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Lou Dobbs Tonight

Fallujah Solution?; Should United States Withdraw From Iraq?

Aired April 29, 2004 - 18:00   ET

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

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


(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, U.S. Marine officers say there is a deal to end the three-week siege of Fallujah with the help of former generals from Saddam Hussein's army.

UNIDENTIFIED MALE: We have heard that the American troops are going to withdraw there.

DOBBS: Should the United States withdraw from Iraq? Former National Security Agency Director and retired General William Odom says it is. He's our guest tonight.

In "Broken Borders" tonight, what a novel idea, police and federal immigration agents working together for the first time, searching for illegal aliens in Los Angeles.

UNIDENTIFIED FEMALE: We're going to be realigning our resources. We're going to be trying to work these cases smarter.

DOBBS: And a Republican lawmaker who has broken ranks with those who support free trade at any price. I'll be joined by Congressman Mac Collins, who says it's all about jobs.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, April 29. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

Tonight, U.S. commanders in Fallujah say they have reached a deal to end the three-week siege of the city. U.S. Marines have surrounded Fallujah since insurgents killed and mutilated four American civilian contractors. Elsewhere in Iraq today, insurgents killed 10 American soldiers, eight of them in one car bomb attack south of Baghdad. The other two Americans were killed in separate attacks in Baghdad and Baquba.

(BEGIN VIDEOTAPE)

DOBBS: (voice-over): A group of Saddam Hussein's former generals have offered to build an Iraqi security force that would move into Fallujah and U.S. Marines would pull back. The Iraqi generals say they will put a force of 600 to 1,000 men. Iraqi negotiators are optimistic that this could be the beginning of a settlement. SAIB AL-GILANI, NEGOTIATOR: We have heard that the American troops are going to withdraw their powers from Fallujah and this is -- if it happens will be a very good sign.

DOBBS: The cease-fire in Fallujah is a cease-fire in name only. F-18 fighter jets flying off the USS George Washington again pounded targets in the insurgent stronghold. At least 16 bombs hit Fallujah over the past 24 hours. The Marines are upbeat.

QUESTION: What do you think about the overall assessment of the CPA?

GEN. JAMES CONWAY, MARINE EXPEDITIONARY FORCE: It's good. It's good. It's a good battalion doing good work in a bad place.

QUESTION: Are you optimistic about what's happening here?

CONWAY: Yes, I am. Any time Marines are on deck, you need to be optimistic.

DOBBS: April is the deadliest month in Iraq for the United States since the war began; 10 U.S. soldiers were killed today; 736 U.S. troops have died in Iraq.

(END VIDEOTAPE)

DOBBS: Gunmen loyal to the radical cleric Muqtada al-Sadr have launched hit-and-run attacks against U.S. troops in central Iraq. Today, those insurgents opened fire on a checkpoint between Najaf and Kufa.

Jane Arraf has the report.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF (voice-over): It was a simple checkpoint near Najaf. There is nothing routine, though, about a city controlled by a Shia militia with U.S. forces on the edges.

On only the second day U.S. soldiers have operated these control points, there were a few friendly waves and a lot of wary looks. Then suddenly, the traffic stopped, a warning to these soldiers from the 2nd Battalion, 37th Armored Regiment who had been in Baghdad for a year.

CPL. KADE CLARK, 1ST ARMORED DIVISION: Every time the streets clear, we get attacked.

ARRAF (on camera): Has it happened before?

CLARK: When I was on top of an I.P. station, it happened. I was in a convoy. They had to stop because they had the blocked the road.

UNIDENTIFIED MALE: There we go.

UNIDENTIFIED MALE: Take cover! UNIDENTIFIED MALE: Take cover!

UNIDENTIFIED MALE: It came from our rear.

UNIDENTIFIED MALE: Stay down!

ARRAF (voice-over): We did, taking covered near an armored vehicle.

(on camera): Just a few minutes ago, this was a normal busy street with traffic going back and forth. Now, we're in the middle of rocket-propelled grenade and mortar attacks. There's smalls-arms fire. And the unit we're with has called in for tanks.

(voice-over): Across the bridge at the first American checkpoint, there was a virtually simultaneous attack, both believed launched by Muqtada al-Sadr's militia. And where we were, the soldiers, a mortar platoon attached to the 2nd Armored Cavalry Regiment, bided their time. They would have liked to be more aggressive, but they are under orders to avoid inflaming tension.

UNIDENTIFIED MALE: Let's go.

UNIDENTIFIED MALE: Is anybody hit, anybody injured?

ARRAF: One of the soldiers from headquarters' company was grazed by a bullet in the leg. They were all relieved it wasn't worse.

UNIDENTIFIED MALE: It really wasn't that bad. Usually, when they do hit us, it's a lot more. But I guess that was just kind of trying -- I don't know, like a territory spot or something. I don't know.

ARRAF: Just minutes after the firing ended, Iraqis started to venture out again. An hour later, the soldiers resumed the checkpoint. No one killed in this shoot-out, but a message sent on both sides.

Jane Arraf, CNN, between Kufa and Najaf, Iraq.

(END VIDEOTAPE)

DOBBS: As Jane reported in that story, only one American soldier was wounded and only lightly. But Jane and photographer Rick Hall (ph) were uninjured in the attack.

In just a few minutes here, I will be talking about the military challenges presented in Iraq with General David Grange. And I'll be talking with General William Odom. He's the former director of national security. And he says it is time for the United States to withdraw from Iraq and as soon as possible.

Turning now to the Pentagon, where officials tonight are not confirming there is a deal to end that siege of Fallujah. They say, instead, negotiations are being handled by military commanders in Iraq. Our senior Pentagon correspondent, Jamie McIntyre, has the report.

Jamie, a deal or not?

(CROSSTALK)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, there's some genuine confusion on that here at the Pentagon, even among some very senior officials.

Two things going on here. One is the desire by the Pentagon to downplay the idea that there is any sort of a final deal, particularly if it doesn't happen. They don't want to look like they had a deal and it fell through. The other thing that's happening is that U.S. commanders on the scene have been given wide latitude to exercise the kind of judgment they need to do in trying to quiet the situation in Fallujah, short of an all-out military assault by the Marines there.

So Pentagon officials are confirming that some Iraqi -- former generals have come forward, have offered to put together a force, that there's an idea that's being explored to have that force go into the city and allow the Marines to pull back. But what the Pentagon is shying away from is saying that this is a done deal. As one person described it, more of a concept than a plan at this point, with a lot of things still need to be worked out.

And, again, a lot of senior officials here in the Pentagon still not having been briefed on the progress of this particular approach. So they're stepping back a little bit from the Pentagon. But, at the same time, they can't say that it's not really a deal because those kind of decisions are being made at the tactical level at the scene -- Lou.

DOBBS: At the tactical level. With 1,500 Marines of the 1st Marine Expeditionary Force surrounding Fallujah, tactical decisions are being made on something as important as this?

MCINTYRE: Well, the overall objective is to calm the situation without having to have an all-out assault and to find a -- quote -- "Iraqi solution" to that.

If that can involve some Iraqi forces going in who are in support of the Marines, if they can work that out, they would like to try to do that. But they don't want to say that they're putting all their eggs in that basket at the moment. They have not ruled out an offensive because they say those details just haven't been worked out.

DOBBS: And I would like to ask you one other question, Jamie, before we let you go. Jane Arraf reported that the soldiers in which you saw that firefight, that brief skirmish, wanted to pursue aggressively those attacking them, but had been cautioned not to -- quote, unquote -- "inflame tensions."

Is that a broader directive to our troops in Iraq at this point? MCINTYRE: Well, no, that's specific to the situation in Najaf, where the U.S. is still wrestling with the best way to go after Muqtada al-Sadr.

They believe that they have the military forces, that they could simply go in and take out his militia and crush him, but not without some political cost. And they're trying to walk that thin line. And those are the instructions that the U.S. troops have there at the moment, which is aggressive self-defense, going on some patrols, but not to the point where they're going after directly Muqtada al-Sadr.

DOBBS: Thank you, Jamie -- Jamie McIntyre, our senior Pentagon correspondent.

Some military experts now say the outcome of the battle for Fallujah, should it turn into a further battle, would determine the future of the war in Iraq itself. Those experts say U.S. Marines must take back Fallujah from the insurgents or American troops will face similar battles across the entirety of Iraq.

Joining me now is General David Grange in "Grange On Point."

The situation in Fallujah. You have just heard Jamie McIntyre say that the decision about whether or not to bring back Baathist generals and to create an Iraqi force to go in and for U.S. Marines to withdraw is being made at the tactical level.

General, does that surprise you?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: I don't believe it's at the tactical level.

I think the highest levels in Iraq on the coalition side are involved in this. These generals would have to be vetted, obviously, so they have some credibility and a trust factor. And then it's going to be something, if it does happen, it is not going to happen overnight, Lou. They are going to get 800 to 1,000 Iraqi military ready to go with some kind of credible capability to calm insurgents and establish some kind of rule of law. That will definitely not happen overnight.

DOBBS: Not happening overnight. U.S. Marines surrounding Fallujah. They have lost comrades, four American contractors killed and mutilated, withdrawing from ground that they paid for with American lives. What will be the reaction for those troops?

GRANGE: Well, any time you give up ground, it is hard for a troop to understand that, especially if the comrades bled for that piece of ground.

The objective, though, is not terrain. The objective is to take down, to remove the insurgent force. But when you're on the ground as a foot soldier, the dirt means a lot to you. It is just something you depend on. And every foot, every inch counts. But they need to be briefed by the chain of command of the purpose, the rationale of moving forward or backwards within a piece of terrain in order to accomplish their mission.

But I think the Marines are going to keep a tight noose on that place and stand by to continue attacks as they occur, which they will.

DOBBS: And also you've heard, as we have all, Jane Arraf's report, young soldiers saying that they were not going to aggressively respond to the attack against them because they were under orders not to -- quote, unquote -- "inflame tensions." Your reading and your assessment.

GRANGE: Lou, that is situationally dependent on where they are in Iraq.

There's always constraints on rules of engagement. When life is threatened, of course they will react violently. But, in this case, the leadership on the ground felt that they could contain what was happening. It's like that in all combat and in this case in Iraq, throughout the country, depending on where you are.

DOBBS: In your best judgment, if the situation in Fallujah is not resolved by the U.S. military or its proxies, what will be the impact?

GRANGE: Well, Fallujah I think is an example. I think that here you have a town that is controlled by insurgents. I don't believe all the residents are against the coalition or the new Iraqi government, but they are controlled by insurgents.

And what happens to these people if there is a cease-fire? Do they meld back into the neighborhood? Do they become shop owners? What happens to their weapons. All these weapons need to be turned in and the insurgents need to be destroyed or they need to be arrested or moved out. They cannot hang out in this town after a cease-fire.

DOBBS: General David Grange, thank you, sir.

GRANGE: My pleasure.

DOBBS: More on Iraq ahead. We'll be joined by former National Security Agency Director retired General William Odom, who says the United States should simply withdraw and immediately. He's our guest.

The State Department issues a new warning about the threat from radical Islamist terrorists. We'll have that report for you.

President Bush, Vice President Cheney, they spent more than three hours talking with the 9/11 Commission in private not under oath and without recording. We'll have the report from the White House.

In "Broke Borders" tonight, two organizations finally working together for the first time ever. They're searching for illegal aliens in the city of Los Angeles.

Those stories, a great deal more still ahead, coming right up.

(COMMERCIAL BREAK) DOBBS: President Bush, Vice President Cheney, today they spent more than three hours talking privately with the commission investigating September 11. Afterwards, President Bush said he answered every question. The commission said it found the president and vice president -- quote/unquote -- "forthcoming and candid."

Senior White House correspondent John King has the report for us -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, remember, this president at first opposed the creation of the commission. Then the White House negotiated for weeks, even months, over whether the president would answer questions in the first place.

But as the president emerged from more than three hours and 10 minutes of questioning today, he said he was very much glad to do it. Now, both the president and the commission declining to get into any details. But sources tell us the issues discussed did include the administration's assessment of the al Qaeda threat pre-9/11, that August 2001 intelligence warning that al Qaeda was poised to strike, perhaps even here in the United States.

Former White House official Richard Clarke's testimony quite critical of the president, saying he all but ignored the terrorist threat, that came up as well. It also came up how Mr. Bush and Vice President Cheney directed the government's response on the day of September 11 in those immediate hours and minutes after the attacks.

Now, the president, of course, had been criticized for initially saying he would not testify. Then there was some criticism as to why did he insist on having the vice president at his side. The president said today, Lou, he was glad he did it.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If we had something to hide, we wouldn't have met with them in the first place. We answered all their questions. And, as I say, I came away good about the session, because I wanted them to know, you know, how I set strategy, how we run the White House, how we deal with threats.

(END VIDEO CLIP)

KING: The president described the meeting as cordial. He complimented the commission members, saying he thought they asked very good questions.

And the commission quickly returned the favor. In a statement issued shortly after the meeting broke up, the 9/11 Commission said -- quote -- "The meeting was extraordinary and lasted for more than three hours. The commission found the president and the vice president forthcoming and candid."

Now, we are told by sources that the president did most of the talking during that three hours because he was asked most of the questions, again, some of it about his actions pre-9/11, some of it about his actions on that day. And when the vice president was involved, Lou, we are told mostly the vice president was involved on a number of detailed questions on just how the government responded in the immediate minutes and hours after the attacks. Remember, Mr. Bush was in Florida at that fateful moment. Mr. Cheney directed much that immediate response from a bunker here at the White House -- Lou.

DOBBS: John, how many of the commission members were there?

KING: All 10 commission members showed up. Two of the Democratic members, Vice Chairman Lee Hamilton and former Nebraska Senator Bob Kerrey, left after two hours. Both said they had previously scheduled commitments that they needed to keep. But all 10 were there, plus a staff member. And then, again, Lee Hamilton and Bob Kerrey did leave a bit early.

DOBBS: Previously scheduled commitments that took precedence over meeting with the president of the United States?

KING: Well, Senator Kerrey said that he needed to go to Capitol Hill for a previously scheduled meeting with a Republican senator, Pete Domenici. And in Lee Hamilton's case, he runs the Woodrow Wilson Center here in Washington. He said that he had personally arranged a visit from the Canadian prime minister, Paul Martin. And Lee Hamilton said, since he arranged that meeting, the extraordinary speech by Prime Minister Martin, he felt he had to attend.

DOBBS: There's no way in which that can be construed as a walk- out from that proceeding, then?

KING: Well, the White House says it understands. And it does say that both men had the courtesy to tell the White House in advance of the meeting that they would have to leave about two hours in.

DOBBS: Thank you very much, John King, our senior White House correspondent.

The State Department today said the number of terrorists attacks around the world declined last year, but the government's annual report on terrorism includes a chilling warning about the year ahead.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The State Department says terrorists are planning an attack on U.S. soil. High on their anxiety list, terrorist Abu Musab al-Zarqawi.

AMB. COFER BLACK, COORDINATOR FOR COUNTERTERRORISM: He is representative of a very real and credible threat. His operatives are planning and attempting now to attack American targets, and we are after them with a vengeance.

PILGRIM: Seventy percent of al Qaeda leadership has been arrested, killed or detained. But the new threat is independent, localized groups, such as the one responsible for the Madrid train bombing.

JONATHAN SCHANZER, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: You have several dozen affiliate group. These are smaller, local organic groups that have gone out and started fighting in the name of al Qaeda without the direct orders of al Qaeda.

PILGRIM: On the list of seven states that sponsor terrorism, Libya and Sudan took steps to cooperate on global terrorism. But other state sponsors, Iran, Syria, Cuba, and North Korea, did not.

In Iraq, the regime that supported terrorist groups has been removed. But Iraq will still be listed until a new government renounces terrorism. Afghanistan is no longer a breeding ground for terrorists, says the State Department. Libya was noted as improving. Libyan leader Colonel Moammar Gadhafi has been on a P.R. campaign in Europe this week to shake off Libya's image as a country that sponsors terrorism.

U.S. Deputy Secretary of State Richard Armitage talked about being in Riyadh last week when a bomb went off.

RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: That brutality only served to strengthen Saudi resolve, inject more urgency into ongoing counterterrorism efforts, and open entirely new avenues of cooperation.

PILGRIM: Saudi Arabia, he says, is in a period of -- quote -- "soul-searching and internal reform" -- unquote.

(END VIDEOTAPE)

PILGRIM: Today, the State Department said it is a valid concern that there could be an attack against the United States before the November election. The most disturbing trend globally is the targeting of soft targets, such as hotels, trains, public places -- Lou.

DOBBS: Zarqawi, any suggestions from these gentlemen, Ambassador Black or Armitage, as to when and where Osama bin Laden might be captured?

PILGRIM: They really didn't go into it. And they said it's almost a side point given there's so many splinter points that are now

(CROSSTALK)

DOBBS: A side point? A side point?

PILGRIM: Well, it is not a side point. But it is -- the more immediate threat is the splinter groups that are operating in the United States and in Europe.

DOBBS: And this bellicose sort of machoism, this machismo, after Zarqawi with a vengeance, that language suggesting what?

PILGRIM: Well, that he's an important guy to apprehend, I would guess.

DOBBS: Thank you very much, Kitty Pilgrim.

Tonight, Los Angeles is on an alert for a possible terrorist attack. The FBI warned city officials about a potential threat to a Los Angeles shopping mall. That warning did not name a particular mall, but it did indicate an attack may have been planned for today. The Los Angeles Police Department has increased security in malls and urged people to report anything suspicious. Los Angeles, like New York and Washington, has been on a higher state of alert than the rest of the nation since September 11.

Elsewhere in Los Angeles this week, a landmark meeting between police and federal immigration officials following the discovery of 100 illegal aliens in a small house. The two groups of agencies trying to mend a fractured relationship that has undermined and hampered efforts to control our nation's borders.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): This tiny house in the Watts section in Los Angeles is empty now. Gone are about 100 illegal aliens held hostage here by smugglers waiting for family members to pay border crossing debts. The house is in City Councilwoman Janice Hahn's district. So she called a meeting with the Los Angeles Police Department and the Bureau of Immigration and Customs Enforcement, seeking answers.

JANICE HAHN, LOS ANGELES CITY COUNCIL: What I was most shocked about, to find out the actual number of agents who are responsible for Los Angeles County. The resources in the federal government should match the problem here in Los Angeles. And the problem is huge. And it is not -- it does not seem to be getting better.

WIAN: ICE has 20 agents responsible for Los Angeles County, home to an estimated one million illegal aliens. Hahn says she will lobby for more federal resources. L.A.'s top federal immigration agent doesn't sound optimistic.

LORAINE BROWN, ICE AGENT IN CHARGE: Locally, we're going to be realigning our resources. We're going to be trying to work these cases smarter. Certainly, if we can get some additional resources even on a temporary basis, be happy to have them.

WIAN: Also discussed, the strained relationship between the local cops and federal agents. They have accused each other of not doing enough to fight immigrant smuggling.

GEORGE GASCON, ASST. CHIEF, LAPD: They are understaffed. We're understaffed. And sometimes when you have two moving parts and people don't have all the resources that you may need to have, there's going to be friction sometimes.

WIAN: The meeting produced promises of better cooperation and a few ideas, including public education campaigns and a crackdown on drop house property owners.

(on camera): The most telling sign that neither the Los Angeles Police Department, nor federal immigration official have the resources to stop immigrant smuggling rings is the fact that this drop house operated for two years before it was discovered last week.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: Still ahead here tonight, the former director of the National Security Agency says Operation Iraqi Freedom is a failure and it could, in fact, radicalize much of the Middle East. General William Odom is our guest.

And outrage over the Bush's administration refusal to take action against China for unfair trade practices.

We'll have those stories and a great deal more still ahead here. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says the United States has failed in Iraq and it should leave immediately. General William Odom directed the National Security Agency under President Reagan, served on President Carter's National Security Council. He is the co-author of a new book called "America's Inadvertent Empire."

And General Odom joins us tonight from Washington, D.C.

General, good to have you with us.

RET. GEN. WILLIAM ODOM, AUTHOR, "AMERICA'S INADVERTENT EMPIRE": Thank you.

DOBBS: There are many people who know you, who have great respect for your service to the nation, including your military service, who are shocked that you would say, it's time to withdraw from Iraq. Why have you -- how have you come to that conclusion?

ODOM: Well, I reached the conclusion before we went in that it was not in the U.S. interest.

And I actually -- I didn't publish anything. But I at least said to people who asked me that the issue wasn't whether we would be greeted as liberators when we came in, but how we would be treated six months after we're there. And the idea that we could create a constitutional regime that would be pro-U.S. in a short period of time there struck me as pure fantasy.

I must say, I found it hard to believe that the administration internally could make that argument convincingly to themselves. And I've just sort of been quiet since. But it seems now there is enough evidence where I can at least say not that I told you so, but that it really doesn't pay -- I would like very much to be wrong on this, but I don't see how it pays the United States to continue to go down this path.

And to understand that, you have to really I think analyze it at the Iraqi level, the regional level and particularly they international European level.

DOBBS: Well, let's talk about it, if we may, first, from the standpoint -- there are those who will be listening to you say this and say, my God, we've got to support our troops. Irrespective of the ultimate strategic decision about withdrawal and at what point or whether we achieve success and at what point. Are you concerned about this kind of discussion first and foremost having an impact on American troops in Iraq?

ODOM: The word I've heard from what was written about me in the "Wall Street Journal" is that the troops seem to like it, or at least the ones who I have. You know, the troops are not dumb about this business. They were not very happy, if you remember. Some of them even spoke out, naming the secretary of defense last year about his policy there.

And because we have vastly too few army troops to do what the administration wants to do over there, they're really feeling the pain. So I don't think this kind of discussion would create that reaction among the troops. In fact, quite the contrary.

DOBBS: As you say General, they're the ones who feel the pain and it is their blood that is, unfortunately, being spilled. Let's talk about Fallujah, if we may, from first the tactical standpoint. Your suggestion, your consideration as to what it means for the future of Iraq.

The Pentagon cannot confirm that a deal is in place, or chooses not to. We are told it is being handled by a tactical level in which generals from Saddam Hussein's army would be moved in with an Iraqi army, U.S. marines withdraw. This sounds -- give us your characterization, your assessment of what is going on.

ODOM: It's very confusing to me. I don't know why they would do that. Maybe there are reasons we just don't know from afar with the information we have. But I don't see how turning it over into an Iraqi general now that we have been working with for a good period of time is a wise thing to do.

It might tamper things down in Fallujah temporarily. But my judgment about whether to continue down this path isn't based on whether we could stop the violence in Fallujah right now, but suppose we did. We're still on a downward course. The battles we're seeing right now are with the residual parts of the old Baathists Sunni regime, we haven't begun the big fight yet with the Sunnis except with Muqtada al-Sadr. And that may give you a little idea what we can face at that level.

DOBBS: As you know, General, there are those who say that if we do not bring Fallujah, Najaf to successful conclusion, if we are indeed, not successful in Iraq itself in bringing about at least the incipient form of democracy for Iraq, that we have simply invited greater problems for the western world in terms of radical Islamist terrorism and that we will be paying a very high price in the future. How do you respond?

ODOM: Well, I said those things before we went in. I said we'll make it safe for al Qaeda and that we'll please Iran enormously, because they hated Saddam. I think Osama bin Laden couldn't be more pleased.

I'm concerned about putting our resources against al Qaeda and stabilizing the larger region. And what I think this is doing is undercutting the U.S. international authority for stabilizing the region at large.

And we've let the tactical focus on Saddam completely unhinge our military commitments from a larger strategic interest of stabilizing that region and defeating al Qaeda. And you've got this brilliant military, which has performed marvelously. It is unprecedented in military anals what they've been able to do. But military power, unless it is directed to some sensible, achievable political end, has no purpose.

What I see here is an unhinging of our military capabilities from our political strategy. And that's what I think we have to pull back, pay the price for, in order to keep from wasting more resources, regain the support of our allies and then try to take charge of a larger region in a way where we're not dealing on just our resources with the rest of the world standing off and enjoying our pain, but with the rest of the world cooperating with us.

DOBBS: General William Odom, thank you for being here. Always good to talk with you.

ODOM: Thank you.

DOBBS: That brings us to the subject of tonight's poll. The question, "do you believe the United States should remain committed to Democratizing Iraq? Yes or no." Cast your vote at CNN.com/lou. We'll have the results for you later in the broadcast.

Still ahead, the bush administration is accused of playing patty- cake, not in Iraq, but in its trade relations with China. We'll have the special report.

And keeping American jobs in this country. Congressman Mac Collins has some idea about how to stop the flow of American jobs to cheap overseas labor markets. He's our guest next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Outrage tonight in some quarters over the Bush administration's refusal to investigate allegations of Chinese labor violations and currency manipulation. Four top members of the president's economic team yesterday argued that diplomacy would provide a greater payoff than what it called economic isolationism. Peter Vials reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Labor leaders thought they had a chance to pressure the Bush administration to investigate labor abuses in China under tough U.S. trade laws designed to protect American workers and ensure fair trade, but the Bush administration said no way.

THEA LEE, AFL-CIO: This administration has not lifted a finger help workers here, to help workers in other countries. This is not one of their priorities. Certainly with respect to China, this administration is passive, and inactive, has failed to use the tools at its disposal. And the result is $124 billion trade deficit with that country.

SEN. JON CORZINE, (D) NEW JERSEY: The idea that the administration is not prepared to negotiate under the rules of WTO labor standards with the Chinese is just mind boggling to me. I think this fits into the pattern of believing that outsourcing is great for America.

VILES: The administration argued the best way to bring about reform in China is working with the Chinese, not against them. What the administration calls leveraged engagement.

ROBERT ZOELLICK, U.S. TRADE REPRESENTATIVE: These measures would cut China off from trade that would overcome poverty and improve working conditions. Accepting these petitions would take us down the path of economic isolationism. That is a path we will not take.

VILES: And in case you missed that talking point, three cabinet members repeated it, one of them literally reading it from a cue card.

ELAINE CHAO, LABOR SECRETARY: Engagement is the key to improving working conditions, not economic isolation.

DON EVANS, COMMERCE SECRETARY: Promoting economic engagement not economic isolation.

JOHN SNOW, TREASURY SECRETARY: Economic isolationism doesn't work. And it's a path we will not follow.

VILES: Now it's never clear what the administration means by economic isolationism. The petition it denied doesn't isolate anything or anyone, it simply directs the administration to investigate labor abuses in China.

(END VIDEOTAPE)

VILES: The administration also rejected preemptively a push to pressure the Chinese into floating their currency, again arguing it is better to work with the Chinese on these issues than against them, Lou.

DOBBS: One could hardly say it is more profitable. $124 billion trade deficit. I love that, economic isolationism. It is as if children had discovered a new play thing. It doesn't mean anything. VILES: It is a one-stop solution for any criticism of their trade policy. That's isolationism. But it hasn't really been defined by this administration what had they mean. In this case it doesn't seem a fair criticism.

DOBBS: It doesn't seem like a fair criticism. It seems like a strawman and lacking meaning an interesting exercise. Again, I'm sure that there is a deeper and better reason underlying it, even though not expressed in terms we all understand.

VILES: I hope we hear it some day.

DOBBS: Peter Viles, thank you very much.

One interest group that thought the Bush administration made the right decision on China is the U.S. Chamber of Commerce. The president and the CEO of the Chamber of Commerce, Tom Donohue, who is one of my biggest fans, will be our guest here Monday.

It is the time of year when high school and college students start lining up their summer jobs. But in resort and beach towns, more of those jobs are going to foreign workers. There is now a proposal, a serious proposal in Congress that would help businesses hire more foreign workers. Lisa Sylvester reports from Ocean City, Maryland.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): In the next two weeks, the Phillips Beach Plaza Hotel in Ocean City, Maryland will have to add to its current staff to accommodate the summer rush. The hotel and restaurant chain has been bringing in dozens of workers from Mexico through the H-2b visa program. But this year a national cap of 66,000 H-2b visas has already been reached.

PAUL WALL, PHILLIPS SEAFOOD RESTAURANTS: We're running ads in newspapers, almost any type of solicitation for employees. It is hard to find seasonal help because most people are look for a full-time job.

SYLVESTER: Wall is among those lobbying Congress to expand the cap on the H-2b seasonal visas to 106,000. Many resort managers say they prefer hiring foreign workers because they can work the longer summer season which now stretches past September.

TINA TOMCZYK, MARK DOUGLAS JEWELERS: I would think that we definitely need the international students every year just because of the lack of applicants from the United States.

SYLVESTER: Business owners say it's hard to find people willing to work seasonal jobs. Critics question whether the employers are actively recruiting Americans. Joanie Allan made several calls to resort businesses on Martha's Vineyard looking for summer jobs for her three teenage grandkids. No one returned her calls.

JOANIE ALLAN, GRANDMOTHER: They live in a single-parent family. My son has raised the children since they were little. Every dime counts.

SYLVESTER: Those who oppose adding more seasonal foreign workers say companies need to think about the impact to the American worker.

ROSEMARY JENKS, NUMBERSUSA: We're outsourcing American jobs, sending them overseas and then we're bringing in foreign workers to take jobs that remain here. It is a double whammy for the American worker.

SYLVESTER: With 14 million people out of work, opponents argue the United States shouldn't be giving jobs away, especially ones that come with a view. Lisa Sylvester, Ocean City, Maryland.

(END VIDEOTAPE)

DOBBS: Well, it's really tough because minor league baseball is also striking out in the visa department. Some 200 players in the Minor League system are stuck in their home countries waiting for visas. They need those same H-2b visas that summer employees try to obtain. As Lisa Sylvester reported, the full year's quota has been filled.

Well, still ahead here, "Exporting America." We'll be talking with Congressman Mac Collins of Georgia. He says the nation could face a perilous economic future and in "America Works," a bartender -- this bartender, in fact, who keeps New Yorkers going as we celebrate those who make this country work. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest has often broken partisan lines, one of the few Republicans to oppose NAFTA, CAFTA, the Free Trade Area of the Americas. Congressman Mac Collins of Georgia says it is all about jobs. He's a member of the powerful House (UNINTELLIGIBLE) committee, joining us tonight from our studios in Atlanta. Good to have you with us. Let me start with the Bush administration's decision not to pursue enforcement of agreements with China. What's your reaction?

REP. MAC COLLINS (R), GEORGIA: Well, I regret we're not going to do an investigation or call for an investigation of the manipulation of the currency and dumping. I think they're putting too much products of certain products in this country. I think it does need to be investigated. The labor, that's their doing but the currency and dumping is ours. (UNINTELLIGIBLE) we should be concerned about.

DOBBS: The American Competitiveness Enhancement Act which you have sponsored and re-introduced, lowering corporate tax rates, you think that's the proper way to stop outsourcing to start incentivizing (ph) American corporations to keep jobs here?

COLLINS: I think it's only a stop gap. We do need to look at the corporate tax rates. If you look at manufacturing and why manufacturing is moving to where there's cheaper labor it's to offset other costs. Those costs are excessive taxation is the high cost of (UNINTELLIGIBLE) regulatory provisions and it's also a high cost of protecting yourself against possible lawsuits, a class action in the medical profession, health insurance, healthcare is very high and a lot of it is because of malpractice insurance.

DOBBS: All of that...

COLLINS: That's only an interim step. In the long run what we have to do in this country, we have to change this tax system. We have to get away from this worldwide income tax and go to consumption tax. If you are going to be level on the playing field with the rest of the world and our trading partners.

DOBBS: Which permits our trading partners not to get too involved in this, the bad tax, which allows them to effectively export to this country with tax advantages that we don't enjoy, despite everything we're doing.

COLLINS: That's right. They export to us, and we have done away with a lot of our tariffs or eliminated a lot of the tariffs. That used to be the way we taxed was tariff and excise. We -- they have border corrections. We do not have any kind of border corrections ourselves and we do not impose any type of tax on the product that they export and we import.

DOBBS: Congressman, we have about 30 seconds left. The labor in this country is under a great deal of pressure. The working man and woman in this country, is there hope, in your judgment, on Capitol Hill to see their needs, their interests prevail against a host of special interests and power that is (UNINTELLIGIBLE) against their interest?

COLLINS: The only way things move on Capitol Hill is for the people to contact their members of the House, the Senate, encourage them and tell them, look, we want this type of legislation passed. That's the reason I say the consumption tax is the ultimate way to go. If the people will get behind it that will eventually happen. I hope we hold hearings on it later this year. (UNINTELLIGIBLE) is going to hold hearings. We'll get it out. Let the people understand exactly how it works and then I hope they will get behind it and push it because there's a national association manufacturers state and their most recent report, changing this tax system is the only way to level the playing field with the rest of our trading partners.

DOBBS: Congressman Mac Collins, thank you very much for being with us.

COLLINS: Thank you.

DOBBS: That brings us to the subject of tonight's thought. "Wise are those who learn that the bottom line doesn't always have to be their top priority." Those are the words of American educator William Ward.

Still ahead, we'll share your thoughts about exporting America and then our special feature report on the men and women who make this country work. Tonight a New York bartender. That story and more still ahead.

(COMMERCIAL BREAK) DOBBS: Stocks down today. Some new concerns about inflation. The prospect of rising interest rates, the Dow lost more than 70 points, the Nasdaq fell 31, almost and the S&P 500 down more than 8.5. Christine Romans is here now and has the story for us -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Lou, stocks have been selling down on heavy volume and moving up on light volume. And that suggests to many that there are some sustainability problems with these market levels. The Dow, S&P 500, Nasdaq all at the lowest in a month.

The economy grew 4.2 percent in the first quarter. That's good, but less than the 5 percent many hoped for. And 338,000 Americans filed new claims for unemployment benefits in the latest week, that's an improvement. But S&P economist David Wyss says there is a chilling new reality in the labor market.

(BEGIN VIDEO CLIP)

DAVID WYSS, STANDARD AND POORS: After learning how to do just in time inventories they're now learning how to do just in time employment. You don't need to hire the guy. You bring him in for the month and if you don't need him next month he's not there.

(END VIDEO CLIP)

ROMANS: Not there. Meantime, every day there are new job cuts. Today, Dow chemical will cut another 3,000 jobs and Gateway Computer will slash another 40 percent of its work force. It now expects to have just 2,000 employees by the end of the year -- Lou.

DOBBS: Christine, thank you very much. At least that 18,000 decline in jobless claims is a positive as you pointed out. All right, thanks.

Taking a look now at some of your thoughts.

Buddy Georgia of Walla Walla, Washington, "thank you for being a voice of common sense in a time when the number of troop casualties climbs daily, the national debt is at an all time high and jobs are leaving faster than illegal aliens are arriving. Can't we find something more important than Sen. Kerry's medals to talk about."

Many of you wrote in about my discussion last night with the chairman and the CEO of Time Warner. Here we call him the boss. He said Time Warner employees in India use Dell computers and Compact computers and Carrier air conditioners. That made him feel better about the issue of outsourcing. Jim in Greenvalley, Indiana wrote in to say, "Dick Parsons needs to do his homework. I just checked the tag on my Carrier A.C. It was manufactured in Mexico."

And Rich Murgatroyd of Tuscon, Arizona, "I have a Dell computer and I looked at it after the interview. The monitor, keyboard and speakers all say, made in China."

We love hearing from you. E-mail us at loudobbs@CNN.com. Turning now to "America Works," celebrating the men and who make this work. Tonight, Urban Insginares. Bill Tucker has this story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I see America drinking the fabulous cocktails I make.

UNIDENTIFIED MALE: Cranberry juice. Enjoy it.

BILL TUCKER, CNN CORRESPONDENT (voice-over): This bar is a little different. With a bartender, Irv, who looks more like a bodyguard, who doesn't sound much like your typical New Yorker.

UNIDENTIFIED MALE: How we doing, ladies? are they still good?

IRVIN INSIGNARES, BARTENDER: That's what I hear every day, where you from. I was born here, left when I was 10, went to school in Virginia, North Carolina, got married, stayed down south, came back in '98.

TUCKER: While Irv may be the unexpected New Yorker, the bar which opened in 1933 is just what would you expect. It got its name from Tallulah Bankhead.

UNIDENTIFIED FEMALE: 20 minutes! For heavens, my nails, my hair, my face.

TUCKER: Yes, that Tallulah. Humphrey Bogart and Lauren Becall knocked back a few here, and that's just a start of a long list of celebrities.

INSIGNARES: Well, I've seen a lot of athletes in here. When I was at at the register, I looked in the mirror and Peyton Manning was behind me. Now we got his brother coming to New York. Mike Ditka. They have shot a lot of movies in here. "Sex and the City" shot a couple clips. So, there's a lot of history.

UNIDENTIFIED MALE: Best cosmo in the city, right here.

TUCKER: With his two children grown, Irv's happy with his job and he's happy with his life.

INSIGNARES: I tried other stuff. I always came back to working in bars. I've got a very simple life going. You know, go to the gym. It is very good for me. I need the gym. Can't do without it. Shooting pool, roller blading, go to Broadway show every now and then.

TUCKER (on camera): This is not the only bar that Irv works. The group that owns this restaurant owns several others, a couple within walking distance. And on the nights that Irv's is not here, they will only be too happy to refer you to the bar where he can be found. Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: Coming up next here, the results of our poll tonight. We continue in just a moment. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: And now, the results of tonight's poll. 16 percent of you said the United States should remain committed to Democratizing Iraq and overwhelming number says no: 84 percent. That's our show for tonight. We thank you for being with us.

Please join us tomorrow when Arthur Max Boot (ph) joins us. He says the U.S. military has a shortage of soldiers. He calls it the muscle gap. And he says Senator John Kerry should be focusing on it.

We'll also be joined by E.J. Dionne, the columnist for the "Washington Post" a senior fellow at the studies at the Brookings Institution.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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


Aired April 29, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight, U.S. Marine officers say there is a deal to end the three-week siege of Fallujah with the help of former generals from Saddam Hussein's army.

UNIDENTIFIED MALE: We have heard that the American troops are going to withdraw there.

DOBBS: Should the United States withdraw from Iraq? Former National Security Agency Director and retired General William Odom says it is. He's our guest tonight.

In "Broken Borders" tonight, what a novel idea, police and federal immigration agents working together for the first time, searching for illegal aliens in Los Angeles.

UNIDENTIFIED FEMALE: We're going to be realigning our resources. We're going to be trying to work these cases smarter.

DOBBS: And a Republican lawmaker who has broken ranks with those who support free trade at any price. I'll be joined by Congressman Mac Collins, who says it's all about jobs.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, April 29. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

Tonight, U.S. commanders in Fallujah say they have reached a deal to end the three-week siege of the city. U.S. Marines have surrounded Fallujah since insurgents killed and mutilated four American civilian contractors. Elsewhere in Iraq today, insurgents killed 10 American soldiers, eight of them in one car bomb attack south of Baghdad. The other two Americans were killed in separate attacks in Baghdad and Baquba.

(BEGIN VIDEOTAPE)

DOBBS: (voice-over): A group of Saddam Hussein's former generals have offered to build an Iraqi security force that would move into Fallujah and U.S. Marines would pull back. The Iraqi generals say they will put a force of 600 to 1,000 men. Iraqi negotiators are optimistic that this could be the beginning of a settlement. SAIB AL-GILANI, NEGOTIATOR: We have heard that the American troops are going to withdraw their powers from Fallujah and this is -- if it happens will be a very good sign.

DOBBS: The cease-fire in Fallujah is a cease-fire in name only. F-18 fighter jets flying off the USS George Washington again pounded targets in the insurgent stronghold. At least 16 bombs hit Fallujah over the past 24 hours. The Marines are upbeat.

QUESTION: What do you think about the overall assessment of the CPA?

GEN. JAMES CONWAY, MARINE EXPEDITIONARY FORCE: It's good. It's good. It's a good battalion doing good work in a bad place.

QUESTION: Are you optimistic about what's happening here?

CONWAY: Yes, I am. Any time Marines are on deck, you need to be optimistic.

DOBBS: April is the deadliest month in Iraq for the United States since the war began; 10 U.S. soldiers were killed today; 736 U.S. troops have died in Iraq.

(END VIDEOTAPE)

DOBBS: Gunmen loyal to the radical cleric Muqtada al-Sadr have launched hit-and-run attacks against U.S. troops in central Iraq. Today, those insurgents opened fire on a checkpoint between Najaf and Kufa.

Jane Arraf has the report.

(BEGIN VIDEOTAPE)

JANE ARRAF, CNN BAGHDAD BUREAU CHIEF (voice-over): It was a simple checkpoint near Najaf. There is nothing routine, though, about a city controlled by a Shia militia with U.S. forces on the edges.

On only the second day U.S. soldiers have operated these control points, there were a few friendly waves and a lot of wary looks. Then suddenly, the traffic stopped, a warning to these soldiers from the 2nd Battalion, 37th Armored Regiment who had been in Baghdad for a year.

CPL. KADE CLARK, 1ST ARMORED DIVISION: Every time the streets clear, we get attacked.

ARRAF (on camera): Has it happened before?

CLARK: When I was on top of an I.P. station, it happened. I was in a convoy. They had to stop because they had the blocked the road.

UNIDENTIFIED MALE: There we go.

UNIDENTIFIED MALE: Take cover! UNIDENTIFIED MALE: Take cover!

UNIDENTIFIED MALE: It came from our rear.

UNIDENTIFIED MALE: Stay down!

ARRAF (voice-over): We did, taking covered near an armored vehicle.

(on camera): Just a few minutes ago, this was a normal busy street with traffic going back and forth. Now, we're in the middle of rocket-propelled grenade and mortar attacks. There's smalls-arms fire. And the unit we're with has called in for tanks.

(voice-over): Across the bridge at the first American checkpoint, there was a virtually simultaneous attack, both believed launched by Muqtada al-Sadr's militia. And where we were, the soldiers, a mortar platoon attached to the 2nd Armored Cavalry Regiment, bided their time. They would have liked to be more aggressive, but they are under orders to avoid inflaming tension.

UNIDENTIFIED MALE: Let's go.

UNIDENTIFIED MALE: Is anybody hit, anybody injured?

ARRAF: One of the soldiers from headquarters' company was grazed by a bullet in the leg. They were all relieved it wasn't worse.

UNIDENTIFIED MALE: It really wasn't that bad. Usually, when they do hit us, it's a lot more. But I guess that was just kind of trying -- I don't know, like a territory spot or something. I don't know.

ARRAF: Just minutes after the firing ended, Iraqis started to venture out again. An hour later, the soldiers resumed the checkpoint. No one killed in this shoot-out, but a message sent on both sides.

Jane Arraf, CNN, between Kufa and Najaf, Iraq.

(END VIDEOTAPE)

DOBBS: As Jane reported in that story, only one American soldier was wounded and only lightly. But Jane and photographer Rick Hall (ph) were uninjured in the attack.

In just a few minutes here, I will be talking about the military challenges presented in Iraq with General David Grange. And I'll be talking with General William Odom. He's the former director of national security. And he says it is time for the United States to withdraw from Iraq and as soon as possible.

Turning now to the Pentagon, where officials tonight are not confirming there is a deal to end that siege of Fallujah. They say, instead, negotiations are being handled by military commanders in Iraq. Our senior Pentagon correspondent, Jamie McIntyre, has the report.

Jamie, a deal or not?

(CROSSTALK)

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, there's some genuine confusion on that here at the Pentagon, even among some very senior officials.

Two things going on here. One is the desire by the Pentagon to downplay the idea that there is any sort of a final deal, particularly if it doesn't happen. They don't want to look like they had a deal and it fell through. The other thing that's happening is that U.S. commanders on the scene have been given wide latitude to exercise the kind of judgment they need to do in trying to quiet the situation in Fallujah, short of an all-out military assault by the Marines there.

So Pentagon officials are confirming that some Iraqi -- former generals have come forward, have offered to put together a force, that there's an idea that's being explored to have that force go into the city and allow the Marines to pull back. But what the Pentagon is shying away from is saying that this is a done deal. As one person described it, more of a concept than a plan at this point, with a lot of things still need to be worked out.

And, again, a lot of senior officials here in the Pentagon still not having been briefed on the progress of this particular approach. So they're stepping back a little bit from the Pentagon. But, at the same time, they can't say that it's not really a deal because those kind of decisions are being made at the tactical level at the scene -- Lou.

DOBBS: At the tactical level. With 1,500 Marines of the 1st Marine Expeditionary Force surrounding Fallujah, tactical decisions are being made on something as important as this?

MCINTYRE: Well, the overall objective is to calm the situation without having to have an all-out assault and to find a -- quote -- "Iraqi solution" to that.

If that can involve some Iraqi forces going in who are in support of the Marines, if they can work that out, they would like to try to do that. But they don't want to say that they're putting all their eggs in that basket at the moment. They have not ruled out an offensive because they say those details just haven't been worked out.

DOBBS: And I would like to ask you one other question, Jamie, before we let you go. Jane Arraf reported that the soldiers in which you saw that firefight, that brief skirmish, wanted to pursue aggressively those attacking them, but had been cautioned not to -- quote, unquote -- "inflame tensions."

Is that a broader directive to our troops in Iraq at this point? MCINTYRE: Well, no, that's specific to the situation in Najaf, where the U.S. is still wrestling with the best way to go after Muqtada al-Sadr.

They believe that they have the military forces, that they could simply go in and take out his militia and crush him, but not without some political cost. And they're trying to walk that thin line. And those are the instructions that the U.S. troops have there at the moment, which is aggressive self-defense, going on some patrols, but not to the point where they're going after directly Muqtada al-Sadr.

DOBBS: Thank you, Jamie -- Jamie McIntyre, our senior Pentagon correspondent.

Some military experts now say the outcome of the battle for Fallujah, should it turn into a further battle, would determine the future of the war in Iraq itself. Those experts say U.S. Marines must take back Fallujah from the insurgents or American troops will face similar battles across the entirety of Iraq.

Joining me now is General David Grange in "Grange On Point."

The situation in Fallujah. You have just heard Jamie McIntyre say that the decision about whether or not to bring back Baathist generals and to create an Iraqi force to go in and for U.S. Marines to withdraw is being made at the tactical level.

General, does that surprise you?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: I don't believe it's at the tactical level.

I think the highest levels in Iraq on the coalition side are involved in this. These generals would have to be vetted, obviously, so they have some credibility and a trust factor. And then it's going to be something, if it does happen, it is not going to happen overnight, Lou. They are going to get 800 to 1,000 Iraqi military ready to go with some kind of credible capability to calm insurgents and establish some kind of rule of law. That will definitely not happen overnight.

DOBBS: Not happening overnight. U.S. Marines surrounding Fallujah. They have lost comrades, four American contractors killed and mutilated, withdrawing from ground that they paid for with American lives. What will be the reaction for those troops?

GRANGE: Well, any time you give up ground, it is hard for a troop to understand that, especially if the comrades bled for that piece of ground.

The objective, though, is not terrain. The objective is to take down, to remove the insurgent force. But when you're on the ground as a foot soldier, the dirt means a lot to you. It is just something you depend on. And every foot, every inch counts. But they need to be briefed by the chain of command of the purpose, the rationale of moving forward or backwards within a piece of terrain in order to accomplish their mission.

But I think the Marines are going to keep a tight noose on that place and stand by to continue attacks as they occur, which they will.

DOBBS: And also you've heard, as we have all, Jane Arraf's report, young soldiers saying that they were not going to aggressively respond to the attack against them because they were under orders not to -- quote, unquote -- "inflame tensions." Your reading and your assessment.

GRANGE: Lou, that is situationally dependent on where they are in Iraq.

There's always constraints on rules of engagement. When life is threatened, of course they will react violently. But, in this case, the leadership on the ground felt that they could contain what was happening. It's like that in all combat and in this case in Iraq, throughout the country, depending on where you are.

DOBBS: In your best judgment, if the situation in Fallujah is not resolved by the U.S. military or its proxies, what will be the impact?

GRANGE: Well, Fallujah I think is an example. I think that here you have a town that is controlled by insurgents. I don't believe all the residents are against the coalition or the new Iraqi government, but they are controlled by insurgents.

And what happens to these people if there is a cease-fire? Do they meld back into the neighborhood? Do they become shop owners? What happens to their weapons. All these weapons need to be turned in and the insurgents need to be destroyed or they need to be arrested or moved out. They cannot hang out in this town after a cease-fire.

DOBBS: General David Grange, thank you, sir.

GRANGE: My pleasure.

DOBBS: More on Iraq ahead. We'll be joined by former National Security Agency Director retired General William Odom, who says the United States should simply withdraw and immediately. He's our guest.

The State Department issues a new warning about the threat from radical Islamist terrorists. We'll have that report for you.

President Bush, Vice President Cheney, they spent more than three hours talking with the 9/11 Commission in private not under oath and without recording. We'll have the report from the White House.

In "Broke Borders" tonight, two organizations finally working together for the first time ever. They're searching for illegal aliens in the city of Los Angeles.

Those stories, a great deal more still ahead, coming right up.

(COMMERCIAL BREAK) DOBBS: President Bush, Vice President Cheney, today they spent more than three hours talking privately with the commission investigating September 11. Afterwards, President Bush said he answered every question. The commission said it found the president and vice president -- quote/unquote -- "forthcoming and candid."

Senior White House correspondent John King has the report for us -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, remember, this president at first opposed the creation of the commission. Then the White House negotiated for weeks, even months, over whether the president would answer questions in the first place.

But as the president emerged from more than three hours and 10 minutes of questioning today, he said he was very much glad to do it. Now, both the president and the commission declining to get into any details. But sources tell us the issues discussed did include the administration's assessment of the al Qaeda threat pre-9/11, that August 2001 intelligence warning that al Qaeda was poised to strike, perhaps even here in the United States.

Former White House official Richard Clarke's testimony quite critical of the president, saying he all but ignored the terrorist threat, that came up as well. It also came up how Mr. Bush and Vice President Cheney directed the government's response on the day of September 11 in those immediate hours and minutes after the attacks.

Now, the president, of course, had been criticized for initially saying he would not testify. Then there was some criticism as to why did he insist on having the vice president at his side. The president said today, Lou, he was glad he did it.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: If we had something to hide, we wouldn't have met with them in the first place. We answered all their questions. And, as I say, I came away good about the session, because I wanted them to know, you know, how I set strategy, how we run the White House, how we deal with threats.

(END VIDEO CLIP)

KING: The president described the meeting as cordial. He complimented the commission members, saying he thought they asked very good questions.

And the commission quickly returned the favor. In a statement issued shortly after the meeting broke up, the 9/11 Commission said -- quote -- "The meeting was extraordinary and lasted for more than three hours. The commission found the president and the vice president forthcoming and candid."

Now, we are told by sources that the president did most of the talking during that three hours because he was asked most of the questions, again, some of it about his actions pre-9/11, some of it about his actions on that day. And when the vice president was involved, Lou, we are told mostly the vice president was involved on a number of detailed questions on just how the government responded in the immediate minutes and hours after the attacks. Remember, Mr. Bush was in Florida at that fateful moment. Mr. Cheney directed much that immediate response from a bunker here at the White House -- Lou.

DOBBS: John, how many of the commission members were there?

KING: All 10 commission members showed up. Two of the Democratic members, Vice Chairman Lee Hamilton and former Nebraska Senator Bob Kerrey, left after two hours. Both said they had previously scheduled commitments that they needed to keep. But all 10 were there, plus a staff member. And then, again, Lee Hamilton and Bob Kerrey did leave a bit early.

DOBBS: Previously scheduled commitments that took precedence over meeting with the president of the United States?

KING: Well, Senator Kerrey said that he needed to go to Capitol Hill for a previously scheduled meeting with a Republican senator, Pete Domenici. And in Lee Hamilton's case, he runs the Woodrow Wilson Center here in Washington. He said that he had personally arranged a visit from the Canadian prime minister, Paul Martin. And Lee Hamilton said, since he arranged that meeting, the extraordinary speech by Prime Minister Martin, he felt he had to attend.

DOBBS: There's no way in which that can be construed as a walk- out from that proceeding, then?

KING: Well, the White House says it understands. And it does say that both men had the courtesy to tell the White House in advance of the meeting that they would have to leave about two hours in.

DOBBS: Thank you very much, John King, our senior White House correspondent.

The State Department today said the number of terrorists attacks around the world declined last year, but the government's annual report on terrorism includes a chilling warning about the year ahead.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): The State Department says terrorists are planning an attack on U.S. soil. High on their anxiety list, terrorist Abu Musab al-Zarqawi.

AMB. COFER BLACK, COORDINATOR FOR COUNTERTERRORISM: He is representative of a very real and credible threat. His operatives are planning and attempting now to attack American targets, and we are after them with a vengeance.

PILGRIM: Seventy percent of al Qaeda leadership has been arrested, killed or detained. But the new threat is independent, localized groups, such as the one responsible for the Madrid train bombing.

JONATHAN SCHANZER, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: You have several dozen affiliate group. These are smaller, local organic groups that have gone out and started fighting in the name of al Qaeda without the direct orders of al Qaeda.

PILGRIM: On the list of seven states that sponsor terrorism, Libya and Sudan took steps to cooperate on global terrorism. But other state sponsors, Iran, Syria, Cuba, and North Korea, did not.

In Iraq, the regime that supported terrorist groups has been removed. But Iraq will still be listed until a new government renounces terrorism. Afghanistan is no longer a breeding ground for terrorists, says the State Department. Libya was noted as improving. Libyan leader Colonel Moammar Gadhafi has been on a P.R. campaign in Europe this week to shake off Libya's image as a country that sponsors terrorism.

U.S. Deputy Secretary of State Richard Armitage talked about being in Riyadh last week when a bomb went off.

RICHARD ARMITAGE, DEPUTY SECRETARY OF STATE: That brutality only served to strengthen Saudi resolve, inject more urgency into ongoing counterterrorism efforts, and open entirely new avenues of cooperation.

PILGRIM: Saudi Arabia, he says, is in a period of -- quote -- "soul-searching and internal reform" -- unquote.

(END VIDEOTAPE)

PILGRIM: Today, the State Department said it is a valid concern that there could be an attack against the United States before the November election. The most disturbing trend globally is the targeting of soft targets, such as hotels, trains, public places -- Lou.

DOBBS: Zarqawi, any suggestions from these gentlemen, Ambassador Black or Armitage, as to when and where Osama bin Laden might be captured?

PILGRIM: They really didn't go into it. And they said it's almost a side point given there's so many splinter points that are now

(CROSSTALK)

DOBBS: A side point? A side point?

PILGRIM: Well, it is not a side point. But it is -- the more immediate threat is the splinter groups that are operating in the United States and in Europe.

DOBBS: And this bellicose sort of machoism, this machismo, after Zarqawi with a vengeance, that language suggesting what?

PILGRIM: Well, that he's an important guy to apprehend, I would guess.

DOBBS: Thank you very much, Kitty Pilgrim.

Tonight, Los Angeles is on an alert for a possible terrorist attack. The FBI warned city officials about a potential threat to a Los Angeles shopping mall. That warning did not name a particular mall, but it did indicate an attack may have been planned for today. The Los Angeles Police Department has increased security in malls and urged people to report anything suspicious. Los Angeles, like New York and Washington, has been on a higher state of alert than the rest of the nation since September 11.

Elsewhere in Los Angeles this week, a landmark meeting between police and federal immigration officials following the discovery of 100 illegal aliens in a small house. The two groups of agencies trying to mend a fractured relationship that has undermined and hampered efforts to control our nation's borders.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): This tiny house in the Watts section in Los Angeles is empty now. Gone are about 100 illegal aliens held hostage here by smugglers waiting for family members to pay border crossing debts. The house is in City Councilwoman Janice Hahn's district. So she called a meeting with the Los Angeles Police Department and the Bureau of Immigration and Customs Enforcement, seeking answers.

JANICE HAHN, LOS ANGELES CITY COUNCIL: What I was most shocked about, to find out the actual number of agents who are responsible for Los Angeles County. The resources in the federal government should match the problem here in Los Angeles. And the problem is huge. And it is not -- it does not seem to be getting better.

WIAN: ICE has 20 agents responsible for Los Angeles County, home to an estimated one million illegal aliens. Hahn says she will lobby for more federal resources. L.A.'s top federal immigration agent doesn't sound optimistic.

LORAINE BROWN, ICE AGENT IN CHARGE: Locally, we're going to be realigning our resources. We're going to be trying to work these cases smarter. Certainly, if we can get some additional resources even on a temporary basis, be happy to have them.

WIAN: Also discussed, the strained relationship between the local cops and federal agents. They have accused each other of not doing enough to fight immigrant smuggling.

GEORGE GASCON, ASST. CHIEF, LAPD: They are understaffed. We're understaffed. And sometimes when you have two moving parts and people don't have all the resources that you may need to have, there's going to be friction sometimes.

WIAN: The meeting produced promises of better cooperation and a few ideas, including public education campaigns and a crackdown on drop house property owners.

(on camera): The most telling sign that neither the Los Angeles Police Department, nor federal immigration official have the resources to stop immigrant smuggling rings is the fact that this drop house operated for two years before it was discovered last week.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: Still ahead here tonight, the former director of the National Security Agency says Operation Iraqi Freedom is a failure and it could, in fact, radicalize much of the Middle East. General William Odom is our guest.

And outrage over the Bush's administration refusal to take action against China for unfair trade practices.

We'll have those stories and a great deal more still ahead here. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says the United States has failed in Iraq and it should leave immediately. General William Odom directed the National Security Agency under President Reagan, served on President Carter's National Security Council. He is the co-author of a new book called "America's Inadvertent Empire."

And General Odom joins us tonight from Washington, D.C.

General, good to have you with us.

RET. GEN. WILLIAM ODOM, AUTHOR, "AMERICA'S INADVERTENT EMPIRE": Thank you.

DOBBS: There are many people who know you, who have great respect for your service to the nation, including your military service, who are shocked that you would say, it's time to withdraw from Iraq. Why have you -- how have you come to that conclusion?

ODOM: Well, I reached the conclusion before we went in that it was not in the U.S. interest.

And I actually -- I didn't publish anything. But I at least said to people who asked me that the issue wasn't whether we would be greeted as liberators when we came in, but how we would be treated six months after we're there. And the idea that we could create a constitutional regime that would be pro-U.S. in a short period of time there struck me as pure fantasy.

I must say, I found it hard to believe that the administration internally could make that argument convincingly to themselves. And I've just sort of been quiet since. But it seems now there is enough evidence where I can at least say not that I told you so, but that it really doesn't pay -- I would like very much to be wrong on this, but I don't see how it pays the United States to continue to go down this path.

And to understand that, you have to really I think analyze it at the Iraqi level, the regional level and particularly they international European level.

DOBBS: Well, let's talk about it, if we may, first, from the standpoint -- there are those who will be listening to you say this and say, my God, we've got to support our troops. Irrespective of the ultimate strategic decision about withdrawal and at what point or whether we achieve success and at what point. Are you concerned about this kind of discussion first and foremost having an impact on American troops in Iraq?

ODOM: The word I've heard from what was written about me in the "Wall Street Journal" is that the troops seem to like it, or at least the ones who I have. You know, the troops are not dumb about this business. They were not very happy, if you remember. Some of them even spoke out, naming the secretary of defense last year about his policy there.

And because we have vastly too few army troops to do what the administration wants to do over there, they're really feeling the pain. So I don't think this kind of discussion would create that reaction among the troops. In fact, quite the contrary.

DOBBS: As you say General, they're the ones who feel the pain and it is their blood that is, unfortunately, being spilled. Let's talk about Fallujah, if we may, from first the tactical standpoint. Your suggestion, your consideration as to what it means for the future of Iraq.

The Pentagon cannot confirm that a deal is in place, or chooses not to. We are told it is being handled by a tactical level in which generals from Saddam Hussein's army would be moved in with an Iraqi army, U.S. marines withdraw. This sounds -- give us your characterization, your assessment of what is going on.

ODOM: It's very confusing to me. I don't know why they would do that. Maybe there are reasons we just don't know from afar with the information we have. But I don't see how turning it over into an Iraqi general now that we have been working with for a good period of time is a wise thing to do.

It might tamper things down in Fallujah temporarily. But my judgment about whether to continue down this path isn't based on whether we could stop the violence in Fallujah right now, but suppose we did. We're still on a downward course. The battles we're seeing right now are with the residual parts of the old Baathists Sunni regime, we haven't begun the big fight yet with the Sunnis except with Muqtada al-Sadr. And that may give you a little idea what we can face at that level.

DOBBS: As you know, General, there are those who say that if we do not bring Fallujah, Najaf to successful conclusion, if we are indeed, not successful in Iraq itself in bringing about at least the incipient form of democracy for Iraq, that we have simply invited greater problems for the western world in terms of radical Islamist terrorism and that we will be paying a very high price in the future. How do you respond?

ODOM: Well, I said those things before we went in. I said we'll make it safe for al Qaeda and that we'll please Iran enormously, because they hated Saddam. I think Osama bin Laden couldn't be more pleased.

I'm concerned about putting our resources against al Qaeda and stabilizing the larger region. And what I think this is doing is undercutting the U.S. international authority for stabilizing the region at large.

And we've let the tactical focus on Saddam completely unhinge our military commitments from a larger strategic interest of stabilizing that region and defeating al Qaeda. And you've got this brilliant military, which has performed marvelously. It is unprecedented in military anals what they've been able to do. But military power, unless it is directed to some sensible, achievable political end, has no purpose.

What I see here is an unhinging of our military capabilities from our political strategy. And that's what I think we have to pull back, pay the price for, in order to keep from wasting more resources, regain the support of our allies and then try to take charge of a larger region in a way where we're not dealing on just our resources with the rest of the world standing off and enjoying our pain, but with the rest of the world cooperating with us.

DOBBS: General William Odom, thank you for being here. Always good to talk with you.

ODOM: Thank you.

DOBBS: That brings us to the subject of tonight's poll. The question, "do you believe the United States should remain committed to Democratizing Iraq? Yes or no." Cast your vote at CNN.com/lou. We'll have the results for you later in the broadcast.

Still ahead, the bush administration is accused of playing patty- cake, not in Iraq, but in its trade relations with China. We'll have the special report.

And keeping American jobs in this country. Congressman Mac Collins has some idea about how to stop the flow of American jobs to cheap overseas labor markets. He's our guest next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Outrage tonight in some quarters over the Bush administration's refusal to investigate allegations of Chinese labor violations and currency manipulation. Four top members of the president's economic team yesterday argued that diplomacy would provide a greater payoff than what it called economic isolationism. Peter Vials reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Labor leaders thought they had a chance to pressure the Bush administration to investigate labor abuses in China under tough U.S. trade laws designed to protect American workers and ensure fair trade, but the Bush administration said no way.

THEA LEE, AFL-CIO: This administration has not lifted a finger help workers here, to help workers in other countries. This is not one of their priorities. Certainly with respect to China, this administration is passive, and inactive, has failed to use the tools at its disposal. And the result is $124 billion trade deficit with that country.

SEN. JON CORZINE, (D) NEW JERSEY: The idea that the administration is not prepared to negotiate under the rules of WTO labor standards with the Chinese is just mind boggling to me. I think this fits into the pattern of believing that outsourcing is great for America.

VILES: The administration argued the best way to bring about reform in China is working with the Chinese, not against them. What the administration calls leveraged engagement.

ROBERT ZOELLICK, U.S. TRADE REPRESENTATIVE: These measures would cut China off from trade that would overcome poverty and improve working conditions. Accepting these petitions would take us down the path of economic isolationism. That is a path we will not take.

VILES: And in case you missed that talking point, three cabinet members repeated it, one of them literally reading it from a cue card.

ELAINE CHAO, LABOR SECRETARY: Engagement is the key to improving working conditions, not economic isolation.

DON EVANS, COMMERCE SECRETARY: Promoting economic engagement not economic isolation.

JOHN SNOW, TREASURY SECRETARY: Economic isolationism doesn't work. And it's a path we will not follow.

VILES: Now it's never clear what the administration means by economic isolationism. The petition it denied doesn't isolate anything or anyone, it simply directs the administration to investigate labor abuses in China.

(END VIDEOTAPE)

VILES: The administration also rejected preemptively a push to pressure the Chinese into floating their currency, again arguing it is better to work with the Chinese on these issues than against them, Lou.

DOBBS: One could hardly say it is more profitable. $124 billion trade deficit. I love that, economic isolationism. It is as if children had discovered a new play thing. It doesn't mean anything. VILES: It is a one-stop solution for any criticism of their trade policy. That's isolationism. But it hasn't really been defined by this administration what had they mean. In this case it doesn't seem a fair criticism.

DOBBS: It doesn't seem like a fair criticism. It seems like a strawman and lacking meaning an interesting exercise. Again, I'm sure that there is a deeper and better reason underlying it, even though not expressed in terms we all understand.

VILES: I hope we hear it some day.

DOBBS: Peter Viles, thank you very much.

One interest group that thought the Bush administration made the right decision on China is the U.S. Chamber of Commerce. The president and the CEO of the Chamber of Commerce, Tom Donohue, who is one of my biggest fans, will be our guest here Monday.

It is the time of year when high school and college students start lining up their summer jobs. But in resort and beach towns, more of those jobs are going to foreign workers. There is now a proposal, a serious proposal in Congress that would help businesses hire more foreign workers. Lisa Sylvester reports from Ocean City, Maryland.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): In the next two weeks, the Phillips Beach Plaza Hotel in Ocean City, Maryland will have to add to its current staff to accommodate the summer rush. The hotel and restaurant chain has been bringing in dozens of workers from Mexico through the H-2b visa program. But this year a national cap of 66,000 H-2b visas has already been reached.

PAUL WALL, PHILLIPS SEAFOOD RESTAURANTS: We're running ads in newspapers, almost any type of solicitation for employees. It is hard to find seasonal help because most people are look for a full-time job.

SYLVESTER: Wall is among those lobbying Congress to expand the cap on the H-2b seasonal visas to 106,000. Many resort managers say they prefer hiring foreign workers because they can work the longer summer season which now stretches past September.

TINA TOMCZYK, MARK DOUGLAS JEWELERS: I would think that we definitely need the international students every year just because of the lack of applicants from the United States.

SYLVESTER: Business owners say it's hard to find people willing to work seasonal jobs. Critics question whether the employers are actively recruiting Americans. Joanie Allan made several calls to resort businesses on Martha's Vineyard looking for summer jobs for her three teenage grandkids. No one returned her calls.

JOANIE ALLAN, GRANDMOTHER: They live in a single-parent family. My son has raised the children since they were little. Every dime counts.

SYLVESTER: Those who oppose adding more seasonal foreign workers say companies need to think about the impact to the American worker.

ROSEMARY JENKS, NUMBERSUSA: We're outsourcing American jobs, sending them overseas and then we're bringing in foreign workers to take jobs that remain here. It is a double whammy for the American worker.

SYLVESTER: With 14 million people out of work, opponents argue the United States shouldn't be giving jobs away, especially ones that come with a view. Lisa Sylvester, Ocean City, Maryland.

(END VIDEOTAPE)

DOBBS: Well, it's really tough because minor league baseball is also striking out in the visa department. Some 200 players in the Minor League system are stuck in their home countries waiting for visas. They need those same H-2b visas that summer employees try to obtain. As Lisa Sylvester reported, the full year's quota has been filled.

Well, still ahead here, "Exporting America." We'll be talking with Congressman Mac Collins of Georgia. He says the nation could face a perilous economic future and in "America Works," a bartender -- this bartender, in fact, who keeps New Yorkers going as we celebrate those who make this country work. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest has often broken partisan lines, one of the few Republicans to oppose NAFTA, CAFTA, the Free Trade Area of the Americas. Congressman Mac Collins of Georgia says it is all about jobs. He's a member of the powerful House (UNINTELLIGIBLE) committee, joining us tonight from our studios in Atlanta. Good to have you with us. Let me start with the Bush administration's decision not to pursue enforcement of agreements with China. What's your reaction?

REP. MAC COLLINS (R), GEORGIA: Well, I regret we're not going to do an investigation or call for an investigation of the manipulation of the currency and dumping. I think they're putting too much products of certain products in this country. I think it does need to be investigated. The labor, that's their doing but the currency and dumping is ours. (UNINTELLIGIBLE) we should be concerned about.

DOBBS: The American Competitiveness Enhancement Act which you have sponsored and re-introduced, lowering corporate tax rates, you think that's the proper way to stop outsourcing to start incentivizing (ph) American corporations to keep jobs here?

COLLINS: I think it's only a stop gap. We do need to look at the corporate tax rates. If you look at manufacturing and why manufacturing is moving to where there's cheaper labor it's to offset other costs. Those costs are excessive taxation is the high cost of (UNINTELLIGIBLE) regulatory provisions and it's also a high cost of protecting yourself against possible lawsuits, a class action in the medical profession, health insurance, healthcare is very high and a lot of it is because of malpractice insurance.

DOBBS: All of that...

COLLINS: That's only an interim step. In the long run what we have to do in this country, we have to change this tax system. We have to get away from this worldwide income tax and go to consumption tax. If you are going to be level on the playing field with the rest of the world and our trading partners.

DOBBS: Which permits our trading partners not to get too involved in this, the bad tax, which allows them to effectively export to this country with tax advantages that we don't enjoy, despite everything we're doing.

COLLINS: That's right. They export to us, and we have done away with a lot of our tariffs or eliminated a lot of the tariffs. That used to be the way we taxed was tariff and excise. We -- they have border corrections. We do not have any kind of border corrections ourselves and we do not impose any type of tax on the product that they export and we import.

DOBBS: Congressman, we have about 30 seconds left. The labor in this country is under a great deal of pressure. The working man and woman in this country, is there hope, in your judgment, on Capitol Hill to see their needs, their interests prevail against a host of special interests and power that is (UNINTELLIGIBLE) against their interest?

COLLINS: The only way things move on Capitol Hill is for the people to contact their members of the House, the Senate, encourage them and tell them, look, we want this type of legislation passed. That's the reason I say the consumption tax is the ultimate way to go. If the people will get behind it that will eventually happen. I hope we hold hearings on it later this year. (UNINTELLIGIBLE) is going to hold hearings. We'll get it out. Let the people understand exactly how it works and then I hope they will get behind it and push it because there's a national association manufacturers state and their most recent report, changing this tax system is the only way to level the playing field with the rest of our trading partners.

DOBBS: Congressman Mac Collins, thank you very much for being with us.

COLLINS: Thank you.

DOBBS: That brings us to the subject of tonight's thought. "Wise are those who learn that the bottom line doesn't always have to be their top priority." Those are the words of American educator William Ward.

Still ahead, we'll share your thoughts about exporting America and then our special feature report on the men and women who make this country work. Tonight a New York bartender. That story and more still ahead.

(COMMERCIAL BREAK) DOBBS: Stocks down today. Some new concerns about inflation. The prospect of rising interest rates, the Dow lost more than 70 points, the Nasdaq fell 31, almost and the S&P 500 down more than 8.5. Christine Romans is here now and has the story for us -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Lou, stocks have been selling down on heavy volume and moving up on light volume. And that suggests to many that there are some sustainability problems with these market levels. The Dow, S&P 500, Nasdaq all at the lowest in a month.

The economy grew 4.2 percent in the first quarter. That's good, but less than the 5 percent many hoped for. And 338,000 Americans filed new claims for unemployment benefits in the latest week, that's an improvement. But S&P economist David Wyss says there is a chilling new reality in the labor market.

(BEGIN VIDEO CLIP)

DAVID WYSS, STANDARD AND POORS: After learning how to do just in time inventories they're now learning how to do just in time employment. You don't need to hire the guy. You bring him in for the month and if you don't need him next month he's not there.

(END VIDEO CLIP)

ROMANS: Not there. Meantime, every day there are new job cuts. Today, Dow chemical will cut another 3,000 jobs and Gateway Computer will slash another 40 percent of its work force. It now expects to have just 2,000 employees by the end of the year -- Lou.

DOBBS: Christine, thank you very much. At least that 18,000 decline in jobless claims is a positive as you pointed out. All right, thanks.

Taking a look now at some of your thoughts.

Buddy Georgia of Walla Walla, Washington, "thank you for being a voice of common sense in a time when the number of troop casualties climbs daily, the national debt is at an all time high and jobs are leaving faster than illegal aliens are arriving. Can't we find something more important than Sen. Kerry's medals to talk about."

Many of you wrote in about my discussion last night with the chairman and the CEO of Time Warner. Here we call him the boss. He said Time Warner employees in India use Dell computers and Compact computers and Carrier air conditioners. That made him feel better about the issue of outsourcing. Jim in Greenvalley, Indiana wrote in to say, "Dick Parsons needs to do his homework. I just checked the tag on my Carrier A.C. It was manufactured in Mexico."

And Rich Murgatroyd of Tuscon, Arizona, "I have a Dell computer and I looked at it after the interview. The monitor, keyboard and speakers all say, made in China."

We love hearing from you. E-mail us at loudobbs@CNN.com. Turning now to "America Works," celebrating the men and who make this work. Tonight, Urban Insginares. Bill Tucker has this story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I see America drinking the fabulous cocktails I make.

UNIDENTIFIED MALE: Cranberry juice. Enjoy it.

BILL TUCKER, CNN CORRESPONDENT (voice-over): This bar is a little different. With a bartender, Irv, who looks more like a bodyguard, who doesn't sound much like your typical New Yorker.

UNIDENTIFIED MALE: How we doing, ladies? are they still good?

IRVIN INSIGNARES, BARTENDER: That's what I hear every day, where you from. I was born here, left when I was 10, went to school in Virginia, North Carolina, got married, stayed down south, came back in '98.

TUCKER: While Irv may be the unexpected New Yorker, the bar which opened in 1933 is just what would you expect. It got its name from Tallulah Bankhead.

UNIDENTIFIED FEMALE: 20 minutes! For heavens, my nails, my hair, my face.

TUCKER: Yes, that Tallulah. Humphrey Bogart and Lauren Becall knocked back a few here, and that's just a start of a long list of celebrities.

INSIGNARES: Well, I've seen a lot of athletes in here. When I was at at the register, I looked in the mirror and Peyton Manning was behind me. Now we got his brother coming to New York. Mike Ditka. They have shot a lot of movies in here. "Sex and the City" shot a couple clips. So, there's a lot of history.

UNIDENTIFIED MALE: Best cosmo in the city, right here.

TUCKER: With his two children grown, Irv's happy with his job and he's happy with his life.

INSIGNARES: I tried other stuff. I always came back to working in bars. I've got a very simple life going. You know, go to the gym. It is very good for me. I need the gym. Can't do without it. Shooting pool, roller blading, go to Broadway show every now and then.

TUCKER (on camera): This is not the only bar that Irv works. The group that owns this restaurant owns several others, a couple within walking distance. And on the nights that Irv's is not here, they will only be too happy to refer you to the bar where he can be found. Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: Coming up next here, the results of our poll tonight. We continue in just a moment. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: And now, the results of tonight's poll. 16 percent of you said the United States should remain committed to Democratizing Iraq and overwhelming number says no: 84 percent. That's our show for tonight. We thank you for being with us.

Please join us tomorrow when Arthur Max Boot (ph) joins us. He says the U.S. military has a shortage of soldiers. He calls it the muscle gap. And he says Senator John Kerry should be focusing on it.

We'll also be joined by E.J. Dionne, the columnist for the "Washington Post" a senior fellow at the studies at the Brookings Institution.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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