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Lou Dobbs Tonight
Israel Assassinates Hamas Leader; Rising Cost of Health Insurance; New Wave of Political Ads
Aired March 22, 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: Israel assassinates the leader of Hamas. Tonight, anger and grief in the Middle East and cries for revenge against the United States.
UNIDENTIFIED MALE: Ahmed Yassin was the godfather of the suicide bombers.
DOBBS: Republicans and Democrats launch a new wave of political ads and charges and countercharges on the al Qaeda and counterterrorism. I'll be joined by the chairman of the president's reelection campaign, Marc Racicot, and the chairwoman of Senator Kerry's campaign, Jeanne Shaheen.
The rising cost of medical insurance. Many middle-class Americans can no longer afford even basic medical coverage.
And CEO bonuses rise to the highest levels in nearly five years.
UNIDENTIFIED FEMALE: The average CEO bonus is up around $2 million.
DOBBS: Tonight, our special report on CEO greed while working wages decline.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, March 2. Here now for an hour of news, debate and opinion, Lou Dobbs.
DOBBS: Good evening.
Tonight, the radical Islamist group Hamas is threatening the indicates. Hamas is promising to retaliate against the United States and Israel after Israel killed the organization's spiritual leader and founder, Sheik Ahmed Yassin. Israeli missiles killed Sheik Yassin and seven others outside a mosque in Gaza. Israel says Hamas terrorists have killed almost 400 Israelis since September of 2000.
Ben Wedeman has the report from Gaza -- Ben.
BEN WEDEMAN, CNN CORRESPONDENT: Yes, Lou, it started early in the morning and the anger hasn't stopped here in Gaza.
We saw more than 100,000 people came out into the streets of this crowded city to attend his very tumultuous funeral. They accompanied his flag-draped coffin as it was taken to the grave. Now, to the Israelis, Sheik Ahmed Yassin was, in the words of Prime Minister Ariel Sharon, an arch-murderer with a blood-stained past.
But to many Palestinians as well as Arabs, he was a folk hero, a man who, even though he was in a wheelchair, seemingly weak, he was very powerful, had a huge following within Palestine and outside, throughout the entire Arab world. They saw him as a man who, despite his power, was not corrupted, this in a part of the world where power and corruption often go hand in hand.
Now, earlier today, we heard the PLO representative in Washington, Hassan Abdel Rahman, pouring scorn on the idea that Sheik Ahmed Yassin was some sort of terrorist mastermind.
(BEGIN VIDEO CLIP)
HASAN RAHMAN, PLO REPRESENTATIVE TO UNITED STATES: A man who is 68 years old, three-quarters deaf, three-quarters blind on a wheelchair assassinated in a mafia style by an Apache helicopter, that is unbefitting a state that claims to be a democracy and a state of law. This is lawlessness at its best.
(END VIDEO CLIP)
WEDEMAN: And, of course, Hamas has threatened to retaliate in many different ways saying that its retaliation will shake Israel like an earthquake -- Lou.
DOBBS: Ben, thank you -- Ben Wedeman reporting from Gaza.
European governments were quick to strongly criticize Israel's killing of Sheik Yassin. Foreign ministers said the airstrike was violation of international law and a setback for peace efforts in the Middle East.
(BEGIN VIDEO CLIP)
JACK STRAW, BRITISH FOREIGN MINISTER: Israel is fully entitled to defend itself against terrorism which it faces, but to do that within international law. It is not entitled to carry out unlawful killings, which we've condemned in the past and we condemn today.
DOMINIQUE DE VILLEPIN, FRENCH FOREIGN MINISTER: We are convinced that all try -- all attempts to this kind of targeted killings are illegal. They're not complying with international law and at the very moment in which we are trying to give a new impulse to the peace process.
(END VIDEO CLIP)
DOBBS: The White House considerably more measured in its reaction to the assassination. White House spokesman Scott McClellan said the United States is deeply troubled by the killing, but McClellan again said Israel has the right to defend itself.
Senior White House correspondent John King with the report -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, in private, a senior U.S. official said the assassination of Sheik Yassin is -- quote -- "not helpful." The administration had hoped that perhaps Prime Minister Sharon's controversial proposal to put out from the West Bank and Gaza might somehow get a peace process back on track, at least eventually.
All those hopes now dashed. And the worry here at the White House is that there will be an escalation of violence between the Israelis and the Palestinians. The Israeli foreign minister made a visit to Washington to brief not only Condoleezza Rice, the national security adviser, but also Vice President Cheney and Secretary Powell on this operation.
He says the Israeli government has intelligence proving that Sheik Yassin is directly involved in terrorist strikes against Israel. So, again, as you put it, Lou, not a condemnation like you've from the European foreign capitals, the White House voicing its deep concern. And what we are told the private message to the Israelis was, try to show restraint in the days ahead to try to keep the violence from escalating out of control -- Lou.
DOBBS: John, little restraint in the White House reaction to the controversy over a new book by former White House counterterrorism official Richard Clarke. Clarke has accused the White House of ignoring the al Qaeda threat before September 11. What is the White House position tonight?
KING: Lou, from the highest levels of this administration, a remarkable blunt, forceful counteroffensive to this new book by former counterterrorism czar Dick Clarke.
The administration in that book is painted as so obsessed with Saddam Hussein and Iraq that it ignored from day one the warnings of the mounting al Qaeda threat. White House officials say nothing is further from the truth. Dick Clarke, though, says he decided to go public and to write this book because he says he finds it offensive that President Bush is campaigning for reelection on the theme of terrorism, a threat Dick Clarke says this president has ignored.
(BEGIN VIDEO CLIP)
RICHARD CLARKE, FORMER COUNTERTERRORISM ADVISER: I find it outrageous that the president is running for reelection on the grounds that he's done such great things about terrorism. He ignored it. He ignored terrorism for months when maybe we could have done something to stop 9/11, maybe. We'll never know.
(END VIDEO CLIP)
KING: Now, the administration says nothing could be further from the truth and it is particularly upset -- you might say overly riled, Lou -- at the idea that Dick Clarke is suggesting that President Bush somehow could have prevented 9/11 had he taken the threat from al Qaeda more seriously. The White House press secretary said that is a flat lie.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think that his assertions that there was something or his assertion that there was something we could have done to prevent the September 11 attacks from happening is deeply irresponsible. It's offensive. And it's flat-out false.
(END VIDEO CLIP)
KING: Now, the administration says that all senior officials were briefed on the al Qaeda threat in the transition from the Clinton administration to the Bush administration. They say Dick Clarke himself was personally tasked just five weeks into the Bush administration to develop a new strategy not simply to contain al Qaeda, but to eliminate al Qaeda.
And they also say, Lou, that, even if they had acted more quickly on some of his recommendations for actions overseas, it would not have protected or prevented 9/11 because those hijackers, most of them, anyway, were already in the United States. A forceful rebuttal from the administration. Look for it to continue in the days ahead, because, of course, the 9/11 Commission is about to hold public hearings -- Lou.
DOBBS: And Dick Clarke is about to testify in two days before that commission. John King, thank you.
Well, as John just report, Dick Clarke talked about his book on CBS' "60 Minutes" last night. But "60 Minutes" did not disclose that the parent company, Viacom, has a financial interest in that book's success. The book is published by Free Press, a subsidiary of Simon & Schuster, which is in turn owned by Viacom.
Tonight, CBS News told us here that "60 Minutes" is beholden to no one.
Former Treasury Secretary Paul O'Neill was the main source of another highly critical book about the Bush administration. Today, the Treasury Department's inspector general cleared O'Neill of any wrongdoing after an investigation into the way he obtained so-called sensitive documents. The inspector general said O'Neill gained access to nearly 150 classified documents because those documents were not properly marked as classified.
Turning to the hunt for al Qaeda's leaders, Pakistani troops fighting radical Islamist terrorists have found a network of tunnels near the border with Afghanistan. Senior al Qaeda leaders may have used those tunnels to escape from advancing Pakistani soldiers. As the Pakistani military continued its offensive, the head of the U.S. Central Command, General John Abizaid, visited Pakistan to talk about the global war on terror.
Senior Pentagon correspondent Jamie McIntyre reports -- Jamie. JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, U.S. Central Commander General John Abizaid did meet with senior Pakistani military officials today, no doubt to discuss the situation along the border.
But the Pentagon insists that that meeting was planned well ahead of time and was not directly connected to what's going on in that border region. The big question, of course, is, did senior al Qaeda leaders, perhaps Ayman al-Zawahiri or someone else, escape through a tunnel that was discover by the Pakistani military today? The tunnel about a mile long and connected to separate compounds used by local tribal leaders in that area who have been in a pitched battle with the Pakistani military there for days now, more than several thousand Pakistani troops fighting off several hundred Muslim fighters in that area.
They are in negotiations, trying to get them to turn themselves in or to give up. Meanwhile, the Pakistani military did display some bodies today that they say are foreign fighters, but there was no way to tell what nationality they were. They all seemed too young to be al-Zawahiri, who was Osama bin Laden's No. 2 in al Qaeda. The U.S. government continues to say it has no information about exactly who was in the area, but they're stepping up the vigils along the border in case they flee into Afghanistan -- Lou.
DOBBS: Jamie, President Musharraf told CNN's Aaron Brown that the Pakistani military surrounded a -- quote-unquote -- "high-value target." Is there any indication who that might have been some three days later?
MCINTYRE: Well, President Musharraf was clear at the time that he didn't know who it was and that they were piecing together information from intelligence.
The Pakistani military has indicated variously that it could be either Ayman al-Zawahiri or someone else high in al Qaeda. Then they indicated it could be an Uzbek leaders, because they said some Uzbeks fighting in here. And then they also said it might be one of the powerful local tribal leaders. So they clearly don't know who is in that area or whether they got away.
DOBBS: The bottom line is, we just don't know much more tonight.
Jamie, thank you very much -- Jamie McIntyre, our senior Pentagon correspondent.
In Iraq, insurgents have killed another American soldier, three other troops wounded. They exploded a roadside bomb as soldiers patrolled western Baghdad. In Southern Iraq, 13 British soldiers were wounded in two explosions in the center of Basra. The British Army said those soldiers were attacked during a demonstration by unemployed Iraqis. The demonstrators threw gasoline bombs at the troops. The Army said none of the soldiers was seriously wounded.
A new round of attacks tonight on the campaign trail. We'll be talking with the Bush/Cheney campaign chairman, Marc Racicot, and the chairwoman of the Kerry campaign, Jeanne Shaheen.
Also tonight, a presidential report on the financial squeeze facing middle-class Americans, rising health care costs, rising energy costs and falling wages.
And bonuses for corporate executives have skyrocketed. We'll have that and a great deal more still ahead here.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: We've been reporting here for some time on what we call the middle-class squeeze. Tonight, we focus on health care; 44 million Americans are now living without even the most basic health insurance. One reason, premiums have skyrocketed while wages have fallen. The result, millions of hardworking middle-class families are unable to pay for their health care.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Forty-six-year- old Pat Lawrence runs her own catering business. She makes enough money to cover food and rent, but cannot afford the $600 a month for health insurance.
PAT LAWRENCE, UNINSURED WORKER: A lot of people have more month at the end of their money than they do money at the end of their month. And I kind of fall into that same category.
SYLVESTER: For most of her adult life, she has not had health coverage.
LAWRENCE: I don't have the annual Pap smear or the mammogram or I don't even go in and have my blood pressure checked.
SYLVESTER: She is among 44 million uninsured Americans, many of them professionals, small business owners and freelancers. The Census Bureau says the number of uninsured has increased by 10 percent in the last two years. Rising health care costs and shrinking wages have put health care coverage out of reach for more middle-class Americans. Four out of five people without insurance are in working families.
RON POLLACK, FAMILIES USA: They tend not to have coverage because their employer doesn't provide coverage or their employer provides coverage and is charging the worker too much money that they can't afford and they're ineligible for any public safety net program.
SYLVESTER: Employers are increasingly asking their workers to shoulder more of the cost of health insurance. Those unable to afford the higher premiums end up dropping their coverage.
STUART SCHEAR, ROBERT WOOD JOHNSON FOUNDATION: So, even if you are employed and you have health coverage, it's very likely that in the last two years you've seen an increase in the co-payment you pay when you get a prescription at the drugstore, that you pay more on a monthly basis for your health premiums.
SYLVESTER: Those without insurance do what Pat Lawrence does, play the game of medical roulette, hoping nothing happens.
(END VIDEOTAPE)
SYLVESTER: A major part of the problem is rising health care costs. The general inflation rate is about 2 percent a year, but health care premiums by comparison are up on average 14 percent -- Lou.
DOBBS: Lisa, thank you very much.
Well, if you think economic conditions are tougher than ever, you're exactly right. The middle class is being squeezed and squeezed hard.
Christine Romans is here now with more disturbing news about shrinking American paychecks -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, Americans' purchasing power is faltering here.
Real wage growth has turned negative for the first time since 1995 and it has deteriorated dramatically in the past year and a half, these numbers from Merrill Lynch, high gas prices and a weak jobs market delivering a one-two punch to consumers. Economist David Rosenberg says that pain at the pump has wiped out more than $20 billion of the coming $40 billion in tax refund checks.
And nothing affects the consumer more than jobs, right? Merrill called jobs growth amazingly anemic. And for those with jobs, just like Lisa said, purchasing power further in jeopardy as benefit costs gets pushed back onto the worker, Lou, a tough situation for the American middle class. And one potential tailwind, low rates during another round of refinancing, Merrill says that's only good news if homeowners use the money to repay their own -- repair their own balance sheets.
DOBBS: I can't imagine rates going much lower than this. In real terms, we're already negative.
ROMANS: Absolutely. It's been a really amazing ride and now you've got real wages lower, first time in nine years.
DOBBS: Well, it's not good news and we haven't had much good news for working people in this country for some time. Thank you very much.
ROMANS: You're welcome.
DOBBS: Corporate America may not be hiring workers, but excessive CEO pay is certainly alive, well and growing more excessive, it seems, almost every day. We'll have that report for you. And President Bush's campaign chairman, Marc Racicot, is our guest tonight.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The economy is growing, but that growth has not yet, at least, created jobs, not that any of that is restraining corporate CEO pay. In fact, when it comes to compensation, many top executives have their heads buried in the trough.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Cash is king. Stock options are out.
JANNICE KOORS, PEARL MEYER & ASSOCIATES: Average bonuses for CEOs will be up probably in the 15 percent to 20 percent range compared to last year. Early filers that we've looked at, the average CEO bonus is up around $2 million.
TUCKER: Cash is back as boards worry about the potential impact of expense and stock option grants. So rather than cut bonuses, boards are trading one form of compensation for another. Among the companies filing early earnings reports, almost half with revenue topping $22 billion made changes in options perhaps. Only about one in five made changes in annual incentive plans. And long-term incentive changes were made by relatively few companies, but they have high profiles, creating the impression that more change occurred than actually did.
Increasingly, however, boards are having to ask themselves a new question.
BRENT LONGNECKER, LONGNECKER & ASSOCIATES: How are people going to respond to it, especially the people we have working for us, if we're in the middle of layoffs, if we're in the middle of hiring freezes, or merit freezes? How does this look? And I think they have to be more and more sensitive to those kind of issues.
TUCKER: But the pace of change is slow and many boards remain in denial they are overpaying executives.
(END VIDEOTAPE)
TUCKER: There apparently is no denial at Sears Corporation. The board there cut CEO Alan Lacy's bonus in half today, down to $900,000, and left his pay flat. So at least some companies are getting the message, Lou.
DOBBS: Good. A few companies.
TUCKER: Yes. DOBBS: Bill, thank you very much -- Bill Tucker.
Tyco's former chief executive officer is famous for his excesses, most notoriously for a $6,000 shower curtain and a $2 million birthday party for his girlfriend at the time. Dennis Kozlowski and his former chief financial officer Mark Swartz are accused of looting $600 million from Tyco. Jury deliberations in the trial stretched into a third day today. If they are found guilty, Kozlowski and Swartz each faces up to 30 years in prison.
New ads, new attacks in the presidential campaign tonight. We'll be talking with the heads of both campaigns. Bush/Cheney chairman Marc Racicot, Kerry chairwoman Jeanne Shaheen will join us.
Also, should the United Nations play a larger role in Iraq? Senator Carl Levin says yes. He's just returned from Iraq and he joins us.
And fighting the battle of the sexes on the campaign trail. One of the presidential candidates says he'll make equal work for equal pay a key issue. That and great deal more still ahead.
(COMMERCIAL BREAK)
DOBBS: The Republican National Committee is trying a new tack on its Web site tonight, the target, not surprisingly, Senator John Kerry.
The John Kerry so-called spendometer, or spendometer -- I'll talk with Governor Racicot and find out how to say that -- calculates how much the RNC says Kerry's spending proposal will cost taxpayers. President Bush's reelection campaign now puts the amount at $1 trillion, $100 billion more than a previous estimate in Bush-Cheney ad released just last week.
Joining me now, the chairman of the president's reelection campaign, the former governor of Montana, Marc Racicot, joining us from Washington, D.C.
Good to have you here.
MARC RACICOT, BUSH-CHENEY CAMPAIGN CHAIRMAN: It's nice to be here. Thank you.
DOBBS: A trillion dollars? That's a lot of money.
RACICOT: Well, it's actually -- that's an underestimation of how much we're talking about.
Senator Kerry's been all over the country promising a lot of spending, about 73 different programs. And we have independent evidence that calculates the cost for 23 of those programs. And it amounts to about $1.7 billion -- or trillion dollars -- excuse me. And he's proposed about $700 trillion -- or $700 billion in increases in revenue. So that leaves you a trillion unaccounted for. It's a huge amount of money and a substantial underestimation really of how much it's going to cost.
DOBBS: Let's talk about an attack against the president, the administration. That, I'm referring, of course, in the CBS, "60 Minutes" interview, Richard Clarke attacking the administration, saying Condoleezza Rice didn't even know what al Qaeda was in his assessment, or he inferred that that could be the case, saying the administration had not done enough to prepare for September 11, and perhaps, in his words again, to have even stopped it. Your reaction.
RACICOT: Well, it's patent nonsense. The record is overpowering supporting the notion that upon first entry into office, after receiving briefings from the previous administration, which I might add is the administration that was in charge when these cells first started infiltrating this country, the president focused immediately and with a sense of great urgency upon al Qaeda and the Taliban.
And there's evidence throughout thereafter that he pursued that very, very diligently, as did the entire administration. So Mr. Clarke's representations go beyond patent nonsense. In my judgment, they're almost malevolent in their design.
DOBBS: Let's turn to the Kerry campaign suggesting that there was no imminent threat, saying, in point of fact, straight out that there was no evidence of any imminent threat from Saddam Hussein's regime. This looks as though this campaign is going to be focused a great deal on history here. To what degree are you comfortable or uncomfortable with that being the case?
RACICOT: Very comfortable, because you determine what it is that somebody's going to do in the future, Lou, by what they've done in the past.
This senator who is running as the Democratic nominee voted with very aggressive language associated with his vote to use force in Iraq and then, within months thereafter, after putting his finger in the wind, decided that he wasn't going to approve the appropriations for our troops in Iraq that supplied them everything from body armor to hazard pay.
So the fact of the matter is how you reacted in the past determines what you're going to do in the future. The American people have a right to know what John Kerry did.
DOBBS: And this administration accused in various instances leading up to the war in Iraq, during the post-Iraq war construction phase, accused of not being sufficiently multilateral. We've seen what has transpired in Spain. The president has spoken out, urging other nations to stay in the war on terror.
Does this look like it's going to be a huge issue, the issue of multilateralism, for the president?
RACICOT: Well, I think the president has set about to reach as broadly as he possibly can. We had more nations involved in the coalition that went into Iraq and that have been associated with the reconstruction activities than we did in 1991. So the fact of the matter is, there are more nations, more democracies, associated with this than ever before. The president has reached out all along. He's also displayed leadership, however, and thank God for Prime Minister Blair because he has displayed the same kind of leadership. This is no time for us to cower and shrink back into the position we were before which is we were worried about being fearful all the time, wondering what might happen, hoping something wouldn't happen.
This president said from the beginning, we're going to address this issue of terrorism and I think the American people wholeheartedly endorse that concept.
DOBBS: The latest "New York Times"/CBS News poll shows that, at least, in that survey that the two primary issues for voters right now are the economy and employment. Merrill Lynch, as we reported earlier in this broadcast showing that wages have fallen for the first time in seven years in this country, real wages, the economy, I think we could agree is in a fragile state right now.
The issue of outsourcing, Secretary of State Colin Powell in India reassuring the Indian government that the Bush administration supports outsourcing. Is there any likelihood that the administration would change its view given the fact there has not been job creation, that this is a fragile moment in the economy's growth?
RACICOT: Well, the fact is the president has addressed the economy virtually every single day and has a six-point plan to do that very aggressively. The flip side is, of course, that you have Senator Kerry, who wants to instantly raise taxes, he won't fight against frivolous lawsuits. He hasn't proposed a plan that makes health care more affordable to the American people. On and on and on with regulation cap-based standards that would put 100,000 people out of work in the automotive industry almost overnight.
So the fact is, this president has this economy pointed in the right direction. You mentioned, Lou, that in your earlier report, one of the reasons that incomes are being impacted is because of energy. This president put forward an energy bill that a good senator from Massachusetts didn't even show up to vote on. And the fact is we do need an energy program but the Americans I think, know that every economic indicator is pointed in the right direction. Almost 400,000 jobs created over the last six months. Largest growth we've ever had in the last half of last year, in 20 years. We have low unemployment below the rates of the 70s and 80s and 90s so the fact is that we're pointed in the right direction. Senator Kerry would bring that process to a complete, screeching halt.
DOBBS: Governor, I have to, just if I may, temper in response a couple of your indicators, one, of course, with the 5.6 percent unemployment rate, we do have almost a total of 15 million people, including discouraged workers. We have at the same time a half trillion-dollar federal budget deficit, a half trillion dollar trade deficit. Are we to expect -- you suggested that the past was prologue in governance. Are we to expect that this administration is committed to those kinds of deficits in terms of trade going forward?
RACICOT: There's no doubt about it. Absolutely no doubt about that. Lou, from the very beginning, the president's talked about the deficit and has a plan in place to reduce it over the course of the next five years by half. But when you have to choose between protecting your friends and neighbors and the people you work for and you have to choose whether or not you're going to make certain the jobs are created, you have to proceed rapidly and you know every business on occasion has to take out a loan or has to do something to address urgent circumstances, that's what the president did and now, the deficit is in the crosshairs of his focus and he has a plan on the table. The flipside is Senator Kerry talks about nothing but increased spending.
DOBBS: Thank you very much, Governor Mark Racicot, the head of the Bush/Cheney re-election campaign.
In just a few minutes, I'll be joined by the chairwoman of Senator Kerry's campaign, former New Hampshire governor Jean Shaheen. But first my next guest has just returned from Iraq along with four other senators. He's calling for the United Nations to be what he calls a full partner in the United States and the coalition in establishing a new Iraq government. Senator Carl Levin of Michigan is the ranking Democratic on the Armed Services Committee. Joins us tonight from Capitol Hill. Senator, good to have you with us.
Your assessment that you convey great respect for the job that our men and women in uniform are doing in Iraq. Also, suggested that the issue of governance was as -- future governance was almost as critical as the security issue right now in Iraq. How hopeful are you that the process underway is going to be successful?
SEN. CARL LEVIN (D), MICHIGAN: We have to be hopeful but it's a very, very difficult job ahead of us because we failed to get the international community to support our going in. We are paying a heavy price for that failure. We cannot fail again when July 1 comes again or comes this year because on that date, we, apparently -- have decided now that we will be restoring sovereignty to an Iraqi entity and whatever we do on that date, it must have the support of the international community or we going to have even greater civil violence and civil disorder, I'm afraid, than we do now. It's critically important that we involve the international community in this phase and to get their approval of the entity that's created so it's not just a U.S.-dominated decision here as to who the Iraqi sovereign government will be.
DOBBS: Senator, your assessment of the job that Paul Bremer has done as administrator of the CPA in Iraq.
LEVIN: I think he's done a good job. I hope, though, and we've talked to him again when we were there, but I really hope that now we're going to focus on what will it take to get the international community to support whatever decision is made relative to that entity that's going to be given sovereignty back on July 1. And I'm hopeful that Bremer will not just push ahead oblivious of the importance of having that international support because without it, if we transfer sovereignty to a entity that does not have international support, I'm just -- I am very leery about the chaos, even worse than we have now, which is going to result. DOBBS: Chaos as well in Israel and the Middle East. The assassination of Sheikh Yassin today by the Israeli forces. Your assessment and to the degree to which that raises the stakes.
LEVIN: I think that the statement of the administration sets the right tone on that.
DOBBS: And you would disavow the condemnation by the UK, France and a number of other European countries?
LEVIN: I think you have to expect that when you have an organization like Hamas, which is an avowedly terrorist organization that targets innocent civilians, that any country is going to respond against that organization. And Hamas takes credit for killing innocents in Israel and the man who was assassinated is the head of that organization and I think any country has the right to go after an organization which attacks its innocent civilians.
DOBBS: Senator Levin, as always, good to have you here.
LEVIN: Thank you, Lou.
DOBBS: That brings us to the subject of tonight's poll, the question -- do you believe the United Nations should be an equal partner with the coalition in establishing a new Iraqi government? Yes or no. Cast your vote at CNN.com/lou. We'll have results for you later in the broadcast. We'll be talking more about the war in Iraq. Next we'll talk with John Kerry's campaign chairwoman. Senator Kerry is promising a new direction for America. We'll find out precisely what that direction would be when we talk with former New Hampshire governor Jean Shaheen. One issue Senator Kerry is focusing on, the battle of the sexes in the workplace. We'll tell you why equal pay for equal work is still a campaign slogan.
(COMMERCIAL BREAK)
DOBBS: Legendary newscaster Walter Cronkite is criticizing Senator John Kerry for denying he's a liberal. Cronkite wrote an open letter to the senator in a column for "The Denver Post" in which Cronkite said Senator Kerry has reaffirmed what Michael Dukakis suggested back in 1988, that liberals don't like being called liberal. Cronkite writes, quote: "If 1988 taught us anything, it is that a candidate who lacks the courage of his convictions cannot hope to convince the nation that he should be given its leadership. Take my advice and lay it all out, before it's too late." End quote.
Senator Kerry's campaign today released a new ad. The campaign said the commercial should change the tone of the presidential race. The ad highlights Senator Kerry's military service in Vietnam and promises a new direction for America. It's running now in 17 states. Joining me, the chairwoman of the senator's campaign, former New Hampshire Governor Jeanne Shaheen, joining us from Manchester, New Hampshire. Governor, good to have you here.
JEANNE SHAHEEN, FORMER GOVERNOR OF NEW HAMPSHIRE: Thanks. It's nice to be here. DOBBS: First, let's address Walter Cronkite's counsel to the senator. Your thoughts, your reaction.
SHAHEEN: Well, I hope that if we've learned anything from past campaigns, it is that labeling people who are running for office doesn't make sense, that what we want to talk about in the Kerry campaign is what John Kerry wants to do for America.
He wants to turn this country around. He believes we need a plan that's going to really create jobs. I was interested in the revisionist history we heard from the Bush campaign chair, Marc Racicot. The fact is under the Bush administration, he said he was going to create several million jobs and he's actually lost almost three million jobs, the most jobs lost since the Great Depression. John Kerry thinks we need to create jobs. He thinks we need to have a health care proposal that's going to lower the cost of health care, that's going to expand accessibility to health care. He has a proposal to do that. And he does a very good job of paying for these by rolling back the tax cuts on the wealthiest Americans.
DOBBS: Yet, Governor Racicot and the president have suggested that that will result in a huge amount of spending, new spending. Governor Racicot suggesting well over $1 trillion.
SHAHEEN: Well, their numbers are really made up. And they really don't have any credibility. This is a president who said he was going to do something about the deficit. He's taken the biggest surplus in this country's history and turned it into the biggest deficit in the country's history. He said he was going to do something about creating jobs. He's lost jobs. He said, when he submitted a budget to Congress, that that was a budget that he was going to pay for, and he didn't even include the cost of the war in Iraq, which is costing us about $1 billion a week, and he also gave us the wrong numbers on the cost of the prescription drug benefit under Medicare. We know now, because we've heard from the top Medicare expert in the Bush administration, that he told the president that the cost of that program would be over $100 billion more than the Bush administration acknowledged to Congress. So they don't have any credibility.
DOBBS: Governor, let me ask you this, Governor, I know you could go on for some time, but allow me if I may to interrupt you, as rude as I must be in doing so.
SHAHEEN: You didn't interrupt Governor Racicot.
DOBBS: I know, I'm absolutely biased beyond belief and I apologize for that. The next time he goes on as long as your sentence, I assure you I will, in fact, interrupt him.
But if I may, Governor, the fact is George Bush, the president of the United States, put through two tax cuts, and according to the latest reports, there's some good news and some bad news if you're a Democratic or Republican. If you're a Democrat, I suppose it's helpful to the campaign that real wages have declined in the last year, but the Merrill Lynch study also shows that with energy prices rising, half the tax cut will be used up. Wasn't -- weren't those tax cuts in point of fact fortuitous on the part of the Bush administration?
SHAHEEN: No, I don't think they were, and I don't think whether you're a Democrat or a Republican, Lou, you want to see real wages decline for average workers, and the fact is that's what the policies under this administration have done. While we've seen corporate profits continue to rise, and we saw them rise almost 40 percent in the last quarter of 2003, we've seen, as you just pointed out, average wages for average workers out there have declined. That's not good news.
What we need is a president who will do what John Kerry has said he's going to do, and that is have a plan to create good jobs for people. One of the things that he's talking about is making us more energy independent, something we absolutely need. If we want to talk about how we are going to get gas prices down, making sure we have more alternative and renewable sources of energy are going to do that, and John Kerry has a proposal to do that that will create 500,000 jobs. That's the kind of leadership we need.
DOBBS: Jeanne Shaheen, former governor of New Hampshire. We thank you very much for being with us.
SHAHEEN: Thank you. Nice to be with you.
DOBBS: Chairwoman of the Senator Kerry for president campaign. Thank you.
Tonight's thought is on elections. "There is nothing wrong with this country which a good election can't fix." Those are the words of former President Richard Nixon.
A reminder now to vote in our poll tonight, the question -- do you believe the United Nations should be an equal partner with the coalition in establishing a new Iraqi government, yes or no? Cast your vote at cnn.com/lou. We'll have the results for you a little later in the broadcast.
When we continue, the wage gap is a decades-old issue. Men being paid more for doing the same jobs as women. Tonight, we'll tell you why that issue won't be ignored this election year.
And the government puts out a suicide warning for popular prescription medications. We'll have much more on that story. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Equal pay for equal work. It's a campaign slogan from the 1970s, but one that continues this year. According to government and private surveys, women are still paid less than men for doing the same work. Senator Kerry is making the pay gap a campaign issue. He says we should improve enforcement and disclosure about payment practices. Kitty Pilgrim has the story.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): This job has two different salaries. One if a woman does it, and another if a man does it. The wage gap has been documented by the Census Bureau and many other government and private organizations since the mid-'60s, but women's groups say many people refuse to believe the problem is still here.
KATHY RODGERS, PRESIDENT, NOW LEGAL DEFENSE: There is also a desire to believe that the problem is solved. Otherwise known as denial. And so people say, well, there is no problem.
PILGRIM: The election year may be different. John Kerry recently pointed out women only earn 73 cents to every dollar a man makes saying he favors more pay equity enforcement and salary disclosure. Forget the soccer mom vote of elections past or even this year's NASCAR dads, the issue could resonate with working moms and 78 percent of women with school-age children work. It's hard to pin down why the wage gap exists. A recent general accounting office report in October of 2003 found women earn only three-quarters of what men make and, quote, "Questions remain about reasons for any earnings difference," unquote. Depressed wages for women cut across a variety of jobs, from account executives to advertising manager, banking director, insurance agent, surgeon, magazine editor, and real estate agent. The equal pay act of the mid-'60s was designed to make salaries equitable but that hasn't worked in many instances.
BETTY SPENCE, PRESIDENT, NATIONAL ASSN. OF FEMALE EXECUTIVES: Because a private company doesn't have to make salaries publish so there's no effort to do that. There's only voluntary complaints on the part of companies.
PILGRIM: Some states such as Maine have encouraged companies to internally review their data and have offered benefits for doing so.
(END VIDEOTAPE)
PILGRIM: Legislation such as the paycheck fairness act has been stuck in Congress and is not likely to pass this year. But election year campaigns may bring more pressure on this issue -- Lou.
DOBBS: Those are incredible statistic.
PILGRIM: I was shocked and I thought I knew but when I looked at the numbers today, and it's not just one study, it's studies across the board. Government and private organizations.
DOBBS: I have to confess, I thought I knew, too, and I thought it was an area in which we had seen remarkable progress.
PILGRIM: We have not seen progress. And especially in the '90s we've seen about notch up, a tiny, tiny, tiny improvement.
DOBBS: The fact that nearly 80 percent, four out of five women in this country, with school-age children, are working.
PILGRIM: That's exactly right.
DOBBS: Amazing. All right, thank you very much, Kitty Pilgrim.
News in brief tonight, an Oklahoma jury heard opening arguments today in the state trial of Oklahoma city bombing conspirator Terry Nichols. Prosecutors are seeking the death penalty. Nichols is already serving a life sentence for his role in the bombing.
The FDA is investigating a link between anti-depressants and suicide. Until any possible link is investigated, they want doctors to keep a close watch on their patients and have warning labels placed on all prescriptions.
And the Internet Witty Worm is eating through firewalls. The new computer virus overrides hard drives with junk data, patches are now available.
And on Wall Street today, no patches were available. Stocks down sharply. The Dow down almost 122 points, the Nasdaq fell 30, the S&P down 14.
Christine Romans with market for us.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, another tough day. Five of the past nine sessions, the Dow has fallen triple digits during the day and stocks now down to three-month lows. Ninety percent of the shares traded today moved lower on the day. All the year's stock market gains have evaporated. The S&P 500 below 1,100 now, the Nasdaq has lost 11 percent. And Smith Barney says another 10 percent lower, these average could go. Mike Slepkovic (ph) there says...
DOBBS: Smith Barney knows, right?
They know it's going to be 10 percent.
ROMANS: They think it's going to be testify 10 percent. Mike Slepkovic (ph) there says tax refunds are shielding consumers a bit from higher energy prices, but that shelter, Lou, is temporary. UBS Warburg surveyed investors, look at this, 90 percent worry about energy prices, other top worries, accounting shenanigans, outsources and the budget deficit, 77 percent of investors worried about that. And Lou, in the past week, terrorism and security fears back on the radar screen.
DOBBS: Back on the radar screen but obviously not there and it looks like those are far more substantive fears and immediate fears for moment American investors. Thanks very much.
A growing problem tonight for steelmakers in this country. A worldwide shortage of raw materials. One major cause -- economic growth in China.
Casey Wian reports from Los Angeles.
(BEGIN VIDEOTAPE) CASEY WIAN, CNN CORRESPONDENT (voice-over): Rebar is the skeleton of big construction projects. It's made from scrap metal, melted and compressed into long steel rods. Because China is buying up much of the world's scrap to fuel its own construction boom, the price steel mills here have to pay for scrap has nearly tripled.
JACK STUTZ, CEO, TAMCO STEEL: Beginning in October, scrap prices started to escalate at levels that we have never seen before. What's fueling this is China. The rapid growth in China.
WIAN: So much scrap is being exported to China, at least seven U.S. steelmakers have had to suspend protection production in the past two months because of shortages of raw materials. Tamco has been able to pass its added costs onto customers, it worries about their ability to pay. Franklin Steel fabricates rebar into structural components for buildings and highways. The owner John Franklin says the price he pays for rebar has jumped important in the past year than it did during the previous 30 years combined.
JOHN FRANKLIN, PRES., FRANKLIN STEEL: For our business is devastating we have no -- we don't have escalations in our contract and without warning, we can't predict what's coming on. So it's going to cost our company considerable amount of money.
WIAN: Like on this big building in orange county, California.
(on camera): Franklin's part of the job is worth about $3.5 million but since the contract was signed, Franklin says its rebar costs have gone up $650,000 or nearly 20 percent of the value of the contract. It means that Franklin is likely to lose money on the deal. In the meantime, they're scaling back, cutting a third of its workforce and trying to convince some customers to renegotiate contracts so it can complete their jobs. Steel industry executives predict consumers will see higher prices of products made from steel very soon.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
DOBBS: Tonight, we want do congratulate the state of Michigan, the governor of that state, for fighting to keep jobs and tax dollars from being shipped overseas. Governor Jennifer Granholm is working for us by signing two executive directives to address the impact of outsourcing and offshore tax havens. The measures discouraged the state from awarding contracts to companies and offshore tax havens and actually require the Department of Management and Budget to gather information as on the location of the company's employees. Those directives also call for contracts to be awarded to Michigan-based companies who employ American workers whenever possible. The governor's directives were inspired by a bill from Michigan State Representative Andy Meisner. Congratulations to you both.
We'll have the results of tonight's poll question when we continue, but first, a reminder to check our Web site for the complete list of companies we confirm to be "Exporting America," cnn.com/lou. We'll continue in a moment, please stay with us.
(COMMERCIAL BREAK)
The results of our poll, 88 percent of you said the United Nations should be an equal partner with the coalition in establishing a new Iraqi government.
That's our show for tonight. Thanks for being with us.
Tomorrow please join us. Senator Fritz Hollings of South Carolina says Congress is failing Americans when it comes to job security. And essayist John Ralston Saul, on what he says of the collapse of globalism and the rebirth of nationalism. Thanks for being with us. Good night from New York. "ANDERSON COOPER" is next.
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(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR: Israel assassinates the leader of Hamas. Tonight, anger and grief in the Middle East and cries for revenge against the United States.
UNIDENTIFIED MALE: Ahmed Yassin was the godfather of the suicide bombers.
DOBBS: Republicans and Democrats launch a new wave of political ads and charges and countercharges on the al Qaeda and counterterrorism. I'll be joined by the chairman of the president's reelection campaign, Marc Racicot, and the chairwoman of Senator Kerry's campaign, Jeanne Shaheen.
The rising cost of medical insurance. Many middle-class Americans can no longer afford even basic medical coverage.
And CEO bonuses rise to the highest levels in nearly five years.
UNIDENTIFIED FEMALE: The average CEO bonus is up around $2 million.
DOBBS: Tonight, our special report on CEO greed while working wages decline.
(END VIDEOTAPE)
ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, March 2. Here now for an hour of news, debate and opinion, Lou Dobbs.
DOBBS: Good evening.
Tonight, the radical Islamist group Hamas is threatening the indicates. Hamas is promising to retaliate against the United States and Israel after Israel killed the organization's spiritual leader and founder, Sheik Ahmed Yassin. Israeli missiles killed Sheik Yassin and seven others outside a mosque in Gaza. Israel says Hamas terrorists have killed almost 400 Israelis since September of 2000.
Ben Wedeman has the report from Gaza -- Ben.
BEN WEDEMAN, CNN CORRESPONDENT: Yes, Lou, it started early in the morning and the anger hasn't stopped here in Gaza.
We saw more than 100,000 people came out into the streets of this crowded city to attend his very tumultuous funeral. They accompanied his flag-draped coffin as it was taken to the grave. Now, to the Israelis, Sheik Ahmed Yassin was, in the words of Prime Minister Ariel Sharon, an arch-murderer with a blood-stained past.
But to many Palestinians as well as Arabs, he was a folk hero, a man who, even though he was in a wheelchair, seemingly weak, he was very powerful, had a huge following within Palestine and outside, throughout the entire Arab world. They saw him as a man who, despite his power, was not corrupted, this in a part of the world where power and corruption often go hand in hand.
Now, earlier today, we heard the PLO representative in Washington, Hassan Abdel Rahman, pouring scorn on the idea that Sheik Ahmed Yassin was some sort of terrorist mastermind.
(BEGIN VIDEO CLIP)
HASAN RAHMAN, PLO REPRESENTATIVE TO UNITED STATES: A man who is 68 years old, three-quarters deaf, three-quarters blind on a wheelchair assassinated in a mafia style by an Apache helicopter, that is unbefitting a state that claims to be a democracy and a state of law. This is lawlessness at its best.
(END VIDEO CLIP)
WEDEMAN: And, of course, Hamas has threatened to retaliate in many different ways saying that its retaliation will shake Israel like an earthquake -- Lou.
DOBBS: Ben, thank you -- Ben Wedeman reporting from Gaza.
European governments were quick to strongly criticize Israel's killing of Sheik Yassin. Foreign ministers said the airstrike was violation of international law and a setback for peace efforts in the Middle East.
(BEGIN VIDEO CLIP)
JACK STRAW, BRITISH FOREIGN MINISTER: Israel is fully entitled to defend itself against terrorism which it faces, but to do that within international law. It is not entitled to carry out unlawful killings, which we've condemned in the past and we condemn today.
DOMINIQUE DE VILLEPIN, FRENCH FOREIGN MINISTER: We are convinced that all try -- all attempts to this kind of targeted killings are illegal. They're not complying with international law and at the very moment in which we are trying to give a new impulse to the peace process.
(END VIDEO CLIP)
DOBBS: The White House considerably more measured in its reaction to the assassination. White House spokesman Scott McClellan said the United States is deeply troubled by the killing, but McClellan again said Israel has the right to defend itself.
Senior White House correspondent John King with the report -- John.
JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, in private, a senior U.S. official said the assassination of Sheik Yassin is -- quote -- "not helpful." The administration had hoped that perhaps Prime Minister Sharon's controversial proposal to put out from the West Bank and Gaza might somehow get a peace process back on track, at least eventually.
All those hopes now dashed. And the worry here at the White House is that there will be an escalation of violence between the Israelis and the Palestinians. The Israeli foreign minister made a visit to Washington to brief not only Condoleezza Rice, the national security adviser, but also Vice President Cheney and Secretary Powell on this operation.
He says the Israeli government has intelligence proving that Sheik Yassin is directly involved in terrorist strikes against Israel. So, again, as you put it, Lou, not a condemnation like you've from the European foreign capitals, the White House voicing its deep concern. And what we are told the private message to the Israelis was, try to show restraint in the days ahead to try to keep the violence from escalating out of control -- Lou.
DOBBS: John, little restraint in the White House reaction to the controversy over a new book by former White House counterterrorism official Richard Clarke. Clarke has accused the White House of ignoring the al Qaeda threat before September 11. What is the White House position tonight?
KING: Lou, from the highest levels of this administration, a remarkable blunt, forceful counteroffensive to this new book by former counterterrorism czar Dick Clarke.
The administration in that book is painted as so obsessed with Saddam Hussein and Iraq that it ignored from day one the warnings of the mounting al Qaeda threat. White House officials say nothing is further from the truth. Dick Clarke, though, says he decided to go public and to write this book because he says he finds it offensive that President Bush is campaigning for reelection on the theme of terrorism, a threat Dick Clarke says this president has ignored.
(BEGIN VIDEO CLIP)
RICHARD CLARKE, FORMER COUNTERTERRORISM ADVISER: I find it outrageous that the president is running for reelection on the grounds that he's done such great things about terrorism. He ignored it. He ignored terrorism for months when maybe we could have done something to stop 9/11, maybe. We'll never know.
(END VIDEO CLIP)
KING: Now, the administration says nothing could be further from the truth and it is particularly upset -- you might say overly riled, Lou -- at the idea that Dick Clarke is suggesting that President Bush somehow could have prevented 9/11 had he taken the threat from al Qaeda more seriously. The White House press secretary said that is a flat lie.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I think that his assertions that there was something or his assertion that there was something we could have done to prevent the September 11 attacks from happening is deeply irresponsible. It's offensive. And it's flat-out false.
(END VIDEO CLIP)
KING: Now, the administration says that all senior officials were briefed on the al Qaeda threat in the transition from the Clinton administration to the Bush administration. They say Dick Clarke himself was personally tasked just five weeks into the Bush administration to develop a new strategy not simply to contain al Qaeda, but to eliminate al Qaeda.
And they also say, Lou, that, even if they had acted more quickly on some of his recommendations for actions overseas, it would not have protected or prevented 9/11 because those hijackers, most of them, anyway, were already in the United States. A forceful rebuttal from the administration. Look for it to continue in the days ahead, because, of course, the 9/11 Commission is about to hold public hearings -- Lou.
DOBBS: And Dick Clarke is about to testify in two days before that commission. John King, thank you.
Well, as John just report, Dick Clarke talked about his book on CBS' "60 Minutes" last night. But "60 Minutes" did not disclose that the parent company, Viacom, has a financial interest in that book's success. The book is published by Free Press, a subsidiary of Simon & Schuster, which is in turn owned by Viacom.
Tonight, CBS News told us here that "60 Minutes" is beholden to no one.
Former Treasury Secretary Paul O'Neill was the main source of another highly critical book about the Bush administration. Today, the Treasury Department's inspector general cleared O'Neill of any wrongdoing after an investigation into the way he obtained so-called sensitive documents. The inspector general said O'Neill gained access to nearly 150 classified documents because those documents were not properly marked as classified.
Turning to the hunt for al Qaeda's leaders, Pakistani troops fighting radical Islamist terrorists have found a network of tunnels near the border with Afghanistan. Senior al Qaeda leaders may have used those tunnels to escape from advancing Pakistani soldiers. As the Pakistani military continued its offensive, the head of the U.S. Central Command, General John Abizaid, visited Pakistan to talk about the global war on terror.
Senior Pentagon correspondent Jamie McIntyre reports -- Jamie. JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, U.S. Central Commander General John Abizaid did meet with senior Pakistani military officials today, no doubt to discuss the situation along the border.
But the Pentagon insists that that meeting was planned well ahead of time and was not directly connected to what's going on in that border region. The big question, of course, is, did senior al Qaeda leaders, perhaps Ayman al-Zawahiri or someone else, escape through a tunnel that was discover by the Pakistani military today? The tunnel about a mile long and connected to separate compounds used by local tribal leaders in that area who have been in a pitched battle with the Pakistani military there for days now, more than several thousand Pakistani troops fighting off several hundred Muslim fighters in that area.
They are in negotiations, trying to get them to turn themselves in or to give up. Meanwhile, the Pakistani military did display some bodies today that they say are foreign fighters, but there was no way to tell what nationality they were. They all seemed too young to be al-Zawahiri, who was Osama bin Laden's No. 2 in al Qaeda. The U.S. government continues to say it has no information about exactly who was in the area, but they're stepping up the vigils along the border in case they flee into Afghanistan -- Lou.
DOBBS: Jamie, President Musharraf told CNN's Aaron Brown that the Pakistani military surrounded a -- quote-unquote -- "high-value target." Is there any indication who that might have been some three days later?
MCINTYRE: Well, President Musharraf was clear at the time that he didn't know who it was and that they were piecing together information from intelligence.
The Pakistani military has indicated variously that it could be either Ayman al-Zawahiri or someone else high in al Qaeda. Then they indicated it could be an Uzbek leaders, because they said some Uzbeks fighting in here. And then they also said it might be one of the powerful local tribal leaders. So they clearly don't know who is in that area or whether they got away.
DOBBS: The bottom line is, we just don't know much more tonight.
Jamie, thank you very much -- Jamie McIntyre, our senior Pentagon correspondent.
In Iraq, insurgents have killed another American soldier, three other troops wounded. They exploded a roadside bomb as soldiers patrolled western Baghdad. In Southern Iraq, 13 British soldiers were wounded in two explosions in the center of Basra. The British Army said those soldiers were attacked during a demonstration by unemployed Iraqis. The demonstrators threw gasoline bombs at the troops. The Army said none of the soldiers was seriously wounded.
A new round of attacks tonight on the campaign trail. We'll be talking with the Bush/Cheney campaign chairman, Marc Racicot, and the chairwoman of the Kerry campaign, Jeanne Shaheen.
Also tonight, a presidential report on the financial squeeze facing middle-class Americans, rising health care costs, rising energy costs and falling wages.
And bonuses for corporate executives have skyrocketed. We'll have that and a great deal more still ahead here.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: We've been reporting here for some time on what we call the middle-class squeeze. Tonight, we focus on health care; 44 million Americans are now living without even the most basic health insurance. One reason, premiums have skyrocketed while wages have fallen. The result, millions of hardworking middle-class families are unable to pay for their health care.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Forty-six-year- old Pat Lawrence runs her own catering business. She makes enough money to cover food and rent, but cannot afford the $600 a month for health insurance.
PAT LAWRENCE, UNINSURED WORKER: A lot of people have more month at the end of their money than they do money at the end of their month. And I kind of fall into that same category.
SYLVESTER: For most of her adult life, she has not had health coverage.
LAWRENCE: I don't have the annual Pap smear or the mammogram or I don't even go in and have my blood pressure checked.
SYLVESTER: She is among 44 million uninsured Americans, many of them professionals, small business owners and freelancers. The Census Bureau says the number of uninsured has increased by 10 percent in the last two years. Rising health care costs and shrinking wages have put health care coverage out of reach for more middle-class Americans. Four out of five people without insurance are in working families.
RON POLLACK, FAMILIES USA: They tend not to have coverage because their employer doesn't provide coverage or their employer provides coverage and is charging the worker too much money that they can't afford and they're ineligible for any public safety net program.
SYLVESTER: Employers are increasingly asking their workers to shoulder more of the cost of health insurance. Those unable to afford the higher premiums end up dropping their coverage.
STUART SCHEAR, ROBERT WOOD JOHNSON FOUNDATION: So, even if you are employed and you have health coverage, it's very likely that in the last two years you've seen an increase in the co-payment you pay when you get a prescription at the drugstore, that you pay more on a monthly basis for your health premiums.
SYLVESTER: Those without insurance do what Pat Lawrence does, play the game of medical roulette, hoping nothing happens.
(END VIDEOTAPE)
SYLVESTER: A major part of the problem is rising health care costs. The general inflation rate is about 2 percent a year, but health care premiums by comparison are up on average 14 percent -- Lou.
DOBBS: Lisa, thank you very much.
Well, if you think economic conditions are tougher than ever, you're exactly right. The middle class is being squeezed and squeezed hard.
Christine Romans is here now with more disturbing news about shrinking American paychecks -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, Americans' purchasing power is faltering here.
Real wage growth has turned negative for the first time since 1995 and it has deteriorated dramatically in the past year and a half, these numbers from Merrill Lynch, high gas prices and a weak jobs market delivering a one-two punch to consumers. Economist David Rosenberg says that pain at the pump has wiped out more than $20 billion of the coming $40 billion in tax refund checks.
And nothing affects the consumer more than jobs, right? Merrill called jobs growth amazingly anemic. And for those with jobs, just like Lisa said, purchasing power further in jeopardy as benefit costs gets pushed back onto the worker, Lou, a tough situation for the American middle class. And one potential tailwind, low rates during another round of refinancing, Merrill says that's only good news if homeowners use the money to repay their own -- repair their own balance sheets.
DOBBS: I can't imagine rates going much lower than this. In real terms, we're already negative.
ROMANS: Absolutely. It's been a really amazing ride and now you've got real wages lower, first time in nine years.
DOBBS: Well, it's not good news and we haven't had much good news for working people in this country for some time. Thank you very much.
ROMANS: You're welcome.
DOBBS: Corporate America may not be hiring workers, but excessive CEO pay is certainly alive, well and growing more excessive, it seems, almost every day. We'll have that report for you. And President Bush's campaign chairman, Marc Racicot, is our guest tonight.
Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The economy is growing, but that growth has not yet, at least, created jobs, not that any of that is restraining corporate CEO pay. In fact, when it comes to compensation, many top executives have their heads buried in the trough.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): Cash is king. Stock options are out.
JANNICE KOORS, PEARL MEYER & ASSOCIATES: Average bonuses for CEOs will be up probably in the 15 percent to 20 percent range compared to last year. Early filers that we've looked at, the average CEO bonus is up around $2 million.
TUCKER: Cash is back as boards worry about the potential impact of expense and stock option grants. So rather than cut bonuses, boards are trading one form of compensation for another. Among the companies filing early earnings reports, almost half with revenue topping $22 billion made changes in options perhaps. Only about one in five made changes in annual incentive plans. And long-term incentive changes were made by relatively few companies, but they have high profiles, creating the impression that more change occurred than actually did.
Increasingly, however, boards are having to ask themselves a new question.
BRENT LONGNECKER, LONGNECKER & ASSOCIATES: How are people going to respond to it, especially the people we have working for us, if we're in the middle of layoffs, if we're in the middle of hiring freezes, or merit freezes? How does this look? And I think they have to be more and more sensitive to those kind of issues.
TUCKER: But the pace of change is slow and many boards remain in denial they are overpaying executives.
(END VIDEOTAPE)
TUCKER: There apparently is no denial at Sears Corporation. The board there cut CEO Alan Lacy's bonus in half today, down to $900,000, and left his pay flat. So at least some companies are getting the message, Lou.
DOBBS: Good. A few companies.
TUCKER: Yes. DOBBS: Bill, thank you very much -- Bill Tucker.
Tyco's former chief executive officer is famous for his excesses, most notoriously for a $6,000 shower curtain and a $2 million birthday party for his girlfriend at the time. Dennis Kozlowski and his former chief financial officer Mark Swartz are accused of looting $600 million from Tyco. Jury deliberations in the trial stretched into a third day today. If they are found guilty, Kozlowski and Swartz each faces up to 30 years in prison.
New ads, new attacks in the presidential campaign tonight. We'll be talking with the heads of both campaigns. Bush/Cheney chairman Marc Racicot, Kerry chairwoman Jeanne Shaheen will join us.
Also, should the United Nations play a larger role in Iraq? Senator Carl Levin says yes. He's just returned from Iraq and he joins us.
And fighting the battle of the sexes on the campaign trail. One of the presidential candidates says he'll make equal work for equal pay a key issue. That and great deal more still ahead.
(COMMERCIAL BREAK)
DOBBS: The Republican National Committee is trying a new tack on its Web site tonight, the target, not surprisingly, Senator John Kerry.
The John Kerry so-called spendometer, or spendometer -- I'll talk with Governor Racicot and find out how to say that -- calculates how much the RNC says Kerry's spending proposal will cost taxpayers. President Bush's reelection campaign now puts the amount at $1 trillion, $100 billion more than a previous estimate in Bush-Cheney ad released just last week.
Joining me now, the chairman of the president's reelection campaign, the former governor of Montana, Marc Racicot, joining us from Washington, D.C.
Good to have you here.
MARC RACICOT, BUSH-CHENEY CAMPAIGN CHAIRMAN: It's nice to be here. Thank you.
DOBBS: A trillion dollars? That's a lot of money.
RACICOT: Well, it's actually -- that's an underestimation of how much we're talking about.
Senator Kerry's been all over the country promising a lot of spending, about 73 different programs. And we have independent evidence that calculates the cost for 23 of those programs. And it amounts to about $1.7 billion -- or trillion dollars -- excuse me. And he's proposed about $700 trillion -- or $700 billion in increases in revenue. So that leaves you a trillion unaccounted for. It's a huge amount of money and a substantial underestimation really of how much it's going to cost.
DOBBS: Let's talk about an attack against the president, the administration. That, I'm referring, of course, in the CBS, "60 Minutes" interview, Richard Clarke attacking the administration, saying Condoleezza Rice didn't even know what al Qaeda was in his assessment, or he inferred that that could be the case, saying the administration had not done enough to prepare for September 11, and perhaps, in his words again, to have even stopped it. Your reaction.
RACICOT: Well, it's patent nonsense. The record is overpowering supporting the notion that upon first entry into office, after receiving briefings from the previous administration, which I might add is the administration that was in charge when these cells first started infiltrating this country, the president focused immediately and with a sense of great urgency upon al Qaeda and the Taliban.
And there's evidence throughout thereafter that he pursued that very, very diligently, as did the entire administration. So Mr. Clarke's representations go beyond patent nonsense. In my judgment, they're almost malevolent in their design.
DOBBS: Let's turn to the Kerry campaign suggesting that there was no imminent threat, saying, in point of fact, straight out that there was no evidence of any imminent threat from Saddam Hussein's regime. This looks as though this campaign is going to be focused a great deal on history here. To what degree are you comfortable or uncomfortable with that being the case?
RACICOT: Very comfortable, because you determine what it is that somebody's going to do in the future, Lou, by what they've done in the past.
This senator who is running as the Democratic nominee voted with very aggressive language associated with his vote to use force in Iraq and then, within months thereafter, after putting his finger in the wind, decided that he wasn't going to approve the appropriations for our troops in Iraq that supplied them everything from body armor to hazard pay.
So the fact of the matter is how you reacted in the past determines what you're going to do in the future. The American people have a right to know what John Kerry did.
DOBBS: And this administration accused in various instances leading up to the war in Iraq, during the post-Iraq war construction phase, accused of not being sufficiently multilateral. We've seen what has transpired in Spain. The president has spoken out, urging other nations to stay in the war on terror.
Does this look like it's going to be a huge issue, the issue of multilateralism, for the president?
RACICOT: Well, I think the president has set about to reach as broadly as he possibly can. We had more nations involved in the coalition that went into Iraq and that have been associated with the reconstruction activities than we did in 1991. So the fact of the matter is, there are more nations, more democracies, associated with this than ever before. The president has reached out all along. He's also displayed leadership, however, and thank God for Prime Minister Blair because he has displayed the same kind of leadership. This is no time for us to cower and shrink back into the position we were before which is we were worried about being fearful all the time, wondering what might happen, hoping something wouldn't happen.
This president said from the beginning, we're going to address this issue of terrorism and I think the American people wholeheartedly endorse that concept.
DOBBS: The latest "New York Times"/CBS News poll shows that, at least, in that survey that the two primary issues for voters right now are the economy and employment. Merrill Lynch, as we reported earlier in this broadcast showing that wages have fallen for the first time in seven years in this country, real wages, the economy, I think we could agree is in a fragile state right now.
The issue of outsourcing, Secretary of State Colin Powell in India reassuring the Indian government that the Bush administration supports outsourcing. Is there any likelihood that the administration would change its view given the fact there has not been job creation, that this is a fragile moment in the economy's growth?
RACICOT: Well, the fact is the president has addressed the economy virtually every single day and has a six-point plan to do that very aggressively. The flip side is, of course, that you have Senator Kerry, who wants to instantly raise taxes, he won't fight against frivolous lawsuits. He hasn't proposed a plan that makes health care more affordable to the American people. On and on and on with regulation cap-based standards that would put 100,000 people out of work in the automotive industry almost overnight.
So the fact is, this president has this economy pointed in the right direction. You mentioned, Lou, that in your earlier report, one of the reasons that incomes are being impacted is because of energy. This president put forward an energy bill that a good senator from Massachusetts didn't even show up to vote on. And the fact is we do need an energy program but the Americans I think, know that every economic indicator is pointed in the right direction. Almost 400,000 jobs created over the last six months. Largest growth we've ever had in the last half of last year, in 20 years. We have low unemployment below the rates of the 70s and 80s and 90s so the fact is that we're pointed in the right direction. Senator Kerry would bring that process to a complete, screeching halt.
DOBBS: Governor, I have to, just if I may, temper in response a couple of your indicators, one, of course, with the 5.6 percent unemployment rate, we do have almost a total of 15 million people, including discouraged workers. We have at the same time a half trillion-dollar federal budget deficit, a half trillion dollar trade deficit. Are we to expect -- you suggested that the past was prologue in governance. Are we to expect that this administration is committed to those kinds of deficits in terms of trade going forward?
RACICOT: There's no doubt about it. Absolutely no doubt about that. Lou, from the very beginning, the president's talked about the deficit and has a plan in place to reduce it over the course of the next five years by half. But when you have to choose between protecting your friends and neighbors and the people you work for and you have to choose whether or not you're going to make certain the jobs are created, you have to proceed rapidly and you know every business on occasion has to take out a loan or has to do something to address urgent circumstances, that's what the president did and now, the deficit is in the crosshairs of his focus and he has a plan on the table. The flipside is Senator Kerry talks about nothing but increased spending.
DOBBS: Thank you very much, Governor Mark Racicot, the head of the Bush/Cheney re-election campaign.
In just a few minutes, I'll be joined by the chairwoman of Senator Kerry's campaign, former New Hampshire governor Jean Shaheen. But first my next guest has just returned from Iraq along with four other senators. He's calling for the United Nations to be what he calls a full partner in the United States and the coalition in establishing a new Iraq government. Senator Carl Levin of Michigan is the ranking Democratic on the Armed Services Committee. Joins us tonight from Capitol Hill. Senator, good to have you with us.
Your assessment that you convey great respect for the job that our men and women in uniform are doing in Iraq. Also, suggested that the issue of governance was as -- future governance was almost as critical as the security issue right now in Iraq. How hopeful are you that the process underway is going to be successful?
SEN. CARL LEVIN (D), MICHIGAN: We have to be hopeful but it's a very, very difficult job ahead of us because we failed to get the international community to support our going in. We are paying a heavy price for that failure. We cannot fail again when July 1 comes again or comes this year because on that date, we, apparently -- have decided now that we will be restoring sovereignty to an Iraqi entity and whatever we do on that date, it must have the support of the international community or we going to have even greater civil violence and civil disorder, I'm afraid, than we do now. It's critically important that we involve the international community in this phase and to get their approval of the entity that's created so it's not just a U.S.-dominated decision here as to who the Iraqi sovereign government will be.
DOBBS: Senator, your assessment of the job that Paul Bremer has done as administrator of the CPA in Iraq.
LEVIN: I think he's done a good job. I hope, though, and we've talked to him again when we were there, but I really hope that now we're going to focus on what will it take to get the international community to support whatever decision is made relative to that entity that's going to be given sovereignty back on July 1. And I'm hopeful that Bremer will not just push ahead oblivious of the importance of having that international support because without it, if we transfer sovereignty to a entity that does not have international support, I'm just -- I am very leery about the chaos, even worse than we have now, which is going to result. DOBBS: Chaos as well in Israel and the Middle East. The assassination of Sheikh Yassin today by the Israeli forces. Your assessment and to the degree to which that raises the stakes.
LEVIN: I think that the statement of the administration sets the right tone on that.
DOBBS: And you would disavow the condemnation by the UK, France and a number of other European countries?
LEVIN: I think you have to expect that when you have an organization like Hamas, which is an avowedly terrorist organization that targets innocent civilians, that any country is going to respond against that organization. And Hamas takes credit for killing innocents in Israel and the man who was assassinated is the head of that organization and I think any country has the right to go after an organization which attacks its innocent civilians.
DOBBS: Senator Levin, as always, good to have you here.
LEVIN: Thank you, Lou.
DOBBS: That brings us to the subject of tonight's poll, the question -- do you believe the United Nations should be an equal partner with the coalition in establishing a new Iraqi government? Yes or no. Cast your vote at CNN.com/lou. We'll have results for you later in the broadcast. We'll be talking more about the war in Iraq. Next we'll talk with John Kerry's campaign chairwoman. Senator Kerry is promising a new direction for America. We'll find out precisely what that direction would be when we talk with former New Hampshire governor Jean Shaheen. One issue Senator Kerry is focusing on, the battle of the sexes in the workplace. We'll tell you why equal pay for equal work is still a campaign slogan.
(COMMERCIAL BREAK)
DOBBS: Legendary newscaster Walter Cronkite is criticizing Senator John Kerry for denying he's a liberal. Cronkite wrote an open letter to the senator in a column for "The Denver Post" in which Cronkite said Senator Kerry has reaffirmed what Michael Dukakis suggested back in 1988, that liberals don't like being called liberal. Cronkite writes, quote: "If 1988 taught us anything, it is that a candidate who lacks the courage of his convictions cannot hope to convince the nation that he should be given its leadership. Take my advice and lay it all out, before it's too late." End quote.
Senator Kerry's campaign today released a new ad. The campaign said the commercial should change the tone of the presidential race. The ad highlights Senator Kerry's military service in Vietnam and promises a new direction for America. It's running now in 17 states. Joining me, the chairwoman of the senator's campaign, former New Hampshire Governor Jeanne Shaheen, joining us from Manchester, New Hampshire. Governor, good to have you here.
JEANNE SHAHEEN, FORMER GOVERNOR OF NEW HAMPSHIRE: Thanks. It's nice to be here. DOBBS: First, let's address Walter Cronkite's counsel to the senator. Your thoughts, your reaction.
SHAHEEN: Well, I hope that if we've learned anything from past campaigns, it is that labeling people who are running for office doesn't make sense, that what we want to talk about in the Kerry campaign is what John Kerry wants to do for America.
He wants to turn this country around. He believes we need a plan that's going to really create jobs. I was interested in the revisionist history we heard from the Bush campaign chair, Marc Racicot. The fact is under the Bush administration, he said he was going to create several million jobs and he's actually lost almost three million jobs, the most jobs lost since the Great Depression. John Kerry thinks we need to create jobs. He thinks we need to have a health care proposal that's going to lower the cost of health care, that's going to expand accessibility to health care. He has a proposal to do that. And he does a very good job of paying for these by rolling back the tax cuts on the wealthiest Americans.
DOBBS: Yet, Governor Racicot and the president have suggested that that will result in a huge amount of spending, new spending. Governor Racicot suggesting well over $1 trillion.
SHAHEEN: Well, their numbers are really made up. And they really don't have any credibility. This is a president who said he was going to do something about the deficit. He's taken the biggest surplus in this country's history and turned it into the biggest deficit in the country's history. He said he was going to do something about creating jobs. He's lost jobs. He said, when he submitted a budget to Congress, that that was a budget that he was going to pay for, and he didn't even include the cost of the war in Iraq, which is costing us about $1 billion a week, and he also gave us the wrong numbers on the cost of the prescription drug benefit under Medicare. We know now, because we've heard from the top Medicare expert in the Bush administration, that he told the president that the cost of that program would be over $100 billion more than the Bush administration acknowledged to Congress. So they don't have any credibility.
DOBBS: Governor, let me ask you this, Governor, I know you could go on for some time, but allow me if I may to interrupt you, as rude as I must be in doing so.
SHAHEEN: You didn't interrupt Governor Racicot.
DOBBS: I know, I'm absolutely biased beyond belief and I apologize for that. The next time he goes on as long as your sentence, I assure you I will, in fact, interrupt him.
But if I may, Governor, the fact is George Bush, the president of the United States, put through two tax cuts, and according to the latest reports, there's some good news and some bad news if you're a Democratic or Republican. If you're a Democrat, I suppose it's helpful to the campaign that real wages have declined in the last year, but the Merrill Lynch study also shows that with energy prices rising, half the tax cut will be used up. Wasn't -- weren't those tax cuts in point of fact fortuitous on the part of the Bush administration?
SHAHEEN: No, I don't think they were, and I don't think whether you're a Democrat or a Republican, Lou, you want to see real wages decline for average workers, and the fact is that's what the policies under this administration have done. While we've seen corporate profits continue to rise, and we saw them rise almost 40 percent in the last quarter of 2003, we've seen, as you just pointed out, average wages for average workers out there have declined. That's not good news.
What we need is a president who will do what John Kerry has said he's going to do, and that is have a plan to create good jobs for people. One of the things that he's talking about is making us more energy independent, something we absolutely need. If we want to talk about how we are going to get gas prices down, making sure we have more alternative and renewable sources of energy are going to do that, and John Kerry has a proposal to do that that will create 500,000 jobs. That's the kind of leadership we need.
DOBBS: Jeanne Shaheen, former governor of New Hampshire. We thank you very much for being with us.
SHAHEEN: Thank you. Nice to be with you.
DOBBS: Chairwoman of the Senator Kerry for president campaign. Thank you.
Tonight's thought is on elections. "There is nothing wrong with this country which a good election can't fix." Those are the words of former President Richard Nixon.
A reminder now to vote in our poll tonight, the question -- do you believe the United Nations should be an equal partner with the coalition in establishing a new Iraqi government, yes or no? Cast your vote at cnn.com/lou. We'll have the results for you a little later in the broadcast.
When we continue, the wage gap is a decades-old issue. Men being paid more for doing the same jobs as women. Tonight, we'll tell you why that issue won't be ignored this election year.
And the government puts out a suicide warning for popular prescription medications. We'll have much more on that story. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Equal pay for equal work. It's a campaign slogan from the 1970s, but one that continues this year. According to government and private surveys, women are still paid less than men for doing the same work. Senator Kerry is making the pay gap a campaign issue. He says we should improve enforcement and disclosure about payment practices. Kitty Pilgrim has the story.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): This job has two different salaries. One if a woman does it, and another if a man does it. The wage gap has been documented by the Census Bureau and many other government and private organizations since the mid-'60s, but women's groups say many people refuse to believe the problem is still here.
KATHY RODGERS, PRESIDENT, NOW LEGAL DEFENSE: There is also a desire to believe that the problem is solved. Otherwise known as denial. And so people say, well, there is no problem.
PILGRIM: The election year may be different. John Kerry recently pointed out women only earn 73 cents to every dollar a man makes saying he favors more pay equity enforcement and salary disclosure. Forget the soccer mom vote of elections past or even this year's NASCAR dads, the issue could resonate with working moms and 78 percent of women with school-age children work. It's hard to pin down why the wage gap exists. A recent general accounting office report in October of 2003 found women earn only three-quarters of what men make and, quote, "Questions remain about reasons for any earnings difference," unquote. Depressed wages for women cut across a variety of jobs, from account executives to advertising manager, banking director, insurance agent, surgeon, magazine editor, and real estate agent. The equal pay act of the mid-'60s was designed to make salaries equitable but that hasn't worked in many instances.
BETTY SPENCE, PRESIDENT, NATIONAL ASSN. OF FEMALE EXECUTIVES: Because a private company doesn't have to make salaries publish so there's no effort to do that. There's only voluntary complaints on the part of companies.
PILGRIM: Some states such as Maine have encouraged companies to internally review their data and have offered benefits for doing so.
(END VIDEOTAPE)
PILGRIM: Legislation such as the paycheck fairness act has been stuck in Congress and is not likely to pass this year. But election year campaigns may bring more pressure on this issue -- Lou.
DOBBS: Those are incredible statistic.
PILGRIM: I was shocked and I thought I knew but when I looked at the numbers today, and it's not just one study, it's studies across the board. Government and private organizations.
DOBBS: I have to confess, I thought I knew, too, and I thought it was an area in which we had seen remarkable progress.
PILGRIM: We have not seen progress. And especially in the '90s we've seen about notch up, a tiny, tiny, tiny improvement.
DOBBS: The fact that nearly 80 percent, four out of five women in this country, with school-age children, are working.
PILGRIM: That's exactly right.
DOBBS: Amazing. All right, thank you very much, Kitty Pilgrim.
News in brief tonight, an Oklahoma jury heard opening arguments today in the state trial of Oklahoma city bombing conspirator Terry Nichols. Prosecutors are seeking the death penalty. Nichols is already serving a life sentence for his role in the bombing.
The FDA is investigating a link between anti-depressants and suicide. Until any possible link is investigated, they want doctors to keep a close watch on their patients and have warning labels placed on all prescriptions.
And the Internet Witty Worm is eating through firewalls. The new computer virus overrides hard drives with junk data, patches are now available.
And on Wall Street today, no patches were available. Stocks down sharply. The Dow down almost 122 points, the Nasdaq fell 30, the S&P down 14.
Christine Romans with market for us.
CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, another tough day. Five of the past nine sessions, the Dow has fallen triple digits during the day and stocks now down to three-month lows. Ninety percent of the shares traded today moved lower on the day. All the year's stock market gains have evaporated. The S&P 500 below 1,100 now, the Nasdaq has lost 11 percent. And Smith Barney says another 10 percent lower, these average could go. Mike Slepkovic (ph) there says...
DOBBS: Smith Barney knows, right?
They know it's going to be 10 percent.
ROMANS: They think it's going to be testify 10 percent. Mike Slepkovic (ph) there says tax refunds are shielding consumers a bit from higher energy prices, but that shelter, Lou, is temporary. UBS Warburg surveyed investors, look at this, 90 percent worry about energy prices, other top worries, accounting shenanigans, outsources and the budget deficit, 77 percent of investors worried about that. And Lou, in the past week, terrorism and security fears back on the radar screen.
DOBBS: Back on the radar screen but obviously not there and it looks like those are far more substantive fears and immediate fears for moment American investors. Thanks very much.
A growing problem tonight for steelmakers in this country. A worldwide shortage of raw materials. One major cause -- economic growth in China.
Casey Wian reports from Los Angeles.
(BEGIN VIDEOTAPE) CASEY WIAN, CNN CORRESPONDENT (voice-over): Rebar is the skeleton of big construction projects. It's made from scrap metal, melted and compressed into long steel rods. Because China is buying up much of the world's scrap to fuel its own construction boom, the price steel mills here have to pay for scrap has nearly tripled.
JACK STUTZ, CEO, TAMCO STEEL: Beginning in October, scrap prices started to escalate at levels that we have never seen before. What's fueling this is China. The rapid growth in China.
WIAN: So much scrap is being exported to China, at least seven U.S. steelmakers have had to suspend protection production in the past two months because of shortages of raw materials. Tamco has been able to pass its added costs onto customers, it worries about their ability to pay. Franklin Steel fabricates rebar into structural components for buildings and highways. The owner John Franklin says the price he pays for rebar has jumped important in the past year than it did during the previous 30 years combined.
JOHN FRANKLIN, PRES., FRANKLIN STEEL: For our business is devastating we have no -- we don't have escalations in our contract and without warning, we can't predict what's coming on. So it's going to cost our company considerable amount of money.
WIAN: Like on this big building in orange county, California.
(on camera): Franklin's part of the job is worth about $3.5 million but since the contract was signed, Franklin says its rebar costs have gone up $650,000 or nearly 20 percent of the value of the contract. It means that Franklin is likely to lose money on the deal. In the meantime, they're scaling back, cutting a third of its workforce and trying to convince some customers to renegotiate contracts so it can complete their jobs. Steel industry executives predict consumers will see higher prices of products made from steel very soon.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
DOBBS: Tonight, we want do congratulate the state of Michigan, the governor of that state, for fighting to keep jobs and tax dollars from being shipped overseas. Governor Jennifer Granholm is working for us by signing two executive directives to address the impact of outsourcing and offshore tax havens. The measures discouraged the state from awarding contracts to companies and offshore tax havens and actually require the Department of Management and Budget to gather information as on the location of the company's employees. Those directives also call for contracts to be awarded to Michigan-based companies who employ American workers whenever possible. The governor's directives were inspired by a bill from Michigan State Representative Andy Meisner. Congratulations to you both.
We'll have the results of tonight's poll question when we continue, but first, a reminder to check our Web site for the complete list of companies we confirm to be "Exporting America," cnn.com/lou. We'll continue in a moment, please stay with us.
(COMMERCIAL BREAK)
The results of our poll, 88 percent of you said the United Nations should be an equal partner with the coalition in establishing a new Iraqi government.
That's our show for tonight. Thanks for being with us.
Tomorrow please join us. Senator Fritz Hollings of South Carolina says Congress is failing Americans when it comes to job security. And essayist John Ralston Saul, on what he says of the collapse of globalism and the rebirth of nationalism. Thanks for being with us. Good night from New York. "ANDERSON COOPER" is next.
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