.

VILES: The president has used protectionism on occasion, notably in big agriculture subsidies and steel tariffs.

(END VIDEOTAPE)

VILES: The hot-button issue now in this trade debate has been the outsourcing of jobs. Kerry calls CEOs who outsource jobs traitors to their country. And Edwards ran TV ads in Wisconsin saying it is now time to -- quote -- "hire American" -- Lou.

DOBBS: Some would argue past time.

VILES: Sure.

DOBBS: Pete, thank you -- Peter Viles.

President Bush plans to spend another $300 million to help American workers who can't find jobs. Many of those workers are unemployed because their jobs have been exported to cheap overseas labor markets. But it turns out that more government spending may not help.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Dave Kintner spent 30 years as a telecommunication engineer. He was laid off two years ago and sent out hundreds of resumes.

DAVE KINTNER, LAID-OFF TELECOM WORKER: After a couple months of doing this. well, I've got to start something else. I've got to redo some retraining.

WIAN: In his 50s, Kintner thought college would take too long, so he retrained himself in construction, first working at a home supply center, then for a contractor. Now he's on his own, struggling in an industry dominated by cheap illegal alien labor.

KINTNER: You can't go from making $35, $40 an hour down to $10 an hour and still maintain your lifestyle.

WIAN: President Bush proposes spending $300 million for community college job retraining and personally reemployment accounts. Already, the Labor Department spends $6 billion a year on a dozen retraining programs, which some say isn't enough.

ANDY VAN KLEUNEN, EXECUTIVE DIRECTOR, WORKFORCE ALLIANCE: We have two million long-term unemployed Americans out of work who are likely going to need new skills to get back into the job market. We are currently funding federal programs that at best might be retraining a tenth of those workers every year. WIAN: But more federal spending may not be the answer.

(on camera): In 1996, the General Accounting Office studied the Federal Job Training Partnership Act. It found no significant impact on long-term employment rates or wages. It's been replaced with another program.

BILL CONERLY, NATIONAL CENTER FOR POLICY ANALYSIS: The evidence overwhelmingly says, our efforts to create skills that help people get better jobs have not worked. It's been more or less money down a rat hole.

WIAN (voice-over): Retraining works best when it goes beyond basic skills and prepares workers for specific jobs. Westwood College identifies hot job markets and offers training to match.

JOHN HANSON, WESTWOOD COLLEGE: On average, 80 to 85 percent of our graduates are employed within their field of expertise within the first 90 days after graduation.

WIAN: John Osgood was laid off from his management job at a trucking company. Now he's learning computer design.

JOHN OSGOOD, STUDENT: I think it's going to open up a lot more possibilities.

WIAN: Some of those include computer game design, health care and criminal justice.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: As John King earlier reported, John Kerry today criticized the White House for backing off that jobs forecast.

(BEGIN VIDEO CLIP)

KERRY: Just a couple of days ago, the administration promised America several million jobs over the course of the next months.

I immediately said that those predictions would fall short, based on the promises they made with respect to the tax cut, which was supposed to give a million jobs. It didn't. It lost a million. The next tax cut was supposed to produce a million jobs, lost a million. And now they are already walking backwards on their own predictions.

(END VIDEO CLIP)

DOBBS: Senator Kerry is campaigning in Ohio tonight. Ohio, of course, is key among the 10 states awarding delegates on Super Tuesday.

Senator Kerry is continuing to focus his attacks on President Bush. He made little mention of his closest challenger in Wisconsin, the surprisingly strong finish by Senator John Edwards. Edwards today took off from campaigning. Tomorrow, he returns to the campaign trail. He'll be in New York and Georgia, two more key Super Tuesday states.

Howard Dean today dropped out of the race for the Democratic presidential nomination. Dean did not endorse either John Kerry or John Edwards. Instead, Dean promised to continue to work to transform the Democratic Party and to change the country.

Candy Crowley reports from Burlington, Vermont.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Six weeks ago, when he led nearly every poll in every state, this day would have been unimaginable. But after losing 17 contests across the country in a single month, Dr. Dean pulled the plug.

HOWARD DEAN (D), FORMER PRESIDENTIAL CANDIDATE: I am no longer actively pursuing the presidency. We will, however, continue to build a new organization, using our enormous grassroots network to continue the effort to transform the Democratic Party and to change our country.

CROWLEY: His candidacy may be over, but Dean, who both dominated and defined the 2004 Democratic race, made it perfectly clear, he still has a voice.

DEAN: I will support the nominee of our party. I will do everything I can to beat George W. Bush. I urge you to do the same. But we will not be above in this organization of letting our nominee know that we expect them to adhere to the standards that this organization has set for decency, honesty, integrity and standing up for ordinary American working people.

(CHEERING AND APPLAUSE)

CROWLEY: It is possible Dean could endorse another candidate still in the race. But if he is to make a difference, he will have to do that soon.

Other than that, the Dean campaign has managed to put together a list of previously unknown small donors. And that alone makes him a very valuable asset to the Democratic Party.

Candy Crowley, CNN, Burlington, Vermont.

(END VIDEOTAPE)

DOBBS: In just a moment, I'll be talking with Howard Dean's former campaign manager, Steve Grossman, who made it to the door before Howard Dean.

Also ahead tonight, American troops capture seven suspected al Qaeda terrorists in Iraq -- Senior Pentagon correspondent Jamie McIntyre with that report. And in "Face-Off" tonight, the growing controversy in this country over gay marriage. Genevieve Wood of the Family Research Council, Ralph Neas of People For the American Way will debate the issue.

And most of the toys sold in this country, no surprise, are made in China. But some American toymakers have survived and they are fighting back. We'll have a special report.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Howard Dean's demise came after he spent nearly all of the record-breaking $41 million campaign chest he raised and failed to win any of the 17 primaries and caucuses that he contested.

My guest, until two days ago, was Dr. Dean's campaign chairman. Steve Grossman left the campaign, after he said he would support Senator Kerry if Howard Dean lost in Wisconsin. Both have materialized now. Steve Grossman is also the former chairman of the Democratic National Committee, joining us tonight from Boston.

Steve, thanks for being here.

STEVE GROSSMAN, FORMER DEAN CAMPAIGN CHAIRMAN: Thanks for having me.

DOBBS: Watching your former candidate today wrap it up had to be tough emotionally.

GROSSMAN: It is, it was, and will continue to be for a while. I think it's a sad day.

But I want to reflect, just for a few moments, on what I think Howard Dean achieved. I think he defined the debate in the Democratic Party. I think he has created this movement that can really reinvigorate participatory politics and really give people a sense of political empowerment. And if he sticks with that pledge that he made today -- and I know that he will -- he can be a leader in this Democratic Party and a force in American politics for a long time to come. I expect he will do that.

DOBBS: There is also, of course, Steve, as you well know, an accomplished experienced politician, the possibility of having cross- voices at a time when cross-voices are not needed. That is, the voice of the candidate needs to be heard by the people.

Let's go to a couple of the things that you just suggested. Certainly, no question about it, Governor Dean put the opposition to the Iraq war and opposition to the Bush administration front and center for the Democratic Party, articulated that. Do you -- what do you think is the biggest mistake he made in the course of this campaign?

GROSSMAN: Well, I think, in Iowa, when we had the message, the money, the motivation, he got into this really tough negative struggle with Dick Gephardt.

And, you know, there's an axiom in politics that, if one candidate attacks another, then a third party benefits. And it was clear that the voters of Iowa rejected that. John Kerry and John Edwards really were lifted up by that struggle that Dick Gephardt and Howard Dean were involved in and lost the momentum in Iowa. After the Iowa primary -- Iowa caucus, the evening of the Iowa caucus and that speech, we never regained our momentum.

And once you lost Iowa and New Hampshire, and you predicated the whole campaign on winning those two, it was kind of hard to ever get back in the race.

DOBBS: Is this hindsight talking, Steve, now or did you counsel Governor Dean not to get into a negative contest with Congressman Gephardt?

GROSSMAN: No, I don't -- I can't say that I didn't counsel it.

Here you had Dick Gephardt as the principal opponent. And it was -- you know, it was hard-charging. And a lot of things are said during a campaign that can be interpreted. But the voters of Iowa clearly made a statement on caucus night. And that is, they were going to reward the people with the positive, visionary, forward- looking message. And John Kerry and John Edwards certainly got that reward for themselves.

DOBBS: Are you surprised, Steve, by the criticism that you have received in op-ed pages on the part of some commentators as basically, in having left the campaign before the candidate, effectively a criticism boils down to, good decision, bad form?

GROSSMAN: Well, look, I was the first -- by Howard's own admission, the first Democratic leader in the country to support Howard in the summer of '02.

DOBBS: Right.

GROSSMAN: I spent 19 months on this campaign and felt very good about what I did.

Look, if it caused any anger or upset and in some way got Howard Dean off-message for the past last couple of days of the Wisconsin campaign, I meant no offense. I was simply saying that, if Howard Dean didn't win Wisconsin, I was going to reach out to John Kerry. Howard Dean had already said, if I don't win Wisconsin, I'm effectively out of the race. So I didn't really think that that was such a shocking statement.

But, again, if it upset anybody, including Dean supporters, I feel apologetic for that, because I don't want to taint the wonderful work we all did together around a truly courageous man who defined this race for a year and made it acceptable to criticize the president legitimately on important national issues.

DOBBS: Steve Grossman, we thank you for being here. GROSSMAN: Thanks, Lou.

DOBBS: That brings us to the subject of tonight's poll. The question: What do you believe is the most important issue in this election, the economy, health care, education, or Iraq? Please cast your vote at CNN.com/Lou. We'll have the results coming up later in the broadcast.

Up next, American forces raid a suspected al Qaeda hideout before dawn in Iraq. We'll have a live report for you from the Pentagon.

And tonight, in "Face-Off," the White House today entered the national debate over the wave of gay marriages taking place in San Francisco. I'll be talking with two experts who have very different views on this controversial topic -- that and a great deal more still ahead here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: American troops in Iraq today captured seven terrorist suspects who may be linked to the al Qaeda terrorist network. Soldiers also detained 15 other people during a raid north of Baghdad.

We go now to Jamie McIntyre at the Pentagon for the report.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: The raid, conducted by soldiers of the 4th Infantry Division, was aimed at taking down an anti-coalition cell in Baquba, an Iraqi city in the heart of the so-called Sunni Triangle, where opposition to the U.S. remains strong.

According to the U.S. military, 22 people were detained, including seven suspects who were specifically targeted and are believed to have links to Osama bin Laden's al Qaeda terrorist network.

COL. WILLIAM ADAMSON, U.S. ARMY: And this morning in Baquba, we conducted a series of raids to detain people associated with a terrorist group with ties to al Qaeda. We suspected that they were responsible for a suicide car bombing in Baquba on 15 January.

MCINTYRE: Suicide attacks like the one that rocked the Polish military base south of Baghdad Wednesday are thought to be closer to the M.O. of al Qaeda fanatics, rather than former Iraqi regime members.

Since earlier this month, when the coalition authority released the contests of a seized document reportedly written by top al Qaeda operative Abu Musab Zarqawi, U.S. officials have been blaming more of the violence on outside agitators.

DONALD RUMSFELD, SECRETARY OF DEFENSE: They're also terrorists that are coming in from other countries across the Iranian border, the Syrian border, and they're determined to have a radical regime, a regime that is -- would be supportive of Osama bin Laden and people of that ilk.

(END VIDEOTAPE)

MCINTYRE: Iraqi civilians continue to bear the brunt of these attacks. Since the 1st of the year, some 300 have been killed in suicide attacks. Nevertheless, the U.S. military says most Iraqis support the coalition and continue on a daily basis to provide tips about enemy hideouts -- Lou.

DOBBS: Jamie, thank you very much -- Jamie McIntyre at the Pentagon.

Coming up next, thousands of gay couples marry in San Francisco. President Bush says he is troubled. We'll be talking with two experts who are leading each side of this debate on gay marriage. They face off tonight.

And exhibit A in Martha Stewart's obstruction of justice trial, prosecutors showing jurors what they say is proof of a cover-up.

And there were two. We'll have the latest from the campaign trail. We'll be talking with our panel of top political journalists -- that, a great deal more, still ahead here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Hundreds of gay and lesbian couples today were married in San Francisco, a scene that's been repeated for almost a week now. This Friday, a judge will hold another hearing on whether to stop the city from granting marriage licenses to gay and lesbian couples. That is keeping the issue of gay marriage alive in the headlines and certainly on the campaign trail.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): President Bush today said he was troubled by gay weddings in San Francisco and the court decision in Massachusetts that would permit gay marriage.

BUSH: I strongly believe that marriage should be defined as between a man and a woman. The people need to be involved with this decision. Marriage ought to be defined by the people, not by the courts. And I'm watching it carefully.

DOBBS: President Bush stopped short of publicly endorsing a constitutional ban against gay marriage. But he said the San Francisco and Massachusetts developments would influence his coming decisions.

San Francisco Gavin Newsom continues to permit gay marriage in his city. More than 2,600 same-sex couples have been married since last Thursday.

GAVIN NEWSOM (D), MAYOR OF SAN FRANCISCO: We'll continue to do the right thing. We'll continue to no longer discriminate people just because of their sexual orientation. And I'm proud to stand on that principle. And we'll fight hard to do the right thing and change minds and, more importantly, change hearts.

DOBBS: The presidential election will not decide this controversial issue. Both Senator John Kerry and Senator John Edwards also oppose gay marriage.

There are now 39 states that ban same-sex marriage. Vermont is the only state in which same-sex civil unions are legal.

(END VIDEOTAPE)

DOBBS: And gay marriage is the subject of the tonight's "Face- Off."

Genevieve Wood says marriage should be between a man and a woman and gay couples can receive the same benefits as marriage couples without being married. She is vice president of communications at the Family Research Council, a member of the Heritage Foundation's National Media Advisory Board.

Good to have you with us.

GENEVIEVE WOOD, FAMILY RESEARCH COUNCIL: Thank you.

DOBBS: Ralph Neas, however, disagrees. He says same-sex couples miss out on benefits given married couples. And he says gay Americans deserve the same rights at heterosexuals. Ralph Neas is president of People For the American Way. He also served for 14 years as the executive director of the Leadership Conference on Civil Rights. Both join us tonight from Washington, D.C..

Good to have you with us, Ralph.

RALPH NEAS, PRESIDENT, PEOPLE FOR THE AMERICAN WAY: Thank you. Thank you very much.

DOBBS: Let me begin with the first issue here. Why is it important for the marriage to be applied here to gay and lesbian couples, if other legal and social benefits attend without the actual nomenclature marriage?

NEAS: No. 1, those benefits do not extend to unmarried couples. And we're talking about state inheritance. We're talking about state property issues. We're talking about children's issues, we're talking about power of attorneys. There are literally thousands of rights you do not have unless you have the same rights and responsibilities as a married couple as heterosexuals do.

It certainly involves legal rights and economic rights, but also means having the same rights and responsibilities as every heterosexual in this country. It's an equal protection issue. It's a fundamental civil rights issue.

DOBBS: Genevieve...

WOOD: I disagree.

DOBBS: I thought you might.

WOOD: The fact of the matter is the majority of benefits that they do talk about you can get through other ways. Look, you can leave your house, your possessions to anybody you want to. We had a woman not too long ago a very wealthy woman who left her inheritance to her cat. So, you can get around a lot of these things.

The fact is, the homosexual community, by and large, isn't so much interested in benefits, some of them are, but what they really want is a public stamp of approval.

And an example of that is what is going on in Boston. Even when an amendment came forward that said marriage will be between a man and a woman, but you have civil unions that gave all the benefits of marriage to homosexual couples, those in the homosexual activist said no, that's not good enough, we want the word marriage. And that's because they're more interested in a public stamp of approval than the benefit.

NEAS: That's just not true, Lou. It's been such an exciting time in American history in which you have in Boston, what you have in San Francisco, as my wife Katie said to me this morning, this inspirational. You have individuals who want to be part of the American dream. Who want to be part of the American way. They want to make a commitment to one another. They want to pledge fidelity. They want to take on the responsibility of taking care of their partner and children for the rest of their lives.

WOOD: But Ralph, why would you also deny those things...

NEAS: Please, don't interrupt me. Please, Genevieve -- please Genevieve, just for a moment, if you would.

DOBBS: Genevieve, just for a moment if you would.

NEAS: You'll have your opportunity.

I would think that conservatives and liberals and moderates all over America would salute those who have these family values. Who want to have commitment, who want to have stability. It strengthens our families and our community in America.

WOOD: To that, Lou, I would suggest and ask Ralph, why would you cut that off then to those who are interested in, for instance, polygamy or any other type of arrangement. There are people out there, I'm not suggesting Ralph thinks it's a good idea, but there are people out there that want to engage in polygamy, they think that's a good family structure. There are others who think that group marriages are a family structure. But that doesn't mean society has to step forward and go that's great. The homosexual community is saying we need to redefine marriage to include homosexual, same-sex couples. Why, if we're going to get into redefining, why would we stop there? Why would we limit it to two people who are committed to each other? Based on what? Tradition? If that's the case, why wouldn't we keep it with a tradition of a couple of man and a woman. Where would you stop the redefinition.

NEAS: Genevieve, I hope that truly was not a serious argument.

WOOD: I think it's a very serious argument.

NEAS: Polygamy is unlawful. Everyone...

WOOD: So is homosexual marriage but you're wanting to change that. Why wouldn't we also change for it other groups, other people who have different ideas of what marriage ought to be.

NEAS: We have changed the marriage definition in the past, remember 1967 it was a Supreme Court decision which said you could not have the states prohibiting interracial marriages.

We are saying that marriage involves two people. Polygamy...

WOOD: But why? Based on what?

NEAS: Polygamy by its very nature hurts people.

WOOD: Hey, Ralph, there are a lot of studies out there that say children need a mom and dad and you don't seem to be interested in that.

NEAS: Genevieve, you are very, very rude. Please allow me to finish. All the studies show that children -- by the way, there are a million children who have gay parents. Children need two parents, that's the best situation. All the studies show that whether you are gay couples or heterosexual couples, the emotional and social development is the same. We should strengthen and protect children...

WOOD: Lou, I'm not going to sit here and making up statements about these studies. It's just not true. What is more important than family income, what is more important that what part of the country you grow up with, is whether you have a mother and a father in the home. Two moms don't make a dad and two dads don't make a mother.

And look, these couples that want to use their children to try to gain public recognition for their marriage and their unions, they are using children that's emotional blackmail on the public to say we already have these families need to recognize them.

DOBBS: I'm sorry, Ralph...

NEAS: Lou, go ahead.

DOBBS: Genevieve, let me ask you this. We started out by rights, we're attendant to those that are married, heterosexual marriages in this country. Do you or your organization have any problem with all of those rights being attended to gay and lesbian couples.

WOOD: Well, we don't -- you mean through like something like civil unions?

DOBBS: Through whatever the contrivance of society might be. Whether it be civil -- leave marriage out of this for right now.

Is there any opposition, any objection on your part or your organizations to those same rights attending those individuals and those couples?

WOOD: Look, Lou, I think anybody ought to be able to visit a friend, a relative in the hospital, that ought to be up to the patient.

DOBBS: That's a simple question that I'm laying out before you.

WOOD: I'm saying some of them, yes. I'm saying some of them, yes. But I would not be in favor nor would Family Research Council be in favor of creating what I would call counterfeit marriages, basically the same institution...

DOBBS: I left marriage out of it. I'm just trying to get for our audience a clear understanding of your position. You would not deny those rights to those gay and lesbian individuals whose decide to form couples, period, is that correct?

WOOD: I don't think we deny. I don't know what rights we're denying.

DOBBS: You know, I'm not asking if you do.

NEAS: Lou, may I interject for a second?

DOBBS: Is there any right that attends a heterosexual in this country you would deny a homosexual?

WOOD: Yes. For instance, Social Security benefits, government benefits that we give -- look, we don't give some of those benefits to a roommates who lives together for 10 years. Why do we say we're going to give it to homosexual couples? There are a lot of committed relationships out there we don't give special privileges to. And the reason is not because we like men and women who get better than anybody else. It's because we realize marriage is a lot more than two people enter into it. That's the basis for forming families and raising children.

NEAS: I would advise your listenership, those that are watching this program, to go to Genevieve's Web site. Go to Family Research Council and see what they are asking all candidates to sign as a pledge that these candidates would pledge not to give any rights or benefits to civil unions, or any artificial partnerships as they call them. They don't want any rights or benefits that would be part of a marriage extended to civil unions or any other kind of domestic partnership or any relationship between gay individuals.

WOOD: That's FRC.org. Please go and read it for yourself. FRC.org

NEAS: I encourage you to.

DOBBS: If I may, I'd like to ask you one last question, we have to wrap this up because we're running out of time. The idea of marriage between a gay and lesbian couple or heterosexuals. With the state of marriage in this country, more than half now ending in divorce, the number of single family parents in this country -- you were talking about the difficulties, the preference for a mother and a dad. Is there some way that you could come together on this issue, your organization, Ralph, yours, and I'm being very serious about this.

You are so worried about a relatively small number of people in this country who are gay, who are seeking to marry, yet we have tens of millions of children in families in this country who are under inordinate economic pressure, under inordinate social pressure and we are all -- I will plead culpability, because this is an important issue, but we probably devoted more time to this issue tonight than frankly it deserves against the background of those tremendous social and economic pressures that are negatively affecting every family, nearly every family in this country.

WOOD: Lou, I'll be brief and Ralph if you want to have the last word, then go for it. Look, the reason -- while we're debating the this, e also supporting the healthy marriage initiatives that the president has put forward. It's about building strong families.

And I'll tell you, the last time government got involved in this, 30 years ago with no-fault divorce is the reason we have the divorce rates to the great extent we have today. We don't need to further weaken it by tinkering with marriage again. The fact is, we need to try to strengthen it, not weaken it again.

And the reason we're having this debate is because we have a mayor out in San Francisco who is breaking the law by handing out marriage licenses to homosexual couples. That's why this is such a news story right now.

NEAS: Lou, this is an historic debate. And as Dick Cheney said, as I don't usually agree with Dick Cheney, it will be decided state by state.

I think your right, as important and historic as it is, we shouldn't be spending so much time on it, because the war in Iraq should be addressed, the war on terror should addressed, the economic issues, the healthcare issues.

But the Richard Worthland (ph), Republican poster, has told the right wing, told the Republican party this is a great wedge issue. This will distract the American people from the real issues facing America: infidelity, drug problems, alcohol problems, economic issues, drive marriages apart and cause divorces. There's no threat from two people committing themselves to one another for life, to making a pledge of fidelity, to provide and promise to protect one another and care for one another for the rest of their lives. That's healthy, that's good, it's all American, that's what we should all want from all individuals whether it's a gay, lesbian or heterosexual.

DOBBS: Genevieve, with about 15 seconds, you can have the last word or words within that time.

WOOD: Well I would ask what I began with at the beginning if we're going to get into redefining marriage why would we stop at just allowing homosexual marriage? I know it sounds weird to people, but there are other groups out there that think other ideas are good too. And I think they'll come up. And with the court cases that are being brought forward by groups like Ralph Neas there will be no reason to not open it up to everybody and everything.

DOBBS: Ralph Neas, Genevieve Wood, we thank you both for being here.

Coming up next, Howard Dean may be out of the race, well, he is out of the race, but Senator Kerry, Senator Edwards they are preparing for the Super Tuesday primaries. We'll be talking with three of the country's top political journalists next and attorneys in the Martha Stewart trial, battling in a game of show and tell, we'll have the very latest for you live from the courthouse.

(COMMERCIAL BREAK)

DOBBS: In the Martha Stewart trial, a former top attorney for Stewart's company went on the witness stand. Mary Snow has the live report for us at the courthouse in lower Manhattan -- Mary.

MARY SNOW, CNN CORRESPONDENT: Martha Stewart side gained some more headway in fighting the most serious charge against Martha Stewart's securities fraud. Greg Blatt, the former general counsel of Stewart's company testified he called Stewart's attorneys in June of 2002 and encouraged Stewart to make a public statement after she was publicly linked to Sam Waksal and her shares of Imclone stock. He also said that there were business concerns among advertisers.

Now Stewart's declaration of innocence has become the focus of that securities fraud charge which alone carry as maximum penalty of ten years in prison, the judge herself has said it was a novel charge. Stewart's attorney once again indicated he plans to try to dismiss the charge when the defense begins its case. That is being pushed back a bit because the prosecution now says it won't be able to rest tomorrow. It still has eight witnesses to call, one of the key witnesses will be one of Martha Stewart's best friends, a woman she was traveling with the day Stewart sold her shares of Imclone stock and the defense says it has not yet made a decision on whether or not to call Stewart to the stand -- Lou.

DOBBS: Mary, thank you. Tonight, the race for the Democratic presidential nomination down to two candidates. And we're now joined by our political panel, joining us Ron Brownstein, the national political correspondent for the "Los Angeles Times." From Washington, Tom DeFrank in Washington as well where he is bureau chief for the "New York Daily News" and Carlos Watson, CNN political analyst tonight from Mountainview, California. Gentlemen, good to have you with us.

As each of you correctly forecast, a single-digit win for John Kerry in Wisconsin. This seems to be two points of view, Senator Kerry posts another win. It's irrelevant that Edwards is second. The second is that it's an up surge and now we have a real contest. What's the right answer, Carlos?

CARLOS WATSON, CNN POLITICAL ANALYST: Right answer is that this is Kerry's nomination, 16-2. He won't win it on March 2, though, he'll win it on March 9. I think after March 9 one of the most exciting new things you'll see is the return of Bill Clinton. I think you'll see him on the campaign trail no later than March 10. You might even see him on March 9 in Texas and Florida.

DOBBS: Who is he working for?

WATSON: I think he'll be helping out John Kerry. I think John Kerry will head into...

WATSON: Oh, great question, Lou. Were you asking about his wife?

DOBBS: Well, that's exactly what I was asking about.

WATSON: Who knows. I mean I still doubt and Ron and Tom may feel differently. I doubt that she will be on the list of vice presidential candidates. But I will say this if John Edwards wins Ohio or Georgia, two critical states, pivotal states, I think he'll double his chances of being the vice presidential nominee. That much is at the stake, I think, on March 2.

RON BROWNSTEIN, "LOS ANGELES TIMES": We sort of settled the presidential race before we get to the vice president and John Edwards has bought himself one more window to try to make the case. I agree with Carlos it's very much an uphill challenge. John Edwards has done well where he has been able to focus his time, make himself better known to voters and he's closed well as we talked about yesterday especially with Independents, Moderates, voters concerned about the economy. The problem he now faces, Lou, is that in two weeks he has to appeal in ten states at once.

The approach that's worked for him simply isn't applicable. He's got to be able to sort of appeal more through the mass media. Obviously, he's going to get more attention but it's very much of an uphill climb. Nonetheless, he has a spotlight and that gives him at least breathing room for one more bite of the apple.

TOM DEFRANK, "NEW YORK DAILY NEWS": I agree with that, Lou. I mean, I think Edwards starts from too far back in the pack. And, also, many of these states that are coming up here, Ohio, New York, Minnesota, I don't think that the electorate, the Democratic electorate in those states is particularly sympathetic to Edwards. They like him but I think his appeal in these states is not going to be as strong for obvious reasons as say, South Carolina.

DOBBS: Let's go to the other party and it's incumbent, President Bush, today talking about the economy is strong, backing away from the forecast of his Council of Economic Advisers. How significant is that, Carlos?

WATSON: Lou, I think you've -- if I can compliment you on your own show. I think you've actually put the issue squarely on the table on the outsourcing of jobs. You hear a lot more conversation not just about economic growth but about economic fairness and about economic security. But I think you'll start to see the president over the next several weeks trying to have a broader conversation on the economy where he says while job loss is part of the story, that people have become wealthy in other ways including equity in their homes. Homeownership rates as you know, are at 68, 69 percent, the highest they have been in 25 years. And he'll try and paint a broader picture.

BROWNSTEIN: Lou, there was a poll out yesterday and today in Ohio where President Bush's approval rating in that state fell below 50 percent, for the first time in his presidency, way below 50 on the economy. If you look at what is going on in the economy, I think the battleground here in 2004 will be much more than Midwest, than the border south or even Florida and that may be one hurdle that John Edwards faces as potential nominee. I think Carlos got it right. If he can win Ohio, show he can win back blue-collar votes, sort of a younger Dick Gephardt, maybe that would make him attractive if Kerry does outlast him.

DEFRANK: Especially, Lou, since Ohio is a state Bush has to have and the White House is very worried about Ohio. They are far more worried about everything at the moment. The truth is George W. Bush has had a terrible 2004, nothing has really gone well this year for him. Not the State of the Union, not the "Meet the Press" performance, not the dismal handling of the National Guard issue by his staff. Bush has to be lucky that all campaigns are cyclical. This is a bad phase for him. It won't be the last phase. And his time will probably come. But he's not doing well at the moment.

DOBBS: Tom DeFrank, Carlos Watson and Ron Brownstein, we thank you gentlemen for being here.

Coming up next, in "Made in America," toy makers unveil thousands of new creations at the International Toy Fair but only a handful are made in the USA. We'll be seeing them. And Bank of America creates 1,000 new jobs, not in this country, however. Christine Romans will have the story. That and a great deal more still ahead, stay with us.

(COMMERCIAL BREAK)

DOBBS: The American international toy fair, well the name says American an overwhelming majority of the toys on display at the fair are made outside this country. Last year, China, in fact, shipped more than $12 billion worth of toys to this country. But despite tremendous pressure to compete, some American toy manufacturers are determined to produce and sell toys made in America.

Kitty Pilgrim reports.

(BEGIN VIDEO CLIP)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Of the 1,200 exhibitors at the New York toy fair only a handful still make their products in America. Scale Models put it right there on the sign. The toy tractor company, based in Iowa, employees 130 people.

JOSEPH ERTL, SCALE MODELS: You want to make more money, you go to China or someplace. But I feel the lord is being good to me. I have employees who need jobs. And people in our area and I think it's a bad policy for the way our American manufacturing is being destroyed in this country.

PILGRIM: Vermont based Maple Landmark Woodcraft says it's hard to compete with imported mass market products sold in retail chains like Wal-Mart.

MIKE RAINVILLE, MAPLE LANDMARK WOODCRAFT: It does hurt us without doubt but I think also provides us an opportunity to try to set ourselves apart and being something different.

PILGRIM: The Vermont company is also committed to keeping manufacturing jobs in their home state.

UNIDENTIFIED MALE: We have to make every part, put it all together by hand.

PILGRIM: At the toy fair, manufacturers say over and over, cheap labor is increasingly luring manufacturing overseas.

(on camera): Some manufacturers tell us basing production here in the United States is actually a better business plan when it comes to bringing products to market. For example, Step 2 company based in Cleveland says because everything is made here, they can design a new toy and get it in the stores in less than two months.

TODD HURST, STEP 2: All of our research and development is done here, all of our market something done here. We have an in-house sales force and it's really easy for control wise, we really can get a product out and go through the whole life cycle of the product.

PILGIRM: With 50 new product this is season, for them made in America makes better business sense.

Kitty Pilgrim, CNN, New York.

(END VIDEOTAPE)

DOBBS: On Wall Street today, stocks down modestly. The Dow off 43 points, the Nasdaq down 4, the S&P off 5. Another American company today said it will ship more Americans jobs over seas.

Christine Romans, is here with the report -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Bank of America will hire a thousand people in India, setting up some back office business for a subsidiary there. But that bank, Lou, as we reported here has already outsourced thousands of jobs, analysts say two thirds of American banks now are shoveling U.S. jobs overseas to cut cost. It's not just to India, Lou, these banks are going to China and to Russia. And it's curious because CEOs say they are more optimistic about the U.S. economy but they don't plan to hire, at least not here.

DOBBS: On another subject relationship of lost jobs and excessive CEO and executive pay and maybe not the way to do business.

ROMANS: The prosecution in the Tyco trial, painting Mike Scores (ph) the former CFO the man responsible for 10's of thousands of job cuts while living large on the company dime. He and his old boss accused of bilking shareholders of $600 million at the same time through Tyco's veracious and ill advised mergers 70,000 jobs were lost. Now that's Tyco. A now a note on Enron. Remember Enron? It's former -- it's former CEO, Jeff Skilling expected to surrender tomorrow to charges in front of a federal judge.

DOBBS: A little over two years and here we go.

ROMANS: Here we go.

DOBBS: Christine thanks.

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

John Bill of Gainesville, Florida, wrote about the liability and security of electronic voting. "It is hard for me to believe that it didn't occur to the people who design voting machines to put a small roll of paper, similar to a that on a cash register, on voting machines to keep a paper record of each vote. No chad, not confusing ballots, no problems, right?"

Well, Carla Wood of Birmingham, Alabama, "I would think that the fiasco in Florida last time proved that we can't even trust a paper trail."

Come on.

John of Clinton, Missouri, "Can you explain how a company like Halliburton can over-charge our government by millions and millions of dollars and get away with just reimbursing the government with no prosecution. While Martha Stewart gets prosecuted for selling $40,000 worth of stock, attracts the full weight of the government, faces jail time and possibly ruining her business.

"Exporting America," Jonathan, of Overland park, Kansas, President Bush "said his priorities are jobs, jobs, jobs. Would that be for jobs in India, China and Mexico?"

Send us your thoughts. We love hearing from you. E-mail us at loudobbs@cnn.com.

Coming up next, the results of our poll. And now a quick update on the list of companies we confirmed to be exporting America. The companies sending American jobs overseas or choosing to employee cheap foreign labor. Tonight's additions to our list of 300 companies, American House Hold formerly known as Sunbeam, Anheuser Busch, Automatic Data Processing, Columbia House, Compuserve, General Motors, Sallie Mae, Teradyne, TransUnion and USAA. Log on to cnn.com/lou for the entire list. We'll be right back. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of "Tonight's Poll." The question, what do you believe is the most important issue?

Seventy-nine percent of you say economy, 10 percent healthcare, 1 percent education, 10 percent Iraq.

That is our show for tonight. Please join us tomorrow. We'll be joined by Congressman David Dreier. He's here to discuss the presidents trade policies. We'll also be joined by Mary Matalin to tell us how the Republicans are doing. Friday, Richard Trumka, the AFL-CIO on the exporting of American jobs. He's trying to stop it. We'll be Washington Monday. We'll be talking with Dr. Catherine Mann.

For all us here, good night from New York. "ANDERSON COOPER" next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





International Trade>


Aired February 18, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight: The White House backs off its forecast of 2.6 million new jobs this year, saying the president is focusing on policies, not forecasts.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the economy is growing and I think it's going to get stronger.

DOBBS: The president's Democratic rivals focus on international trade and its effect on American jobs. John Kerry and John Edwards agree on the problem, but not the solution.

UNIDENTIFIED MALE: I now pronounce you spouses for life.

DOBBS: In "Face-Off" tonight: same-sex marriage. Genevieve Wood of the Family Research Council, Ralph Neas of People For the American Way debate gay marriage.

And Martha Stewart, the former top attorney in her company takes the witness stand. The pace of the trial picks up.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, February 18. Here now, Lou Dobbs.

DOBBS: Good evening.

One of the president's top advisers is making economics not only interesting, but controversial. Last week, President Bush distanced himself from his chief economic adviser, Greg Mankiw's statement that outsourcing is good for the American company. And today, the White House distanced itself from Mankiw's forecast that the economy will create 2.6 million new jobs this year.

Senior White House correspondent John King with the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: Lou, that prediction, 2.6 million new jobs this year, of course, an election year, is in this report issued just nine days ago sent up to the Congress and carrying the president's signature.

Now, Mr. Bush was asked today in the Oval Office did he stand by the prediction of 2.6 million new jobs. The president would not give a direct answer.

(BEGIN VIDEO CLIP)

BUSH: I think the economy is growing. And I think it's going to get stronger. But I do think there are some things we need to do. We need to make sure the tax cuts are permanent. I look forward to continuing to talk about this issue. Uncertainty in the tax code could affect small-business planning. Uncertainty in the tax code will make it harder for citizens to make rational decisions about spending money.

(END VIDEO CLIP)

KING: Now, in a conversation with CNN just a short time ago, the lead author of this report, Greg Mankiw, says that prediction of 2.6 million new jobs was based on economic data back in December, when this report was being put together to help the president craft his budget.

Mr. Mankiw saying the economy has changed a bit then, so the numbers might be a bit stale. He says, though, he will not give a new prediction, that that is not the White House's business, to be in the forecasting business. The president's press secretary was peppered with questions about all this today. And he said the president will be judged in November based on his performance, not on any predictions.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: You know, I think that people can debate the numbers all they want. The president is focused on acting on policies to create as robust an environment for job creation as possible, so that we can help those who are hurting because they are looking for work and cannot find a job.

(END VIDEO CLIP)

KING: Democrats, though, see an immediate political opening. In a letter to the president from six leading Senate Democrats, they ask this question -- quote -- "In light of these broken promises and mixed messages, we urge you to provide a meaningful jobs prediction that all Americans, including your own Cabinet, would find credible."

And, Lou, out on the campaign trail, the Democratic front-runner, John Kerry, also questioning this White House retreat from this prediction, saying, though, it's no surprise to him. He says the administration promised new jobs after each of the first two big Bush tax cuts. Senator Kerry saying those jobs never materialized -- Lou.

DOBBS: John, President Bush is making the economy a key feature of his recent public appearances. Are we likely to see an even greater emphasis on the part of the president on the issue of the economy in the weeks and months ahead?

KING: You certainly will, Lou. You will see the president traveling to promote his economic policy, including his big tax cuts. You will see the president making the case that jobs are coming back.

I will say that some Republicans are getting a bit nervous at the poll numbers and all the controversy about economic predictions and even the questions about going to war in Iraq. Some Republicans say the president should tap into his huge financial advantage, start spending on television ads right now. The Bush-Cheney team, though, says it's going to wait another week, maybe two, to be certain that Senator Kerry is the Democratic nominee. Just in case he stumbles, they don't want to start spending just yet.

DOBBS: Senior White House correspondent John King, thank you.

International trade and its effect on American jobs is rapidly becoming a major issue in the presidential election campaign. The issue has been raised repeatedly in the race now for the Democratic presidential nomination. It has also exposed a key difference between Senators Kerry and Edwards.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): In what's now a two-man race for the Democratic nomination, John Kerry claims there is no quarrel over trade policy.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: We have the same policy on trade, exactly the same policy. He voted for the China trade agreement. So did I. And we, both of us, want to have labor agreements and environment agreements as part of a trade agreement.

VILES: But it takes two to see eye to eye. And John Edwards doesn't see it that way.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: We have legitimate differences about issues like jobs and trade. Senator Kerry supported NAFTA and other trade agreements. I was against NAFTA and some of the trade agreements that he was for. And I think they have cost us millions of jobs.

VILES: For the record, Kerry voted in favor of permanent trade status for China, in favor of fast-track negotiations, in favor of NAFTA. He now wants to review NAFTA and all other trade deals and use the tax code to discourage outsourcing and encourage manufacturing.

Edwards voted in favor of the China bill, but against fast track. He opposed NAFTA and now wants to renegotiate it, and would also use the tax code to discourage outsourcing.

Now, whoever wins that fight will face a president who does not apologize for his free trading ways. His White House says outsourcing makes sense and has continued the Clinton policy of global deal- making. This was September, signing trade deals with Singapore and Chile.

BUSH: We're now negotiating with Australia and Morocco, five nations in Central America, and the Southern African Customs Union. Soon, we'll begin negotiations with Bahrain and the Dominican Republic. We're working with 33 other nations in our hemisphere to create the Free Trade Area of the Americas.

VILES: The president has used protectionism on occasion, notably in big agriculture subsidies and steel tariffs.

(END VIDEOTAPE)

VILES: The hot-button issue now in this trade debate has been the outsourcing of jobs. Kerry calls CEOs who outsource jobs traitors to their country. And Edwards ran TV ads in Wisconsin saying it is now time to -- quote -- "hire American" -- Lou.

DOBBS: Some would argue past time.

VILES: Sure.

DOBBS: Pete, thank you -- Peter Viles.

President Bush plans to spend another $300 million to help American workers who can't find jobs. Many of those workers are unemployed because their jobs have been exported to cheap overseas labor markets. But it turns out that more government spending may not help.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Dave Kintner spent 30 years as a telecommunication engineer. He was laid off two years ago and sent out hundreds of resumes.

DAVE KINTNER, LAID-OFF TELECOM WORKER: After a couple months of doing this. well, I've got to start something else. I've got to redo some retraining.

WIAN: In his 50s, Kintner thought college would take too long, so he retrained himself in construction, first working at a home supply center, then for a contractor. Now he's on his own, struggling in an industry dominated by cheap illegal alien labor.

KINTNER: You can't go from making $35, $40 an hour down to $10 an hour and still maintain your lifestyle.

WIAN: President Bush proposes spending $300 million for community college job retraining and personally reemployment accounts. Already, the Labor Department spends $6 billion a year on a dozen retraining programs, which some say isn't enough.

ANDY VAN KLEUNEN, EXECUTIVE DIRECTOR, WORKFORCE ALLIANCE: We have two million long-term unemployed Americans out of work who are likely going to need new skills to get back into the job market. We are currently funding federal programs that at best might be retraining a tenth of those workers every year. WIAN: But more federal spending may not be the answer.

(on camera): In 1996, the General Accounting Office studied the Federal Job Training Partnership Act. It found no significant impact on long-term employment rates or wages. It's been replaced with another program.

BILL CONERLY, NATIONAL CENTER FOR POLICY ANALYSIS: The evidence overwhelmingly says, our efforts to create skills that help people get better jobs have not worked. It's been more or less money down a rat hole.

WIAN (voice-over): Retraining works best when it goes beyond basic skills and prepares workers for specific jobs. Westwood College identifies hot job markets and offers training to match.

JOHN HANSON, WESTWOOD COLLEGE: On average, 80 to 85 percent of our graduates are employed within their field of expertise within the first 90 days after graduation.

WIAN: John Osgood was laid off from his management job at a trucking company. Now he's learning computer design.

JOHN OSGOOD, STUDENT: I think it's going to open up a lot more possibilities.

WIAN: Some of those include computer game design, health care and criminal justice.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: As John King earlier reported, John Kerry today criticized the White House for backing off that jobs forecast.

(BEGIN VIDEO CLIP)

KERRY: Just a couple of days ago, the administration promised America several million jobs over the course of the next months.

I immediately said that those predictions would fall short, based on the promises they made with respect to the tax cut, which was supposed to give a million jobs. It didn't. It lost a million. The next tax cut was supposed to produce a million jobs, lost a million. And now they are already walking backwards on their own predictions.

(END VIDEO CLIP)

DOBBS: Senator Kerry is campaigning in Ohio tonight. Ohio, of course, is key among the 10 states awarding delegates on Super Tuesday.

Senator Kerry is continuing to focus his attacks on President Bush. He made little mention of his closest challenger in Wisconsin, the surprisingly strong finish by Senator John Edwards. Edwards today took off from campaigning. Tomorrow, he returns to the campaign trail. He'll be in New York and Georgia, two more key Super Tuesday states.

Howard Dean today dropped out of the race for the Democratic presidential nomination. Dean did not endorse either John Kerry or John Edwards. Instead, Dean promised to continue to work to transform the Democratic Party and to change the country.

Candy Crowley reports from Burlington, Vermont.

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Six weeks ago, when he led nearly every poll in every state, this day would have been unimaginable. But after losing 17 contests across the country in a single month, Dr. Dean pulled the plug.

HOWARD DEAN (D), FORMER PRESIDENTIAL CANDIDATE: I am no longer actively pursuing the presidency. We will, however, continue to build a new organization, using our enormous grassroots network to continue the effort to transform the Democratic Party and to change our country.

CROWLEY: His candidacy may be over, but Dean, who both dominated and defined the 2004 Democratic race, made it perfectly clear, he still has a voice.

DEAN: I will support the nominee of our party. I will do everything I can to beat George W. Bush. I urge you to do the same. But we will not be above in this organization of letting our nominee know that we expect them to adhere to the standards that this organization has set for decency, honesty, integrity and standing up for ordinary American working people.

(CHEERING AND APPLAUSE)

CROWLEY: It is possible Dean could endorse another candidate still in the race. But if he is to make a difference, he will have to do that soon.

Other than that, the Dean campaign has managed to put together a list of previously unknown small donors. And that alone makes him a very valuable asset to the Democratic Party.

Candy Crowley, CNN, Burlington, Vermont.

(END VIDEOTAPE)

DOBBS: In just a moment, I'll be talking with Howard Dean's former campaign manager, Steve Grossman, who made it to the door before Howard Dean.

Also ahead tonight, American troops capture seven suspected al Qaeda terrorists in Iraq -- Senior Pentagon correspondent Jamie McIntyre with that report. And in "Face-Off" tonight, the growing controversy in this country over gay marriage. Genevieve Wood of the Family Research Council, Ralph Neas of People For the American Way will debate the issue.

And most of the toys sold in this country, no surprise, are made in China. But some American toymakers have survived and they are fighting back. We'll have a special report.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Howard Dean's demise came after he spent nearly all of the record-breaking $41 million campaign chest he raised and failed to win any of the 17 primaries and caucuses that he contested.

My guest, until two days ago, was Dr. Dean's campaign chairman. Steve Grossman left the campaign, after he said he would support Senator Kerry if Howard Dean lost in Wisconsin. Both have materialized now. Steve Grossman is also the former chairman of the Democratic National Committee, joining us tonight from Boston.

Steve, thanks for being here.

STEVE GROSSMAN, FORMER DEAN CAMPAIGN CHAIRMAN: Thanks for having me.

DOBBS: Watching your former candidate today wrap it up had to be tough emotionally.

GROSSMAN: It is, it was, and will continue to be for a while. I think it's a sad day.

But I want to reflect, just for a few moments, on what I think Howard Dean achieved. I think he defined the debate in the Democratic Party. I think he has created this movement that can really reinvigorate participatory politics and really give people a sense of political empowerment. And if he sticks with that pledge that he made today -- and I know that he will -- he can be a leader in this Democratic Party and a force in American politics for a long time to come. I expect he will do that.

DOBBS: There is also, of course, Steve, as you well know, an accomplished experienced politician, the possibility of having cross- voices at a time when cross-voices are not needed. That is, the voice of the candidate needs to be heard by the people.

Let's go to a couple of the things that you just suggested. Certainly, no question about it, Governor Dean put the opposition to the Iraq war and opposition to the Bush administration front and center for the Democratic Party, articulated that. Do you -- what do you think is the biggest mistake he made in the course of this campaign?

GROSSMAN: Well, I think, in Iowa, when we had the message, the money, the motivation, he got into this really tough negative struggle with Dick Gephardt.

And, you know, there's an axiom in politics that, if one candidate attacks another, then a third party benefits. And it was clear that the voters of Iowa rejected that. John Kerry and John Edwards really were lifted up by that struggle that Dick Gephardt and Howard Dean were involved in and lost the momentum in Iowa. After the Iowa primary -- Iowa caucus, the evening of the Iowa caucus and that speech, we never regained our momentum.

And once you lost Iowa and New Hampshire, and you predicated the whole campaign on winning those two, it was kind of hard to ever get back in the race.

DOBBS: Is this hindsight talking, Steve, now or did you counsel Governor Dean not to get into a negative contest with Congressman Gephardt?

GROSSMAN: No, I don't -- I can't say that I didn't counsel it.

Here you had Dick Gephardt as the principal opponent. And it was -- you know, it was hard-charging. And a lot of things are said during a campaign that can be interpreted. But the voters of Iowa clearly made a statement on caucus night. And that is, they were going to reward the people with the positive, visionary, forward- looking message. And John Kerry and John Edwards certainly got that reward for themselves.

DOBBS: Are you surprised, Steve, by the criticism that you have received in op-ed pages on the part of some commentators as basically, in having left the campaign before the candidate, effectively a criticism boils down to, good decision, bad form?

GROSSMAN: Well, look, I was the first -- by Howard's own admission, the first Democratic leader in the country to support Howard in the summer of '02.

DOBBS: Right.

GROSSMAN: I spent 19 months on this campaign and felt very good about what I did.

Look, if it caused any anger or upset and in some way got Howard Dean off-message for the past last couple of days of the Wisconsin campaign, I meant no offense. I was simply saying that, if Howard Dean didn't win Wisconsin, I was going to reach out to John Kerry. Howard Dean had already said, if I don't win Wisconsin, I'm effectively out of the race. So I didn't really think that that was such a shocking statement.

But, again, if it upset anybody, including Dean supporters, I feel apologetic for that, because I don't want to taint the wonderful work we all did together around a truly courageous man who defined this race for a year and made it acceptable to criticize the president legitimately on important national issues.

DOBBS: Steve Grossman, we thank you for being here. GROSSMAN: Thanks, Lou.

DOBBS: That brings us to the subject of tonight's poll. The question: What do you believe is the most important issue in this election, the economy, health care, education, or Iraq? Please cast your vote at CNN.com/Lou. We'll have the results coming up later in the broadcast.

Up next, American forces raid a suspected al Qaeda hideout before dawn in Iraq. We'll have a live report for you from the Pentagon.

And tonight, in "Face-Off," the White House today entered the national debate over the wave of gay marriages taking place in San Francisco. I'll be talking with two experts who have very different views on this controversial topic -- that and a great deal more still ahead here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: American troops in Iraq today captured seven terrorist suspects who may be linked to the al Qaeda terrorist network. Soldiers also detained 15 other people during a raid north of Baghdad.

We go now to Jamie McIntyre at the Pentagon for the report.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: The raid, conducted by soldiers of the 4th Infantry Division, was aimed at taking down an anti-coalition cell in Baquba, an Iraqi city in the heart of the so-called Sunni Triangle, where opposition to the U.S. remains strong.

According to the U.S. military, 22 people were detained, including seven suspects who were specifically targeted and are believed to have links to Osama bin Laden's al Qaeda terrorist network.

COL. WILLIAM ADAMSON, U.S. ARMY: And this morning in Baquba, we conducted a series of raids to detain people associated with a terrorist group with ties to al Qaeda. We suspected that they were responsible for a suicide car bombing in Baquba on 15 January.

MCINTYRE: Suicide attacks like the one that rocked the Polish military base south of Baghdad Wednesday are thought to be closer to the M.O. of al Qaeda fanatics, rather than former Iraqi regime members.

Since earlier this month, when the coalition authority released the contests of a seized document reportedly written by top al Qaeda operative Abu Musab Zarqawi, U.S. officials have been blaming more of the violence on outside agitators.

DONALD RUMSFELD, SECRETARY OF DEFENSE: They're also terrorists that are coming in from other countries across the Iranian border, the Syrian border, and they're determined to have a radical regime, a regime that is -- would be supportive of Osama bin Laden and people of that ilk.

(END VIDEOTAPE)

MCINTYRE: Iraqi civilians continue to bear the brunt of these attacks. Since the 1st of the year, some 300 have been killed in suicide attacks. Nevertheless, the U.S. military says most Iraqis support the coalition and continue on a daily basis to provide tips about enemy hideouts -- Lou.

DOBBS: Jamie, thank you very much -- Jamie McIntyre at the Pentagon.

Coming up next, thousands of gay couples marry in San Francisco. President Bush says he is troubled. We'll be talking with two experts who are leading each side of this debate on gay marriage. They face off tonight.

And exhibit A in Martha Stewart's obstruction of justice trial, prosecutors showing jurors what they say is proof of a cover-up.

And there were two. We'll have the latest from the campaign trail. We'll be talking with our panel of top political journalists -- that, a great deal more, still ahead here.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Hundreds of gay and lesbian couples today were married in San Francisco, a scene that's been repeated for almost a week now. This Friday, a judge will hold another hearing on whether to stop the city from granting marriage licenses to gay and lesbian couples. That is keeping the issue of gay marriage alive in the headlines and certainly on the campaign trail.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): President Bush today said he was troubled by gay weddings in San Francisco and the court decision in Massachusetts that would permit gay marriage.

BUSH: I strongly believe that marriage should be defined as between a man and a woman. The people need to be involved with this decision. Marriage ought to be defined by the people, not by the courts. And I'm watching it carefully.

DOBBS: President Bush stopped short of publicly endorsing a constitutional ban against gay marriage. But he said the San Francisco and Massachusetts developments would influence his coming decisions.

San Francisco Gavin Newsom continues to permit gay marriage in his city. More than 2,600 same-sex couples have been married since last Thursday.

GAVIN NEWSOM (D), MAYOR OF SAN FRANCISCO: We'll continue to do the right thing. We'll continue to no longer discriminate people just because of their sexual orientation. And I'm proud to stand on that principle. And we'll fight hard to do the right thing and change minds and, more importantly, change hearts.

DOBBS: The presidential election will not decide this controversial issue. Both Senator John Kerry and Senator John Edwards also oppose gay marriage.

There are now 39 states that ban same-sex marriage. Vermont is the only state in which same-sex civil unions are legal.

(END VIDEOTAPE)

DOBBS: And gay marriage is the subject of the tonight's "Face- Off."

Genevieve Wood says marriage should be between a man and a woman and gay couples can receive the same benefits as marriage couples without being married. She is vice president of communications at the Family Research Council, a member of the Heritage Foundation's National Media Advisory Board.

Good to have you with us.

GENEVIEVE WOOD, FAMILY RESEARCH COUNCIL: Thank you.

DOBBS: Ralph Neas, however, disagrees. He says same-sex couples miss out on benefits given married couples. And he says gay Americans deserve the same rights at heterosexuals. Ralph Neas is president of People For the American Way. He also served for 14 years as the executive director of the Leadership Conference on Civil Rights. Both join us tonight from Washington, D.C..

Good to have you with us, Ralph.

RALPH NEAS, PRESIDENT, PEOPLE FOR THE AMERICAN WAY: Thank you. Thank you very much.

DOBBS: Let me begin with the first issue here. Why is it important for the marriage to be applied here to gay and lesbian couples, if other legal and social benefits attend without the actual nomenclature marriage?

NEAS: No. 1, those benefits do not extend to unmarried couples. And we're talking about state inheritance. We're talking about state property issues. We're talking about children's issues, we're talking about power of attorneys. There are literally thousands of rights you do not have unless you have the same rights and responsibilities as a married couple as heterosexuals do.

It certainly involves legal rights and economic rights, but also means having the same rights and responsibilities as every heterosexual in this country. It's an equal protection issue. It's a fundamental civil rights issue.

DOBBS: Genevieve...

WOOD: I disagree.

DOBBS: I thought you might.

WOOD: The fact of the matter is the majority of benefits that they do talk about you can get through other ways. Look, you can leave your house, your possessions to anybody you want to. We had a woman not too long ago a very wealthy woman who left her inheritance to her cat. So, you can get around a lot of these things.

The fact is, the homosexual community, by and large, isn't so much interested in benefits, some of them are, but what they really want is a public stamp of approval.

And an example of that is what is going on in Boston. Even when an amendment came forward that said marriage will be between a man and a woman, but you have civil unions that gave all the benefits of marriage to homosexual couples, those in the homosexual activist said no, that's not good enough, we want the word marriage. And that's because they're more interested in a public stamp of approval than the benefit.

NEAS: That's just not true, Lou. It's been such an exciting time in American history in which you have in Boston, what you have in San Francisco, as my wife Katie said to me this morning, this inspirational. You have individuals who want to be part of the American dream. Who want to be part of the American way. They want to make a commitment to one another. They want to pledge fidelity. They want to take on the responsibility of taking care of their partner and children for the rest of their lives.

WOOD: But Ralph, why would you also deny those things...

NEAS: Please, don't interrupt me. Please, Genevieve -- please Genevieve, just for a moment, if you would.

DOBBS: Genevieve, just for a moment if you would.

NEAS: You'll have your opportunity.

I would think that conservatives and liberals and moderates all over America would salute those who have these family values. Who want to have commitment, who want to have stability. It strengthens our families and our community in America.

WOOD: To that, Lou, I would suggest and ask Ralph, why would you cut that off then to those who are interested in, for instance, polygamy or any other type of arrangement. There are people out there, I'm not suggesting Ralph thinks it's a good idea, but there are people out there that want to engage in polygamy, they think that's a good family structure. There are others who think that group marriages are a family structure. But that doesn't mean society has to step forward and go that's great. The homosexual community is saying we need to redefine marriage to include homosexual, same-sex couples. Why, if we're going to get into redefining, why would we stop there? Why would we limit it to two people who are committed to each other? Based on what? Tradition? If that's the case, why wouldn't we keep it with a tradition of a couple of man and a woman. Where would you stop the redefinition.

NEAS: Genevieve, I hope that truly was not a serious argument.

WOOD: I think it's a very serious argument.

NEAS: Polygamy is unlawful. Everyone...

WOOD: So is homosexual marriage but you're wanting to change that. Why wouldn't we also change for it other groups, other people who have different ideas of what marriage ought to be.

NEAS: We have changed the marriage definition in the past, remember 1967 it was a Supreme Court decision which said you could not have the states prohibiting interracial marriages.

We are saying that marriage involves two people. Polygamy...

WOOD: But why? Based on what?

NEAS: Polygamy by its very nature hurts people.

WOOD: Hey, Ralph, there are a lot of studies out there that say children need a mom and dad and you don't seem to be interested in that.

NEAS: Genevieve, you are very, very rude. Please allow me to finish. All the studies show that children -- by the way, there are a million children who have gay parents. Children need two parents, that's the best situation. All the studies show that whether you are gay couples or heterosexual couples, the emotional and social development is the same. We should strengthen and protect children...

WOOD: Lou, I'm not going to sit here and making up statements about these studies. It's just not true. What is more important than family income, what is more important that what part of the country you grow up with, is whether you have a mother and a father in the home. Two moms don't make a dad and two dads don't make a mother.

And look, these couples that want to use their children to try to gain public recognition for their marriage and their unions, they are using children that's emotional blackmail on the public to say we already have these families need to recognize them.

DOBBS: I'm sorry, Ralph...

NEAS: Lou, go ahead.

DOBBS: Genevieve, let me ask you this. We started out by rights, we're attendant to those that are married, heterosexual marriages in this country. Do you or your organization have any problem with all of those rights being attended to gay and lesbian couples.

WOOD: Well, we don't -- you mean through like something like civil unions?

DOBBS: Through whatever the contrivance of society might be. Whether it be civil -- leave marriage out of this for right now.

Is there any opposition, any objection on your part or your organizations to those same rights attending those individuals and those couples?

WOOD: Look, Lou, I think anybody ought to be able to visit a friend, a relative in the hospital, that ought to be up to the patient.

DOBBS: That's a simple question that I'm laying out before you.

WOOD: I'm saying some of them, yes. I'm saying some of them, yes. But I would not be in favor nor would Family Research Council be in favor of creating what I would call counterfeit marriages, basically the same institution...

DOBBS: I left marriage out of it. I'm just trying to get for our audience a clear understanding of your position. You would not deny those rights to those gay and lesbian individuals whose decide to form couples, period, is that correct?

WOOD: I don't think we deny. I don't know what rights we're denying.

DOBBS: You know, I'm not asking if you do.

NEAS: Lou, may I interject for a second?

DOBBS: Is there any right that attends a heterosexual in this country you would deny a homosexual?

WOOD: Yes. For instance, Social Security benefits, government benefits that we give -- look, we don't give some of those benefits to a roommates who lives together for 10 years. Why do we say we're going to give it to homosexual couples? There are a lot of committed relationships out there we don't give special privileges to. And the reason is not because we like men and women who get better than anybody else. It's because we realize marriage is a lot more than two people enter into it. That's the basis for forming families and raising children.

NEAS: I would advise your listenership, those that are watching this program, to go to Genevieve's Web site. Go to Family Research Council and see what they are asking all candidates to sign as a pledge that these candidates would pledge not to give any rights or benefits to civil unions, or any artificial partnerships as they call them. They don't want any rights or benefits that would be part of a marriage extended to civil unions or any other kind of domestic partnership or any relationship between gay individuals.

WOOD: That's FRC.org. Please go and read it for yourself. FRC.org

NEAS: I encourage you to.

DOBBS: If I may, I'd like to ask you one last question, we have to wrap this up because we're running out of time. The idea of marriage between a gay and lesbian couple or heterosexuals. With the state of marriage in this country, more than half now ending in divorce, the number of single family parents in this country -- you were talking about the difficulties, the preference for a mother and a dad. Is there some way that you could come together on this issue, your organization, Ralph, yours, and I'm being very serious about this.

You are so worried about a relatively small number of people in this country who are gay, who are seeking to marry, yet we have tens of millions of children in families in this country who are under inordinate economic pressure, under inordinate social pressure and we are all -- I will plead culpability, because this is an important issue, but we probably devoted more time to this issue tonight than frankly it deserves against the background of those tremendous social and economic pressures that are negatively affecting every family, nearly every family in this country.

WOOD: Lou, I'll be brief and Ralph if you want to have the last word, then go for it. Look, the reason -- while we're debating the this, e also supporting the healthy marriage initiatives that the president has put forward. It's about building strong families.

And I'll tell you, the last time government got involved in this, 30 years ago with no-fault divorce is the reason we have the divorce rates to the great extent we have today. We don't need to further weaken it by tinkering with marriage again. The fact is, we need to try to strengthen it, not weaken it again.

And the reason we're having this debate is because we have a mayor out in San Francisco who is breaking the law by handing out marriage licenses to homosexual couples. That's why this is such a news story right now.

NEAS: Lou, this is an historic debate. And as Dick Cheney said, as I don't usually agree with Dick Cheney, it will be decided state by state.

I think your right, as important and historic as it is, we shouldn't be spending so much time on it, because the war in Iraq should be addressed, the war on terror should addressed, the economic issues, the healthcare issues.

But the Richard Worthland (ph), Republican poster, has told the right wing, told the Republican party this is a great wedge issue. This will distract the American people from the real issues facing America: infidelity, drug problems, alcohol problems, economic issues, drive marriages apart and cause divorces. There's no threat from two people committing themselves to one another for life, to making a pledge of fidelity, to provide and promise to protect one another and care for one another for the rest of their lives. That's healthy, that's good, it's all American, that's what we should all want from all individuals whether it's a gay, lesbian or heterosexual.

DOBBS: Genevieve, with about 15 seconds, you can have the last word or words within that time.

WOOD: Well I would ask what I began with at the beginning if we're going to get into redefining marriage why would we stop at just allowing homosexual marriage? I know it sounds weird to people, but there are other groups out there that think other ideas are good too. And I think they'll come up. And with the court cases that are being brought forward by groups like Ralph Neas there will be no reason to not open it up to everybody and everything.

DOBBS: Ralph Neas, Genevieve Wood, we thank you both for being here.

Coming up next, Howard Dean may be out of the race, well, he is out of the race, but Senator Kerry, Senator Edwards they are preparing for the Super Tuesday primaries. We'll be talking with three of the country's top political journalists next and attorneys in the Martha Stewart trial, battling in a game of show and tell, we'll have the very latest for you live from the courthouse.

(COMMERCIAL BREAK)

DOBBS: In the Martha Stewart trial, a former top attorney for Stewart's company went on the witness stand. Mary Snow has the live report for us at the courthouse in lower Manhattan -- Mary.

MARY SNOW, CNN CORRESPONDENT: Martha Stewart side gained some more headway in fighting the most serious charge against Martha Stewart's securities fraud. Greg Blatt, the former general counsel of Stewart's company testified he called Stewart's attorneys in June of 2002 and encouraged Stewart to make a public statement after she was publicly linked to Sam Waksal and her shares of Imclone stock. He also said that there were business concerns among advertisers.

Now Stewart's declaration of innocence has become the focus of that securities fraud charge which alone carry as maximum penalty of ten years in prison, the judge herself has said it was a novel charge. Stewart's attorney once again indicated he plans to try to dismiss the charge when the defense begins its case. That is being pushed back a bit because the prosecution now says it won't be able to rest tomorrow. It still has eight witnesses to call, one of the key witnesses will be one of Martha Stewart's best friends, a woman she was traveling with the day Stewart sold her shares of Imclone stock and the defense says it has not yet made a decision on whether or not to call Stewart to the stand -- Lou.

DOBBS: Mary, thank you. Tonight, the race for the Democratic presidential nomination down to two candidates. And we're now joined by our political panel, joining us Ron Brownstein, the national political correspondent for the "Los Angeles Times." From Washington, Tom DeFrank in Washington as well where he is bureau chief for the "New York Daily News" and Carlos Watson, CNN political analyst tonight from Mountainview, California. Gentlemen, good to have you with us.

As each of you correctly forecast, a single-digit win for John Kerry in Wisconsin. This seems to be two points of view, Senator Kerry posts another win. It's irrelevant that Edwards is second. The second is that it's an up surge and now we have a real contest. What's the right answer, Carlos?

CARLOS WATSON, CNN POLITICAL ANALYST: Right answer is that this is Kerry's nomination, 16-2. He won't win it on March 2, though, he'll win it on March 9. I think after March 9 one of the most exciting new things you'll see is the return of Bill Clinton. I think you'll see him on the campaign trail no later than March 10. You might even see him on March 9 in Texas and Florida.

DOBBS: Who is he working for?

WATSON: I think he'll be helping out John Kerry. I think John Kerry will head into...

WATSON: Oh, great question, Lou. Were you asking about his wife?

DOBBS: Well, that's exactly what I was asking about.

WATSON: Who knows. I mean I still doubt and Ron and Tom may feel differently. I doubt that she will be on the list of vice presidential candidates. But I will say this if John Edwards wins Ohio or Georgia, two critical states, pivotal states, I think he'll double his chances of being the vice presidential nominee. That much is at the stake, I think, on March 2.

RON BROWNSTEIN, "LOS ANGELES TIMES": We sort of settled the presidential race before we get to the vice president and John Edwards has bought himself one more window to try to make the case. I agree with Carlos it's very much an uphill challenge. John Edwards has done well where he has been able to focus his time, make himself better known to voters and he's closed well as we talked about yesterday especially with Independents, Moderates, voters concerned about the economy. The problem he now faces, Lou, is that in two weeks he has to appeal in ten states at once.

The approach that's worked for him simply isn't applicable. He's got to be able to sort of appeal more through the mass media. Obviously, he's going to get more attention but it's very much of an uphill climb. Nonetheless, he has a spotlight and that gives him at least breathing room for one more bite of the apple.

TOM DEFRANK, "NEW YORK DAILY NEWS": I agree with that, Lou. I mean, I think Edwards starts from too far back in the pack. And, also, many of these states that are coming up here, Ohio, New York, Minnesota, I don't think that the electorate, the Democratic electorate in those states is particularly sympathetic to Edwards. They like him but I think his appeal in these states is not going to be as strong for obvious reasons as say, South Carolina.

DOBBS: Let's go to the other party and it's incumbent, President Bush, today talking about the economy is strong, backing away from the forecast of his Council of Economic Advisers. How significant is that, Carlos?

WATSON: Lou, I think you've -- if I can compliment you on your own show. I think you've actually put the issue squarely on the table on the outsourcing of jobs. You hear a lot more conversation not just about economic growth but about economic fairness and about economic security. But I think you'll start to see the president over the next several weeks trying to have a broader conversation on the economy where he says while job loss is part of the story, that people have become wealthy in other ways including equity in their homes. Homeownership rates as you know, are at 68, 69 percent, the highest they have been in 25 years. And he'll try and paint a broader picture.

BROWNSTEIN: Lou, there was a poll out yesterday and today in Ohio where President Bush's approval rating in that state fell below 50 percent, for the first time in his presidency, way below 50 on the economy. If you look at what is going on in the economy, I think the battleground here in 2004 will be much more than Midwest, than the border south or even Florida and that may be one hurdle that John Edwards faces as potential nominee. I think Carlos got it right. If he can win Ohio, show he can win back blue-collar votes, sort of a younger Dick Gephardt, maybe that would make him attractive if Kerry does outlast him.

DEFRANK: Especially, Lou, since Ohio is a state Bush has to have and the White House is very worried about Ohio. They are far more worried about everything at the moment. The truth is George W. Bush has had a terrible 2004, nothing has really gone well this year for him. Not the State of the Union, not the "Meet the Press" performance, not the dismal handling of the National Guard issue by his staff. Bush has to be lucky that all campaigns are cyclical. This is a bad phase for him. It won't be the last phase. And his time will probably come. But he's not doing well at the moment.

DOBBS: Tom DeFrank, Carlos Watson and Ron Brownstein, we thank you gentlemen for being here.

Coming up next, in "Made in America," toy makers unveil thousands of new creations at the International Toy Fair but only a handful are made in the USA. We'll be seeing them. And Bank of America creates 1,000 new jobs, not in this country, however. Christine Romans will have the story. That and a great deal more still ahead, stay with us.

(COMMERCIAL BREAK)

DOBBS: The American international toy fair, well the name says American an overwhelming majority of the toys on display at the fair are made outside this country. Last year, China, in fact, shipped more than $12 billion worth of toys to this country. But despite tremendous pressure to compete, some American toy manufacturers are determined to produce and sell toys made in America.

Kitty Pilgrim reports.

(BEGIN VIDEO CLIP)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Of the 1,200 exhibitors at the New York toy fair only a handful still make their products in America. Scale Models put it right there on the sign. The toy tractor company, based in Iowa, employees 130 people.

JOSEPH ERTL, SCALE MODELS: You want to make more money, you go to China or someplace. But I feel the lord is being good to me. I have employees who need jobs. And people in our area and I think it's a bad policy for the way our American manufacturing is being destroyed in this country.

PILGRIM: Vermont based Maple Landmark Woodcraft says it's hard to compete with imported mass market products sold in retail chains like Wal-Mart.

MIKE RAINVILLE, MAPLE LANDMARK WOODCRAFT: It does hurt us without doubt but I think also provides us an opportunity to try to set ourselves apart and being something different.

PILGRIM: The Vermont company is also committed to keeping manufacturing jobs in their home state.

UNIDENTIFIED MALE: We have to make every part, put it all together by hand.

PILGRIM: At the toy fair, manufacturers say over and over, cheap labor is increasingly luring manufacturing overseas.

(on camera): Some manufacturers tell us basing production here in the United States is actually a better business plan when it comes to bringing products to market. For example, Step 2 company based in Cleveland says because everything is made here, they can design a new toy and get it in the stores in less than two months.

TODD HURST, STEP 2: All of our research and development is done here, all of our market something done here. We have an in-house sales force and it's really easy for control wise, we really can get a product out and go through the whole life cycle of the product.

PILGIRM: With 50 new product this is season, for them made in America makes better business sense.

Kitty Pilgrim, CNN, New York.

(END VIDEOTAPE)

DOBBS: On Wall Street today, stocks down modestly. The Dow off 43 points, the Nasdaq down 4, the S&P off 5. Another American company today said it will ship more Americans jobs over seas.

Christine Romans, is here with the report -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Bank of America will hire a thousand people in India, setting up some back office business for a subsidiary there. But that bank, Lou, as we reported here has already outsourced thousands of jobs, analysts say two thirds of American banks now are shoveling U.S. jobs overseas to cut cost. It's not just to India, Lou, these banks are going to China and to Russia. And it's curious because CEOs say they are more optimistic about the U.S. economy but they don't plan to hire, at least not here.

DOBBS: On another subject relationship of lost jobs and excessive CEO and executive pay and maybe not the way to do business.

ROMANS: The prosecution in the Tyco trial, painting Mike Scores (ph) the former CFO the man responsible for 10's of thousands of job cuts while living large on the company dime. He and his old boss accused of bilking shareholders of $600 million at the same time through Tyco's veracious and ill advised mergers 70,000 jobs were lost. Now that's Tyco. A now a note on Enron. Remember Enron? It's former -- it's former CEO, Jeff Skilling expected to surrender tomorrow to charges in front of a federal judge.

DOBBS: A little over two years and here we go.

ROMANS: Here we go.

DOBBS: Christine thanks.

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

John Bill of Gainesville, Florida, wrote about the liability and security of electronic voting. "It is hard for me to believe that it didn't occur to the people who design voting machines to put a small roll of paper, similar to a that on a cash register, on voting machines to keep a paper record of each vote. No chad, not confusing ballots, no problems, right?"

Well, Carla Wood of Birmingham, Alabama, "I would think that the fiasco in Florida last time proved that we can't even trust a paper trail."

Come on.

John of Clinton, Missouri, "Can you explain how a company like Halliburton can over-charge our government by millions and millions of dollars and get away with just reimbursing the government with no prosecution. While Martha Stewart gets prosecuted for selling $40,000 worth of stock, attracts the full weight of the government, faces jail time and possibly ruining her business.

"Exporting America," Jonathan, of Overland park, Kansas, President Bush "said his priorities are jobs, jobs, jobs. Would that be for jobs in India, China and Mexico?"

Send us your thoughts. We love hearing from you. E-mail us at loudobbs@cnn.com.

Coming up next, the results of our poll. And now a quick update on the list of companies we confirmed to be exporting America. The companies sending American jobs overseas or choosing to employee cheap foreign labor. Tonight's additions to our list of 300 companies, American House Hold formerly known as Sunbeam, Anheuser Busch, Automatic Data Processing, Columbia House, Compuserve, General Motors, Sallie Mae, Teradyne, TransUnion and USAA. Log on to cnn.com/lou for the entire list. We'll be right back. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now the results of "Tonight's Poll." The question, what do you believe is the most important issue?

Seventy-nine percent of you say economy, 10 percent healthcare, 1 percent education, 10 percent Iraq.

That is our show for tonight. Please join us tomorrow. We'll be joined by Congressman David Dreier. He's here to discuss the presidents trade policies. We'll also be joined by Mary Matalin to tell us how the Republicans are doing. Friday, Richard Trumka, the AFL-CIO on the exporting of American jobs. He's trying to stop it. We'll be Washington Monday. We'll be talking with Dr. Catherine Mann.

For all us here, good night from New York. "ANDERSON COOPER" next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





International Trade>