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Lou Dobbs Tonight
Bush: U.S. Will Accept Nothing Less Than Total Victory in War on Terror; The Politics of Energy
Aired June 02, 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.
KITTY PILGRIM, CNN ANCHOR (voice-over): Tonight, President Bush says the United States will accept nothing less than victory in the global war terror.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Success in this struggle is our only option.
(END VIDEO CLIP)
PILGRIM: The new Iraqi government wants to bring back thousands of Saddam Hussein's troops. We'll have a report from the Pentagon, and I will talk with one of this country's leading Middle East experts, Ambassador Richard Murphy.
Outta Gas, the politics of energy. We'll have a special report.
And in "Face-Off" tonight, two opposing views on what should be done to lower gasoline prices.
And broken borders. American citizens are taking drastic action to stop the flood of illegal aliens into our country.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This system is designed to fail without the American people knowing it.
(END VIDEO CLIP)
PILGRIM: Tonight, we'll have a special report from Arizona.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, June 2. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening. President Bush today compared the war on terror with the struggle against fascism and communism. The president told Air Force Academy graduates the United States offers liberty to oppressed people everywhere.
The president's speech came one day after the formation of a new Iraqi government and one day before he travels to Europe. White House Correspondent Suzanne Malveaux reports -- Suzanne. SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, this really is a pivotal time for the Bush administration. As you know, after the introduction of that new Iraqi interim government and now the U.N. Security Council resolution that is in the works, President Bush today was speaking to two audiences, a domestic audience, cadets who might be actually sent off for combat, and also international leaders who he's trying to win support from.
Earlier today he was at the U.S. Air Force Academy in Colorado Springs. That is where he previewed his message he will deliver on Sunday at the 60th anniversary of D-Day landings that he's going to travel to Normandy, France, where he'll deliver those remarks, and he likened the ideology that killed World War II and Nazi Germany and the Stalinist regime to the terrorism of al Qaeda today.
(BEGIN VIDEO CLIP)
BUSH: This is not a clash of civilizations. The civilization of Islam with its humane traditions of learning and tolerance has no place for this violent sect of killers and aspiring tyrants. This is not a clash of religions. The faith of Islam teaches moral responsibility that ennobles men and women and forbids the shedding of innocent blood. Instead, this is a clash of political visions.
(END VIDEO CLIP)
MALVEAUX: And, Kitty, those visions he's talking about, one which oppresses people, the other one which liberates. The president tomorrow is going to be traveling to Italy and to France for the next couple of days. That is where he's going to be meeting with key allies to try to win that critical support for the Iraq mission -- Kitty.
PILGRIM: All right. Thanks very much.
Suzanne Malveaux.
More violence in Iraq today. American troops and Shiite gunmen fought new battles in the City of Kufa. There was also another car bomb attack in Baghdad where the continuing insurgency is a major issue for the new Iraqi government.
Harris Whitbeck reports from Baghdad.
(BEGIN VIDEOTAPE)
HARRIS WHITBECK, CNN CORRESPONDENT (voice-over): Iraq's new interim Cabinet meets as a quasi-governing body for the first time. The focus remains security and stability. Interim Prime Minister Iyad Allawi said his government would rely on a multinational force in Iraq under the control of the United Nations, but the force may be headed by a U.S. commander.
Another bomb exploded in a residential neighborhood of Baghdad Wednesday. At least five people died and 37 wounded. And in Kufa near the holy city of Najaf, more skirmishes between U.S. forces and militia loyal to radical Shiite cleric Muqtada al- Sadr. Mortars were fired at U.S. troops in the city and at their base nearby.
U.N. Special Envoy Lakhdar Brahimi in a news conference carried on Iraqi TV said that if security doesn't improve in the next six months, there will be a problem. Then he asked the Iraqi people to support the new government.
LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY TO IRAQ: I would appeal to the Iraqi people, as I said yesterday, to give this government a chance. There is a lot of talent in the Cabinet.
WHITBECK: Iraqis have said they will support their new government if they feel it is truly in control.
(on camera): But many Iraqis question how sovereign the new interim government really will be. The U.S. has said it will grant full sovereignty on June 30. But, with tens of thousands of U.S. troops on Iraqi soil and not under direct Iraqi control, the meaning of full sovereignty remains an open question.
Harris Whitbeck, CNN, Baghdad.
(END VIDEOTAPE)
PILGRIM: Saudi Arabia today announced a crackdown on charities that help fund terrorist organizations. Saudi Arabia's foreign policy adviser said his government will consolidate all charities that do business overseas into one organization.
In Saudi Arabia today, gunmen opened fire on two American military officers in the capital Riyadh. One of the Americans was slightly wounded. The attack came days after terrorists killed 22 people in Khobar.
The new Iraqi government wants to reinstate four divisions of troops from Saddam Hussein's army. That could be as many as 50,000 soldiers. The plan is a complete reversal of policy from the coalition authority which disbanded the entire Iraqi army.
Senior Pentagon Correspondent Jamie McIntyre reports.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Many analysts believe it was a blunder for the U.S. not to try to keep the Iraqi army together after defeated on the battlefield. Now, more than a year later, Iraq's new prime minister says he would like to reconstitute as many as four army divisions using the same Iraqi soldiers. That wasn't in the original plan, but the American general just put in charge of training Iraqi security forces insists Iraq needs to make its own decisions.
LT. GEN. DAVID PETRAEUS, U.S. ARMY: Bringing back former elements of the Iraq army, I think, is a distinct possibility, if this is an option that they choose to follow.
MCINTYRE: General Petraeus has been given a tall order by his commander in chief: Train some 260,000 Iraqi soldiers, police and other security forces.
BUSH: We're stepping up our efforts to train effective Iraqi security forces that will eventually defend the liberty of their own country.
MCINTYRE: But even as President Bush was underscoring his goal, Congress was being told that the Pentagon's cumbersome acquisition rules have for months delayed weapons for the small number of Iraqi forces already trained.
GEN. PETER PACE, JOINT CHIEFS VICE CHAIRMAN: Their equipment right now is on order but not yet in theater.
MCINTYRE: And lack of equipment only partly explains the poor motivation of many Iraqi soldiers.
PETRAEUS: Understandably, Iraqis do not want to fight for a foreign power, no matter who that is. They want to fight for their own government.
MCINTYRE: Experts say success hinges on making sure the new army is loyal to the new government.
(on camera): While the Iraqi army under Saddam Hussein was a force for oppression, most foot soldiers had little choice but to follow orders. Putting those men back in uniform now will help Iraq with two of its more desperate needs: security and jobs.
Jamie McIntyre, CNN, the Pentagon.
(END VIDEOTAPE)
PILGRIM: The CIA today launched an investigation today into the former Iraqi exile, Ahmed Chalabi. Chalabi was once the Pentagon's favorite Iraqi politician. Now U.S. officials say that Chalabi told Iran the United States had broken its intelligence code.
National Security Correspondent David Ensor reports.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): Knowledgeable sources say Ahmed Chalabi give Iran a key piece of intelligence, the fact that the U.S. had cracked the codes used by Iranian intelligence. The revelation could close down a critical national security asset, a window into what Iranian intelligence is up to.
REP. JANE HARMAN (D), INTELLIGENCE COMMITTEE: The fact that broke the Iranian code was communicated by him to the Iranians. That's as bad as it gets. That is absolute, you know, Class A treachery. ENSOR: Sources say an Iranian official in Baghdad sent a cable to Tehran about a conversation he'd had with Chalabi who has been open about his efforts to build ties in Iran. The cable quoted Chalabi warning that the Americans knew Iran's secret code. According to "The New York Times," it even quoted Chalabi saying the American official who told him this was "drunk."
KENNETH POLLACK, BROOKINGS INSTITUTION: If these charges are borne out, what seems to have happened is that someone got a little bit too chummy with Chalabi and forgot that he was someone who really wasn't an American or working for the United States. He was someone who was working for himself and would use whatever information we passed him for whatever purpose would serve his interests, not necessarily ours.
ENSOR: An urgent FBI investigation into who could have leaked the information to Chalabi will focus on officials he has been in contact with, including top Pentagon officials like Douglas Feith and Paul Wolfowitz. But officials say it will also cover many more, like staff in Baghdad who worked for the National Security Agency, the nation's code breakers and eavesdroppers.
In Iraq, Chalabi called the charge "stupid and false," but legal experts say the Iraqi could be prosecuted under U.S. law, that he could be vulnerable to arrest if he enters U.S. territory again.
(on camera): U.S. officials say the CIA will conduct a damage assessment. But, first, the FBI must try to figure out who told Chalabi that the U.S. was monitoring Iranian intelligence communications.
David Ensor, CNN, Washington.
(END VIDEOTAPE)
PILGRIM: Still to come, the fight for Iraq. American troops battle insurgents. The new Iraqi government makes security its top priority. Ambassador Richard Murphy is my guest.
Americans living on the Mexican border say the federal government can't stop illegal aliens. So they are taking drastic action of their own. We'll have a live report from Arizona.
And Outta Gas. Gasoline prices at record highs, but Congress can't agree on an energy plan after four years of trying. We'll have a special report.
(COMMERCIAL BREAK)
PILGRIM: The new Iraqi government's main priority is to end the insurgency and restore law and order. Now the new government was formed yesterday from a cross-section of Iraqi politicians. It will stay in power until elections next year.
But the fighting between coalition troops and insurgents continues. So far, Iraqi troops and police seem unable or unwilling to take over security.
Joining me now is Ambassador Richard Murphy. He served in Saudi Arabia, Syria, the Philippines. He was also the assistant secretary of state, and Ambassador Murphy is now a senior fellow at the Council on Foreign Relations.
And thanks very much for joining us.
AMB. RICHARD MURPHY, SENIOR FELLOW, COUNCIL ON FOREIGN RELATIONS: Thank you.
PILGRIM: We see a U.S. and British resolution, a revised resolution, presented to the U.N. It appears to give more power to the Iraqis. Do you think it's sufficient, and do you think it will stem criticism that this isn't a full transfer of sovereignty?
MURPHY: I don't think it will stem the criticism, but I'm optimistic that within the Security Council, they're going to find their way fairly soon to an agreement on the text. Criticism will remain because -- I think the point was made in your own program a bit earlier -- with all those troops under American command, how is there going to be full sovereignty?
But even beyond that, with a government which is billed as a caretaker preparing for national elections presumably no later than January, it can't adopting legislation which could affect the course of that future government.
PILGRIM: The big issue is U.S. troop withdrawal, and the U.S. and Britain have set early 2006 as the target date of troop withdrawal. Is that doable? Do you think that will be doable? And how will this be affected? After all, exit strategy is the great catch phrase du jour, right?
MURPHY: Frankly, I think it's going to be a push-pull effect. I think the Iraqis will want us out, I think the American public will want the troops back.
So you're talking about a year and a half time from now or from the moment that this transitional government starts, then the first set of elections is held. I think it's probably going to have to be enough to have them for a further year and a half.
PILGRIM: The great debate was over the deadline up to last week, and yet it appears that the deadline seems intact, right?
MURPHY: The deadline for them to take over?
PILGRIM: The June 30 deadline.
MURPHY: The June 30. Yes. Yes, that's not the problem. I mean, there was tension, obviously, jockeying back and forth, but it's not a bad thing that, apparently, our interest in a particular candidate for president and for prime minister were both rejected by the governing council. Now these fellows need the appearance and increasing reality of distance between Washington and Baghdad. PILGRIM: It was remarkable President Bush yesterday insisted we did not pick the interim government, and yet so many of them do have ties to the United States. Some have spent time here. Some have other ties. Some have alleged ties.
Does this in any way complicate the legitimacy of this government are, or do you think that this will be a government that can go forward towards the elections?
MURPHY: We can only hope it will be able to go forward towards the election, but it's going forward is not going to depend on its relationship with us nearly as much as on its relationship with its own people. Will they hold it against these various ministers that many of them spent years and years in exile, some of them under threat of their own life, like the prime minister?
PILGRIM: Well, the point you bring up about the give-and-take in this election process does bode well for continued give-and-take in this process.
Let's talk about the American presence in Baghdad. It will be the biggest embassy ever. What does that say about U.S. influence in the region and the perception of influence in the region?
MURPHY: It will -- the perception will be that we're dominating every decision, every step along the way, and that's why I say let's get used to the idea that those who come into the government over the next year and a half will not be outspokenly, at least not continuously, pro-American. We don't need it, and they won't survive if they are seen as our puppets.
PILGRIM: I hate to ask you, but are we on track with this process, just your considered and very experienced assessment?
MURPHY: Well...
PILGRIM: I know with the violence issue, it is a difficult call...
MURPHY: Yes, it's...
PILGRIM: ... but in terms of the political process.
MURPHY: The political process -- as I see it, we've been on a very steep learning curve from day one of the invasion. We went into Iraq dumb and blind in terms of Iraqi history, in terms of having any cadre of Iraqi specialists -- any sizable cadre.
We weren't represented in Iraq except -- fully represented except for six years in the 37 years from 1967 until the moment of the invasion. So we never developed the insights and the feeling for Iraqi domestic political dynamics.
PILGRIM: All right. Thank you very much for your assessment, and we will continue to draw on your expertise as we go forward. Thank you very much. Ambassador Richard Murphy.
MURPHY: Thank you.
PILGRIM: A date is set tonight for the first private manned flight into space. Scaled Composites is the company that built the spacecraft, and it says it plans to launch the first private flight into space on June 21st. The ship is called Spaceship One. It will travel 60 miles into space.
Meanwhile, NASA today released two images of Mars. The Opportunity Rover took these photos of the endurance crater and a series of rocks on the rim of that crater. Now scientists hope to find more evidence of a past lake or a sea environment on the red planet.
Coming up, broken borders. We'll take you to Tucson, Arizona, where the Bush administration is taking a new approach to border security. We'll have a progress report.
And in our series, Outta Gas, it continues with a look at sky- high oil prices and the politics behind those prices. Whatever happened to the energy bill? We'll have some answers.
And later, a big win for Congress for the Democrats. We'll tell you why they're celebrating and what that could mean come November.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Crude prices fell sharply today after OPEC signaled it will increase supply, but oil hit a record $42 a barrel yesterday after the terrorist attack in Saudi Arabia.
Oil prices have made their way into election year politics from tapping the oil reserves to drilling in Alaska. It has all become fodder for the talk shows.
Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Is consumer outrage about rising gasoline prices enough to break the logjam blocking an energy bill? Anyone up for reelection knows the issue packs a punch.
BUSH: I've been calling upon the United States Congress to pass an energy plan for nearly two years, but they hadn't listened, and now people are going to the pump and finding out what I was talking about.
SCHIAVONE: Yet, despite blackouts, price spikes and terror threats, Congress has invested almost four years with nothing yet to show. SEN. TOM DASCHLE (D-SD), MINORITY LEADER: I don't see how we can leave this Senate this year without having addressed effectively energy policy.
SEN. PETE DOMENICI (R), NEW MEXICO: We are still here debating what this guy likes, what this senator likes, what this senator likes, what the Democrats like, and we have tried very hard to accommodate, but we can't.
SCHIAVONE: And everyone seems to agree that's the problem. The energy bill is larded with pork, estimated in the range of $15 billion to $30 billion.
MICHAEL FRANC, HERITAGE FOUNDATION: In bill after bill, whether it is the transportation bill or a run-of-the-mill appropriations bill, we end up with a proliferation of targeted, earmarked, special interest provisions, and that tends to bring down the overall quality of what Congress is trying to do.
SCHIAVONE: Typical of such provisions, $2 billion in phase-out funds to producers of MTBEs, a full additive now found to be a pollutant; $3.5 billion worth of tax breaks to electric companies who sell their power lines to regional organizations.
Meanwhile, global supply and consumption continue to push up prices.
KATERI CALLAHAN, ALLIANCE TO SAVE ENERGY: We have rising demand in the U.S., and we have rising demand around the world for energy resources that are becoming more scarce. So you do the math.
SCHIAVONE: Don't look for drilling in the Arctic National Wildlife Refuge or tougher fuel economy standards. They're still considered too controversial.
(END VIDEOTAPE)
SCHIAVONE: Here's a solution, Kitty. Energy week. That's right. Next week, Republicans will try to revive the stalled energy bill with fresh debate in the Senate and more votes in the House, and, while it may show that lawmakers know there' a problem, the solution still evades them -- Kitty.
PILGRIM: Couldn't come too soon.
Louise Schiavone.
Thanks very much, Louise.
Well, finding a solution to the spike in oil prices is at the center of tonight's "Face-Off." One of the most contentious issues involves the Strategic Petroleum Reserve and the debate over whether the United States should tap into this emergency oil stockpile.
Joining me tonight is John Felmy, a chief economist at American Petroleum Institute, and he says the SPR, Strategic Petroleum Reserve, should be reserved for emergencies, and this is not an emergency; and Jerry Taylor, on the other hand, says we should open the reserves to oil companies if they promise to replenish that oil in the future with interest, and he is with the CATO Institute. And both join me from our Washington studios.
And thanks very much, gentlemen, for joining us. This is a difficult issue and a very popular issue because everyone does see the net effect of higher oil prices when they fill up their cars.
John Felmy, let's talk about the strategicness of strategic. Strategic Petroleum Reserve. Is now a strategic time, and should it be tapped?
JOHN FELMY, CHIEF ECONOMIST, AMERICAN PETROLEUM INSTITUTE: It's not a strategic time right now. We have oil that's ample on the market. It's very high priced because of very tight markets. We've got limited supplies and increased demand. Now is not the time to be getting rid of our insurance policy, and that's what the SPR is.
PILGRIM: All right. Let's let Jerry get in on this -- Jerry.
JERRY TAYLOR, DIRECTOR, NATURAL RESOURCES STUDIES, CATO: Well, the SPR is sport of a rainy day fund for a rainy day that's almost certain never to come. We set up the reserve as a hedge against a future embargo. The problem is we now understand that oil embargoes are make-believe events. There is no way that an oil producer can keep oil out of targeted countries as long as it puts it on the world market.
All that happened, for example, in 1973, is that instead of buying oil from OPEC, we bought oil from people who bought from oil from OPEC, and we bought from non-OPEC suppliers who used to sell to somebody else and then sold to us. So the embargo worry is not a real worry.
The real worry is a significant production cutback that might drive price. But how is that different from a demand spike that drives price, is my question. Oil is not ample in the market today. The demand -- the production is, indeed, up by 10 percent from OPEC countries over the past couple of years, but demand is skyrocketing.
This is exactly the sort of price spike that we set up the SPR to address, and I think we should at least get some return for the taxpayer and sell while the selling is good.
PILGRIM: Well, let me throw something out there. Some say the SPR was set up in the 1970s with the oil embargo. Now we don't need it. We have a futures market, and that actually serves the function.
Let's get John in on this.
FELMY: Well, the futures market clearly improves the efficiency in the overall oil situation. If you do have a disruption, the futures market will help resolve it, but it won't necessarily ensure that prices won't go up dramatically. The futures market improves efficiency, but it doesn't eliminate the problem if you have a shortage of oil, which could happen if we have a major disruption of some type.
PILGRIM: OK. Jerry?
TAYLOR: Well, that's just the problem. Back in 1979 when we set up the SPR, we didn't have a futures market to repair to, but the fact is -- think of SPR like a public insurance policy. The government buys this insurance
policy to help everyone to hedge against the risk of a supply disruption. But we can provide for that private insurance, if we so desire, by going to the futures market and locking in price, as you say. For instance, one of the reasons that Southwest Airlines is doing so well in their market is because they locked in jet fuel prices when the prices were reasonably good.
So, if you want to protect yourself against the threat of a price shock, you can do that by going to the futures market, and, if you're a consumer, you can do that by buying a fuel-efficient car. So we don't need the government to buy insurance for us when we can buy that insurance ourselves. All it does is gets politicians in the middle of markets by being a commodities broker, and I think that's a bad model.
We should get this out of the hands of politicians and put that oil in the hands of the market actors, and I think that's the right position to take.
PILGRIM: What about this solution -- and it was proposed by John Kerry -- that we don't add to the Strategic Petroleum Reserve at this point, we just stop adding to it and let that work through the market, that that is a neat solution to a situation that almost splits the difference? Let's get...
TAYLOR: Well, I think that's a smart approach. You don't want to buy oil at high prices and sell in the future when it's low. But I don't know if that would have a tremendous effect on oil price. It would help a bit, but -- and it makes sense, but I don't think that's going to be a magic solution to high price.
PILGRIM: All right. Jerry? Or John?
FELMY: Well, it would largely have no impact, if -- it would be a very small reduction in supply. The amount of oil that's going into the SPR right now is less than two minutes' worth of consumption worldwide. The Department of Energy indicated it would have a penny or two impact on the market. So that in and of itself is not going to have a significant impact.
PILGRIM: Let's talk about our domestic resources, and, of course, the Arctic National Wildlife Reserve generates all kinds of controversy. You have environmentalists on one side saying don't touch it, don't even think of touching it, and other people saying why don't we develop our own natural resources. After all, we import some 60 percent of our oil in this country. Where do you come down on this? Let's start with you, John.
FELMY: Well, there's no question we should be developing the Arctic resources. You're talking about something that is 10 billion barrels which could produce a million barrels a day for 30 years. That's a huge amount of oil that could generate a significant amount of jobs, reduce our import dependence, improve our trade deficit, and potentially lower prices as we experienced in the '80s when Alaska peeked the first time. It's a resource that should be developed for American consumers.
PILGRIM: OK. We'll let you have the last word, Jerry.
TAYLOR: Well, we don't really know how much oil is economically recover in the Arctic National Wildlife Refuge because we haven't done enough exploratory drilling to know.
But, assuming that John's figures are correct, that millions a day that it could produce is about 1.25 percent of the world market. That's nice, but it's not going to do anything significant to break OPEC's back, turn the United States into Saudi Arabia or anything else.
The fundamental problem here, though, is you've an argument in which some politicians like George Bush say oil is more valuable than the wilderness, environmentalist say no, no, no, the wilderness is more valuable than the oil. Who is right? It is impossible unless we have price information to guide us.
If we knew how to allocate a scarce resource amongst competing users without price data, than we should take jobs running the North Korean economy, because you can't do that and make economies work. We need to get them in private hands, there are many ways you can think of doing that. But without doing that, and you ask the question what should we do with the 2,000 acres in ANWAR, nobody can give you a sensible or intelligent answer because we don't have enough information to go by.
PILGRIM: Well, hopefully we've given informs to our viewers tonight. Sensible and intelligent, also. Thanks for helping us sort it out. Jerry Taylor and John Felmy thanks a lot.
We'll have more on the rise in oil prices tomorrow night when Energy Secretary Spencer Abraham joins me as my guest. And that's Thursday night right here on LOU DOBBS TONIGHT.
That does bring us to the topic of tonight's poll. And we'll ask you, "do you believe it's time for the United States to tap the strategic petroleum reserve?" Yes or No. Do cast your vote, CNN.com/lou. We'll bring you the results later in the show.
Let's take look at some of your thoughts on the federal government's decision to award a multi-billion dollar border security contract to a foreign company.
And we'll take a look at our e-mails. Judy Smith of Ft. Worth, Texas says, "is that like asking the fox to guard the hen house? The only thing we need to be outsourcing are CEO's for each company that approves of outsourcing American jobs." Now, Keith Owen of Texas says, "outsourcing border security to a foreign company, is it June 1 or April 1? Somebody's a fool today without a doubt."
And Tammara Walker of Albany, Oregon says, "help me understand this, please. Outsourcing our border security, isn't that an oxymoron?"
And Keith Erlandson of St. Paul, Minnesota says, "if outsourcing national security isn't such a good deal than why doesn't the government outsource security in Iraq?"
We absolutely love hearing from you. E-mail us at loudobbs@CNN.com. And we'll share more of your thoughts later in the broadcast.
Still ahead, a new multi-million dollar plan to stop illegal aliens crossing the border in Mexico. A report in "Broken Borders" next.
Plus, Democrats say they're on a roll after picking up another seat in Congress. We'll have a report from Capitol Hill.
And then baseball fans battle in Detroit over whether hot dogs go better with opera. That and a great deal more. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: In "Broken Borders" tonight, almost half of the illegal aliens who enter this country from Mexico cross the border in Arizona. But the Homeland Security Department hopes to change that this week with a new border control program. Catherine Barrett has the report from southern Arizona.
(BEGIN VIDEOTAPE)
KATHERINE BARRETT, CNN CORRESPONDENT (voice-over): In broad daylight, a group of 13 suspected illegal aliens is pinned down and detained by immigration and customs enforcement agents patrolling in Black Hawk helicopters. This sun-seared desert is the place only the determined or desperate dare cross.
But cross, they do. 2,000 to 3,000 each day since October. And that's those who have been caught. Dozens have died. The Department of Homeland Security in March proposed a $10 million plan to cut the human traffic by summer, but the Arizona Border Control or ABC initiative gets poor grades from critics.
The border patrol has hired less than half the 250 extra agent that were promised. Plans for a $2 million air conditioned detention tents have been scrapped. And unmanned aerial vehicles that were to patrol the Arizona skies are grounded for at least another month.
ASA HUTCHINSON, UNDERSECRETARY DEPT. OF HOMELAND SECURITY: Why did it take a delay? There is air space requirements. There is training. There are liability issues that had to be addressed. I forgot to factor in the lawyer element to the deployment of the UAVs.
BARRETT: Hutchinson admits border patrol is a work in progress. Some say it is out of control. Glenn Spencer and a handful of committed friends run a nonprofit shadow border patrol. Their technology rivals the feds. Seismic ground sensors, infrared cameras and their pride and joy, a computer guided, camera equipped surveillance plane. Several nights a week, the group drives border sorties broadcasts them live online.
GLENN SPENCER, AMERICAN BORDER PATROL: We call them with GPS coordinates. They don't know how to read a GPS coordinate. This is an embarrassment for the most technological company -- country in the world that our border patrol agents can't even read a map.
(END VIDEOTAPE)
BARRETT: Kitty, when the American Border Patrol, this is this nonprofit group, actually locates groups of immigrants attempting to cross the border, they in in turn, call the real border patrol and tell them to come pick them up. They insist they have a strict no- contact policy.
Now, although Homeland Security admits that its work at the Arizona border is less than half finished. They also say their commitment is strong and necessary not just poor Mexican workers who come across the border, but potential terrorists who might travel these desert highways as well -- Kitty.
PILGRIM: It is a tough, tough job and a very important one. Thank very much. Katherine Barrett reporting from Arizona. Thanks Katherine.
Tonight's thought is on immigration. "No matter what other nations may say about the United States, immigration is still the sincerest form of flattery." And those are words of author Clayton Cramer.
Democrats tonight are celebrating a major victory. The minority party will gain another seat in Congress after Stephanie Herseth's won a special election in South Dakota. Now that victory is raising Democrats' hopes of even bigger gains in November. Congressional Correspondent Ed Henry reports.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): House Democrats were jubilant about Stephanie Herseth's victory.
REP. NANCY PELOSI, (D-CA) MINORITY LEADER: It means the Democrats are on a roll.
HENRY: Democrats note President Bush carried South Dakota by a wider margin than Texas 4 years ago. And Tuesday's win comes on a special election pick-up in Kentucky.
STEPHANIE HERSETH, (D) SOUTH DAKOTA: I do think it gives the Democrats some momentum, given historically, they've had difficulty picking up special election seats. And we've done that now twice prior to November.
HENRY: But Republican leaders insist this will not translate into a Democratic takeover. They note their candidate Larry Deidrich started 30 points behind and lost by two points.
REP. ROY BLUNT, (R-MO) MAJORITY WHIP: Well, it's a tidal wave or where our guy losses 28 points in just a few weeks. Sounds like a tidal wave in our direction, not theirs.
HENRY: Democrats think they're setting the stage for more upsets.
PELOSI: We have to win in the red states to take back the House. I think we've demonstrated that we not only will fight in the red states, we will win in the red states and they will bring us a Democratic majority.
HENRY: Democrats believe rural and blue collar voters are concerned about the president's policies on Iraq and domestic issues. And this could be a sign that major upheaval is coming.
STAN GREENBERG, DEMOCRATIC POLLSTER: We know in '94, we know in 1980, that it is possible to have election that is have a wave and may well be that South Dakota and Kentucky are precursors to that.
HENRY (on camera): House Republican leader Tom Delay said there will be no national implications from this race in South Dakota. Delay also said that Democrats will not get any momentum heading into the fall. And Republicans are vowing they will take this seat back in November. Ed Henry, CNN, Capitol Hill.
(END VIDEOTAPE)
PILGRIM: Well as they say, all politics are local. In Detroit, a political wrangle over a singing hot dog vendor at the Comerica Park. Now for years baseball fans have listened to the operatic melodies of Charlie Marcuse (ph) at the Tigers home games.
Now, Charlie has been silenced. The general manager of the stadium services said some fans complained and Charlie has been told not to sing. But no final decision has been made. Now, Charlie's fans have begun singing for him. And they also held up signs during Monday's game that read free Charlie and let the man sing.
That does bring us to the topic of "Tonight's poll." Do you believe it's time for the United States to tap the Strategic Petroleum Reserve. Nothing to do with opera. Yes or no. Cast your vote at cnn.com/lou. We'll bring the results a little bit later in the show.
Still ahead tonight, the army moves to keep soldiers in combat even after their terms end.
"Grange on Point" is next. A volcanic wonder in Hawaii. Hot lava is flowing to unusual places on the big island. We have that story and more ahead. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: In "Grange on Point" tonight, the army today issued new order that is prevent soldiers from leaving the military after their terms are complete. The stop loss order will require soldiers to stay with their unit until the unit completes its deployment. Now, the army acknowledges the change comes as combat missions in Iraq and Afghanistan are, quote, "stretched." Critics say it undermines the concept of an all voluntary military. Joining me now for more is General David Grange and he joins us from Oakbrook, Illinois.
Thanks for joining us, General Grange.
BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Thank you.
PILGIRM: Why -- first of all the real question, why must this be done. Because certainly it does create a certain amount of hardship for those who cannot leave when their term is up.
GRANGE: There's a few reasons, Kitty. First of all there a lot of commitments. The military is probably committed to the maximum right now, and it's a small force. It is not a large force with all of these commitments. And so the military should have been grown larger years ago. The other is that the essence of establishing continuity, the importance of that, and what's a most frustrating thing to junior and senior leaders is once you train them together, establish a brotherhood, a camaraderie, trust and confidence, you break it up when send a soldier here and there when their time is up. So you are not combat ready. That's the biggest reason. And so it's important for continuity that they do stop loss which is a last stop measure to meet these commitments.
PILGRIM: What about the argument that it does break the concept of all volunteer army and people are staying beyond their commitment?
GRANGE: Well, I believe it is the last thing that any command wants to do, is to say to someone, well, sorry about that. You served honorably for three year and tough hardship tours, but you have to stay another year or 90 days, or whatever the mace may be. But it is necessary. The mission comes first. Personal affairs comes second. And it actually causes more risk and danger to lives if you don't do something like this and you're not combat ready.
PILGRIM: You know, our viewers may not be aware of the history of this.
Has this ever been employed before?
Is this an unusual measure?
Is this a normal procedure?
Can you fill us in on that?
GRANGE: It has been done in the past. It was done several times while I served. Probably not at this magnitude. Usually it is done because of a specialty skill that the military is short of, military police, intelligence, personnel. Those type of skills that maybe there's not enough of that high demand, low density specialty. But not in this magnitude.
PILGRIM: The -- let's go to another area, and that's the mission in Iraq. And one of the biggest debates is over the role of U.S. forces vs. the Iraqi command of U.S. forces, how that plays out.
What is the role of U.S. Forces in a combat situation?
How -- you have vast experience in this field, and of course, none of this has been clearly worked out, how do you see this working out to the best arrangement, General Grange?
GRANGE: Well, the key date will be June 30. And on June 30, there will be some agreements made. There may be a mandate that comes from the United Nations that kind of constrains what U.S. and other coalition forces can and cannot do. What will happen, I believe, is that you'll see the U.S. back off a bit from areas that they can turnover the operation to Iraqi forces, civil defense, police, or military. Now, there's not a lot of those properly trained yet to take that responsibility. But I think you will see a lot of the U.S. forces pulling back from the cities. They'll take a training role in creating a more professional and a faster manner these new Iraqi force that is are capable, competent to do these missions. But the U.S. will still have a very significant role in a backdrop to go in and eliminate larger formation of hostility if required.
Then the key is also going to be who approves that action?
Is it the Iraqi sovereign government or an agreement made ahead of time on certain types of operations that the U.S. can do on their own?
PILGRIM: All right. Thanks very much, General David Grange.
Still ahead, we'll share some of your thoughts on "Exporting America."
And powerful thunderstorms bring strong winds and hail to one southern state. We'll have the details in just a moment. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Nature is showing its strength in several parts of the United States. In Texas, thunderstorms with winds of more than 80 miles an hour. Hail the size of tennis balls pounded parts of the state. Hundreds of thousands of families are without power tonight.
In north central Florida today a wildfire caused the evacuation of dozens of families. The fire began yesterday and grew quickly overnight.
The lava is flowing in Hawaii. Steady streams of lava from Kilauea are pouring into the Pacific Ocean. It's the first time in nearly a year the red and orange lava has reached the ocean.
Let's go to Wall Street. Blue chips stocks rose. The Dow gained 60 points. The Nasdaq fell almost 2. The S&P 500 added almost 4. Also tonight shocking newly released tapes reveal Enron traders at work during the California energy crisis. Christine Romans is here with the report -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: A glimpse into what was happening on the Enron trading desk four years ago as an energy crisis raged through California and energy prices soared. Audiotapes of Enron traders gloating about profiting from the California energy crises. The Washington Power Utility alleges these tapes are proof that the traders were manipulating energy prices in California.
And there's more than that tasteless jubilation over natural disasters, driving up energy prices there. Not a surprise if you've ever spent time on a trading desk. But certainly an eerie look into conversations happening four years ago before the Enron collapse. Enron, what is left of it, not commenting on these tapes.
PILGRIM: Enron, one could argue, was the beginning of the scandal season in this world. Yet, we have new target, New York Attorney General Eliot Spitzer is targeting someone else.
ROMANS: He is taking on investment banks, Wall Street analysts, the mutual fund industry, the insurance industry, the Stock Exchange and today he filed suit against GlaxoSmithKline. He says Glaxo misled doctors about the effects of Paxil on children. Paxil is a powerful antidepressant drug. Spitzer claims Glaxo had information that drug might not work on kids, may raise the risks of suicide. Glaxo denied those allegations.
PILGRIM: Thanks very much, Christine Romans. In "Exporting America," another U.S. company makes a decision to send jobs to cheap foreign markets. Aluminum producer Alcoa will be moving information technology jobs to India. The company plans to eliminate about 130 jobs in the United States over roughly the next year. Alcoa executives say, quote, "these types of strategic decisions are necessary for Alcoa to competitively meet our customer needs and to grow our business."
We've reported on the issue of overseas outsourcing on this program for more than a year. One area sometimes overlooked is the effect of outsourcing on this country's older workers. Many of those workers are still too young to retire, but too old to start a new career. Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): When jobs move overseas, entire communities can be devastated. But older Americans often have a harder time recovering from a job layoff. When the Agere (ph) Factory in Reading, Pennsylvania shut down, Shirley Morris lost her job at age 56. She now works part-time at a post office.
SHIRLEY MORRIS, OUTSOURCED WORKER: It is very hard. A lot of my friends are unable to find work. I'm one of the lucky ones.
SYLVESTER: Companies often lay off older workers first because they tend to be the highest paid with high healthcare costs.
CATHERINE MANN, INSTITUTE FOR INTL. ECONOMICS: Job loss is increasingly worse for you the higher up the skill ladder you are. It means that you have the farthest to fall.
SYLVESTER: Losing a job is hard at any age but for older Americans it means losing health insurance at a time when it is needed most. Displaced older workers may have to dip into their retirement savings to cover day-to-day expenses, leaving them even more vulnerable and it is generally harder for them to pick up and move to a new community to start all over again. Many displaced older workers find themselves doing something they never thought they would do again, return to the classroom. Groups like the AARP are sponsoring forums to help seniors adjust.
BRUCE MEHLMAN, COMPUTER SYSTEMS POLICY PROJECT: We have to do, with respect to learning and retraining, is make it not just K-12 but K-Gray.
SYLVESTER: For older Americans losing their job is a more costly prospect than for their younger colleagues. A survey by the Bureau of Labor statistics on displaced workers and salaries found that older workers, those aged 45 to 64, saw their earnings drop 12 percent after being laid off. Younger workers in their late 20s and early 30s, on the other hand, saw their earnings increase on average by 5.5 percent. Lisa Sylvester, CNN, Washington.
(END VIDEOTAPE)
PILGRIM: Let's take a look at some more of your thoughts. David Menard of Mapleville, Rhode Island wrote, "I would like to commend your efforts to spotlight the outsourcing of American jobs and the detrimental effect it has on the American worker. It is destroying the manufacturing industry, leaving less jobs for American families with soaring health insurance costs.
JR. of Baltimore, Maryland says, "if America is to be a government by the people for the people why don't U.S. citizens get to vote on the so-called free trade deals like CAFTA and NAFTA. These agreements cost U.S. workers their jobs and they don't even have a say."
Regina Smith of Scottsdale, Arizona. "Nothing kills the American spirit of enterprise more than watching our government and corporations give away the American dream."
E-mail us at loudobbs@CNN.com.
Still ahead, the results of tonight's poll. First, a reminder to check our website for the complete list of companies we've confirmed to be exporting America. CNN.com/lou. We'll be right back.
(COMMERCIAL BREAK)
PILGRIM: The results of tonight's poll. 45 percent of you believe it's time for the United States to tap the Strategic Petroleum Reserve and 55 percent do not. Thanks for joining us tonight. Please join us tomorrow. Energy Secretary Spencer Abraham will join us on our special report, "Out of Gas" and also tomorrow, Sa'ib Urayqat, chief Palestinian negotiator will be our guest. 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 June 2, 2004 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN ANCHOR (voice-over): Tonight, President Bush says the United States will accept nothing less than victory in the global war terror.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Success in this struggle is our only option.
(END VIDEO CLIP)
PILGRIM: The new Iraqi government wants to bring back thousands of Saddam Hussein's troops. We'll have a report from the Pentagon, and I will talk with one of this country's leading Middle East experts, Ambassador Richard Murphy.
Outta Gas, the politics of energy. We'll have a special report.
And in "Face-Off" tonight, two opposing views on what should be done to lower gasoline prices.
And broken borders. American citizens are taking drastic action to stop the flood of illegal aliens into our country.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: This system is designed to fail without the American people knowing it.
(END VIDEO CLIP)
PILGRIM: Tonight, we'll have a special report from Arizona.
ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, June 2. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs who is on vacation, Kitty Pilgrim.
PILGRIM: Good evening. President Bush today compared the war on terror with the struggle against fascism and communism. The president told Air Force Academy graduates the United States offers liberty to oppressed people everywhere.
The president's speech came one day after the formation of a new Iraqi government and one day before he travels to Europe. White House Correspondent Suzanne Malveaux reports -- Suzanne. SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, this really is a pivotal time for the Bush administration. As you know, after the introduction of that new Iraqi interim government and now the U.N. Security Council resolution that is in the works, President Bush today was speaking to two audiences, a domestic audience, cadets who might be actually sent off for combat, and also international leaders who he's trying to win support from.
Earlier today he was at the U.S. Air Force Academy in Colorado Springs. That is where he previewed his message he will deliver on Sunday at the 60th anniversary of D-Day landings that he's going to travel to Normandy, France, where he'll deliver those remarks, and he likened the ideology that killed World War II and Nazi Germany and the Stalinist regime to the terrorism of al Qaeda today.
(BEGIN VIDEO CLIP)
BUSH: This is not a clash of civilizations. The civilization of Islam with its humane traditions of learning and tolerance has no place for this violent sect of killers and aspiring tyrants. This is not a clash of religions. The faith of Islam teaches moral responsibility that ennobles men and women and forbids the shedding of innocent blood. Instead, this is a clash of political visions.
(END VIDEO CLIP)
MALVEAUX: And, Kitty, those visions he's talking about, one which oppresses people, the other one which liberates. The president tomorrow is going to be traveling to Italy and to France for the next couple of days. That is where he's going to be meeting with key allies to try to win that critical support for the Iraq mission -- Kitty.
PILGRIM: All right. Thanks very much.
Suzanne Malveaux.
More violence in Iraq today. American troops and Shiite gunmen fought new battles in the City of Kufa. There was also another car bomb attack in Baghdad where the continuing insurgency is a major issue for the new Iraqi government.
Harris Whitbeck reports from Baghdad.
(BEGIN VIDEOTAPE)
HARRIS WHITBECK, CNN CORRESPONDENT (voice-over): Iraq's new interim Cabinet meets as a quasi-governing body for the first time. The focus remains security and stability. Interim Prime Minister Iyad Allawi said his government would rely on a multinational force in Iraq under the control of the United Nations, but the force may be headed by a U.S. commander.
Another bomb exploded in a residential neighborhood of Baghdad Wednesday. At least five people died and 37 wounded. And in Kufa near the holy city of Najaf, more skirmishes between U.S. forces and militia loyal to radical Shiite cleric Muqtada al- Sadr. Mortars were fired at U.S. troops in the city and at their base nearby.
U.N. Special Envoy Lakhdar Brahimi in a news conference carried on Iraqi TV said that if security doesn't improve in the next six months, there will be a problem. Then he asked the Iraqi people to support the new government.
LAKHDAR BRAHIMI, U.N. SPECIAL ENVOY TO IRAQ: I would appeal to the Iraqi people, as I said yesterday, to give this government a chance. There is a lot of talent in the Cabinet.
WHITBECK: Iraqis have said they will support their new government if they feel it is truly in control.
(on camera): But many Iraqis question how sovereign the new interim government really will be. The U.S. has said it will grant full sovereignty on June 30. But, with tens of thousands of U.S. troops on Iraqi soil and not under direct Iraqi control, the meaning of full sovereignty remains an open question.
Harris Whitbeck, CNN, Baghdad.
(END VIDEOTAPE)
PILGRIM: Saudi Arabia today announced a crackdown on charities that help fund terrorist organizations. Saudi Arabia's foreign policy adviser said his government will consolidate all charities that do business overseas into one organization.
In Saudi Arabia today, gunmen opened fire on two American military officers in the capital Riyadh. One of the Americans was slightly wounded. The attack came days after terrorists killed 22 people in Khobar.
The new Iraqi government wants to reinstate four divisions of troops from Saddam Hussein's army. That could be as many as 50,000 soldiers. The plan is a complete reversal of policy from the coalition authority which disbanded the entire Iraqi army.
Senior Pentagon Correspondent Jamie McIntyre reports.
(BEGIN VIDEOTAPE)
JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Many analysts believe it was a blunder for the U.S. not to try to keep the Iraqi army together after defeated on the battlefield. Now, more than a year later, Iraq's new prime minister says he would like to reconstitute as many as four army divisions using the same Iraqi soldiers. That wasn't in the original plan, but the American general just put in charge of training Iraqi security forces insists Iraq needs to make its own decisions.
LT. GEN. DAVID PETRAEUS, U.S. ARMY: Bringing back former elements of the Iraq army, I think, is a distinct possibility, if this is an option that they choose to follow.
MCINTYRE: General Petraeus has been given a tall order by his commander in chief: Train some 260,000 Iraqi soldiers, police and other security forces.
BUSH: We're stepping up our efforts to train effective Iraqi security forces that will eventually defend the liberty of their own country.
MCINTYRE: But even as President Bush was underscoring his goal, Congress was being told that the Pentagon's cumbersome acquisition rules have for months delayed weapons for the small number of Iraqi forces already trained.
GEN. PETER PACE, JOINT CHIEFS VICE CHAIRMAN: Their equipment right now is on order but not yet in theater.
MCINTYRE: And lack of equipment only partly explains the poor motivation of many Iraqi soldiers.
PETRAEUS: Understandably, Iraqis do not want to fight for a foreign power, no matter who that is. They want to fight for their own government.
MCINTYRE: Experts say success hinges on making sure the new army is loyal to the new government.
(on camera): While the Iraqi army under Saddam Hussein was a force for oppression, most foot soldiers had little choice but to follow orders. Putting those men back in uniform now will help Iraq with two of its more desperate needs: security and jobs.
Jamie McIntyre, CNN, the Pentagon.
(END VIDEOTAPE)
PILGRIM: The CIA today launched an investigation today into the former Iraqi exile, Ahmed Chalabi. Chalabi was once the Pentagon's favorite Iraqi politician. Now U.S. officials say that Chalabi told Iran the United States had broken its intelligence code.
National Security Correspondent David Ensor reports.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): Knowledgeable sources say Ahmed Chalabi give Iran a key piece of intelligence, the fact that the U.S. had cracked the codes used by Iranian intelligence. The revelation could close down a critical national security asset, a window into what Iranian intelligence is up to.
REP. JANE HARMAN (D), INTELLIGENCE COMMITTEE: The fact that broke the Iranian code was communicated by him to the Iranians. That's as bad as it gets. That is absolute, you know, Class A treachery. ENSOR: Sources say an Iranian official in Baghdad sent a cable to Tehran about a conversation he'd had with Chalabi who has been open about his efforts to build ties in Iran. The cable quoted Chalabi warning that the Americans knew Iran's secret code. According to "The New York Times," it even quoted Chalabi saying the American official who told him this was "drunk."
KENNETH POLLACK, BROOKINGS INSTITUTION: If these charges are borne out, what seems to have happened is that someone got a little bit too chummy with Chalabi and forgot that he was someone who really wasn't an American or working for the United States. He was someone who was working for himself and would use whatever information we passed him for whatever purpose would serve his interests, not necessarily ours.
ENSOR: An urgent FBI investigation into who could have leaked the information to Chalabi will focus on officials he has been in contact with, including top Pentagon officials like Douglas Feith and Paul Wolfowitz. But officials say it will also cover many more, like staff in Baghdad who worked for the National Security Agency, the nation's code breakers and eavesdroppers.
In Iraq, Chalabi called the charge "stupid and false," but legal experts say the Iraqi could be prosecuted under U.S. law, that he could be vulnerable to arrest if he enters U.S. territory again.
(on camera): U.S. officials say the CIA will conduct a damage assessment. But, first, the FBI must try to figure out who told Chalabi that the U.S. was monitoring Iranian intelligence communications.
David Ensor, CNN, Washington.
(END VIDEOTAPE)
PILGRIM: Still to come, the fight for Iraq. American troops battle insurgents. The new Iraqi government makes security its top priority. Ambassador Richard Murphy is my guest.
Americans living on the Mexican border say the federal government can't stop illegal aliens. So they are taking drastic action of their own. We'll have a live report from Arizona.
And Outta Gas. Gasoline prices at record highs, but Congress can't agree on an energy plan after four years of trying. We'll have a special report.
(COMMERCIAL BREAK)
PILGRIM: The new Iraqi government's main priority is to end the insurgency and restore law and order. Now the new government was formed yesterday from a cross-section of Iraqi politicians. It will stay in power until elections next year.
But the fighting between coalition troops and insurgents continues. So far, Iraqi troops and police seem unable or unwilling to take over security.
Joining me now is Ambassador Richard Murphy. He served in Saudi Arabia, Syria, the Philippines. He was also the assistant secretary of state, and Ambassador Murphy is now a senior fellow at the Council on Foreign Relations.
And thanks very much for joining us.
AMB. RICHARD MURPHY, SENIOR FELLOW, COUNCIL ON FOREIGN RELATIONS: Thank you.
PILGRIM: We see a U.S. and British resolution, a revised resolution, presented to the U.N. It appears to give more power to the Iraqis. Do you think it's sufficient, and do you think it will stem criticism that this isn't a full transfer of sovereignty?
MURPHY: I don't think it will stem the criticism, but I'm optimistic that within the Security Council, they're going to find their way fairly soon to an agreement on the text. Criticism will remain because -- I think the point was made in your own program a bit earlier -- with all those troops under American command, how is there going to be full sovereignty?
But even beyond that, with a government which is billed as a caretaker preparing for national elections presumably no later than January, it can't adopting legislation which could affect the course of that future government.
PILGRIM: The big issue is U.S. troop withdrawal, and the U.S. and Britain have set early 2006 as the target date of troop withdrawal. Is that doable? Do you think that will be doable? And how will this be affected? After all, exit strategy is the great catch phrase du jour, right?
MURPHY: Frankly, I think it's going to be a push-pull effect. I think the Iraqis will want us out, I think the American public will want the troops back.
So you're talking about a year and a half time from now or from the moment that this transitional government starts, then the first set of elections is held. I think it's probably going to have to be enough to have them for a further year and a half.
PILGRIM: The great debate was over the deadline up to last week, and yet it appears that the deadline seems intact, right?
MURPHY: The deadline for them to take over?
PILGRIM: The June 30 deadline.
MURPHY: The June 30. Yes. Yes, that's not the problem. I mean, there was tension, obviously, jockeying back and forth, but it's not a bad thing that, apparently, our interest in a particular candidate for president and for prime minister were both rejected by the governing council. Now these fellows need the appearance and increasing reality of distance between Washington and Baghdad. PILGRIM: It was remarkable President Bush yesterday insisted we did not pick the interim government, and yet so many of them do have ties to the United States. Some have spent time here. Some have other ties. Some have alleged ties.
Does this in any way complicate the legitimacy of this government are, or do you think that this will be a government that can go forward towards the elections?
MURPHY: We can only hope it will be able to go forward towards the election, but it's going forward is not going to depend on its relationship with us nearly as much as on its relationship with its own people. Will they hold it against these various ministers that many of them spent years and years in exile, some of them under threat of their own life, like the prime minister?
PILGRIM: Well, the point you bring up about the give-and-take in this election process does bode well for continued give-and-take in this process.
Let's talk about the American presence in Baghdad. It will be the biggest embassy ever. What does that say about U.S. influence in the region and the perception of influence in the region?
MURPHY: It will -- the perception will be that we're dominating every decision, every step along the way, and that's why I say let's get used to the idea that those who come into the government over the next year and a half will not be outspokenly, at least not continuously, pro-American. We don't need it, and they won't survive if they are seen as our puppets.
PILGRIM: I hate to ask you, but are we on track with this process, just your considered and very experienced assessment?
MURPHY: Well...
PILGRIM: I know with the violence issue, it is a difficult call...
MURPHY: Yes, it's...
PILGRIM: ... but in terms of the political process.
MURPHY: The political process -- as I see it, we've been on a very steep learning curve from day one of the invasion. We went into Iraq dumb and blind in terms of Iraqi history, in terms of having any cadre of Iraqi specialists -- any sizable cadre.
We weren't represented in Iraq except -- fully represented except for six years in the 37 years from 1967 until the moment of the invasion. So we never developed the insights and the feeling for Iraqi domestic political dynamics.
PILGRIM: All right. Thank you very much for your assessment, and we will continue to draw on your expertise as we go forward. Thank you very much. Ambassador Richard Murphy.
MURPHY: Thank you.
PILGRIM: A date is set tonight for the first private manned flight into space. Scaled Composites is the company that built the spacecraft, and it says it plans to launch the first private flight into space on June 21st. The ship is called Spaceship One. It will travel 60 miles into space.
Meanwhile, NASA today released two images of Mars. The Opportunity Rover took these photos of the endurance crater and a series of rocks on the rim of that crater. Now scientists hope to find more evidence of a past lake or a sea environment on the red planet.
Coming up, broken borders. We'll take you to Tucson, Arizona, where the Bush administration is taking a new approach to border security. We'll have a progress report.
And in our series, Outta Gas, it continues with a look at sky- high oil prices and the politics behind those prices. Whatever happened to the energy bill? We'll have some answers.
And later, a big win for Congress for the Democrats. We'll tell you why they're celebrating and what that could mean come November.
(COMMERCIAL BREAK)
ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Crude prices fell sharply today after OPEC signaled it will increase supply, but oil hit a record $42 a barrel yesterday after the terrorist attack in Saudi Arabia.
Oil prices have made their way into election year politics from tapping the oil reserves to drilling in Alaska. It has all become fodder for the talk shows.
Louise Schiavone has our report.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Is consumer outrage about rising gasoline prices enough to break the logjam blocking an energy bill? Anyone up for reelection knows the issue packs a punch.
BUSH: I've been calling upon the United States Congress to pass an energy plan for nearly two years, but they hadn't listened, and now people are going to the pump and finding out what I was talking about.
SCHIAVONE: Yet, despite blackouts, price spikes and terror threats, Congress has invested almost four years with nothing yet to show. SEN. TOM DASCHLE (D-SD), MINORITY LEADER: I don't see how we can leave this Senate this year without having addressed effectively energy policy.
SEN. PETE DOMENICI (R), NEW MEXICO: We are still here debating what this guy likes, what this senator likes, what this senator likes, what the Democrats like, and we have tried very hard to accommodate, but we can't.
SCHIAVONE: And everyone seems to agree that's the problem. The energy bill is larded with pork, estimated in the range of $15 billion to $30 billion.
MICHAEL FRANC, HERITAGE FOUNDATION: In bill after bill, whether it is the transportation bill or a run-of-the-mill appropriations bill, we end up with a proliferation of targeted, earmarked, special interest provisions, and that tends to bring down the overall quality of what Congress is trying to do.
SCHIAVONE: Typical of such provisions, $2 billion in phase-out funds to producers of MTBEs, a full additive now found to be a pollutant; $3.5 billion worth of tax breaks to electric companies who sell their power lines to regional organizations.
Meanwhile, global supply and consumption continue to push up prices.
KATERI CALLAHAN, ALLIANCE TO SAVE ENERGY: We have rising demand in the U.S., and we have rising demand around the world for energy resources that are becoming more scarce. So you do the math.
SCHIAVONE: Don't look for drilling in the Arctic National Wildlife Refuge or tougher fuel economy standards. They're still considered too controversial.
(END VIDEOTAPE)
SCHIAVONE: Here's a solution, Kitty. Energy week. That's right. Next week, Republicans will try to revive the stalled energy bill with fresh debate in the Senate and more votes in the House, and, while it may show that lawmakers know there' a problem, the solution still evades them -- Kitty.
PILGRIM: Couldn't come too soon.
Louise Schiavone.
Thanks very much, Louise.
Well, finding a solution to the spike in oil prices is at the center of tonight's "Face-Off." One of the most contentious issues involves the Strategic Petroleum Reserve and the debate over whether the United States should tap into this emergency oil stockpile.
Joining me tonight is John Felmy, a chief economist at American Petroleum Institute, and he says the SPR, Strategic Petroleum Reserve, should be reserved for emergencies, and this is not an emergency; and Jerry Taylor, on the other hand, says we should open the reserves to oil companies if they promise to replenish that oil in the future with interest, and he is with the CATO Institute. And both join me from our Washington studios.
And thanks very much, gentlemen, for joining us. This is a difficult issue and a very popular issue because everyone does see the net effect of higher oil prices when they fill up their cars.
John Felmy, let's talk about the strategicness of strategic. Strategic Petroleum Reserve. Is now a strategic time, and should it be tapped?
JOHN FELMY, CHIEF ECONOMIST, AMERICAN PETROLEUM INSTITUTE: It's not a strategic time right now. We have oil that's ample on the market. It's very high priced because of very tight markets. We've got limited supplies and increased demand. Now is not the time to be getting rid of our insurance policy, and that's what the SPR is.
PILGRIM: All right. Let's let Jerry get in on this -- Jerry.
JERRY TAYLOR, DIRECTOR, NATURAL RESOURCES STUDIES, CATO: Well, the SPR is sport of a rainy day fund for a rainy day that's almost certain never to come. We set up the reserve as a hedge against a future embargo. The problem is we now understand that oil embargoes are make-believe events. There is no way that an oil producer can keep oil out of targeted countries as long as it puts it on the world market.
All that happened, for example, in 1973, is that instead of buying oil from OPEC, we bought oil from people who bought from oil from OPEC, and we bought from non-OPEC suppliers who used to sell to somebody else and then sold to us. So the embargo worry is not a real worry.
The real worry is a significant production cutback that might drive price. But how is that different from a demand spike that drives price, is my question. Oil is not ample in the market today. The demand -- the production is, indeed, up by 10 percent from OPEC countries over the past couple of years, but demand is skyrocketing.
This is exactly the sort of price spike that we set up the SPR to address, and I think we should at least get some return for the taxpayer and sell while the selling is good.
PILGRIM: Well, let me throw something out there. Some say the SPR was set up in the 1970s with the oil embargo. Now we don't need it. We have a futures market, and that actually serves the function.
Let's get John in on this.
FELMY: Well, the futures market clearly improves the efficiency in the overall oil situation. If you do have a disruption, the futures market will help resolve it, but it won't necessarily ensure that prices won't go up dramatically. The futures market improves efficiency, but it doesn't eliminate the problem if you have a shortage of oil, which could happen if we have a major disruption of some type.
PILGRIM: OK. Jerry?
TAYLOR: Well, that's just the problem. Back in 1979 when we set up the SPR, we didn't have a futures market to repair to, but the fact is -- think of SPR like a public insurance policy. The government buys this insurance
policy to help everyone to hedge against the risk of a supply disruption. But we can provide for that private insurance, if we so desire, by going to the futures market and locking in price, as you say. For instance, one of the reasons that Southwest Airlines is doing so well in their market is because they locked in jet fuel prices when the prices were reasonably good.
So, if you want to protect yourself against the threat of a price shock, you can do that by going to the futures market, and, if you're a consumer, you can do that by buying a fuel-efficient car. So we don't need the government to buy insurance for us when we can buy that insurance ourselves. All it does is gets politicians in the middle of markets by being a commodities broker, and I think that's a bad model.
We should get this out of the hands of politicians and put that oil in the hands of the market actors, and I think that's the right position to take.
PILGRIM: What about this solution -- and it was proposed by John Kerry -- that we don't add to the Strategic Petroleum Reserve at this point, we just stop adding to it and let that work through the market, that that is a neat solution to a situation that almost splits the difference? Let's get...
TAYLOR: Well, I think that's a smart approach. You don't want to buy oil at high prices and sell in the future when it's low. But I don't know if that would have a tremendous effect on oil price. It would help a bit, but -- and it makes sense, but I don't think that's going to be a magic solution to high price.
PILGRIM: All right. Jerry? Or John?
FELMY: Well, it would largely have no impact, if -- it would be a very small reduction in supply. The amount of oil that's going into the SPR right now is less than two minutes' worth of consumption worldwide. The Department of Energy indicated it would have a penny or two impact on the market. So that in and of itself is not going to have a significant impact.
PILGRIM: Let's talk about our domestic resources, and, of course, the Arctic National Wildlife Reserve generates all kinds of controversy. You have environmentalists on one side saying don't touch it, don't even think of touching it, and other people saying why don't we develop our own natural resources. After all, we import some 60 percent of our oil in this country. Where do you come down on this? Let's start with you, John.
FELMY: Well, there's no question we should be developing the Arctic resources. You're talking about something that is 10 billion barrels which could produce a million barrels a day for 30 years. That's a huge amount of oil that could generate a significant amount of jobs, reduce our import dependence, improve our trade deficit, and potentially lower prices as we experienced in the '80s when Alaska peeked the first time. It's a resource that should be developed for American consumers.
PILGRIM: OK. We'll let you have the last word, Jerry.
TAYLOR: Well, we don't really know how much oil is economically recover in the Arctic National Wildlife Refuge because we haven't done enough exploratory drilling to know.
But, assuming that John's figures are correct, that millions a day that it could produce is about 1.25 percent of the world market. That's nice, but it's not going to do anything significant to break OPEC's back, turn the United States into Saudi Arabia or anything else.
The fundamental problem here, though, is you've an argument in which some politicians like George Bush say oil is more valuable than the wilderness, environmentalist say no, no, no, the wilderness is more valuable than the oil. Who is right? It is impossible unless we have price information to guide us.
If we knew how to allocate a scarce resource amongst competing users without price data, than we should take jobs running the North Korean economy, because you can't do that and make economies work. We need to get them in private hands, there are many ways you can think of doing that. But without doing that, and you ask the question what should we do with the 2,000 acres in ANWAR, nobody can give you a sensible or intelligent answer because we don't have enough information to go by.
PILGRIM: Well, hopefully we've given informs to our viewers tonight. Sensible and intelligent, also. Thanks for helping us sort it out. Jerry Taylor and John Felmy thanks a lot.
We'll have more on the rise in oil prices tomorrow night when Energy Secretary Spencer Abraham joins me as my guest. And that's Thursday night right here on LOU DOBBS TONIGHT.
That does bring us to the topic of tonight's poll. And we'll ask you, "do you believe it's time for the United States to tap the strategic petroleum reserve?" Yes or No. Do cast your vote, CNN.com/lou. We'll bring you the results later in the show.
Let's take look at some of your thoughts on the federal government's decision to award a multi-billion dollar border security contract to a foreign company.
And we'll take a look at our e-mails. Judy Smith of Ft. Worth, Texas says, "is that like asking the fox to guard the hen house? The only thing we need to be outsourcing are CEO's for each company that approves of outsourcing American jobs." Now, Keith Owen of Texas says, "outsourcing border security to a foreign company, is it June 1 or April 1? Somebody's a fool today without a doubt."
And Tammara Walker of Albany, Oregon says, "help me understand this, please. Outsourcing our border security, isn't that an oxymoron?"
And Keith Erlandson of St. Paul, Minnesota says, "if outsourcing national security isn't such a good deal than why doesn't the government outsource security in Iraq?"
We absolutely love hearing from you. E-mail us at loudobbs@CNN.com. And we'll share more of your thoughts later in the broadcast.
Still ahead, a new multi-million dollar plan to stop illegal aliens crossing the border in Mexico. A report in "Broken Borders" next.
Plus, Democrats say they're on a roll after picking up another seat in Congress. We'll have a report from Capitol Hill.
And then baseball fans battle in Detroit over whether hot dogs go better with opera. That and a great deal more. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: In "Broken Borders" tonight, almost half of the illegal aliens who enter this country from Mexico cross the border in Arizona. But the Homeland Security Department hopes to change that this week with a new border control program. Catherine Barrett has the report from southern Arizona.
(BEGIN VIDEOTAPE)
KATHERINE BARRETT, CNN CORRESPONDENT (voice-over): In broad daylight, a group of 13 suspected illegal aliens is pinned down and detained by immigration and customs enforcement agents patrolling in Black Hawk helicopters. This sun-seared desert is the place only the determined or desperate dare cross.
But cross, they do. 2,000 to 3,000 each day since October. And that's those who have been caught. Dozens have died. The Department of Homeland Security in March proposed a $10 million plan to cut the human traffic by summer, but the Arizona Border Control or ABC initiative gets poor grades from critics.
The border patrol has hired less than half the 250 extra agent that were promised. Plans for a $2 million air conditioned detention tents have been scrapped. And unmanned aerial vehicles that were to patrol the Arizona skies are grounded for at least another month.
ASA HUTCHINSON, UNDERSECRETARY DEPT. OF HOMELAND SECURITY: Why did it take a delay? There is air space requirements. There is training. There are liability issues that had to be addressed. I forgot to factor in the lawyer element to the deployment of the UAVs.
BARRETT: Hutchinson admits border patrol is a work in progress. Some say it is out of control. Glenn Spencer and a handful of committed friends run a nonprofit shadow border patrol. Their technology rivals the feds. Seismic ground sensors, infrared cameras and their pride and joy, a computer guided, camera equipped surveillance plane. Several nights a week, the group drives border sorties broadcasts them live online.
GLENN SPENCER, AMERICAN BORDER PATROL: We call them with GPS coordinates. They don't know how to read a GPS coordinate. This is an embarrassment for the most technological company -- country in the world that our border patrol agents can't even read a map.
(END VIDEOTAPE)
BARRETT: Kitty, when the American Border Patrol, this is this nonprofit group, actually locates groups of immigrants attempting to cross the border, they in in turn, call the real border patrol and tell them to come pick them up. They insist they have a strict no- contact policy.
Now, although Homeland Security admits that its work at the Arizona border is less than half finished. They also say their commitment is strong and necessary not just poor Mexican workers who come across the border, but potential terrorists who might travel these desert highways as well -- Kitty.
PILGRIM: It is a tough, tough job and a very important one. Thank very much. Katherine Barrett reporting from Arizona. Thanks Katherine.
Tonight's thought is on immigration. "No matter what other nations may say about the United States, immigration is still the sincerest form of flattery." And those are words of author Clayton Cramer.
Democrats tonight are celebrating a major victory. The minority party will gain another seat in Congress after Stephanie Herseth's won a special election in South Dakota. Now that victory is raising Democrats' hopes of even bigger gains in November. Congressional Correspondent Ed Henry reports.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CONGRESSIONAL CORRESPONDENT (voice-over): House Democrats were jubilant about Stephanie Herseth's victory.
REP. NANCY PELOSI, (D-CA) MINORITY LEADER: It means the Democrats are on a roll.
HENRY: Democrats note President Bush carried South Dakota by a wider margin than Texas 4 years ago. And Tuesday's win comes on a special election pick-up in Kentucky.
STEPHANIE HERSETH, (D) SOUTH DAKOTA: I do think it gives the Democrats some momentum, given historically, they've had difficulty picking up special election seats. And we've done that now twice prior to November.
HENRY: But Republican leaders insist this will not translate into a Democratic takeover. They note their candidate Larry Deidrich started 30 points behind and lost by two points.
REP. ROY BLUNT, (R-MO) MAJORITY WHIP: Well, it's a tidal wave or where our guy losses 28 points in just a few weeks. Sounds like a tidal wave in our direction, not theirs.
HENRY: Democrats think they're setting the stage for more upsets.
PELOSI: We have to win in the red states to take back the House. I think we've demonstrated that we not only will fight in the red states, we will win in the red states and they will bring us a Democratic majority.
HENRY: Democrats believe rural and blue collar voters are concerned about the president's policies on Iraq and domestic issues. And this could be a sign that major upheaval is coming.
STAN GREENBERG, DEMOCRATIC POLLSTER: We know in '94, we know in 1980, that it is possible to have election that is have a wave and may well be that South Dakota and Kentucky are precursors to that.
HENRY (on camera): House Republican leader Tom Delay said there will be no national implications from this race in South Dakota. Delay also said that Democrats will not get any momentum heading into the fall. And Republicans are vowing they will take this seat back in November. Ed Henry, CNN, Capitol Hill.
(END VIDEOTAPE)
PILGRIM: Well as they say, all politics are local. In Detroit, a political wrangle over a singing hot dog vendor at the Comerica Park. Now for years baseball fans have listened to the operatic melodies of Charlie Marcuse (ph) at the Tigers home games.
Now, Charlie has been silenced. The general manager of the stadium services said some fans complained and Charlie has been told not to sing. But no final decision has been made. Now, Charlie's fans have begun singing for him. And they also held up signs during Monday's game that read free Charlie and let the man sing.
That does bring us to the topic of "Tonight's poll." Do you believe it's time for the United States to tap the Strategic Petroleum Reserve. Nothing to do with opera. Yes or no. Cast your vote at cnn.com/lou. We'll bring the results a little bit later in the show.
Still ahead tonight, the army moves to keep soldiers in combat even after their terms end.
"Grange on Point" is next. A volcanic wonder in Hawaii. Hot lava is flowing to unusual places on the big island. We have that story and more ahead. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: In "Grange on Point" tonight, the army today issued new order that is prevent soldiers from leaving the military after their terms are complete. The stop loss order will require soldiers to stay with their unit until the unit completes its deployment. Now, the army acknowledges the change comes as combat missions in Iraq and Afghanistan are, quote, "stretched." Critics say it undermines the concept of an all voluntary military. Joining me now for more is General David Grange and he joins us from Oakbrook, Illinois.
Thanks for joining us, General Grange.
BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Thank you.
PILGIRM: Why -- first of all the real question, why must this be done. Because certainly it does create a certain amount of hardship for those who cannot leave when their term is up.
GRANGE: There's a few reasons, Kitty. First of all there a lot of commitments. The military is probably committed to the maximum right now, and it's a small force. It is not a large force with all of these commitments. And so the military should have been grown larger years ago. The other is that the essence of establishing continuity, the importance of that, and what's a most frustrating thing to junior and senior leaders is once you train them together, establish a brotherhood, a camaraderie, trust and confidence, you break it up when send a soldier here and there when their time is up. So you are not combat ready. That's the biggest reason. And so it's important for continuity that they do stop loss which is a last stop measure to meet these commitments.
PILGRIM: What about the argument that it does break the concept of all volunteer army and people are staying beyond their commitment?
GRANGE: Well, I believe it is the last thing that any command wants to do, is to say to someone, well, sorry about that. You served honorably for three year and tough hardship tours, but you have to stay another year or 90 days, or whatever the mace may be. But it is necessary. The mission comes first. Personal affairs comes second. And it actually causes more risk and danger to lives if you don't do something like this and you're not combat ready.
PILGRIM: You know, our viewers may not be aware of the history of this.
Has this ever been employed before?
Is this an unusual measure?
Is this a normal procedure?
Can you fill us in on that?
GRANGE: It has been done in the past. It was done several times while I served. Probably not at this magnitude. Usually it is done because of a specialty skill that the military is short of, military police, intelligence, personnel. Those type of skills that maybe there's not enough of that high demand, low density specialty. But not in this magnitude.
PILGRIM: The -- let's go to another area, and that's the mission in Iraq. And one of the biggest debates is over the role of U.S. forces vs. the Iraqi command of U.S. forces, how that plays out.
What is the role of U.S. Forces in a combat situation?
How -- you have vast experience in this field, and of course, none of this has been clearly worked out, how do you see this working out to the best arrangement, General Grange?
GRANGE: Well, the key date will be June 30. And on June 30, there will be some agreements made. There may be a mandate that comes from the United Nations that kind of constrains what U.S. and other coalition forces can and cannot do. What will happen, I believe, is that you'll see the U.S. back off a bit from areas that they can turnover the operation to Iraqi forces, civil defense, police, or military. Now, there's not a lot of those properly trained yet to take that responsibility. But I think you will see a lot of the U.S. forces pulling back from the cities. They'll take a training role in creating a more professional and a faster manner these new Iraqi force that is are capable, competent to do these missions. But the U.S. will still have a very significant role in a backdrop to go in and eliminate larger formation of hostility if required.
Then the key is also going to be who approves that action?
Is it the Iraqi sovereign government or an agreement made ahead of time on certain types of operations that the U.S. can do on their own?
PILGRIM: All right. Thanks very much, General David Grange.
Still ahead, we'll share some of your thoughts on "Exporting America."
And powerful thunderstorms bring strong winds and hail to one southern state. We'll have the details in just a moment. Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Nature is showing its strength in several parts of the United States. In Texas, thunderstorms with winds of more than 80 miles an hour. Hail the size of tennis balls pounded parts of the state. Hundreds of thousands of families are without power tonight.
In north central Florida today a wildfire caused the evacuation of dozens of families. The fire began yesterday and grew quickly overnight.
The lava is flowing in Hawaii. Steady streams of lava from Kilauea are pouring into the Pacific Ocean. It's the first time in nearly a year the red and orange lava has reached the ocean.
Let's go to Wall Street. Blue chips stocks rose. The Dow gained 60 points. The Nasdaq fell almost 2. The S&P 500 added almost 4. Also tonight shocking newly released tapes reveal Enron traders at work during the California energy crisis. Christine Romans is here with the report -- Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: A glimpse into what was happening on the Enron trading desk four years ago as an energy crisis raged through California and energy prices soared. Audiotapes of Enron traders gloating about profiting from the California energy crises. The Washington Power Utility alleges these tapes are proof that the traders were manipulating energy prices in California.
And there's more than that tasteless jubilation over natural disasters, driving up energy prices there. Not a surprise if you've ever spent time on a trading desk. But certainly an eerie look into conversations happening four years ago before the Enron collapse. Enron, what is left of it, not commenting on these tapes.
PILGRIM: Enron, one could argue, was the beginning of the scandal season in this world. Yet, we have new target, New York Attorney General Eliot Spitzer is targeting someone else.
ROMANS: He is taking on investment banks, Wall Street analysts, the mutual fund industry, the insurance industry, the Stock Exchange and today he filed suit against GlaxoSmithKline. He says Glaxo misled doctors about the effects of Paxil on children. Paxil is a powerful antidepressant drug. Spitzer claims Glaxo had information that drug might not work on kids, may raise the risks of suicide. Glaxo denied those allegations.
PILGRIM: Thanks very much, Christine Romans. In "Exporting America," another U.S. company makes a decision to send jobs to cheap foreign markets. Aluminum producer Alcoa will be moving information technology jobs to India. The company plans to eliminate about 130 jobs in the United States over roughly the next year. Alcoa executives say, quote, "these types of strategic decisions are necessary for Alcoa to competitively meet our customer needs and to grow our business."
We've reported on the issue of overseas outsourcing on this program for more than a year. One area sometimes overlooked is the effect of outsourcing on this country's older workers. Many of those workers are still too young to retire, but too old to start a new career. Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT (voice-over): When jobs move overseas, entire communities can be devastated. But older Americans often have a harder time recovering from a job layoff. When the Agere (ph) Factory in Reading, Pennsylvania shut down, Shirley Morris lost her job at age 56. She now works part-time at a post office.
SHIRLEY MORRIS, OUTSOURCED WORKER: It is very hard. A lot of my friends are unable to find work. I'm one of the lucky ones.
SYLVESTER: Companies often lay off older workers first because they tend to be the highest paid with high healthcare costs.
CATHERINE MANN, INSTITUTE FOR INTL. ECONOMICS: Job loss is increasingly worse for you the higher up the skill ladder you are. It means that you have the farthest to fall.
SYLVESTER: Losing a job is hard at any age but for older Americans it means losing health insurance at a time when it is needed most. Displaced older workers may have to dip into their retirement savings to cover day-to-day expenses, leaving them even more vulnerable and it is generally harder for them to pick up and move to a new community to start all over again. Many displaced older workers find themselves doing something they never thought they would do again, return to the classroom. Groups like the AARP are sponsoring forums to help seniors adjust.
BRUCE MEHLMAN, COMPUTER SYSTEMS POLICY PROJECT: We have to do, with respect to learning and retraining, is make it not just K-12 but K-Gray.
SYLVESTER: For older Americans losing their job is a more costly prospect than for their younger colleagues. A survey by the Bureau of Labor statistics on displaced workers and salaries found that older workers, those aged 45 to 64, saw their earnings drop 12 percent after being laid off. Younger workers in their late 20s and early 30s, on the other hand, saw their earnings increase on average by 5.5 percent. Lisa Sylvester, CNN, Washington.
(END VIDEOTAPE)
PILGRIM: Let's take a look at some more of your thoughts. David Menard of Mapleville, Rhode Island wrote, "I would like to commend your efforts to spotlight the outsourcing of American jobs and the detrimental effect it has on the American worker. It is destroying the manufacturing industry, leaving less jobs for American families with soaring health insurance costs.
JR. of Baltimore, Maryland says, "if America is to be a government by the people for the people why don't U.S. citizens get to vote on the so-called free trade deals like CAFTA and NAFTA. These agreements cost U.S. workers their jobs and they don't even have a say."
Regina Smith of Scottsdale, Arizona. "Nothing kills the American spirit of enterprise more than watching our government and corporations give away the American dream."
E-mail us at loudobbs@CNN.com.
Still ahead, the results of tonight's poll. First, a reminder to check our website for the complete list of companies we've confirmed to be exporting America. CNN.com/lou. We'll be right back.
(COMMERCIAL BREAK)
PILGRIM: The results of tonight's poll. 45 percent of you believe it's time for the United States to tap the Strategic Petroleum Reserve and 55 percent do not. Thanks for joining us tonight. Please join us tomorrow. Energy Secretary Spencer Abraham will join us on our special report, "Out of Gas" and also tomorrow, Sa'ib Urayqat, chief Palestinian negotiator will be our guest. For all of us here, good night from New York. "ANDERSON COOPER 360" is next.
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