Return to Transcripts main page

Lou Dobbs Tonight

9/11 Commission Set to Release Report Thursday; San Francisco to Consider Non-Citizen Voting

Aired July 21, 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.


LOU DOBBS, CNN ANCHOR: Tonight, one day before the September 11 commission releases its final report, President Bush said he would have done everything possible to stop the terrorists if he had any inkling that al Qaeda was about to attack.
(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Every American can be certain that their government will continue doing everything in her power to prevent a terrorist attack.

(END VIDEO CLIP)

DOBBS: The 9/11 commission today briefed National Security Adviser Condoleezza Rice about its report. The commission likely to be highly critical of both the Bush and Clinton administrations.

Should the president appoint a new intelligence czar to oversee our intelligence agencies? We'll have two opposing views in our Face Off tonight.

Illegal aliens may have the right to vote in school board elections in San Francisco. Senator Dianne Feinstein of California has vowed to fight that proposal. She's our guest tonight.

The AFL-CIO accuses the Labor Department of failing to help workers who have lost their jobs to cheap overseas labor.

And, tonight, an astonishing admission by one of the world's most distinguished astrophysicists. Stephen Hawking now says his theory that black holes consume everything within their force field is wrong. Astrophysicist Charles Liu joins us.

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, July 21. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

President Bush today said his administration is doing everything possible to prevent another terrorist attack against the United States. President Bush made his remarks just before the release of the September 11 commission report tomorrow.

That report is expected to be highly critical of the government's intelligence gathering before September 11. The commission is also expected to say both the Bush and Clinton administrations missed 10 potential opportunities to stop the hijackers.

White House Correspondent Dana Bash reports -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, the chair and vice chair of the 9/11 commission were here at the White House today briefing the president's national security adviser, chief counsel and chief of staff on the findings of the report. Mr. Bush was supposed to get a feel from his staff at some point today, but he will be presented formally with the report tomorrow.

But we do have, according to several congressional sources, some of what is in the nearly 600-page report. First of all, some of the recommendations: A new national intelligence director, they say, is in order, somebody who will have budget authority and who will head up a national counterterrorism center. That person would make recommendations, that organization also would make recommendations on operational planning, but not necessarily have the authority to execute it. The bottom line from the commission on this point: too much overlap still on intelligence agencies, not enough coordination.

There you see the findings. Ten examples, they will say, of missed opportunities by the Clinton and Bush administrations, but sources will say that none of these was necessarily a silver bullet that could have prevented 9/11.

The commission will also not determine whether or not 9/11 was preventable at all, and sources say that the commission will say that neither the president, this President Bush, or President Clinton did enough to face the al Qaeda threat, to try to attack that threat, but there has certainly been a lot of politics, Lou, as you know, surrounding that issue, whether or not either president could have prevented 9/11.

This President Bush defended not only himself, but his predecessor today.

(BEGIN VIDEO CLIP)

BUSH: Had we had any inkling whatsoever that terrorists were about to attack our country, we would have moved heaven and earth to protect America, and I'm confident President Clinton would have done the same thing. Any president would.

(END VIDEO CLIP)

BASH: Now there are obviously still going to be some other controversial issues coming out in this report tomorrow, like whether or not there was a connection, an operational connection between Iraq and al Qaeda. The commission will still say that they don't believe that there was, and, as we've been reporting this week, they will say that Iran did have a role at least in allowing some of the hijackers to pass through their country before coming to the United States -- Lou.

DOBBS: Dana, one of the controversies surrounding Sandy Berger's removal of classified documents from the National Archive. What's the president's position on that?

BASH: Well, he didn't say a word about it today, Lou. He was asked about it. He refused to comment, saying it was an ongoing investigation.

But there was a new wrinkle here at the White House on that. As you know, some of the controversy, according to the Kerry campaign, is that they think Republicans leaked this in order to try to take away from anything embarrassing that could have been in this commission report for the president.

Yesterday, the White House said that that couldn't be possible because nobody here knew about this investigation. Today, White House spokesman Scott McClellan said some people here did actually know.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: I first became aware of it when the news reports came out, but my understanding is that this investigation has been going on for several months and that some officials in our counsel's office were contacted as part of the investigation.

(END VIDEO CLIP)

BASH: Now McClellan said the reason why members of the White House counsel's office were notified is because this White House was in charge of making sure that all relevant information from the Bush White House and the Clinton administration got to the commission. That's why they were told.

But they again flatly deny that anyone here at the White House or at the Bush campaign had anything to do with leaking the fact that this investigation is going on -- Lou.

DOBBS: Dana, thank you.

Dana Bash from the White House.

Leaders of the September 11 commission have also briefed congressional leaders about their report, but, tonight, both Republican and Democratic lawmakers are steering clear of any partisan battles on this report.

Congressional Correspondent Joe Johns with the report -- Joe?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Lou, there were some aftershocks today about the uproar over Sandy Berger, and then, as you mentioned, a lot of the rhetoric here on Capitol Hill started moving toward bipartisanship, and this is very interesting, of course, simply because this is a highly charged political atmosphere here on Capitol Hill less than a week from the Democratic national convention.

So the question, of course, is why. Why have people started pulling back on what they're saying? Both Democrats and Republicans telling me this is one of those situations where it is a very sensitive issue, the voters are watching, you don't want to go too far, and, most importantly, one Democratic staffer put it, this report is expected to be critical of the United States Congress.

There are -- a lot of people expected a lot of criticism of the administration and the agencies, but it is also going to be critical of the Congress for its oversight, we are told.

So now let's listen to a couple of the leaders on what they've had to say about this report.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R), MAJORITY leader: That this is a nonpartisan report. It is a bipartisan report, AND that spirit of nonpartisanship is very, very important. It came across in the commission members -- it came across in the way it is being received by members of the United States Senate, and, speaking for the Democratic leader and myself, our response to that report will be, I predict, very bipartisan in terms of action that we'll take in the United States Senate.

REP. NANCY PELOSI (D), MINORITY LEADER: For many of us who've been involved in intelligence matters and, of course, events surrounding 9/11 have always considered any consideration of this issue as sacred and hallowed ground, that we go into it with the mission to find answers for the families, to reduce risk to the American people. It's not about assigning blame. It's about preventing any future acts of terrorism to our country.

(END VIDEO CLIP)

JOHNS: Now don't necessarily expect for that tone to last forever. As one member of the Senate suggested, what people are going to do once the report comes out is start picking out those parts of the report that prove the points they want to prove.

So one of the things that is expected to happen tomorrow after the report comes out, just about the entire House leadership is going to hold a news conference to tout the things they think government has done well since September 11 -- Lou.

DOBBS: Joe, thank you very much.

Joe Johns from Capitol Hill.

In Iraq, the withdrawal of Filipino troops appears to have encouraged insurgents there to take more foreign workers hostage. A little-known insurgent group has taken six more foreigners hostage -- three of those hostages from India, two from Kenya, one from Egypt. The insurgents are demanding those three countries withdraw their personnel, even though India, Kenya and Egypt do not have any troops in Iraq.

Earlier this week, the Philippines withdrew its soldiers from Iraq after insurgents threatened to kill a Filipino hostage. That hostage was released yesterday. Saudi Arabian troops and police hunting radical Islamist terrorists have made a gruesome discovery. They found the head of murdered American hostage Paul Johnson during a raid on a terrorist hideout in the Saudi capital of Riyadh.

Saudi Arabian security forces killed two radical Islamists during that raid. Police also found a large quantity of weapons and explosives. The weapons included a shoulder-fired anti-aircraft missile.

Most United Nations members have been unwilling to help the United States in Iraq in any way. Remarkably, those countries also appear reluctant to assist the United Nations in Iraq. Not one country has offered to send troops to protect U.N. staff who will be working on elections and reconstruction.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): The United Nations voted a month and a half ago to send a thousand troops to Iraq. But, so far, member countries have not stepped forward to provide them.

U.N. Secretary General Kofi Annan gave fair warning today that the lack of support will impede the U.N. role in Iraq.

KOFI ANNAN, U.N. SECRETARY GENERAL: That security force is essential. Otherwise, we will not be able to deploy in any large numbers.

PILGRIM: The role of those U.N. troops is to act as a security force, to protect a U.N. contingent as they work on preparing for elections, a critical part of the political process that has nothing to do with combat.

NILE GARDINER, THE HERITAGE FOUNDATION: Well, this is hugely embarrassing for the United Nations, and it clearly does demonstrate the rank hypocrisy of countries such as France and Germany, key members of the U.S., who have been clamoring for a key United Nations role in Iraq, but have been unwilling even to provide one single soldier.

PILGRIM: Last August, an attack devastated U.N. operations in Baghdad, killing 22 people, including U.N. high commissioner for human rights Sergio de Mello. U.N. personnel were withdrawn at that time.

But things have moved on since then, and U.N. Secretary General Kofi Annan named a new envoy to Iraq last week. Scores of countries have been approached for troops. Some suggest leaders of France and Germany, both critics of the war, are unwilling to abandon their anti- war stance for domestic political reasons.

PATRICK BASHAM, CATO INSTITUTE: They're vulnerable in the sense that they are individually unpopular in their own right at the moment. Things are not going well for them politically, and so anything else that goes wrong could, you know, be the catalyst for defeat at the next election in both cases.

(END VIDEOTAPE)

PILGRIM: Now some countries don't want to pay for the cost of sending troops. They want wealthier nations to foot the bill, and, if other countries do not take up the task, then the mission will likely fall to the U.S.-led coalition forces once again -- Lou.

DOBBS: And, as you point out, both Schroeder in Germany and Chirac in France immensely unpopular. Their parties in desperate straits.

PILGRIM: They're in very bad shape politically, and so they don't want to risk anything.

DOBBS: Yet they persist in the policies that are part of the reason for their decline.

Kitty, thank you.

Kitty Pilgrim.

The United States may send as many as 400 Special-Operations troops to Greece to help protect the Olympics. The unprecedented military deployment would be in addition to U.S. plans to send security agents to guard American athletes.

Senior Pentagon Correspondent Jamie McIntyre has the story.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Not since the 1972 Olympics in Munich, when a Palestinian group, Black September, killed 11 Israeli athletes, has the specter of terrorism hung so heavy over the Olympic Games.

U.S. intelligence indicates al Qaeda has at least the desire, if not the intent, to strike during next month's summer games in Athens, Greece, something confirmed by Defense Secretary Donald Rumsfeld at another high-profile event last month, the NATO summit in Istanbul.

DONALD RUMSFELD, SECRETARY OF DEFENSE: There's been a great deal of chatter in the system that they will try to disrupt international events like this, like the Olympics.

MCINTYRE: Greece has been training its police and military to deal with the increased threat and insists it will provide all security for the athletes for more than 200 countries.

But, as a NATO nation, it's also requested support from the alliance, including NATO AWACS airborne radar planes, sea patrols beyond Greek territorial waters and some specialized capabilities, such as a chem-bio unit from the Czech Republic. But the Pentagon says U.S. troops, including highly trained counterterrorist commandos, could also be part of the mix once NATO acts.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: And once that decision is made, then we'll look at the kind of capabilities that might be required to help.

UNIDENTIFIED MALE: Involving U.S. troops?

MYERS: It's all possible.

MCINTYRE: But the State Department is not confirming a "New York Times" report that some 100 armed American agents, some from the State Department's diplomatic security service, will be used as bodyguards for athletes and dignitaries.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: We're cooperating closely with the Greek government. We're doing many things together to support them, but, as far as specific measures and agreements, I really can't get into that.

(END VIDEOTAPE)

MCINTYRE: If U.S. Special-Operations forces are committed to the Olympics, Pentagon officials say they'll likely stay in the background ready to be called on on short notice if there is a terrorist attack. But the Greek government is making it clear that it believes providing the front-line security for the Olympic Games is exclusively its responsibility -- Lou.

DOBBS: Jamie, this has an element, if you will, given all of the rumors and concerns about terrorism at Athens, is looking almost as if a carefully staged perhaps P.R. approach to suggest greater security on the part of the United States without a definite commitment of troops. What is your thinking on that?

MCINTYRE: Well, there's a couple of things at play here. One is the sensitivity of the Greek government, which wants to show that it can handle the games and the security. There's the concern of the United States making sure that it does have forces in place in case it needs to protect its own interests, and then, of course, there's just projecting a strong image as hopefully a deterrent, that terrorists are known to go for soft targets, weak spots. If they think it's really -- the security is really tight, maybe they won't try anything.

DOBBS: And NATO which has been reluctant to be involved in a number of areas, including Iraq -- their role here?

MCINTYRE: Well, I think it's pretty clear that NATO will provide support. Some things are easy, like the AWACS planes. Some things are not as easy, and the United States, of course, is the most capable member of NATO, so the U.S. will definitely be playing a role, but they're going to try and keep it low key and let the Greeks be out in front and show that they're in charge.

DOBBS: Jamie McIntyre from the Pentagon.

Thank you.

Still ahead, the AFL-CIO says the Labor Department has failed to help American workers who have lost their jobs to cheap overseas labor. We'll have that special report.

Illegal aliens could soon win the right to vote in school board elections in the City of San Francisco. Senator Dianne Feinstein says the proposal is simply unconstitutional. She's fighting it. She's our guest.

And in Face Off tonight, two opposing views on whether an intelligence czar should be appointed to supervise the country's 15 intelligence agencies.

Those stories and more coming right up.

(COMMERCIAL BREAK)

DOBBS: Exporting America tonight. A scathing new report on a Labor Department program designed to help Americans who have lost their jobs to cheap foreign labor markets. The AFL-CIO report found the trade adjustment assistance program failed to provide adequate help for laid-off Americans, and, in some cases, American workers were turned away and denied help when they needed it most.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): When the LTV Steel Company folded in 2001 because of a surge of foreign steel imports, some of the employees received benefits and training through the Labor Department's trade adjustment program. But the company's contract workers doing the same job did not.

BOB WEINZETL, LAID-OFF WORKER: They were going their merry way, they had some benefits, they were going through additional training, and we were sitting there basically having done -- you know, sat right next to each other in offices, and we couldn't get anything.

SYLVESTER: After a two-year fight, the U.S. Court of International Trade agreed the Labor Department had unfairly denied the contract workers their benefits. Under the law, factory workers who are directly displaced by trade are entitled to extended unemployment benefits and job training.

The AFL-CIO found at least eight similar cases where the Labor Department had wrongfully denied assistance to laid-off employees. One federal judge ruling in favor of Chevron workers who were denied benefits wrote, "The case stands as a monument to the flaws and dysfunctions in the Labor Department's administration of the nation's trade adjustment assistance laws." That case took four years to resolve. THEA LEE, AFL-CIO: This is something that really defeats the whole purpose of the program. The program is really an emergency assistance program for workers who lose their jobs because of trade impacts, and it's simply not working right now.

SYLVESTER: The Labor Department blames the court system for the delays and says many of the cases were inherited.

JANE MORRIS, DEPARTMENT OF LABOR: The interesting part about the cases that are cited is that the majority of those cases were started under the Clinton administration, and the Bush administration is simply trying to clean that up. We're trying to do the right thing for workers.

SYLVESTER: But denied assistance is not the only problem. States have also run out of federal funding for training assistance programs, leaving dislocated employees out of work and out of luck.

(END VIDEOTAPE)

SYLVESTER: The AFL-CIO also criticizes the Labor Department for not doing enough to publicize programs to help displaced workers. One example is a health-care tax credit for workers who lose their jobs due to free trade. Only 6 percent of the workers who are eligible have actually received the benefit -- Lou?

DOBBS: Lisa, thank you very much for that report, as troubling as it is.

Well, the Labor Department is working to protect another group of workers, immigrants and illegal aliens, specifically from Mexico. Labor Secretary Elaine Chao today signed a joint declaration with Mexico's foreign secretary.

In that joint declaration, both countries promise to work for safer working conditions and better pay for Mexicans who live in this country. That declaration offers no new funding to back up the promises.

Secretary Chao called it historic.

(BEGIN VIDEO CLIP)

ELAINE CHAO, SECRETARY OF LABOR: Hispanics are an integral part of the American workforce, and Mexican workers comprise the largest component within the Hispanic workforce. This administration is committed to ensuring that Hispanic workers are safe on the job and fully and fairly compensated for their work.

(END VIDEO CLIP)

DOBBS: Mexico's foreign secretary said the declaration helps fulfill President Vicente Fox's goal of improving the quality of life for all Mexicans in the United States, including illegal aliens.

Well, San Francisco could soon give illegal aliens and other non- citizens the right to vote. The city's board of supervisors approved a measure that would allow parents of public school children to vote in school board elections, even if they're non-citizens. San Francisco residents will vote on that measure in November.

My guest tonight says the proposal is nothing short of unconstitutional. Senator Dianne Feinstein of California joins me now from Capitol Hill.

Senator, good to have you with us.

SEN. DIANNE FEINSTEIN (D-CA), INTELLIGENCE COMMITTEE: Thank you very much.

DOBBS: This is -- I think most Americans are shocked that such a proposal would even be tendered. What is the motivation?

FEINSTEIN: Well, the motivation, I think is to begin to extend voting rights to people who are non-citizens, and Article II, Section 4 of the California constitution says that if you are a citizen and a resident of California and 18 years old, you may vote in California elections. It seems to me that that's pretty clear.

I think there's an attempt to kind of get the camel's nose under the tent, so to speak, and say, well, because people have children in school, therefore, they should be able to vote, but that's just the beginning because we have elected transportation boards. So, if people use transportation, then should they be able to vote in, say, a Bay Area Rapid Transit election?

My view is that it's unconstitutional. There was a proposed initiative in 1996 that was held unconstitutional. And secondly, I believe this -- and, you know, my own mother is a naturalized or was a naturalized citizen, and I believe that the rights of citizenship are important, and, among those rights, the most basic and the most important right is the right to vote, and I don't think we should dilute citizenship by giving people who are not citizens the right to vote.

How do you make the difference? How do you know whether someone's here legally or illegally? So I think it's opening a Pandora's box, if you will.

I am hopeful that the people of San Francisco will see that and not vote for it, but, even if they do, I think there's going to be a major court case.

DOBBS: A major court case and a major political issue is building in this country around these kinds of rights, which are being extended. The board of supervisors voted, Senator, as you know, 9-2 on this measure, and one only wonders why a board of supervisors would not also -- if it is good for school boards, as you say, why in the world would it not be extended to municipal elections at large? Why not state elections? Why should there be any distinction?

FEINSTEIN: Well, obviously, that could be the next step, and that's why I say I think it's the camel's nose under the tent, and my belief is this, that we should make naturalization available to people who come to this country, who are legally entitled to be naturalized. We should do everything we can -- and I have tried to do this -- to shorten the wait wherever we can, but citizenship has to mean something or else this place is just a place, it isn't a United States of America.

DOBBS: I think that's wonderfully well put, and the fact is that one can be against illegal immigration and not be anti-immigration still, and we thank you for eloquently pointing out that fact.

Let's turn to another controversy in Washington, D.C. Sandy Berger, the respected national security adviser of the Clinton administration, walking out purportedly at least in one charge with classified documents in his socks from the National Archive. What in the world, in your judgment, is going on here?

FEINSTEIN: Well, you know, last night, I went home, and I turned on the television, and almost as if they were talking points, I saw one Republican after the other come to the press and accuse Sandy Berger of all kinds of things, and I thought, you know, if the shoe were on the other foot, we wouldn't do that. We would wait to see what the facts were.

I don't think we know yet what the facts were. I think there were copies of an after action memo surrounding the millennium and terrorist efforts during that period of time. I want to wait until this thing sorts itself out.

But let me say this about Sandy Berger. I watched Sandy Berger for eight years, and this was a man of distinction. He served the country well. He was honest and true, and it really makes me angry to see people so ready to condemn him without knowing what the facts are.

DOBBS: And I should point out to our viewers that not only are you a member the Immigration Border and Citizenship Committee in the Senate, but also a member of the Senate Select, and, Senator Feinstein, we, as always, appreciate your being here. Thank you.

FEINSTEIN: Thank you.

DOBBS: Turning now to the subject of our poll: Do you believe non-citizens should be allowed to vote in U.S. elections? Yes or no? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Coming up right here, the growing debate over whether this country needs a new high-level intelligence chief. Former Assistant Defense Secretary Frank Gaffney and Peter Brooks of Heritage Foundation will Face Off on the issue coming right up.

And Mission Critical. Many in the scientific community say the future of space exploration depends on private investment. We'll have that special report.

All of that and more still ahead here tonight.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.

DOBBS: The independent commission investigating the 9/11 terrorist attacks report their final findings tomorrow. The commission is expected to call for the creation of a cabinet level intelligence czar to oversee the nation's 15 intelligence agencies.

The debate over whether that post should be created, whether it's needed is the focus of our "Face-Off" tonight.

Peter Brooks says the CIA director doesn't have the authority to run the entire intelligence community and a new position is needed. He's a senior fellow at the Heritage Foundation.

Frank Gaffney says creating a new head of intelligence during wartime is simply too dangerous. He's president and CEO of the Center for Security Policy, former assistant secretary of defense. Both joining us tonight from Washington.

Peter, let me begin with you. You know, we have a massive Homeland Security Department. We have, whether checkered results or not, in the recent past, a CIA and an FBI that has, historically at least, done pretty well. Why do we need a czar?

PETER BROOKS, HERITAGE FOUNDATION: Well, one of the problems is is that the director of central intelligence isn't, he is not a director of central intelligence, he's basically the director of the Central Intelligence Agency. There are 15 intelligence agencies, seven of those belong to the secretary of defense and 80 percent of the intelligence community budget belongs to the secretary of defense.

We're no longer in a situation here where we're fighting the Cold War, we're fighting the Soviet Union, potential to fighting the Soviet Union. We're fighting new transnational threats, such as terrorism and weapons of mass destruction. So I think we need somebody in charge of the entire intelligence community to reduce the vulnerabilities and seams we're seeing coming out of the reports on Iraqi weapons of mass destruction and the 9/11 commission.

DOBBS: Frank, you don't agree?

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: I don't agree. I think what Peter has described is true, the question is, in time of war, and I think we have to keep reminding ourselves that's the context in which these decisions are being made, are you going to do something that's pretty much cosmetic, which is sort of create another box in the wiring diagram, which won't really do much to give this individual more authority than the current director of central intelligence has, or are you really going to start ripping things up and giving him authority and budget responsibility in what's more of a line sense over those agencies that are now in the Defense Department, I think for very good reason.

If you do that you're clearly going to start introducing dysfunction, probably a lot more impediments to good intelligence products, and that's actually what we're supposed to be focusing on here is how do you get better products. I think that's through competitive intelligence, not through more integrated, streamlined and possibly sort of homogenized intelligence, which might be the net result of what Peter is talking about at best.

DOBBS: Is that the net result, Peter?

BROOKS: I don't think so. I do agree with Frank, that I am concerned about, last time we organized for national security was 1947, after World War II, before the Korean War when we were at peace. We're no longer at peace. So I do have those same concerns as Frank regards during wartime.

But the fact of the matter is, we have the most fragmented and dysfunctional intelligence community than we perhaps have ever had, and we saw these results, not only with Iraq WMD, but also with 9/11.

We need to consolidate more. I'm not saying we should put them all under roof like the Department of Homeland Security, but I think we should have more of a greater unity of effort, more consolidation, more coordination and more communication across the intelligence agencies.

DOBBS: Government in Washington loves to grow. Government loves to concentrate its power, both bureaucratic and political. To do so with intelligence is sort of anti-intuitive at this point, not counterintuitive, anti-intuitive, because decentralization seems to be the direction which most successful organizations are going. Why the cry now for more centralization?

GAFFNEY: I would actually say that while the bottom line for the report we're expecting tomorrow will be let's create a new box in that wiring diagram, much of the content of its report, and certainly the content of the Senate Select Committee on Intelligence report released with great fanfare two weeks ago, was we need better competitive analysis and for that matter collection of intelligence.

I don't know that you get there by creating a new czar whose job is basically to try to stovepipe, or otherwise streamline intelligence. And I think Peter and I agree, basically on the fundamental here: We're not doing everything perfectly right now.

What we may disagree about is can we make it better? Can we make the job we're working on at the moment, hopefully, which is getting the product better by increasing exactly the kind of thing you're saying is contrary to most good business practice: greater centralization, probably accompanied by greater bureaucratic overlays. I don't know that will get you where you need to go from here.

BROOKS: Lou, I think one of the things, it's very important we have one person setting the priorities, setting the vision for the intelligence community and right now we have six or seven cabinet members who have responsibility for intelligence functions. So, I think it's very important that one person is in charge and that allows us to address the new national security environment that we have today.

DOBBS: Shouldn't that really, as you point out, members of the cabinet, shouldn't that vision, that direction, that strategy not only on foreign policy and intelligence, but in all strategic issues come from the president himself or herself?

BROOKS: Absolutely. Well, I mean certainly the vision for it is, but the day-to-day management should come from a cabinet level official or cabinet official, not from the president. The president doesn't micromanage our different agencies. He relies on...

DOBBS: I was just -- you said vision and strategy. I don't look at that as micro management. That seems to me to be highly executive.

GAFFNEY: Can I get in here?

DOBBS: Sure.

GAFFNEY: The director of central intelligence has, I think, got that kind of authority today. An ability to set priorities to establish a vision, if you will, on the day-to-day management side. The question is, do you want to rip out of the Defense Department, the budgetary decisionmaking that goes with those priorities?

They're done in a consultative collaborative way today. I think that you're likely to see real dysfunction if you do that kind of bifurcation and at worse perhaps, a real disservice to the men and women in uniform who are relying upon those intelligence agencies right now to support their tactical combat and other operations.

DOBBS: And, Peter, I'm give you the last word with this statement in front of it, if I may. It always seems that in moments of criticism and the search for accountability, Washington reflexively, goes to organization or funding rather than looking to direct accountability in how to really make the operation better. Where is Congress' oversight? Where is the CIA, the FBI in terms of their future strategies and approaches? How do you respond to that? You get the last word.

BROOKS: Well, I think it's important we look seriously at all these recommendations. We're going to see the 9/11 commission's recommendations tomorrow. We still have not seen the Senate Select Committee's intelligence recommendations. And the House has recommendations. So I think we need to look at all these seriously and look at things and not just change things for change sake. We have to change things to make more efficient and more effective.

DOBBS: Peter Brooks, Frank Gaffney, we thank you both for aiding, we hope, our policymakers in that effort.

GAFFNEY: Here, here.

DOBBS: Coming up next, "Mission Critical," our special series of reports this week looking at privatization and the business side of space exploration. Is it an essential component of NASA's space future? Also, one of the world most famous scientists, Stephen Hawkin, says one of his theories on black holes is simply wrong. Astrophysicist Charles Liu joins me. We'll be talking about black holes, worm holes, cosmology, the Big Bang and Stream Theory. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now some breaking news. About the September 11th attacks. Never before seen video, if we could see that video, showing the September 11th hijackers, five of them passing through security at the Dulles Airport in Washington. Now, four of the hijackers were actually pulled aside for additional security checks after they set off security alarms. But security guards at Dulles Airport then allowed those hijackers to proceed to their flight. Those hijackers ultimately boarded flight 77, which later, of course, crashed into the Pentagon. And in that crash, 64 people on the plane and 125 people on the ground were killed.

The scientist who first gave us the black hole theory today admitted he was wrong rejecting the decades old theory that made him famous. Stephen Hawking says matter is and does escape from black holes.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): It was a theory that captured the imagination, the massive collapse of all matter at a point in space so profound nothing could escape destroying everything inside of it. It was the theory on which Stephen Hawking built his career and reputation, his book "A Brief History of Time" popularized his theory, sold 10 million copy, made the physicist a household name, and unlikely figure of pop culture. Now the scientist who is crippled by a motor neuron disease says he was wrong. Matter can and does escape a black hole. The admission cost Hawking, not his career but an encyclopedia, the price of a bet he made with an American physicist, John Preskill.

JOHN PRESKILL, CALTECH: I always hoped when he conceded this there would be a witness, but this really exceeds my expectations.

TUCKER: Now the scientific community eagerly awaits the explanation of how that matter, that information escapes. Beyond science fiction fans and scientists this may seem like an obscure theory. Yet, while complex understanding black holes could create new understandings about our universe.

SAMIR MATHUR, OHIO STATE UNIVERSITY: There i a deep between space time and matter that we have been trying to get at for so many years. I think all these threadings meet at the black hole. If one could understand how information comes out of the black hole, we will understand something very important about the interrelation of space, time and matter. TUCKER: Hawking apologized for his reversal warning them if they enter a black hole they'll be returned to this dimension and in a mangled form. It's not often a genius admits a mistake, probably only about once in a blue moon so it can be no coincidence that July is a blue moon month.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: Only Bill Tucker would have worked out the blue moon reference.

Joining me to talk more our expert on all things celestial, Charles Liu astrophysicist at the Museum of Natural History. Good have you with us, Charles.

CHARLES LIU, ASTROPHYSICIST: Always a pleasure.

DOBBS: This is great credit and also some consternation surrounding Stephen Hawking saying, hey, I'm wrong.

LIU: Scientists do that all the time. A lot of folks don't realize that we often change our views and opinions based on new discoveries and new ideas.

DOBBS: What new discovery says to Stephen Hawking with the support of Albert Einstein in point of fact that a black hole is dense matter and a rip and tear and time space continuum from which no one or no thing can escape.

LIU: Well, Stephen Hawking is best known for his theory on so- called Hawking radiation and showed a black hole could lose some of its matter and energy, but it would come out unrecognizably. It's as if you put an apple in a big black blender and you could get some of the matter out but you couldn't know that it was an apple.

DOBBS: You couldn't recognize it.

LIU: Right. Now, Stephen Hawking has used a new mathematical technique he hasn't used before on this problem.

DOBBS: Quantum gravity.

LIU: Yes, and what's called a Euclidean Path Integral, and he has concluded that he can actually trace the particle's path into and back out of a black hole and still keep the information and that's why he thinks he is wrong in the first place.

DOBBS: That's why he thinks he's wrong in the first place mathematically suggesting both conclusions and only mathematically will we know whether one or the other can be substantiated by the community of physicists including yourself. Meeting in Dublin, the 17th international meeting, what's the consensus to this point?

LIU: Well, it's such a new result that the consensus isn't in yet, but I would say that this is not the final word. It basicly...

DOBBS: I would hope not.

LIU: Yes, Professor Hawking is conceding that when you take the apple out of that blender you may get applesauce, but you don't know exactly how that operates and what it's working on, so there's still a lot left to learn.

DOBBS: You mentioned Hawking Radiation, the idea that energy at least in quantum theory it's sometimes hard to tell what's energy and what's matter, leaks away from the edge of that black hole. But at the same time, we have stream theory which is a quite different approach, both mathematically and conceptually to understanding the relationship between energy, matter and what becomes objects at least in our perception.

Where does that fit into all of this?

LIU: Well, stream theory is sort of the next great idea. If we think of the universe not as all there is, but rather just three dimensions of space and one dimension of time there's actually a possibility that much more exists beyond our universe that we can't sense or understand.

DOBBS: When you say beyond, you're talking about in terms of the cosmos, but also in terms of the physical makeup of that which is in point of fact us.

LIU: Exactly. So every one of our subatomic particles that makes us who we are actually is a very complex so called stream, that reaches beyond space and time as we know it, and may interact in strange and unfathomable ways.

DOBBS: And, yet, it's minimal point, matter, existence, things, are they made up of 11 strings, 12 or 14?

We don't know, do we?

LIU: No idea and we can't prove it experimentally for quite some time. But the mathematics is very sound and very interesting and hopefully we'll be able to prove it with real observation sometime soon.

DOBBS: Once again, we have a debt owed you and Stephen Hawking for provoking our thoughts and our imagination. And we appreciate it Charles, thank you.

LIU: I'm no Stephen Hawking, but I'm happy to be here.

DOBBS: You're our Stephen Hawking, by golly. And we thank you for being so.

LIU: Thanks, Lou.

DOBBS: Still ahead "Mission Critical," our special report on the future of space exploration. Tonight we look at the privatization possibilities in space. Stay with us.

(COMMERCIAL BREAK)

DOBBS: "Mission Critical," our look at the future of American space exploration. Tonight we focus on the role of private companies in space exploration. One key finding of this year's Moon to Mars Commission, that NASA needs to turn over more work to the private sector to help build a self sustaining space industry in this country and to free up NASA to focus on deep space exploration.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Just south of Los Angeles, Elon Musk is trying to build a better rocket and to solve a problem that is dogging NASA, why is it so darned expensive to get into space?

ELON MUSK, CHAIRMAN & CEO, SPACEX: I'm not sure people are aware, but the space shuttle costs about a billion dollars a flight. No kidding.

VILES: Most technology gets cheaper over the decades, air travel, computing power, computers, wireless communication.

UNIDENTIFIED MALE: Three, two, one. We have booster ignition.

VILES: But access to space has been the exception, and high costs are holding NASA back. Now, NASA's new mandate is to privatize the routine stuff and focus on exploration, the frontier of space.

NEIL DEGRASSE TYSON, MOON, MARS & BEYOND COMM.: Is low Earth orbit the frontier, no. Hand it over to the private sector. If NASA wants to put a satellite into orbit let them get it off the free market enterprises, OK. Once you've done that you can focus NASA to the frontier that it does best.

VILES: In theory, privatization will re-energize NASA by driving down the cost of unmanned launches.

UNIDENTIFIED MALE: What we're doing is critical to the future of NASA. At the current prices that NASA pays for space transportation, I don't think we'll be able to achieve anything interesting in space.

VILES: The other dividend, a self-sustaining space industry beginning with unmanned launches and then perhaps space tourism.

Across the country entrepreneurs are placing their bets. Amazon.com founder Jeff Bezos has started Blue Origin, a space research company. Microsoft co-founder Paul Allen hired Burt Rutan to build Space Ship One and Elon Musk who made fortune on Internet software is building, without government support, the least expensive rocket ever, the $6 million Falcon 1. His first customer, the Pentagon which will use Falcon later this year to launch Tact Sat One (ph), a tactical satellite. (UNINTELLIGIBLE) goes to the launch pad at Vandenberg Air Force Base in 69 days.

(END VIDEOTAPE)

VILES: Lou, this is not a business for those who worry about pennies per share and quarterly earnings but these entrepreneurs are convinced there is a business in space and like all explorers they want to be there first -- Lou.

DOBBS: High risk and high reward, the essence of the space business and privatization. Peter Viles, thank you, sir.

A different kind of mission today in Tennessee. The phrase "going on a beer run" took on a whole new meaning in Rogersville Tennessee. Two inmates in the county jail escaped after the doors were accidentally left unlocked. Their mission to buy beer. And to return to jail. We are told reliably the mission was a success. They even propped jail door open with a Bible. When the beer ran out, two other inmates pulled the same stunt. Authorities say despite their decision to return, the inmates will still be held responsible and charged with escaping.

When we continue, a rush of cheap Chinese imports is hurting American sock makers. We'll have an update on what the Commerce Department has decided to do about it. A follow-up on our report of last evening. Stay with us. Progress is being made.

(COMMERCIAL BREAK)

DOBBS: Updating a story we brought you last night. The Commerce Department today announced it will consider imposing temporary quotas on imports of Chinese socks. The American sock industry is one of the few remaining parts of the apparel industry in this country, but it's lost half its market share over the past several years. The Commerce Department says it's expected to make a final decision within the next three months. Advocates of those quotas say socks are the last sector in the textile industry in which American companies have dominant market share.

On Wall Street today, the Dow suffered the biggest loss in two months. The Dow down more than a hundred points. The Nasdaq dropped nearly 43 points to its lowest close this year, the S&P down almost 15. Christine Romans is here to bring us up to date -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, on a day Alan Greenspan is talking up the economy investors turn tail. Maybe it was all the badgering from Democrats in the House. Representative Carolyn Maloney bemoaned stagnant wages and anemic job growth. Not to mention that 47 states have higher jobless rates today than when the recession began.

DOBBS: Say that again.

ROMANS: 47 states have higher jobless rates today than when the recession began. It might have also been news about almost 4,000 jobs cuts. Eckerd slashing 1,400, Kodak firing another 1,000 and Capital One Financial is axing 1,400 call center positions, 300 of those jobs heading overseas.

DOBBS: Don't tell me.

ROMANS: Greenspan thinks the jobs market will improve though and at the same time endorses outsourcing American jobs to cheap overseas labor markets. Lou, I asked the president's economic adviser Steven Friedman for the White House view. How do you balance giving a job to every American who wants one against shipping those jobs overseas? He said education is the answer. The president thinks with proper education Americans will have no problem competing against foreign workers -- Lou.

DOBBS: Treasury Secretary John Snow said that critics of outsourcing to cheap overseas labor markets need perspective. I would only say to Secretary Snow and adviser Friedman actually they need a little perspective, too. Education is a long-term proposition and jobs are a short-term critical necessity. I would hope they would consider thinking about that at least. Christine, thank you very much.

ROMANS: You're welcome.

DOBBS: Still ahead here, the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results now of our poll. Somewhat lopsided to say the least. Three percent of you say non-citizens should be allowed to vote in U.S. elections. Ninety-seven percent of you say no.

Thanks for being with us tonight. Please join us tomorrow when the ranking Democrat on the Senate intelligence committee, Senator Jay Rockefeller joins us to discuss the final 9/11 commission report.

And former presidential candidate Senator Gary Hart, he joins us to talk about his new book, "The Fourth Power on American Foreign Policy in the 21st Century."

Please join us. For all of us here, thanks for being with us tonight. 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 July 21, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: Tonight, one day before the September 11 commission releases its final report, President Bush said he would have done everything possible to stop the terrorists if he had any inkling that al Qaeda was about to attack.
(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Every American can be certain that their government will continue doing everything in her power to prevent a terrorist attack.

(END VIDEO CLIP)

DOBBS: The 9/11 commission today briefed National Security Adviser Condoleezza Rice about its report. The commission likely to be highly critical of both the Bush and Clinton administrations.

Should the president appoint a new intelligence czar to oversee our intelligence agencies? We'll have two opposing views in our Face Off tonight.

Illegal aliens may have the right to vote in school board elections in San Francisco. Senator Dianne Feinstein of California has vowed to fight that proposal. She's our guest tonight.

The AFL-CIO accuses the Labor Department of failing to help workers who have lost their jobs to cheap overseas labor.

And, tonight, an astonishing admission by one of the world's most distinguished astrophysicists. Stephen Hawking now says his theory that black holes consume everything within their force field is wrong. Astrophysicist Charles Liu joins us.

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, July 21. Here now for an hour of news, debate and opinion is Lou Dobbs.

DOBBS: Good evening.

President Bush today said his administration is doing everything possible to prevent another terrorist attack against the United States. President Bush made his remarks just before the release of the September 11 commission report tomorrow.

That report is expected to be highly critical of the government's intelligence gathering before September 11. The commission is also expected to say both the Bush and Clinton administrations missed 10 potential opportunities to stop the hijackers.

White House Correspondent Dana Bash reports -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, the chair and vice chair of the 9/11 commission were here at the White House today briefing the president's national security adviser, chief counsel and chief of staff on the findings of the report. Mr. Bush was supposed to get a feel from his staff at some point today, but he will be presented formally with the report tomorrow.

But we do have, according to several congressional sources, some of what is in the nearly 600-page report. First of all, some of the recommendations: A new national intelligence director, they say, is in order, somebody who will have budget authority and who will head up a national counterterrorism center. That person would make recommendations, that organization also would make recommendations on operational planning, but not necessarily have the authority to execute it. The bottom line from the commission on this point: too much overlap still on intelligence agencies, not enough coordination.

There you see the findings. Ten examples, they will say, of missed opportunities by the Clinton and Bush administrations, but sources will say that none of these was necessarily a silver bullet that could have prevented 9/11.

The commission will also not determine whether or not 9/11 was preventable at all, and sources say that the commission will say that neither the president, this President Bush, or President Clinton did enough to face the al Qaeda threat, to try to attack that threat, but there has certainly been a lot of politics, Lou, as you know, surrounding that issue, whether or not either president could have prevented 9/11.

This President Bush defended not only himself, but his predecessor today.

(BEGIN VIDEO CLIP)

BUSH: Had we had any inkling whatsoever that terrorists were about to attack our country, we would have moved heaven and earth to protect America, and I'm confident President Clinton would have done the same thing. Any president would.

(END VIDEO CLIP)

BASH: Now there are obviously still going to be some other controversial issues coming out in this report tomorrow, like whether or not there was a connection, an operational connection between Iraq and al Qaeda. The commission will still say that they don't believe that there was, and, as we've been reporting this week, they will say that Iran did have a role at least in allowing some of the hijackers to pass through their country before coming to the United States -- Lou.

DOBBS: Dana, one of the controversies surrounding Sandy Berger's removal of classified documents from the National Archive. What's the president's position on that?

BASH: Well, he didn't say a word about it today, Lou. He was asked about it. He refused to comment, saying it was an ongoing investigation.

But there was a new wrinkle here at the White House on that. As you know, some of the controversy, according to the Kerry campaign, is that they think Republicans leaked this in order to try to take away from anything embarrassing that could have been in this commission report for the president.

Yesterday, the White House said that that couldn't be possible because nobody here knew about this investigation. Today, White House spokesman Scott McClellan said some people here did actually know.

(BEGIN VIDEO CLIP)

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: I first became aware of it when the news reports came out, but my understanding is that this investigation has been going on for several months and that some officials in our counsel's office were contacted as part of the investigation.

(END VIDEO CLIP)

BASH: Now McClellan said the reason why members of the White House counsel's office were notified is because this White House was in charge of making sure that all relevant information from the Bush White House and the Clinton administration got to the commission. That's why they were told.

But they again flatly deny that anyone here at the White House or at the Bush campaign had anything to do with leaking the fact that this investigation is going on -- Lou.

DOBBS: Dana, thank you.

Dana Bash from the White House.

Leaders of the September 11 commission have also briefed congressional leaders about their report, but, tonight, both Republican and Democratic lawmakers are steering clear of any partisan battles on this report.

Congressional Correspondent Joe Johns with the report -- Joe?

JOE JOHNS, CNN CONGRESSIONAL CORRESPONDENT: Lou, there were some aftershocks today about the uproar over Sandy Berger, and then, as you mentioned, a lot of the rhetoric here on Capitol Hill started moving toward bipartisanship, and this is very interesting, of course, simply because this is a highly charged political atmosphere here on Capitol Hill less than a week from the Democratic national convention.

So the question, of course, is why. Why have people started pulling back on what they're saying? Both Democrats and Republicans telling me this is one of those situations where it is a very sensitive issue, the voters are watching, you don't want to go too far, and, most importantly, one Democratic staffer put it, this report is expected to be critical of the United States Congress.

There are -- a lot of people expected a lot of criticism of the administration and the agencies, but it is also going to be critical of the Congress for its oversight, we are told.

So now let's listen to a couple of the leaders on what they've had to say about this report.

(BEGIN VIDEO CLIP)

SEN. BILL FRIST (R), MAJORITY leader: That this is a nonpartisan report. It is a bipartisan report, AND that spirit of nonpartisanship is very, very important. It came across in the commission members -- it came across in the way it is being received by members of the United States Senate, and, speaking for the Democratic leader and myself, our response to that report will be, I predict, very bipartisan in terms of action that we'll take in the United States Senate.

REP. NANCY PELOSI (D), MINORITY LEADER: For many of us who've been involved in intelligence matters and, of course, events surrounding 9/11 have always considered any consideration of this issue as sacred and hallowed ground, that we go into it with the mission to find answers for the families, to reduce risk to the American people. It's not about assigning blame. It's about preventing any future acts of terrorism to our country.

(END VIDEO CLIP)

JOHNS: Now don't necessarily expect for that tone to last forever. As one member of the Senate suggested, what people are going to do once the report comes out is start picking out those parts of the report that prove the points they want to prove.

So one of the things that is expected to happen tomorrow after the report comes out, just about the entire House leadership is going to hold a news conference to tout the things they think government has done well since September 11 -- Lou.

DOBBS: Joe, thank you very much.

Joe Johns from Capitol Hill.

In Iraq, the withdrawal of Filipino troops appears to have encouraged insurgents there to take more foreign workers hostage. A little-known insurgent group has taken six more foreigners hostage -- three of those hostages from India, two from Kenya, one from Egypt. The insurgents are demanding those three countries withdraw their personnel, even though India, Kenya and Egypt do not have any troops in Iraq.

Earlier this week, the Philippines withdrew its soldiers from Iraq after insurgents threatened to kill a Filipino hostage. That hostage was released yesterday. Saudi Arabian troops and police hunting radical Islamist terrorists have made a gruesome discovery. They found the head of murdered American hostage Paul Johnson during a raid on a terrorist hideout in the Saudi capital of Riyadh.

Saudi Arabian security forces killed two radical Islamists during that raid. Police also found a large quantity of weapons and explosives. The weapons included a shoulder-fired anti-aircraft missile.

Most United Nations members have been unwilling to help the United States in Iraq in any way. Remarkably, those countries also appear reluctant to assist the United Nations in Iraq. Not one country has offered to send troops to protect U.N. staff who will be working on elections and reconstruction.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): The United Nations voted a month and a half ago to send a thousand troops to Iraq. But, so far, member countries have not stepped forward to provide them.

U.N. Secretary General Kofi Annan gave fair warning today that the lack of support will impede the U.N. role in Iraq.

KOFI ANNAN, U.N. SECRETARY GENERAL: That security force is essential. Otherwise, we will not be able to deploy in any large numbers.

PILGRIM: The role of those U.N. troops is to act as a security force, to protect a U.N. contingent as they work on preparing for elections, a critical part of the political process that has nothing to do with combat.

NILE GARDINER, THE HERITAGE FOUNDATION: Well, this is hugely embarrassing for the United Nations, and it clearly does demonstrate the rank hypocrisy of countries such as France and Germany, key members of the U.S., who have been clamoring for a key United Nations role in Iraq, but have been unwilling even to provide one single soldier.

PILGRIM: Last August, an attack devastated U.N. operations in Baghdad, killing 22 people, including U.N. high commissioner for human rights Sergio de Mello. U.N. personnel were withdrawn at that time.

But things have moved on since then, and U.N. Secretary General Kofi Annan named a new envoy to Iraq last week. Scores of countries have been approached for troops. Some suggest leaders of France and Germany, both critics of the war, are unwilling to abandon their anti- war stance for domestic political reasons.

PATRICK BASHAM, CATO INSTITUTE: They're vulnerable in the sense that they are individually unpopular in their own right at the moment. Things are not going well for them politically, and so anything else that goes wrong could, you know, be the catalyst for defeat at the next election in both cases.

(END VIDEOTAPE)

PILGRIM: Now some countries don't want to pay for the cost of sending troops. They want wealthier nations to foot the bill, and, if other countries do not take up the task, then the mission will likely fall to the U.S.-led coalition forces once again -- Lou.

DOBBS: And, as you point out, both Schroeder in Germany and Chirac in France immensely unpopular. Their parties in desperate straits.

PILGRIM: They're in very bad shape politically, and so they don't want to risk anything.

DOBBS: Yet they persist in the policies that are part of the reason for their decline.

Kitty, thank you.

Kitty Pilgrim.

The United States may send as many as 400 Special-Operations troops to Greece to help protect the Olympics. The unprecedented military deployment would be in addition to U.S. plans to send security agents to guard American athletes.

Senior Pentagon Correspondent Jamie McIntyre has the story.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): Not since the 1972 Olympics in Munich, when a Palestinian group, Black September, killed 11 Israeli athletes, has the specter of terrorism hung so heavy over the Olympic Games.

U.S. intelligence indicates al Qaeda has at least the desire, if not the intent, to strike during next month's summer games in Athens, Greece, something confirmed by Defense Secretary Donald Rumsfeld at another high-profile event last month, the NATO summit in Istanbul.

DONALD RUMSFELD, SECRETARY OF DEFENSE: There's been a great deal of chatter in the system that they will try to disrupt international events like this, like the Olympics.

MCINTYRE: Greece has been training its police and military to deal with the increased threat and insists it will provide all security for the athletes for more than 200 countries.

But, as a NATO nation, it's also requested support from the alliance, including NATO AWACS airborne radar planes, sea patrols beyond Greek territorial waters and some specialized capabilities, such as a chem-bio unit from the Czech Republic. But the Pentagon says U.S. troops, including highly trained counterterrorist commandos, could also be part of the mix once NATO acts.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: And once that decision is made, then we'll look at the kind of capabilities that might be required to help.

UNIDENTIFIED MALE: Involving U.S. troops?

MYERS: It's all possible.

MCINTYRE: But the State Department is not confirming a "New York Times" report that some 100 armed American agents, some from the State Department's diplomatic security service, will be used as bodyguards for athletes and dignitaries.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: We're cooperating closely with the Greek government. We're doing many things together to support them, but, as far as specific measures and agreements, I really can't get into that.

(END VIDEOTAPE)

MCINTYRE: If U.S. Special-Operations forces are committed to the Olympics, Pentagon officials say they'll likely stay in the background ready to be called on on short notice if there is a terrorist attack. But the Greek government is making it clear that it believes providing the front-line security for the Olympic Games is exclusively its responsibility -- Lou.

DOBBS: Jamie, this has an element, if you will, given all of the rumors and concerns about terrorism at Athens, is looking almost as if a carefully staged perhaps P.R. approach to suggest greater security on the part of the United States without a definite commitment of troops. What is your thinking on that?

MCINTYRE: Well, there's a couple of things at play here. One is the sensitivity of the Greek government, which wants to show that it can handle the games and the security. There's the concern of the United States making sure that it does have forces in place in case it needs to protect its own interests, and then, of course, there's just projecting a strong image as hopefully a deterrent, that terrorists are known to go for soft targets, weak spots. If they think it's really -- the security is really tight, maybe they won't try anything.

DOBBS: And NATO which has been reluctant to be involved in a number of areas, including Iraq -- their role here?

MCINTYRE: Well, I think it's pretty clear that NATO will provide support. Some things are easy, like the AWACS planes. Some things are not as easy, and the United States, of course, is the most capable member of NATO, so the U.S. will definitely be playing a role, but they're going to try and keep it low key and let the Greeks be out in front and show that they're in charge.

DOBBS: Jamie McIntyre from the Pentagon.

Thank you.

Still ahead, the AFL-CIO says the Labor Department has failed to help American workers who have lost their jobs to cheap overseas labor. We'll have that special report.

Illegal aliens could soon win the right to vote in school board elections in the City of San Francisco. Senator Dianne Feinstein says the proposal is simply unconstitutional. She's fighting it. She's our guest.

And in Face Off tonight, two opposing views on whether an intelligence czar should be appointed to supervise the country's 15 intelligence agencies.

Those stories and more coming right up.

(COMMERCIAL BREAK)

DOBBS: Exporting America tonight. A scathing new report on a Labor Department program designed to help Americans who have lost their jobs to cheap foreign labor markets. The AFL-CIO report found the trade adjustment assistance program failed to provide adequate help for laid-off Americans, and, in some cases, American workers were turned away and denied help when they needed it most.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): When the LTV Steel Company folded in 2001 because of a surge of foreign steel imports, some of the employees received benefits and training through the Labor Department's trade adjustment program. But the company's contract workers doing the same job did not.

BOB WEINZETL, LAID-OFF WORKER: They were going their merry way, they had some benefits, they were going through additional training, and we were sitting there basically having done -- you know, sat right next to each other in offices, and we couldn't get anything.

SYLVESTER: After a two-year fight, the U.S. Court of International Trade agreed the Labor Department had unfairly denied the contract workers their benefits. Under the law, factory workers who are directly displaced by trade are entitled to extended unemployment benefits and job training.

The AFL-CIO found at least eight similar cases where the Labor Department had wrongfully denied assistance to laid-off employees. One federal judge ruling in favor of Chevron workers who were denied benefits wrote, "The case stands as a monument to the flaws and dysfunctions in the Labor Department's administration of the nation's trade adjustment assistance laws." That case took four years to resolve. THEA LEE, AFL-CIO: This is something that really defeats the whole purpose of the program. The program is really an emergency assistance program for workers who lose their jobs because of trade impacts, and it's simply not working right now.

SYLVESTER: The Labor Department blames the court system for the delays and says many of the cases were inherited.

JANE MORRIS, DEPARTMENT OF LABOR: The interesting part about the cases that are cited is that the majority of those cases were started under the Clinton administration, and the Bush administration is simply trying to clean that up. We're trying to do the right thing for workers.

SYLVESTER: But denied assistance is not the only problem. States have also run out of federal funding for training assistance programs, leaving dislocated employees out of work and out of luck.

(END VIDEOTAPE)

SYLVESTER: The AFL-CIO also criticizes the Labor Department for not doing enough to publicize programs to help displaced workers. One example is a health-care tax credit for workers who lose their jobs due to free trade. Only 6 percent of the workers who are eligible have actually received the benefit -- Lou?

DOBBS: Lisa, thank you very much for that report, as troubling as it is.

Well, the Labor Department is working to protect another group of workers, immigrants and illegal aliens, specifically from Mexico. Labor Secretary Elaine Chao today signed a joint declaration with Mexico's foreign secretary.

In that joint declaration, both countries promise to work for safer working conditions and better pay for Mexicans who live in this country. That declaration offers no new funding to back up the promises.

Secretary Chao called it historic.

(BEGIN VIDEO CLIP)

ELAINE CHAO, SECRETARY OF LABOR: Hispanics are an integral part of the American workforce, and Mexican workers comprise the largest component within the Hispanic workforce. This administration is committed to ensuring that Hispanic workers are safe on the job and fully and fairly compensated for their work.

(END VIDEO CLIP)

DOBBS: Mexico's foreign secretary said the declaration helps fulfill President Vicente Fox's goal of improving the quality of life for all Mexicans in the United States, including illegal aliens.

Well, San Francisco could soon give illegal aliens and other non- citizens the right to vote. The city's board of supervisors approved a measure that would allow parents of public school children to vote in school board elections, even if they're non-citizens. San Francisco residents will vote on that measure in November.

My guest tonight says the proposal is nothing short of unconstitutional. Senator Dianne Feinstein of California joins me now from Capitol Hill.

Senator, good to have you with us.

SEN. DIANNE FEINSTEIN (D-CA), INTELLIGENCE COMMITTEE: Thank you very much.

DOBBS: This is -- I think most Americans are shocked that such a proposal would even be tendered. What is the motivation?

FEINSTEIN: Well, the motivation, I think is to begin to extend voting rights to people who are non-citizens, and Article II, Section 4 of the California constitution says that if you are a citizen and a resident of California and 18 years old, you may vote in California elections. It seems to me that that's pretty clear.

I think there's an attempt to kind of get the camel's nose under the tent, so to speak, and say, well, because people have children in school, therefore, they should be able to vote, but that's just the beginning because we have elected transportation boards. So, if people use transportation, then should they be able to vote in, say, a Bay Area Rapid Transit election?

My view is that it's unconstitutional. There was a proposed initiative in 1996 that was held unconstitutional. And secondly, I believe this -- and, you know, my own mother is a naturalized or was a naturalized citizen, and I believe that the rights of citizenship are important, and, among those rights, the most basic and the most important right is the right to vote, and I don't think we should dilute citizenship by giving people who are not citizens the right to vote.

How do you make the difference? How do you know whether someone's here legally or illegally? So I think it's opening a Pandora's box, if you will.

I am hopeful that the people of San Francisco will see that and not vote for it, but, even if they do, I think there's going to be a major court case.

DOBBS: A major court case and a major political issue is building in this country around these kinds of rights, which are being extended. The board of supervisors voted, Senator, as you know, 9-2 on this measure, and one only wonders why a board of supervisors would not also -- if it is good for school boards, as you say, why in the world would it not be extended to municipal elections at large? Why not state elections? Why should there be any distinction?

FEINSTEIN: Well, obviously, that could be the next step, and that's why I say I think it's the camel's nose under the tent, and my belief is this, that we should make naturalization available to people who come to this country, who are legally entitled to be naturalized. We should do everything we can -- and I have tried to do this -- to shorten the wait wherever we can, but citizenship has to mean something or else this place is just a place, it isn't a United States of America.

DOBBS: I think that's wonderfully well put, and the fact is that one can be against illegal immigration and not be anti-immigration still, and we thank you for eloquently pointing out that fact.

Let's turn to another controversy in Washington, D.C. Sandy Berger, the respected national security adviser of the Clinton administration, walking out purportedly at least in one charge with classified documents in his socks from the National Archive. What in the world, in your judgment, is going on here?

FEINSTEIN: Well, you know, last night, I went home, and I turned on the television, and almost as if they were talking points, I saw one Republican after the other come to the press and accuse Sandy Berger of all kinds of things, and I thought, you know, if the shoe were on the other foot, we wouldn't do that. We would wait to see what the facts were.

I don't think we know yet what the facts were. I think there were copies of an after action memo surrounding the millennium and terrorist efforts during that period of time. I want to wait until this thing sorts itself out.

But let me say this about Sandy Berger. I watched Sandy Berger for eight years, and this was a man of distinction. He served the country well. He was honest and true, and it really makes me angry to see people so ready to condemn him without knowing what the facts are.

DOBBS: And I should point out to our viewers that not only are you a member the Immigration Border and Citizenship Committee in the Senate, but also a member of the Senate Select, and, Senator Feinstein, we, as always, appreciate your being here. Thank you.

FEINSTEIN: Thank you.

DOBBS: Turning now to the subject of our poll: Do you believe non-citizens should be allowed to vote in U.S. elections? Yes or no? Cast your vote at cnn.com/lou. We'll have the results for you later in the broadcast.

Coming up right here, the growing debate over whether this country needs a new high-level intelligence chief. Former Assistant Defense Secretary Frank Gaffney and Peter Brooks of Heritage Foundation will Face Off on the issue coming right up.

And Mission Critical. Many in the scientific community say the future of space exploration depends on private investment. We'll have that special report.

All of that and more still ahead here tonight.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.

DOBBS: The independent commission investigating the 9/11 terrorist attacks report their final findings tomorrow. The commission is expected to call for the creation of a cabinet level intelligence czar to oversee the nation's 15 intelligence agencies.

The debate over whether that post should be created, whether it's needed is the focus of our "Face-Off" tonight.

Peter Brooks says the CIA director doesn't have the authority to run the entire intelligence community and a new position is needed. He's a senior fellow at the Heritage Foundation.

Frank Gaffney says creating a new head of intelligence during wartime is simply too dangerous. He's president and CEO of the Center for Security Policy, former assistant secretary of defense. Both joining us tonight from Washington.

Peter, let me begin with you. You know, we have a massive Homeland Security Department. We have, whether checkered results or not, in the recent past, a CIA and an FBI that has, historically at least, done pretty well. Why do we need a czar?

PETER BROOKS, HERITAGE FOUNDATION: Well, one of the problems is is that the director of central intelligence isn't, he is not a director of central intelligence, he's basically the director of the Central Intelligence Agency. There are 15 intelligence agencies, seven of those belong to the secretary of defense and 80 percent of the intelligence community budget belongs to the secretary of defense.

We're no longer in a situation here where we're fighting the Cold War, we're fighting the Soviet Union, potential to fighting the Soviet Union. We're fighting new transnational threats, such as terrorism and weapons of mass destruction. So I think we need somebody in charge of the entire intelligence community to reduce the vulnerabilities and seams we're seeing coming out of the reports on Iraqi weapons of mass destruction and the 9/11 commission.

DOBBS: Frank, you don't agree?

FRANK GAFFNEY, CENTER FOR SECURITY POLICY: I don't agree. I think what Peter has described is true, the question is, in time of war, and I think we have to keep reminding ourselves that's the context in which these decisions are being made, are you going to do something that's pretty much cosmetic, which is sort of create another box in the wiring diagram, which won't really do much to give this individual more authority than the current director of central intelligence has, or are you really going to start ripping things up and giving him authority and budget responsibility in what's more of a line sense over those agencies that are now in the Defense Department, I think for very good reason.

If you do that you're clearly going to start introducing dysfunction, probably a lot more impediments to good intelligence products, and that's actually what we're supposed to be focusing on here is how do you get better products. I think that's through competitive intelligence, not through more integrated, streamlined and possibly sort of homogenized intelligence, which might be the net result of what Peter is talking about at best.

DOBBS: Is that the net result, Peter?

BROOKS: I don't think so. I do agree with Frank, that I am concerned about, last time we organized for national security was 1947, after World War II, before the Korean War when we were at peace. We're no longer at peace. So I do have those same concerns as Frank regards during wartime.

But the fact of the matter is, we have the most fragmented and dysfunctional intelligence community than we perhaps have ever had, and we saw these results, not only with Iraq WMD, but also with 9/11.

We need to consolidate more. I'm not saying we should put them all under roof like the Department of Homeland Security, but I think we should have more of a greater unity of effort, more consolidation, more coordination and more communication across the intelligence agencies.

DOBBS: Government in Washington loves to grow. Government loves to concentrate its power, both bureaucratic and political. To do so with intelligence is sort of anti-intuitive at this point, not counterintuitive, anti-intuitive, because decentralization seems to be the direction which most successful organizations are going. Why the cry now for more centralization?

GAFFNEY: I would actually say that while the bottom line for the report we're expecting tomorrow will be let's create a new box in that wiring diagram, much of the content of its report, and certainly the content of the Senate Select Committee on Intelligence report released with great fanfare two weeks ago, was we need better competitive analysis and for that matter collection of intelligence.

I don't know that you get there by creating a new czar whose job is basically to try to stovepipe, or otherwise streamline intelligence. And I think Peter and I agree, basically on the fundamental here: We're not doing everything perfectly right now.

What we may disagree about is can we make it better? Can we make the job we're working on at the moment, hopefully, which is getting the product better by increasing exactly the kind of thing you're saying is contrary to most good business practice: greater centralization, probably accompanied by greater bureaucratic overlays. I don't know that will get you where you need to go from here.

BROOKS: Lou, I think one of the things, it's very important we have one person setting the priorities, setting the vision for the intelligence community and right now we have six or seven cabinet members who have responsibility for intelligence functions. So, I think it's very important that one person is in charge and that allows us to address the new national security environment that we have today.

DOBBS: Shouldn't that really, as you point out, members of the cabinet, shouldn't that vision, that direction, that strategy not only on foreign policy and intelligence, but in all strategic issues come from the president himself or herself?

BROOKS: Absolutely. Well, I mean certainly the vision for it is, but the day-to-day management should come from a cabinet level official or cabinet official, not from the president. The president doesn't micromanage our different agencies. He relies on...

DOBBS: I was just -- you said vision and strategy. I don't look at that as micro management. That seems to me to be highly executive.

GAFFNEY: Can I get in here?

DOBBS: Sure.

GAFFNEY: The director of central intelligence has, I think, got that kind of authority today. An ability to set priorities to establish a vision, if you will, on the day-to-day management side. The question is, do you want to rip out of the Defense Department, the budgetary decisionmaking that goes with those priorities?

They're done in a consultative collaborative way today. I think that you're likely to see real dysfunction if you do that kind of bifurcation and at worse perhaps, a real disservice to the men and women in uniform who are relying upon those intelligence agencies right now to support their tactical combat and other operations.

DOBBS: And, Peter, I'm give you the last word with this statement in front of it, if I may. It always seems that in moments of criticism and the search for accountability, Washington reflexively, goes to organization or funding rather than looking to direct accountability in how to really make the operation better. Where is Congress' oversight? Where is the CIA, the FBI in terms of their future strategies and approaches? How do you respond to that? You get the last word.

BROOKS: Well, I think it's important we look seriously at all these recommendations. We're going to see the 9/11 commission's recommendations tomorrow. We still have not seen the Senate Select Committee's intelligence recommendations. And the House has recommendations. So I think we need to look at all these seriously and look at things and not just change things for change sake. We have to change things to make more efficient and more effective.

DOBBS: Peter Brooks, Frank Gaffney, we thank you both for aiding, we hope, our policymakers in that effort.

GAFFNEY: Here, here.

DOBBS: Coming up next, "Mission Critical," our special series of reports this week looking at privatization and the business side of space exploration. Is it an essential component of NASA's space future? Also, one of the world most famous scientists, Stephen Hawkin, says one of his theories on black holes is simply wrong. Astrophysicist Charles Liu joins me. We'll be talking about black holes, worm holes, cosmology, the Big Bang and Stream Theory. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Now some breaking news. About the September 11th attacks. Never before seen video, if we could see that video, showing the September 11th hijackers, five of them passing through security at the Dulles Airport in Washington. Now, four of the hijackers were actually pulled aside for additional security checks after they set off security alarms. But security guards at Dulles Airport then allowed those hijackers to proceed to their flight. Those hijackers ultimately boarded flight 77, which later, of course, crashed into the Pentagon. And in that crash, 64 people on the plane and 125 people on the ground were killed.

The scientist who first gave us the black hole theory today admitted he was wrong rejecting the decades old theory that made him famous. Stephen Hawking says matter is and does escape from black holes.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): It was a theory that captured the imagination, the massive collapse of all matter at a point in space so profound nothing could escape destroying everything inside of it. It was the theory on which Stephen Hawking built his career and reputation, his book "A Brief History of Time" popularized his theory, sold 10 million copy, made the physicist a household name, and unlikely figure of pop culture. Now the scientist who is crippled by a motor neuron disease says he was wrong. Matter can and does escape a black hole. The admission cost Hawking, not his career but an encyclopedia, the price of a bet he made with an American physicist, John Preskill.

JOHN PRESKILL, CALTECH: I always hoped when he conceded this there would be a witness, but this really exceeds my expectations.

TUCKER: Now the scientific community eagerly awaits the explanation of how that matter, that information escapes. Beyond science fiction fans and scientists this may seem like an obscure theory. Yet, while complex understanding black holes could create new understandings about our universe.

SAMIR MATHUR, OHIO STATE UNIVERSITY: There i a deep between space time and matter that we have been trying to get at for so many years. I think all these threadings meet at the black hole. If one could understand how information comes out of the black hole, we will understand something very important about the interrelation of space, time and matter. TUCKER: Hawking apologized for his reversal warning them if they enter a black hole they'll be returned to this dimension and in a mangled form. It's not often a genius admits a mistake, probably only about once in a blue moon so it can be no coincidence that July is a blue moon month.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

DOBBS: Only Bill Tucker would have worked out the blue moon reference.

Joining me to talk more our expert on all things celestial, Charles Liu astrophysicist at the Museum of Natural History. Good have you with us, Charles.

CHARLES LIU, ASTROPHYSICIST: Always a pleasure.

DOBBS: This is great credit and also some consternation surrounding Stephen Hawking saying, hey, I'm wrong.

LIU: Scientists do that all the time. A lot of folks don't realize that we often change our views and opinions based on new discoveries and new ideas.

DOBBS: What new discovery says to Stephen Hawking with the support of Albert Einstein in point of fact that a black hole is dense matter and a rip and tear and time space continuum from which no one or no thing can escape.

LIU: Well, Stephen Hawking is best known for his theory on so- called Hawking radiation and showed a black hole could lose some of its matter and energy, but it would come out unrecognizably. It's as if you put an apple in a big black blender and you could get some of the matter out but you couldn't know that it was an apple.

DOBBS: You couldn't recognize it.

LIU: Right. Now, Stephen Hawking has used a new mathematical technique he hasn't used before on this problem.

DOBBS: Quantum gravity.

LIU: Yes, and what's called a Euclidean Path Integral, and he has concluded that he can actually trace the particle's path into and back out of a black hole and still keep the information and that's why he thinks he is wrong in the first place.

DOBBS: That's why he thinks he's wrong in the first place mathematically suggesting both conclusions and only mathematically will we know whether one or the other can be substantiated by the community of physicists including yourself. Meeting in Dublin, the 17th international meeting, what's the consensus to this point?

LIU: Well, it's such a new result that the consensus isn't in yet, but I would say that this is not the final word. It basicly...

DOBBS: I would hope not.

LIU: Yes, Professor Hawking is conceding that when you take the apple out of that blender you may get applesauce, but you don't know exactly how that operates and what it's working on, so there's still a lot left to learn.

DOBBS: You mentioned Hawking Radiation, the idea that energy at least in quantum theory it's sometimes hard to tell what's energy and what's matter, leaks away from the edge of that black hole. But at the same time, we have stream theory which is a quite different approach, both mathematically and conceptually to understanding the relationship between energy, matter and what becomes objects at least in our perception.

Where does that fit into all of this?

LIU: Well, stream theory is sort of the next great idea. If we think of the universe not as all there is, but rather just three dimensions of space and one dimension of time there's actually a possibility that much more exists beyond our universe that we can't sense or understand.

DOBBS: When you say beyond, you're talking about in terms of the cosmos, but also in terms of the physical makeup of that which is in point of fact us.

LIU: Exactly. So every one of our subatomic particles that makes us who we are actually is a very complex so called stream, that reaches beyond space and time as we know it, and may interact in strange and unfathomable ways.

DOBBS: And, yet, it's minimal point, matter, existence, things, are they made up of 11 strings, 12 or 14?

We don't know, do we?

LIU: No idea and we can't prove it experimentally for quite some time. But the mathematics is very sound and very interesting and hopefully we'll be able to prove it with real observation sometime soon.

DOBBS: Once again, we have a debt owed you and Stephen Hawking for provoking our thoughts and our imagination. And we appreciate it Charles, thank you.

LIU: I'm no Stephen Hawking, but I'm happy to be here.

DOBBS: You're our Stephen Hawking, by golly. And we thank you for being so.

LIU: Thanks, Lou.

DOBBS: Still ahead "Mission Critical," our special report on the future of space exploration. Tonight we look at the privatization possibilities in space. Stay with us.

(COMMERCIAL BREAK)

DOBBS: "Mission Critical," our look at the future of American space exploration. Tonight we focus on the role of private companies in space exploration. One key finding of this year's Moon to Mars Commission, that NASA needs to turn over more work to the private sector to help build a self sustaining space industry in this country and to free up NASA to focus on deep space exploration.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Just south of Los Angeles, Elon Musk is trying to build a better rocket and to solve a problem that is dogging NASA, why is it so darned expensive to get into space?

ELON MUSK, CHAIRMAN & CEO, SPACEX: I'm not sure people are aware, but the space shuttle costs about a billion dollars a flight. No kidding.

VILES: Most technology gets cheaper over the decades, air travel, computing power, computers, wireless communication.

UNIDENTIFIED MALE: Three, two, one. We have booster ignition.

VILES: But access to space has been the exception, and high costs are holding NASA back. Now, NASA's new mandate is to privatize the routine stuff and focus on exploration, the frontier of space.

NEIL DEGRASSE TYSON, MOON, MARS & BEYOND COMM.: Is low Earth orbit the frontier, no. Hand it over to the private sector. If NASA wants to put a satellite into orbit let them get it off the free market enterprises, OK. Once you've done that you can focus NASA to the frontier that it does best.

VILES: In theory, privatization will re-energize NASA by driving down the cost of unmanned launches.

UNIDENTIFIED MALE: What we're doing is critical to the future of NASA. At the current prices that NASA pays for space transportation, I don't think we'll be able to achieve anything interesting in space.

VILES: The other dividend, a self-sustaining space industry beginning with unmanned launches and then perhaps space tourism.

Across the country entrepreneurs are placing their bets. Amazon.com founder Jeff Bezos has started Blue Origin, a space research company. Microsoft co-founder Paul Allen hired Burt Rutan to build Space Ship One and Elon Musk who made fortune on Internet software is building, without government support, the least expensive rocket ever, the $6 million Falcon 1. His first customer, the Pentagon which will use Falcon later this year to launch Tact Sat One (ph), a tactical satellite. (UNINTELLIGIBLE) goes to the launch pad at Vandenberg Air Force Base in 69 days.

(END VIDEOTAPE)

VILES: Lou, this is not a business for those who worry about pennies per share and quarterly earnings but these entrepreneurs are convinced there is a business in space and like all explorers they want to be there first -- Lou.

DOBBS: High risk and high reward, the essence of the space business and privatization. Peter Viles, thank you, sir.

A different kind of mission today in Tennessee. The phrase "going on a beer run" took on a whole new meaning in Rogersville Tennessee. Two inmates in the county jail escaped after the doors were accidentally left unlocked. Their mission to buy beer. And to return to jail. We are told reliably the mission was a success. They even propped jail door open with a Bible. When the beer ran out, two other inmates pulled the same stunt. Authorities say despite their decision to return, the inmates will still be held responsible and charged with escaping.

When we continue, a rush of cheap Chinese imports is hurting American sock makers. We'll have an update on what the Commerce Department has decided to do about it. A follow-up on our report of last evening. Stay with us. Progress is being made.

(COMMERCIAL BREAK)

DOBBS: Updating a story we brought you last night. The Commerce Department today announced it will consider imposing temporary quotas on imports of Chinese socks. The American sock industry is one of the few remaining parts of the apparel industry in this country, but it's lost half its market share over the past several years. The Commerce Department says it's expected to make a final decision within the next three months. Advocates of those quotas say socks are the last sector in the textile industry in which American companies have dominant market share.

On Wall Street today, the Dow suffered the biggest loss in two months. The Dow down more than a hundred points. The Nasdaq dropped nearly 43 points to its lowest close this year, the S&P down almost 15. Christine Romans is here to bring us up to date -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, on a day Alan Greenspan is talking up the economy investors turn tail. Maybe it was all the badgering from Democrats in the House. Representative Carolyn Maloney bemoaned stagnant wages and anemic job growth. Not to mention that 47 states have higher jobless rates today than when the recession began.

DOBBS: Say that again.

ROMANS: 47 states have higher jobless rates today than when the recession began. It might have also been news about almost 4,000 jobs cuts. Eckerd slashing 1,400, Kodak firing another 1,000 and Capital One Financial is axing 1,400 call center positions, 300 of those jobs heading overseas.

DOBBS: Don't tell me.

ROMANS: Greenspan thinks the jobs market will improve though and at the same time endorses outsourcing American jobs to cheap overseas labor markets. Lou, I asked the president's economic adviser Steven Friedman for the White House view. How do you balance giving a job to every American who wants one against shipping those jobs overseas? He said education is the answer. The president thinks with proper education Americans will have no problem competing against foreign workers -- Lou.

DOBBS: Treasury Secretary John Snow said that critics of outsourcing to cheap overseas labor markets need perspective. I would only say to Secretary Snow and adviser Friedman actually they need a little perspective, too. Education is a long-term proposition and jobs are a short-term critical necessity. I would hope they would consider thinking about that at least. Christine, thank you very much.

ROMANS: You're welcome.

DOBBS: Still ahead here, the results of tonight's poll. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The results now of our poll. Somewhat lopsided to say the least. Three percent of you say non-citizens should be allowed to vote in U.S. elections. Ninety-seven percent of you say no.

Thanks for being with us tonight. Please join us tomorrow when the ranking Democrat on the Senate intelligence committee, Senator Jay Rockefeller joins us to discuss the final 9/11 commission report.

And former presidential candidate Senator Gary Hart, he joins us to talk about his new book, "The Fourth Power on American Foreign Policy in the 21st Century."

Please join us. For all of us here, thanks for being with us tonight. 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