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Lou Dobbs Tonight
New Round of Attack Politics Launched, Maryland Voters Sue to Block Paperless Voting
Aired August 25, 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, partisan propaganda. The Bush and Kerry campaigns both use their Vietnam veteran supporters to launch a new round of attack politics.
(BEGIN VIDEO CLIP)
MAX CLELAND (D) FORMER U.S. SENATOR: We're asking George Bush today to put up or shut up.
LT. JIM RASSMANN, FORMER GREEN BERET: All veterans have a right to speak, but, if we have 527s, you can't selectively say this one's good, that one's bad.
(END VIDEO CLIP)
DOBBS: And both sides admit their connections to controversial 527 political groups. We have a special report.
Democracy at risk. In Maryland, voters go to court to block the use of electronic voting machines. They say the paperless machines threaten our very democracy.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Basically, they are very vulnerable to human error, computer malfunction and fraud.
(END VIDEO CLIP)
DOBBS: Exporting America. The flood of cheap imported goods into this country now clogging two of our nation's busiest ports. The congestion creating new jobs, but not nearly enough to replace the millions of American jobs lost to cheap foreign labor markets.
Assault on the Middle Class. Both presidential candidates say they will put working Americans first. In tonight's Face Off, economic advisers to both campaigns debate which candidate will do more to help this country's embattled middle class.
And in Broken Borders, an astounding new study finds illegal aliens cost American taxpayers more than $10 billion a year. We'll have a special report.
CNN ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 25. Here now for an hour of news, opinion and debate is Lou Dobbs.
DOBBS: Good evening.
Tonight, the attack politics that have dominated this presidential campaign for the past several weeks became uglier and more bizarre. The head legal adviser to the president's reelection campaign resigned after he admitted he gave legal advice to the Swift Boat Veterans for Truth. Senator John Kerry's campaign also has a connection with a 527 group, sharing a legal adviser with a liberal 527; the group: America's Coming Together.
The resignation of the key Bush adviser came as the Kerry campaign today sent a high-profile visitor to the president's ranch near Crawford, Texas.
Kitty Pilgrim reports.
(BEGIN VIDEO CLIP)
KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): Former senator Max Cleland came to the president's Texas ranch with a letter asking President Bush to denounce commercials impugning Kerry's military record. The letter was delivered with an accusation.
CLELAND: We want George Bush to stand up, come to the plate, and say this is wrong, that attack on the glorious service of a fellow American is wrong. And he is behind it, his campaign is behind it, and so the accountability rests at his door.
PILGRIM: Kerry yesterday called the ad by Swift Boat Veterans for Truth a smear tactic. Benjamin Ginsberg, a lawyer for the Bush- Cheney campaign, resigned today after acknowledging he had advised the group.
And, today, Kerry's spokesmen came out with fighting words.
TAD DEVINE, SENIOR ADVISER, KERRY CAMPAIGN: The president started this, and I'm tell you right now John Kerry's going to finish it.
PILGRIM: The Bush campaign turned around and called on Kerry to stop supporting ads funded by so-called 527 groups.
MARK RACICOT, CHAIRMAN, BUSH CAMPAIGN: The fact of the matter is it appears as if Senator Kerry wants to leave all of these ads except for some that he doesn't like. It's a very disingenuous position to try and occupy. It's quite hypocritical.
PILGRIM: Experts say the ads won't go away any time soon.
DEREK WILLIS, CENTER FOR PUBLIC INTEGRITY: This is a very competitive election, and this is a very important election, and, you know, to leave something sort of in the arsenal without using it -- I wouldn't expect either side to do that.
PILGRIM: While both candidates decry mudslinging, the politics of diatribe has found a solid audience, drawing eyeballs and ink and computer clicks. Michael Moore's critique of the president has become the first documentary to break above $100 million in box-office receipts. Moveon.org supported by many high-profile liberal Democrats and celebrities calls for Rumsfeld to be fired and Congress to censure the president over Iraq.
(END VIDEOTAPE)
PILGRIM: Political experts say it's easier than ever to identify who's funding what ads, but the burden is on the voter to find out. Most political experts say the mudslinging is not likely to stop, despite today's calls for a cease-fire -- Lou.
DOBBS: It doesn't take a rocket scientist these days to figure out which 527 is for which candidate.
Kitty, thank you very much.
Kitty Pilgrim.
As we reported, the Kerry campaign also shares a legal adviser, Robert Bauer, with a liberal 527 group. The group, America Coming Together, has raised millions of dollars in a get-out-the-vote campaign to beat President Bush in November. Tonight, Kerry spokeswoman Stephanie Cutler says that Bob Bauer does not, however, work for America Coming Together. It's simply the law firm that he works for does.
The White House tonight is calling former senator Max Cleland's visit to the president's ranch a political stunt. Press Secretary Scott McClellan said it proves Senator Kerry is not interested in talking about his record and the issues of this campaign.
Suzanne Malveaux at the White House with more reaction -- Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Bush watchers are saying essentially that sometimes it is about politics, other times it is about the law, but today it was all about image, and those Republicans saying that it was not a good day for the White House, the image of Max Cleland going to the Texas ranch to try to hand deliver that letter to the president. This, a day after Senator Kerry said he wanted to put all of this behind him.
With Cleland, was Lieutenant Jim Rassmann, the man who credits Kerry for saving his life in Vietnam. President Bush did not meet with Cleland, but instead sent out a Vietnam veteran and a local Bush supporter, Jerry Patterson, to receive the letter, but also to give Cleland a letter in return, a letter written by the Bush campaign, but signed by Patterson and seven other veterans with a message to Senator Kerry condemning him for not supporting the troops.
Cleland refused to meet and exchange letters with the Bush surrogate. Instead, he and Lieutenant Rassmann turned to the cameras.
(BEGIN VIDEO CLIP)
RASSMANN: I was present during one of the incidents that they brought into question. I was an eyewitness. I had bullets flying around me, and now they're telling me that I'm a liar. I am not a liar. I know it when a bullet comes near me. I know that the crack over my head and the splashes in the water are just exactly what I say they are, and for these people to come out 35 years after the fact and lie, as they're doing, is unconscionable.
(END VIDEO CLIP)
MALVEAUX: Now Bush aides say, of course, that the president has condemned all of those ads -- those negative ads on both sides. They believe that the Kerry camp is being disingenuous, when just yesterday Kerry said he wanted to put all of this behind him and then for the Cleland visit to follow. They are now calling it a political stunt.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president believes this campaign should be focused on the issues, and it should be focused on the differences that face the voters.
Senator Kerry says that's what he wants this campaign to be about, yet today's political stunt was just the latest example that he really isn't interested in talking about the issues.
He doesn't want to talk about his record. He doesn't want to talk about his out-of-the-mainstream views, and that's what you're seeing more of today.
(END VIDEO CLIP)
MALVEAUX: So, Lou,, of course, the big question is who wins and who loses in all of this.
Bush aides and observers say that they win in the sense that they can now talk about the $60 million they believe that have been attacking Bush and the associates of the Kerry camp. They also believe that it prevents Kerry from talking about the real issues that voters care about.
But, on the other hand, the down side, of course, it is never a good day when you have a resignation of a campaign adviser and publicity or a protest that generates a lot of heat outside the Crawford ranch -- Lou.
DOBBS: This is on -- it's for certain that on this day the public body knowledge about the two candidates' positions wasn't appreciably enlarged.
Thank you, Suzanne.
Suzanne Malveaux from the White House.
Senator Kerry's campaign manager, Mary Beth Cahill, issued this statement on the resignation of the Bush campaign's top outside lawyer Ben Ginsberg, saying, "The sudden resignation of Bush's top lawyer doesn't end the extensive web of connections between George Bush and the group trying to smear John Kerry's military record."
Senator Kerry today steered clear of the swift boat controversy during a campaign stop in Philadelphia. Instead, he turned to the war in Iraq. He called on the White House and the Pentagon to take responsibility for the abuse of Iraqi prisoners.
Senator Kerry also called once again for Defense Secretary Donald Rumsfeld to resign.
(BEGIN VIDEO CLIP)
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: It's not just the little person at the bottom who ought to pay the price of responsibility. Harry Truman had that sign on the desk, and it said "The buck stops here." The buck doesn't stop at the Pentagon.
(END VIDEO CLIP)
DOBBS: Senator Kerry is campaigning tonight in Green Bay, Wisconsin. Later tonight, he meets with veterans in Minnesota.
The Swift Boat Veterans for Truth ad has hurt Senator Kerry's support among veterans in at least one recent poll, but now Senator Kerry is moving from defense to offense on the issue, hoping the negative fallout from the ad will help win back support from veterans and, of course, other voters.
Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Political experts know every negative attack carries the risk of blowback.
DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Well, negative ads work in the short term. If they're seen as unfair, as below the belt, as smear tactics, they can backfire on the candidate in the long term.
SCHNEIDER: The Kerry campaign is trying to create blowback against President Bush for the Swift Boat Veterans' attacks on Kerry's Vietnam War record.
SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: This claim that John Kerry's service in Vietnam over 30 years ago back in 1968 -- that his service was not proud and honorable. It's a lie, and the American people now know that it's a lie.
SCHNEIDER: Since President Bush has refused to denounce the attacks, Kerry is pinning responsibility on him.
KERRY: The Bush campaign and its allies have turned to the tactics of fear and smear.
SCHNEIDER: Democrats are trying to show a pattern. JOHN PODESTA, FORMER CLINTON CHIEF OF STAFF: We saw it in 2000 when this group did -- not this group, but this crowd went after Senator McCain. We saw it in 2002 when they went after Max Cleland with -- it's about the politics of personal destruction.
SCHNEIDER: Democrats are still outraged over the attacks on Cleland, a disabled Vietnam veteran defeated in his bid for reelection to the Senate.
Now Cleland has dramatized the issue by going to Crawford, Texas, in an unsuccessful effort to deliver a letter of protest personally to President Bush.
CLELAND: This president has gone after three Vietnam veterans in four years. That's got to stop.
SCHNEIDER: The third is McCain, a Vietnam prisoner of war, whose confrontation with Bush over this issue in 2000 is featured in a Kerry Internet ad that is about to be released for TV.
SEN. JOHN MCCAIN (R), ARIZONA: Governor Bush had an event, and he paid for it, and standing -- he stood next to a spokesman for a fringe veterans group. That fringe veteran said that John McCain had abandoned the veterans. Now I don't know how -- if you can understand this, George, but that really hurts.
SCHNEIDER: At first, Democrats treated the attacks as a threat. Now they're treating them as an opportunity.
EDWARDS: These ads were intended -- that have been running now for about three week -- they were intended to attack the character of John Kerry. In fact, they've shown us something about the character of George W. Bush.
(END VIDEOTAPE)
SCHNEIDER: The second Swift Boat Veterans ad which attacks Kerry for his anti-war activism after he returned from Vietnam is potentially more damaging to Kerry, but, by challenging the credibility of his attackers, Kerry may succeed in blunting the impact of that second ad -- Lou.
DOBBS: Well, there are a lot of ifs in that conclusion, Bill.
SCHNEIDER: Oh, yes.
DOBBS: What kind of evidence do we have as to the effect that these negative ads, these attack ads are having on either campaign?
SCHNEIDER: Not a lot yet, but we will have more tomorrow when we will have the results of our new CNN/"USA Today"/Gallup poll, which will be the first really comprehensive national poll that assesses the impact of this entire controversy. The only thing we know is the result that you cited about veterans, and that was a small poll done early last week. So we'll have a lot more to say about this tomorrow.
DOBBS: Bill Schneider, thank you, and we look forward to that report.
The newest exchange of attack politics comes at least as some Republicans are trying to talk about the issues. The Republican National Committee today began holding committee hearings on the party's platform ahead of its convention in New York next week.
Bob Franken with the report.
(BEGIN VIDEOTAPE)
BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): It's not that the platform discussion is not orderly, but there is some complications.
SEN. BILL FRIST, CHAIRMAN, GOP PLATFORM: A lot of issues weren't around four years ago that we're addressing.
FRANKEN: Issues like stem cell research, immigration, gay marriage, particularly when Vice President Cheney has gone off the reservation a bit on gay marriage.
CHENEY: Historically, that's been a relationship that's been handled by the states. States have made that basic fundamental decision in terms of defining what constitutes a marriage.
FRANKEN: Conservatives weren't all too pleased about that, particularly since they are pleased by the president's support for a federal constitutional amendment.
GARY BAUER, PRESIDENT, AMERICAN VALUES: It's not helpful when the vice president makes a statement like that.
FRANKEN: Conservatives on the platform subcommittee were able to flex their muscles, getting not only the gay marriage constitutional ban approved, but wording that restricts to husband and wife any legal marital benefits, thereby upsetting the Log Cabin Coalition, the group for gay Republicans.
CHRIS BARRON, LOG CABIN REPUBLICANS: Our party can't have it both ways. We can't have the folks sitting in this room crafting a vicious, mean-spirited platform and then our party trying to put lipstick on the pig by sticking Rudy Giuliani and Arnold Schwarzenegger in primetime.
GOV. HALEY BARBOUR, CHAIRMAN GOP PLATFORM SUBCOMMITTEE: This is the conservative party of the United States. The Democrats are the liberal party. Most Republicans are pro-life, but there's plenty of room in our party for pro-choice Republicans.
FRANKEN: The Republicans for Choice group says that's merely platitude since the party is on its way once again to approving a call for a constitutional amendment banning abortion.
ANN STONE, REPUBLICANS FOR CHOICE: This is to give to Senator Bill Frist at the end of the platform hearing because these are the marbles, apparently, the Republican Party has lost. FRANKEN: The one issue that Committee Chairman Frist still has to wrestle with is immigration. The president has expressed his support for amnesty on some occasions for illegals, much to the chagrin of many in the party.
FRIST: Immigration is one that hasn't been fully discussed in the national arena.
(END VIDEOTAPE)
FRANKEN: Translation: A compromise has not been reached. And. as for gay rights and abortion, opposition will be heartfelt but futile. As I said, Lou, Republicans are usually quite orderly, thank you.
DOBBS: Quite orderly, but there seems to be more than the normal amount of disorderliness in this platform as we approach the convention.
FRANKEN: Well, it depends on what's standard. By Republicans' standards, yes. By Democratic standards, this is lost.
DOBBS: It was interesting to hear the Senate leader suggest that there hadn't been a full discussion of immigration issues, not in the Republican Party, not before the nation, but it's one of the critical issues facing us, along with border security.
FRANKEN: It is, and, of course, the Republicans -- a large number of them have very strong feelings about having all kinds of security against immigration, feelings that have been magnified since September 11, and, of course, you have a president who has declared his support for some amnesty. That is something that is going to be hard to reconcile.
DOBBS: And it seems an interesting shift because most Republicans, whether conservative or not, have tended to look upon both gay marriage and abortion or pro-life views as being within the purview of the states. Part of the Republican standard of the past half-century has been states' rights. It seems that they're wanting to co-opt that to the national level.
FRANKEN: Well, nobody has ever suggested that politics are consistent, but both abortion and the questions about rights for gays are issues that have very strong visceral appeal to conservatives, appeal in that they must be severely restricted.
DOBBS: Bob Franken.
As always, thank you, sir.
That brings us to the subject of tonight's poll. What issue is most important to you in this presidential election -- jobs and the economically, health care, national security, or the candidates' lives 35 years ago? Cast your vote at cnn.com/lou. We'll have the results later here in the broadcast. Still ahead tonight, another controversy in upcoming election, this one over electronic voting machines. Tonight, voters in at least one state are taking action to block those electronic voting machines, which they say are flawed, vulnerable to fraud.
And Exporting America tonight. Two of our nation's ports -- they're having to hire extra workers to help sort out a glut of cheap imported goods. Some of the millions of Americans who've lost their jobs to cheap foreign labor markets are lining up to apply.
And Face Off on the middle class. Economic advisers to President Bush and Senator Kerry tonight debate over which candidate will better help this country's middle class.
Stay with us.
(COMMERCIAL BREAK)
DOBBS: Tonight, electronic voting goes on trial for the very first time in this country. A group of citizens challenging the legality of electronic voting machines in the State of Maryland. The outcome of this case could have a critical impact on the very future of democracy and the way in which we vote in this country.
Louise Schiavone reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Democracy means a paper trail now!
UNIDENTIFIED FEMALE: Democracy means a paper trail now!
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): A small but determined band of e-voting protesters took to the streets of Annapolis as a county judge heard a challenge to the state's plans for e-voting in November.
LINDA SCHADE, TRUEVOTEMD.ORG: Basically, they are very vulnerable to human error, computer malfunction and fraud. So those are the three categories, and anyone who's used to computer knows that computers crash and you lose data.
SCHIAVONE: One of many public watchdog groups alarmed by the trend toward high-tech voting, True Vote Maryland wants to state to provide printed receipts to voters. With November fast approaching, however, the group would settle for paper ballots as a remedy. The state is not prepared to offer such a receipt, and, for the record, board of elections officials offer "no comment on the advice of legal counsel."
But the manufacturer of e-voting machines used in Maryland says, "The machines have been used for many years in hundreds of elections without a single factual security issue. Touchscreens break down barriers which have disenfranchised voters with special needs. They are not flexible to language needs and are much more user-friendly." But there are bugs in every manmade system, and the touchscreen machines are no exception. Many states are moving to the technology, key states like California, Ohio and Florida among them.
MATT HOLLAND, TRUE MAJORITY: California had a raft of problems during their primary earlier in the year with machines not booting up, with people not being presented with the right ballots. There have been problems going back several years. One of the best-known examples comes from, ironically, Palm Beach County, Florida, where 132 votes in an off-year election, a single-race election recorded nothing at all, and there's no way to ever go back and find out.
SCHIAVONE: And that's at the root of the court battle in Maryland.
(END VIDEOTAPE)
SCHIAVONE: Lou, polls show this will be one of the closest elections in history. With the bitterness of the Florida recount still fresh, concerns may be greater than ever before that, in November, every vote is counted -- Lou.
DOBBS: The thought that this year's election could be closer than that of 2000 is sobering indeed. Louise Schiavone, thank you.
Joining me now is the plaintiff who brought this case against the Maryland State Board of Elections. Linda Schade is the co-founder of truevotemaryland.org, and she joins me from Washington.
Good to have you here.
What, Linda, made you decide that a lawsuit was the only way to advance the interest of voters in your state?
SCHADE: Well, we began this a year ago, and, after trying to talk to our election officials and then going through a legislative session, we realized that legal action was the only thing it required, and we are arguing that if this election goes forward without a paper trail, it will be legal under Maryland law.
DOBBS: Well, as you know, in a number of states, the secretaries of state have brought action against several counties within their states basically saying that those counties are not ready to use the voting machines without paper backup. What is the basis of your action?
SCHADE: We are -- we had been seeking the decertification of the machines. Basically, as I was saying, our argument is that Maryland law requires a paper trail, and it requires that officials be able to reconstruct the election with an original voter record. And so, without a paper trail, it will be -- it's really invalid to go forward without a paper trail.
DOBBS: And that being the case, what could be the objection of state officials in Maryland? SCHADE: That's the $64,000 question. They consistently maintain that these machines work fine, that the primary election was flawless. We heard devastating testimony today from someone who had an incomplete ballot. The Senate race was missing from it, and it turns out that Senator Mikulski, the injured candidate, has heard from voters in three counties in Maryland that their ballots did not have the Senate race on them.
Linda Schade, we thank you very much. One last question as we must leave you: How soon do we expect the judge to take action on this case?
SCHADE: Well, we know it will be before the election comes, but I can't say more than that. But the trial will go through Friday, and I think very dramatic testimony will unfold in the next few days.
DOBBS: The fact that we are now just less than 10 weeks away from that election puts, I would think, great urgency on the judge to act.
Linda Schade, we thank you very much for being with us here.
SCHADE: Thanks for having me.
DOBBS: We invited Maryland's governor, Robert Erhlich, and Maryland's state elections chief, Linda Lamone, to join us tonight. They declined our invitation.
Palm Beach County, Florida, of course, at the center of the voting controversy in the 2000 presidential election. It was in that county that thousands of votes were counted incorrectly on the infamous butterfly ballots that many voters found apparently too confusing to use properly.
Tonight, you might be surprised to learn that the woman who was in charge of the Palm Beach County election four years ago -- yes, she is the very same woman who designed those confounding butterfly ballots -- is still on the job.
The Palm Beach County Election Supervisor Theresa LePore is still in charge of elections in her county, and we should note that LePore currently is up for reelection and has three opponents. She is the front runner.
Tonight's thought is on voting. "Nobody will ever deprive the American people of the right to vote except the American people themselves, and the only way they could do this is by not voting." President Franklin D. Roosevelt.
Coming up next here, some of your thoughts on the assault on the middle class and which candidate will better serve the interest of American working men and women and their families? Kevin Hassett, economic adviser to the Bush campaign, Gene Sperling, senior economic adviser to Senator Kerry's campaign, face off tonight.
And in Exporting America, hundreds of thousands of Americans clamoring for good-paying jobs as cheap foreign goods flood into our nation's ports.
And American aircraft again pounding targets in the Iraqi city Najaf, but, tonight, new hope for an end to the bloody fighting. We'll have that story next.
(COMMERCIAL BREAK)
CNN ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate and opinion. Here now, Lou Dobbs.
DOBBS: In Iraq tonight, hope for peace after weeks of fierce fighting in the holy city of Najaf. Iraq's most influential Shiite cleric, the Grand Ayatollah Ali al-Sustani, returning to Najaf after undergoing heart surgery in London. Sustani has called upon Iraqis to rally tomorrow in Najaf where he will demand an end to the deadly fighting that has ravaged the city for more than three weeks.
Rebels loyal to the anti-American Shiite cleric Muqtada al Sadr have been holed up in Imam Ali Mosque for weeks now. American warplanes pounded militant targets around the mosque for the fifth straight night.
In Exporting America tonight, a dramatic example of the high cost of this nation's so-called free trade policies. The Ports of Los Angeles and Long Beach are now so congested with cheap foreign imports that those ports must hire 3,000 additional workers to help unload and transport that cargo. Nearly half a million people applied for those jobs underlining the jobs crisis in this country.
Peter Viles reports from Los Angeles.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): You're looking at half a million postcards -- that's half a million hopes and dreams -- all for 3,000 part-time jobs.
JAMES SPINOSA, PRESIDENT, INTERNATIONAL LONGSHORE AND WAREHOUSE UNION: We're very pleased with the turnout. It's a sad turnout in a way because it shows the state of this country when you have 400,000 or 500,000 people trying to get in on a very dangerous industry like ours.
VILES: The Long Shoreman's Union is hiring because the ports of Los Angeles and Long Beach are so congested with Asian imports. Overall traffic in the ports up 15 percent in July and it's not really a two-way street. Imports from Asia outnumber U.S. exports by nearly four containers to one.
UNIDENTIFIED MALE: We've seen the future as it pertains to this issue. The terminals are busting at the seams, ships at anchor, longer term times in port, lack of available labor to supply sufficient crews and many other problems associated with double digit growth.
VILES: A great opportunity for the Long Shoremen, but it comes at a huge cost to the nation, half trillion dollar trade deficit, millions of lost jobs in manufacturing.
ALAN TONELSON, "THE RACE TO THE BOTTOM": It's good honest work that the Long Shoremen are doing, no question about it. But these jobs are only being created and will only be sustained, because the United States buys so much more from the rest of the world than we sell to it. No other country in human history has ever pursued this strategy for long. In the long run, it has to crash and burn.
VILES: The jobs pay nearly $21 an hour, but they're part-time. One union leader, says the huge response is because so many good blue collar jobs have been exported to cheap overseas labor markets.
(END VIDEOTAPE)
VILES: One irony here. The Long Shoreman's Union clearly benefiting from American trade polices, and yet that union opposed NAFTA, and now opposes CAFTA. Says those trade deals, however good for the ports and the workers there, are bad overall for American workers -- Lou.
DOBBS: That is extraordinary, Pete. Nearly 500,000 people applying for 3,000 part-time jobs.
VILES: Yes, just incredible. They told people, do not send more than one postcard in or you'll be disqualified. So we have to believe there may have been some duplication, but most of those cards represented workers who wanted those jobs.
DOBBS: Peter Viles, thank you.
The 50 million families that make up this country's middle class, the single most important group of voters in this or any other election.
Senator Kerry and President Bush, both have proposals to help the struggling middle class in our "Face-Off" tonight. We'll take a look at which candidate would better serve the interest of middle class Americans. Joining me now from Washington is Kevin Hassett, he's economic adviser to the Bush/Cheney campaign and says Senator Kerry is making promises to the middle class, that the country simply can't afford.
And Gene Sperling, senior economic adviser to the Kerry campaign, who says the Bush tax cuts shifted the burden on to the middle class.
Thank you both of you for joining us.
Let me begin with you, if I may, Kevin.
What is the president doing in your judgment and will offer to do for the middle class that will make his policies far more attractive to the voters come November?
KEVIN HASSETT, BUSH CAMPAIGN ECON. ADVISER: Well, I know, Lou, that you follow the data as close as anybody. And I think, one of the most interesting things that we saw in the last few years is that even in the bad years when income wasn't growing as fast as we might like, consumption held up very strong and even the consumption of the middle class.
And I think recent studies out of Princeton suggest this is because the president's tax cuts gave people money, exactly when they needed it. Economy.com just did a report that suggested the recession was almost two years shorter because of these tax cuts. So, I think looking back the tax cuts help the middle class through some tough times. I think going forward what we expect is that the president is going lay out his agenda for the second term next week at the convention. Right now he's laid out some broad guidelines but hasn't made specific proposals yet.
DOBBS: Kevin, do you agree that there is a perception abroad in the country that this administration has represented the interest of business and broader macro policies, but has not focused on the individual, the working man and woman of this country, who by any definition over the past four years has been through some very tough times.
HASSETT: You know, I agree with you that there have been some tough times and times are a lot better now. You know, the last 12 months the economy grew 4.8 percent. And it never grew faster in the eight years Clinton was in office. And so, I think Americans recognize that we've had some tough times and we've turned the corner and are moving upward. But the president said quite tellingly recently that he wasn't satisfied with the job picture. I think the real question is, what is he going to propose next week that directly addresses that. And not being a deep insider, I'm not sure where they are on that. But I expect to see some discussion of that.
DOBBS: Gene Sperling, your candidate focusing on the middle class making it one of the tenants of his campaign. What do you think is the most important thing that he has proposed to this point that will be helpful to working men and women?
GENE SPERLING, KERRY CAMPAIGN SR. ECON. ADVISER: Well, Lou, there's no question the difference is night and day. Senator Kerry puts the middle class first in every single thing he proposes. I mean, the middle class isn't feeling strained, Lou, because they're not getting the good spin from the Bush administration. They're feeling strained for the reasons you just saw in your previous story. People are not finding good jobs. This has been -- we all know, this has been the worst jobs period for a president since 1930s even if you don't count the recession. Real wages are down since December -- December 2001. They are down over the last year. And at the same time, people have seen their healthcare costs, the typical family healthcare cost typical family healthcare go up by $2,600, energy, tuition.
But the key thing, Lou, is that all of these things are things policy matters on. President Bush did nothing on healthcare. Yet Senator Kerry puts forward a dramatic health care plan that not only covers 27 million more Americans, but deals with the spiraling healthcare costs that are squeezing families, squeezing businesses from hiring. Senator Kerry puts forward pro jobs tax credits. He gets rid of the incentives to move jobs overseas. Has a new tax credit for small business for manufacturing. He offers to cut the corporate rate by 5 percent for those who are investing here. Compare that to President Bush, nothing in terms of job creation.
And in fact, contrary to what Kevin just said the economy.com study showed that Bush tax cuts had 0 impact on shortening the recession. They had no impact in 2001 at all. The recession ended in November 2001 and their own study says it had zero impact. Compare that to the new jobs and jobs first emphasis of Senator Kerry's tax cuts.
DOBBS: Kevin, your response?
HASSETT: Yes, I disagree with a lot that Gene said. But I guess, that's his job, right. You know, I think you can read the economy.com study yourself and decide what you think. But, you know, there really has been a difficult time a few years ago. But a lot of the numbers are looking better. I think that it's not as black and white as Gene suggests.
You know, in 1996 when President Clinton was running for re- election, there were 5 million people in the economy that had part- time jobs, that they said because of economic reason, they'd like to work full-time. Today, that number is 4.3 million. You know, back then only 65 percent or so of Americans owned homes, today it's about 69 percent. There are a lot of numbers that are looking very positive.
And economists Ray Fair of Yale University, has tried to predict voting behavior which is the best indicator of whether people think they're doing better or not. And has found the best measure of voting behavior, that predicts voting behavior has been GDP and income growth. And that's been better over the last 12 months than it ever was during the Clinton administration. I think that,s really the best net of all the economic data out there. The Kerry team points to the things that could be better, and a lot of their facts are correct. Some of them I disagree with. But the fact is there are a lot of other things that are great that they're not mentioning. And I think on net, GDP is a good measure of how we're doing. And it's been doing very, very as you know, Lou.
DOBBS: Gene.
SPERLING: Lou, I have to respond...
DOBBS: Sure.
SPERLING: Lou, I have to respond to the notion that things are the same they were in 1996. Do you know that at this point in the economy in July, August of 1996 the economy had created 10 million jobs. Now it's lost 1.1 million. Lou, do you think it makes a difference in the U.S. Economy whether you've created 10 million jobs or you've lost 1 million jobs and are on your way to being the first president to lose jobs since Herbert Hoover. Take the state of Ohio, by this point in president Clinton's first term, Ohio created 411,000 jobs, now they're down 230,000. I bet those 600,000 jobs matter to the people in Ohio. Investment, business investment had been up over 9 percent per year. Now it's actually, down. The difference is night and day. It's just what you said, Lou. Let's look at energy. Perfect example. We could have had bipartisan leadership on energy. We could have alternative fuels being explored now. Why didn't it happen, because they had the secret energy process. They wouldn't pass an energy bill, because they were too beholden to those who wanted to drill in the arctic refuge. This is not the type of putting the middle class first policies that Senator Kerry is proposing.
DOBBS: Gene, just in fairness I think we should point out that administrations and Congresses over a quarter century have failed to come up with an energy policy that mitigates this country's dependence on foreign oil.
But I'd like to go to something and ask both of you this. I think, as you both know, I'm very concerned about trade policies that I think are having an extraordinarily deleterious effect on economy. I'm concerned about outsourcing, the Bush administration not only supports it, but in some quarters advocates it.
Gene, your candidate has been -- we've been told, after talking about Benedict Arnold CEOs, in of it's self, Roger Altman saying this, opposed to outsourcing. Can we get a clear statement about how outsourcing and the trade -- free trade policies that have resulted in 28 years of trade deficits in this country and nearly a $4 trillion external trade debt, how important those are and what you see of the impact of working men in this country and what either of your candidates will do about it? And let me begin with you, if I may, Kevin.
KEVIN HASSETT, BUSH CAMPAIGN ECONOMIC ADVISER: You know, Lou, I think there's a lot that you've said over the month that I disagree with about outsourcing.
DOBBS: Don't get me.
HASSETT: But one of the things they agree about is that we haven't done as good a job as we could at getting other countries to be very open and allowing our goods to sell in those markets. And so the reason that trade is successful in the economic models is that as countries grow wealthier, then they start buying Johnson's Baby Shampoo and they start buying golf clubs.
DOBBS: Kevin, I really wanted less in economy theory, but we've heard a lot of theory from Democrats and Republicans. What I want to hear is what in the world are you guys going for the folks who make this country work, the middle class?
HASSETT: Right, and you know, but we're relating it to outsourcing at the moment. And the fact is, that what we're going to do is push for a trade agenda that opens up those markets and also allows our firms to operate wherever it's best for them to operate.
I think one of the big interesting questions is, why is it that firms are deciding to operate overseas? Take for example semiconductor manufacturers, they only have about 5 percent of their total costs in labor costs and yet many of them have decided to locate in Asia. And if you sort of peel the onion, and look back at why they're doing it, they're doing it because the U.S. is such a high tax country. And so there are things that we can do to make the place a better place.
DOBBS: So the idea is to take away the job of the taxpayer. Gene, go ahead.
GENE SPERLING, KERRY CAMPAIGN SR. ECONOMIC ADVISER: Well, listen, Senator Kerry certainly understands we have to engage in a global economy. We can't keep every single job here. But, there is a dramatic difference between him and President Bush.
No. 1, Senator Kerry fundamentally believes we should have nothing in our tax code that actually encourages companies to move jobs overseas. How amazing that you can have two companies in Columbus, Ohio and if one wants to move to the Cook Islands, and the other wants to expand in Columbus, Ohio, we actually give the one in -- our tax code gives the one that moves overseas a tax incentive. How can the American people ever understand how President Bush supports that?
Secondly, if you're going to have trade you want to have a level playing field. Now I ask you, Lou, over these last three year, President Bush has brought less cases, less WTO cases to enforce our trade agreements in 3 years than president Clinton used to do each year. Now, have we just suddenly nobody trading unfair with us as we've had this massive trade deficit?
Next, look at the fact that...
DOBBS: Jim, I am awfully sorry. And in the interest of equity, I would like to let you finish that question, but we are literally out of time. Gene Sperling we thank you very much. And Kevin, we thank you very much. I hope you both will come back.
HASSETT: Thanks. Great to be here.
DOBBS: I hope you both will come back as voters try to make up their mines on the economic policies of the two candidates. Of course, no one in this country is a single issue voter, but these are critical issues to all of us. Thank you both.
Still ahead here, "Broken Borders" new evidence tonight that illegal aliens are taking a staggering amount of money out of the pockets of hardworking American taxpayers every year. This is immigration policy? We'll have the report next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: In "Broken Borders" tonight, a study released today details the financial burden that illegal aliens are putting on this nation's taxpayers. It's conclusions are stunning, yet simple: Illegal aliens are draining much of the nation's finances, and stronger enforcement of immigration laws is the only practical solution. Casey Wian reports from Los Angeles. (BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): It's a question that is central to the debate over what to do about the 10 million illegal aliens in the United States. Are they an economic benefit? The answer is a resounding no, according to a detailed analysis by the Center for Immigration Studies. Titled "The High Cost of Cheap Labor," it calculates the taxes paid by illegal aliens and the costs they impose. It concludes that illegal aliens take more than $10 billion a year out of the pockets of taxpayers or $2700 per illegal household.
STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels, and resulting low incomes and tax payment, not their legal status or even particularly heavy use of most social services. Nor is it caused by an unwillingness to work, a vast majority of adult illegals, in fact, hold jobs.
WIAN: Among the report's startling findings, illegal aliens make up about 17 percent of federal prison population, even though they're only 3 percent of the general population. And they consume 13 percent of federal spending on medical care for the uninsured.
The study also estimates the financial impact of an amnesty program, like those proposed by both President Bush and Senator Kerry. The taxpayer burden would nearly triple to $29 billion a year. That's more the federal government's entire budget for the Department of Homeland Security.
ROBERT RECTOR, HERITAGE FOUNDATION: A society which has an advanced welfare state for the economically disadvantaged will incur considerable cost when it imports large numbers of low skilled individuals.
WIAN: The study concludes the only practical way to avoid those costs is to enforce the law, and reduce the number of illegal aliens in this country. And the centerpiece of that strategy should be cracking down on employers who continue to hire illegal aliens.
(END VIDEOTAPE)
WIAN: We contacted the offices of several members of the Senate and Congress who are sponsoring illegal alien amnesty bills, none were available to discuss the study. Also the study did not calculate the impact of illegal aliens on state and local governments, but the authors say those are probably even higher -- Lou.
DOBBS: The study is remarkable in that it clearly sets out that the taxpayer in this country is paying for those companies and businesses and homeowners who are hiring illegal aliens and who get all the benefits of illegal alien labor while the taxpayer pays all of the costs. Casey Wian thank you -- yes, go ahead, Casey.
WIAN: You wonder how many lawmakers are going to continue to support illegal alien amnesty bills given these cost estimates -- Lou.
DOBBS: A very good point. Casey Wian, thank you very much for an excellent report. Coming up next here, it is the worst drought to hit this country in as many as 500 years. It's threatening millions of people across the western part of this country. Tonight, warnings that the worst is yet to come. We'll have that special report next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Something of a rally on Wall Street today. The Dow up 83 points, the NASDAQ up 24, almost, the S&P 500 up nearly 9.
A successful stock market debut today for a company profiting, and profiting handsomely from outsourcing. Christine Romans with the story -- Christine.
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Lou, it's India's largest IPO ever. Shares of Tata Consultancy Services jumped 16 percent on their first day of trading in the Indian stock market. With a market value of $10 billion, Tata Consultancy, the third biggest publicly traded company now in India.
Among the American companies, shipping jobs to Tata, American Express, Boeing, AT&T, IBM, GM and Microsoft, not to mention the governments of Montana and Pennsylvania. General Electric also a very big customer. It accounts for 17 percent of Tata Consultancy revenue.
Ironically, as Tata started trading, IT workers in Bangalore braced for a work shutdown after the arrest of a popular politician. Now, some outsourcing offices will shut their doors for the day, others will work with contingency plans. Political and religious unrest, Lou, one of those unintended consequences of shipping jobs overseas. They'll have to close some offices tomorrow.
DOBBS: What happens to all of those call centers? The folks at Dell have got to be nervous, right?
ROMANS: OH, but the business is done so much more cheaply, Lou. It's worth it?
DOBBS: Not to me, and not to millions of other Americans. That's amazing. I guess we'll know tomorrow.
ROMANS: We'll know tomorrow.
DOBBS: All right. Christine, thank you.
Still ahead, the severe drought in the Western United States threatening millions of our fellow citizens. That story is next. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The West is battling what could be the worst drought in 500 years. It may be worsening. Casey Wian reports. (BEGIN VIDEOTAPE)
WIAN (voice-over): Three wildfires blackened 26,000 acres of Northern California last week. Near Las Vegas, Lake Meade has lost nearly half its water. Farther north, Lake Powell is drying up even faster, threatening water and power is supplies. Throughout the West, farmers are abandoning crops and selling water rights to increasingly thirsty cities. It's all the result of a persistent 6 year drought.
MICHAEL HAYES, NATL DROUGHT MITIGATION CENTER: We still have a lot of severe and extreme drought conditions across most of the West. Only in a few areas of the West have we had some easing of the conditions this summer. I would say the front range of Colorado and Northeastern New Mexico. The rest of the West has either stayed about the same or gotten a little bit worse.
WIAN: For some places, the worst is yet to come. Southern California's wildfire season peaks in October. The National Weather Service predicts drought will either persist or intensify, and Southern California and most of Arizona, Nevada and Utah through November.
A growing number of western cities are restricting water use and raising rates. Costs are also rising for utilities that depend on water for power. The Western Area Power Administration delivers hydroelectric power to 15 states. The drought has cut its supply 25 percent.
BOB FULLERTON, WESTERN AREA POWER ADMINISTRATION: We expect that we're going to be expending about $315 million in purchase power in order to make up for the lack of hydrogenration in this fiscal year. So it's a significant impact.
WIAN: Scientists aren't sure if the drought is part of a normal weather pattern reoccurring every few decades, or an event that hasn't happened in centuries. But they know it won't end until there's an unusually heavy winner snow.
(on camera): The Pacific Institute on Monday released a study warning that water shortages, not just in the West but throughout the world, pose a multibillion dollar threat to businesses. The think tank also predicted that access to water will replace access to oil as the world's critical economic issue this Century. Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
DOBBS: Still ahead, we'll have the rules of tonight's poll and a preview of what's ahead tomorrow. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Our survey: 69 percent of you say jobs and the economy are the most important issues in this campaign, only 2 percent of you think the candidate's lives 35 years ago. Thanks for being with us. Please join us tomorrow. The head of one company tells us why he's not sending American jobs to cheap overseas labor markets. For all of us here, good night from New York. "ANDERSON COOPER 360" next.
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Aired August 25, 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, partisan propaganda. The Bush and Kerry campaigns both use their Vietnam veteran supporters to launch a new round of attack politics.
(BEGIN VIDEO CLIP)
MAX CLELAND (D) FORMER U.S. SENATOR: We're asking George Bush today to put up or shut up.
LT. JIM RASSMANN, FORMER GREEN BERET: All veterans have a right to speak, but, if we have 527s, you can't selectively say this one's good, that one's bad.
(END VIDEO CLIP)
DOBBS: And both sides admit their connections to controversial 527 political groups. We have a special report.
Democracy at risk. In Maryland, voters go to court to block the use of electronic voting machines. They say the paperless machines threaten our very democracy.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Basically, they are very vulnerable to human error, computer malfunction and fraud.
(END VIDEO CLIP)
DOBBS: Exporting America. The flood of cheap imported goods into this country now clogging two of our nation's busiest ports. The congestion creating new jobs, but not nearly enough to replace the millions of American jobs lost to cheap foreign labor markets.
Assault on the Middle Class. Both presidential candidates say they will put working Americans first. In tonight's Face Off, economic advisers to both campaigns debate which candidate will do more to help this country's embattled middle class.
And in Broken Borders, an astounding new study finds illegal aliens cost American taxpayers more than $10 billion a year. We'll have a special report.
CNN ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, August 25. Here now for an hour of news, opinion and debate is Lou Dobbs.
DOBBS: Good evening.
Tonight, the attack politics that have dominated this presidential campaign for the past several weeks became uglier and more bizarre. The head legal adviser to the president's reelection campaign resigned after he admitted he gave legal advice to the Swift Boat Veterans for Truth. Senator John Kerry's campaign also has a connection with a 527 group, sharing a legal adviser with a liberal 527; the group: America's Coming Together.
The resignation of the key Bush adviser came as the Kerry campaign today sent a high-profile visitor to the president's ranch near Crawford, Texas.
Kitty Pilgrim reports.
(BEGIN VIDEO CLIP)
KITTY PILGRIM, CNN BUSINESS CORRESPONDENT (voice-over): Former senator Max Cleland came to the president's Texas ranch with a letter asking President Bush to denounce commercials impugning Kerry's military record. The letter was delivered with an accusation.
CLELAND: We want George Bush to stand up, come to the plate, and say this is wrong, that attack on the glorious service of a fellow American is wrong. And he is behind it, his campaign is behind it, and so the accountability rests at his door.
PILGRIM: Kerry yesterday called the ad by Swift Boat Veterans for Truth a smear tactic. Benjamin Ginsberg, a lawyer for the Bush- Cheney campaign, resigned today after acknowledging he had advised the group.
And, today, Kerry's spokesmen came out with fighting words.
TAD DEVINE, SENIOR ADVISER, KERRY CAMPAIGN: The president started this, and I'm tell you right now John Kerry's going to finish it.
PILGRIM: The Bush campaign turned around and called on Kerry to stop supporting ads funded by so-called 527 groups.
MARK RACICOT, CHAIRMAN, BUSH CAMPAIGN: The fact of the matter is it appears as if Senator Kerry wants to leave all of these ads except for some that he doesn't like. It's a very disingenuous position to try and occupy. It's quite hypocritical.
PILGRIM: Experts say the ads won't go away any time soon.
DEREK WILLIS, CENTER FOR PUBLIC INTEGRITY: This is a very competitive election, and this is a very important election, and, you know, to leave something sort of in the arsenal without using it -- I wouldn't expect either side to do that.
PILGRIM: While both candidates decry mudslinging, the politics of diatribe has found a solid audience, drawing eyeballs and ink and computer clicks. Michael Moore's critique of the president has become the first documentary to break above $100 million in box-office receipts. Moveon.org supported by many high-profile liberal Democrats and celebrities calls for Rumsfeld to be fired and Congress to censure the president over Iraq.
(END VIDEOTAPE)
PILGRIM: Political experts say it's easier than ever to identify who's funding what ads, but the burden is on the voter to find out. Most political experts say the mudslinging is not likely to stop, despite today's calls for a cease-fire -- Lou.
DOBBS: It doesn't take a rocket scientist these days to figure out which 527 is for which candidate.
Kitty, thank you very much.
Kitty Pilgrim.
As we reported, the Kerry campaign also shares a legal adviser, Robert Bauer, with a liberal 527 group. The group, America Coming Together, has raised millions of dollars in a get-out-the-vote campaign to beat President Bush in November. Tonight, Kerry spokeswoman Stephanie Cutler says that Bob Bauer does not, however, work for America Coming Together. It's simply the law firm that he works for does.
The White House tonight is calling former senator Max Cleland's visit to the president's ranch a political stunt. Press Secretary Scott McClellan said it proves Senator Kerry is not interested in talking about his record and the issues of this campaign.
Suzanne Malveaux at the White House with more reaction -- Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Bush watchers are saying essentially that sometimes it is about politics, other times it is about the law, but today it was all about image, and those Republicans saying that it was not a good day for the White House, the image of Max Cleland going to the Texas ranch to try to hand deliver that letter to the president. This, a day after Senator Kerry said he wanted to put all of this behind him.
With Cleland, was Lieutenant Jim Rassmann, the man who credits Kerry for saving his life in Vietnam. President Bush did not meet with Cleland, but instead sent out a Vietnam veteran and a local Bush supporter, Jerry Patterson, to receive the letter, but also to give Cleland a letter in return, a letter written by the Bush campaign, but signed by Patterson and seven other veterans with a message to Senator Kerry condemning him for not supporting the troops.
Cleland refused to meet and exchange letters with the Bush surrogate. Instead, he and Lieutenant Rassmann turned to the cameras.
(BEGIN VIDEO CLIP)
RASSMANN: I was present during one of the incidents that they brought into question. I was an eyewitness. I had bullets flying around me, and now they're telling me that I'm a liar. I am not a liar. I know it when a bullet comes near me. I know that the crack over my head and the splashes in the water are just exactly what I say they are, and for these people to come out 35 years after the fact and lie, as they're doing, is unconscionable.
(END VIDEO CLIP)
MALVEAUX: Now Bush aides say, of course, that the president has condemned all of those ads -- those negative ads on both sides. They believe that the Kerry camp is being disingenuous, when just yesterday Kerry said he wanted to put all of this behind him and then for the Cleland visit to follow. They are now calling it a political stunt.
(BEGIN VIDEO CLIP)
SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: The president believes this campaign should be focused on the issues, and it should be focused on the differences that face the voters.
Senator Kerry says that's what he wants this campaign to be about, yet today's political stunt was just the latest example that he really isn't interested in talking about the issues.
He doesn't want to talk about his record. He doesn't want to talk about his out-of-the-mainstream views, and that's what you're seeing more of today.
(END VIDEO CLIP)
MALVEAUX: So, Lou,, of course, the big question is who wins and who loses in all of this.
Bush aides and observers say that they win in the sense that they can now talk about the $60 million they believe that have been attacking Bush and the associates of the Kerry camp. They also believe that it prevents Kerry from talking about the real issues that voters care about.
But, on the other hand, the down side, of course, it is never a good day when you have a resignation of a campaign adviser and publicity or a protest that generates a lot of heat outside the Crawford ranch -- Lou.
DOBBS: This is on -- it's for certain that on this day the public body knowledge about the two candidates' positions wasn't appreciably enlarged.
Thank you, Suzanne.
Suzanne Malveaux from the White House.
Senator Kerry's campaign manager, Mary Beth Cahill, issued this statement on the resignation of the Bush campaign's top outside lawyer Ben Ginsberg, saying, "The sudden resignation of Bush's top lawyer doesn't end the extensive web of connections between George Bush and the group trying to smear John Kerry's military record."
Senator Kerry today steered clear of the swift boat controversy during a campaign stop in Philadelphia. Instead, he turned to the war in Iraq. He called on the White House and the Pentagon to take responsibility for the abuse of Iraqi prisoners.
Senator Kerry also called once again for Defense Secretary Donald Rumsfeld to resign.
(BEGIN VIDEO CLIP)
SEN. JOHN F. KERRY (D-MA), PRESIDENTIAL NOMINEE: It's not just the little person at the bottom who ought to pay the price of responsibility. Harry Truman had that sign on the desk, and it said "The buck stops here." The buck doesn't stop at the Pentagon.
(END VIDEO CLIP)
DOBBS: Senator Kerry is campaigning tonight in Green Bay, Wisconsin. Later tonight, he meets with veterans in Minnesota.
The Swift Boat Veterans for Truth ad has hurt Senator Kerry's support among veterans in at least one recent poll, but now Senator Kerry is moving from defense to offense on the issue, hoping the negative fallout from the ad will help win back support from veterans and, of course, other voters.
Bill Schneider reports.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): Political experts know every negative attack carries the risk of blowback.
DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: Well, negative ads work in the short term. If they're seen as unfair, as below the belt, as smear tactics, they can backfire on the candidate in the long term.
SCHNEIDER: The Kerry campaign is trying to create blowback against President Bush for the Swift Boat Veterans' attacks on Kerry's Vietnam War record.
SEN. JOHN EDWARDS (D-NC), VICE PRESIDENTIAL NOMINEE: This claim that John Kerry's service in Vietnam over 30 years ago back in 1968 -- that his service was not proud and honorable. It's a lie, and the American people now know that it's a lie.
SCHNEIDER: Since President Bush has refused to denounce the attacks, Kerry is pinning responsibility on him.
KERRY: The Bush campaign and its allies have turned to the tactics of fear and smear.
SCHNEIDER: Democrats are trying to show a pattern. JOHN PODESTA, FORMER CLINTON CHIEF OF STAFF: We saw it in 2000 when this group did -- not this group, but this crowd went after Senator McCain. We saw it in 2002 when they went after Max Cleland with -- it's about the politics of personal destruction.
SCHNEIDER: Democrats are still outraged over the attacks on Cleland, a disabled Vietnam veteran defeated in his bid for reelection to the Senate.
Now Cleland has dramatized the issue by going to Crawford, Texas, in an unsuccessful effort to deliver a letter of protest personally to President Bush.
CLELAND: This president has gone after three Vietnam veterans in four years. That's got to stop.
SCHNEIDER: The third is McCain, a Vietnam prisoner of war, whose confrontation with Bush over this issue in 2000 is featured in a Kerry Internet ad that is about to be released for TV.
SEN. JOHN MCCAIN (R), ARIZONA: Governor Bush had an event, and he paid for it, and standing -- he stood next to a spokesman for a fringe veterans group. That fringe veteran said that John McCain had abandoned the veterans. Now I don't know how -- if you can understand this, George, but that really hurts.
SCHNEIDER: At first, Democrats treated the attacks as a threat. Now they're treating them as an opportunity.
EDWARDS: These ads were intended -- that have been running now for about three week -- they were intended to attack the character of John Kerry. In fact, they've shown us something about the character of George W. Bush.
(END VIDEOTAPE)
SCHNEIDER: The second Swift Boat Veterans ad which attacks Kerry for his anti-war activism after he returned from Vietnam is potentially more damaging to Kerry, but, by challenging the credibility of his attackers, Kerry may succeed in blunting the impact of that second ad -- Lou.
DOBBS: Well, there are a lot of ifs in that conclusion, Bill.
SCHNEIDER: Oh, yes.
DOBBS: What kind of evidence do we have as to the effect that these negative ads, these attack ads are having on either campaign?
SCHNEIDER: Not a lot yet, but we will have more tomorrow when we will have the results of our new CNN/"USA Today"/Gallup poll, which will be the first really comprehensive national poll that assesses the impact of this entire controversy. The only thing we know is the result that you cited about veterans, and that was a small poll done early last week. So we'll have a lot more to say about this tomorrow.
DOBBS: Bill Schneider, thank you, and we look forward to that report.
The newest exchange of attack politics comes at least as some Republicans are trying to talk about the issues. The Republican National Committee today began holding committee hearings on the party's platform ahead of its convention in New York next week.
Bob Franken with the report.
(BEGIN VIDEOTAPE)
BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): It's not that the platform discussion is not orderly, but there is some complications.
SEN. BILL FRIST, CHAIRMAN, GOP PLATFORM: A lot of issues weren't around four years ago that we're addressing.
FRANKEN: Issues like stem cell research, immigration, gay marriage, particularly when Vice President Cheney has gone off the reservation a bit on gay marriage.
CHENEY: Historically, that's been a relationship that's been handled by the states. States have made that basic fundamental decision in terms of defining what constitutes a marriage.
FRANKEN: Conservatives weren't all too pleased about that, particularly since they are pleased by the president's support for a federal constitutional amendment.
GARY BAUER, PRESIDENT, AMERICAN VALUES: It's not helpful when the vice president makes a statement like that.
FRANKEN: Conservatives on the platform subcommittee were able to flex their muscles, getting not only the gay marriage constitutional ban approved, but wording that restricts to husband and wife any legal marital benefits, thereby upsetting the Log Cabin Coalition, the group for gay Republicans.
CHRIS BARRON, LOG CABIN REPUBLICANS: Our party can't have it both ways. We can't have the folks sitting in this room crafting a vicious, mean-spirited platform and then our party trying to put lipstick on the pig by sticking Rudy Giuliani and Arnold Schwarzenegger in primetime.
GOV. HALEY BARBOUR, CHAIRMAN GOP PLATFORM SUBCOMMITTEE: This is the conservative party of the United States. The Democrats are the liberal party. Most Republicans are pro-life, but there's plenty of room in our party for pro-choice Republicans.
FRANKEN: The Republicans for Choice group says that's merely platitude since the party is on its way once again to approving a call for a constitutional amendment banning abortion.
ANN STONE, REPUBLICANS FOR CHOICE: This is to give to Senator Bill Frist at the end of the platform hearing because these are the marbles, apparently, the Republican Party has lost. FRANKEN: The one issue that Committee Chairman Frist still has to wrestle with is immigration. The president has expressed his support for amnesty on some occasions for illegals, much to the chagrin of many in the party.
FRIST: Immigration is one that hasn't been fully discussed in the national arena.
(END VIDEOTAPE)
FRANKEN: Translation: A compromise has not been reached. And. as for gay rights and abortion, opposition will be heartfelt but futile. As I said, Lou, Republicans are usually quite orderly, thank you.
DOBBS: Quite orderly, but there seems to be more than the normal amount of disorderliness in this platform as we approach the convention.
FRANKEN: Well, it depends on what's standard. By Republicans' standards, yes. By Democratic standards, this is lost.
DOBBS: It was interesting to hear the Senate leader suggest that there hadn't been a full discussion of immigration issues, not in the Republican Party, not before the nation, but it's one of the critical issues facing us, along with border security.
FRANKEN: It is, and, of course, the Republicans -- a large number of them have very strong feelings about having all kinds of security against immigration, feelings that have been magnified since September 11, and, of course, you have a president who has declared his support for some amnesty. That is something that is going to be hard to reconcile.
DOBBS: And it seems an interesting shift because most Republicans, whether conservative or not, have tended to look upon both gay marriage and abortion or pro-life views as being within the purview of the states. Part of the Republican standard of the past half-century has been states' rights. It seems that they're wanting to co-opt that to the national level.
FRANKEN: Well, nobody has ever suggested that politics are consistent, but both abortion and the questions about rights for gays are issues that have very strong visceral appeal to conservatives, appeal in that they must be severely restricted.
DOBBS: Bob Franken.
As always, thank you, sir.
That brings us to the subject of tonight's poll. What issue is most important to you in this presidential election -- jobs and the economically, health care, national security, or the candidates' lives 35 years ago? Cast your vote at cnn.com/lou. We'll have the results later here in the broadcast. Still ahead tonight, another controversy in upcoming election, this one over electronic voting machines. Tonight, voters in at least one state are taking action to block those electronic voting machines, which they say are flawed, vulnerable to fraud.
And Exporting America tonight. Two of our nation's ports -- they're having to hire extra workers to help sort out a glut of cheap imported goods. Some of the millions of Americans who've lost their jobs to cheap foreign labor markets are lining up to apply.
And Face Off on the middle class. Economic advisers to President Bush and Senator Kerry tonight debate over which candidate will better help this country's middle class.
Stay with us.
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DOBBS: Tonight, electronic voting goes on trial for the very first time in this country. A group of citizens challenging the legality of electronic voting machines in the State of Maryland. The outcome of this case could have a critical impact on the very future of democracy and the way in which we vote in this country.
Louise Schiavone reports.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Democracy means a paper trail now!
UNIDENTIFIED FEMALE: Democracy means a paper trail now!
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): A small but determined band of e-voting protesters took to the streets of Annapolis as a county judge heard a challenge to the state's plans for e-voting in November.
LINDA SCHADE, TRUEVOTEMD.ORG: Basically, they are very vulnerable to human error, computer malfunction and fraud. So those are the three categories, and anyone who's used to computer knows that computers crash and you lose data.
SCHIAVONE: One of many public watchdog groups alarmed by the trend toward high-tech voting, True Vote Maryland wants to state to provide printed receipts to voters. With November fast approaching, however, the group would settle for paper ballots as a remedy. The state is not prepared to offer such a receipt, and, for the record, board of elections officials offer "no comment on the advice of legal counsel."
But the manufacturer of e-voting machines used in Maryland says, "The machines have been used for many years in hundreds of elections without a single factual security issue. Touchscreens break down barriers which have disenfranchised voters with special needs. They are not flexible to language needs and are much more user-friendly." But there are bugs in every manmade system, and the touchscreen machines are no exception. Many states are moving to the technology, key states like California, Ohio and Florida among them.
MATT HOLLAND, TRUE MAJORITY: California had a raft of problems during their primary earlier in the year with machines not booting up, with people not being presented with the right ballots. There have been problems going back several years. One of the best-known examples comes from, ironically, Palm Beach County, Florida, where 132 votes in an off-year election, a single-race election recorded nothing at all, and there's no way to ever go back and find out.
SCHIAVONE: And that's at the root of the court battle in Maryland.
(END VIDEOTAPE)
SCHIAVONE: Lou, polls show this will be one of the closest elections in history. With the bitterness of the Florida recount still fresh, concerns may be greater than ever before that, in November, every vote is counted -- Lou.
DOBBS: The thought that this year's election could be closer than that of 2000 is sobering indeed. Louise Schiavone, thank you.
Joining me now is the plaintiff who brought this case against the Maryland State Board of Elections. Linda Schade is the co-founder of truevotemaryland.org, and she joins me from Washington.
Good to have you here.
What, Linda, made you decide that a lawsuit was the only way to advance the interest of voters in your state?
SCHADE: Well, we began this a year ago, and, after trying to talk to our election officials and then going through a legislative session, we realized that legal action was the only thing it required, and we are arguing that if this election goes forward without a paper trail, it will be legal under Maryland law.
DOBBS: Well, as you know, in a number of states, the secretaries of state have brought action against several counties within their states basically saying that those counties are not ready to use the voting machines without paper backup. What is the basis of your action?
SCHADE: We are -- we had been seeking the decertification of the machines. Basically, as I was saying, our argument is that Maryland law requires a paper trail, and it requires that officials be able to reconstruct the election with an original voter record. And so, without a paper trail, it will be -- it's really invalid to go forward without a paper trail.
DOBBS: And that being the case, what could be the objection of state officials in Maryland? SCHADE: That's the $64,000 question. They consistently maintain that these machines work fine, that the primary election was flawless. We heard devastating testimony today from someone who had an incomplete ballot. The Senate race was missing from it, and it turns out that Senator Mikulski, the injured candidate, has heard from voters in three counties in Maryland that their ballots did not have the Senate race on them.
Linda Schade, we thank you very much. One last question as we must leave you: How soon do we expect the judge to take action on this case?
SCHADE: Well, we know it will be before the election comes, but I can't say more than that. But the trial will go through Friday, and I think very dramatic testimony will unfold in the next few days.
DOBBS: The fact that we are now just less than 10 weeks away from that election puts, I would think, great urgency on the judge to act.
Linda Schade, we thank you very much for being with us here.
SCHADE: Thanks for having me.
DOBBS: We invited Maryland's governor, Robert Erhlich, and Maryland's state elections chief, Linda Lamone, to join us tonight. They declined our invitation.
Palm Beach County, Florida, of course, at the center of the voting controversy in the 2000 presidential election. It was in that county that thousands of votes were counted incorrectly on the infamous butterfly ballots that many voters found apparently too confusing to use properly.
Tonight, you might be surprised to learn that the woman who was in charge of the Palm Beach County election four years ago -- yes, she is the very same woman who designed those confounding butterfly ballots -- is still on the job.
The Palm Beach County Election Supervisor Theresa LePore is still in charge of elections in her county, and we should note that LePore currently is up for reelection and has three opponents. She is the front runner.
Tonight's thought is on voting. "Nobody will ever deprive the American people of the right to vote except the American people themselves, and the only way they could do this is by not voting." President Franklin D. Roosevelt.
Coming up next here, some of your thoughts on the assault on the middle class and which candidate will better serve the interest of American working men and women and their families? Kevin Hassett, economic adviser to the Bush campaign, Gene Sperling, senior economic adviser to Senator Kerry's campaign, face off tonight.
And in Exporting America, hundreds of thousands of Americans clamoring for good-paying jobs as cheap foreign goods flood into our nation's ports.
And American aircraft again pounding targets in the Iraqi city Najaf, but, tonight, new hope for an end to the bloody fighting. We'll have that story next.
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CNN ANNOUNCER: LOU DOBBS TONIGHT continues with more news, debate and opinion. Here now, Lou Dobbs.
DOBBS: In Iraq tonight, hope for peace after weeks of fierce fighting in the holy city of Najaf. Iraq's most influential Shiite cleric, the Grand Ayatollah Ali al-Sustani, returning to Najaf after undergoing heart surgery in London. Sustani has called upon Iraqis to rally tomorrow in Najaf where he will demand an end to the deadly fighting that has ravaged the city for more than three weeks.
Rebels loyal to the anti-American Shiite cleric Muqtada al Sadr have been holed up in Imam Ali Mosque for weeks now. American warplanes pounded militant targets around the mosque for the fifth straight night.
In Exporting America tonight, a dramatic example of the high cost of this nation's so-called free trade policies. The Ports of Los Angeles and Long Beach are now so congested with cheap foreign imports that those ports must hire 3,000 additional workers to help unload and transport that cargo. Nearly half a million people applied for those jobs underlining the jobs crisis in this country.
Peter Viles reports from Los Angeles.
(BEGIN VIDEOTAPE)
PETER VILES, CNN CORRESPONDENT (voice-over): You're looking at half a million postcards -- that's half a million hopes and dreams -- all for 3,000 part-time jobs.
JAMES SPINOSA, PRESIDENT, INTERNATIONAL LONGSHORE AND WAREHOUSE UNION: We're very pleased with the turnout. It's a sad turnout in a way because it shows the state of this country when you have 400,000 or 500,000 people trying to get in on a very dangerous industry like ours.
VILES: The Long Shoreman's Union is hiring because the ports of Los Angeles and Long Beach are so congested with Asian imports. Overall traffic in the ports up 15 percent in July and it's not really a two-way street. Imports from Asia outnumber U.S. exports by nearly four containers to one.
UNIDENTIFIED MALE: We've seen the future as it pertains to this issue. The terminals are busting at the seams, ships at anchor, longer term times in port, lack of available labor to supply sufficient crews and many other problems associated with double digit growth.
VILES: A great opportunity for the Long Shoremen, but it comes at a huge cost to the nation, half trillion dollar trade deficit, millions of lost jobs in manufacturing.
ALAN TONELSON, "THE RACE TO THE BOTTOM": It's good honest work that the Long Shoremen are doing, no question about it. But these jobs are only being created and will only be sustained, because the United States buys so much more from the rest of the world than we sell to it. No other country in human history has ever pursued this strategy for long. In the long run, it has to crash and burn.
VILES: The jobs pay nearly $21 an hour, but they're part-time. One union leader, says the huge response is because so many good blue collar jobs have been exported to cheap overseas labor markets.
(END VIDEOTAPE)
VILES: One irony here. The Long Shoreman's Union clearly benefiting from American trade polices, and yet that union opposed NAFTA, and now opposes CAFTA. Says those trade deals, however good for the ports and the workers there, are bad overall for American workers -- Lou.
DOBBS: That is extraordinary, Pete. Nearly 500,000 people applying for 3,000 part-time jobs.
VILES: Yes, just incredible. They told people, do not send more than one postcard in or you'll be disqualified. So we have to believe there may have been some duplication, but most of those cards represented workers who wanted those jobs.
DOBBS: Peter Viles, thank you.
The 50 million families that make up this country's middle class, the single most important group of voters in this or any other election.
Senator Kerry and President Bush, both have proposals to help the struggling middle class in our "Face-Off" tonight. We'll take a look at which candidate would better serve the interest of middle class Americans. Joining me now from Washington is Kevin Hassett, he's economic adviser to the Bush/Cheney campaign and says Senator Kerry is making promises to the middle class, that the country simply can't afford.
And Gene Sperling, senior economic adviser to the Kerry campaign, who says the Bush tax cuts shifted the burden on to the middle class.
Thank you both of you for joining us.
Let me begin with you, if I may, Kevin.
What is the president doing in your judgment and will offer to do for the middle class that will make his policies far more attractive to the voters come November?
KEVIN HASSETT, BUSH CAMPAIGN ECON. ADVISER: Well, I know, Lou, that you follow the data as close as anybody. And I think, one of the most interesting things that we saw in the last few years is that even in the bad years when income wasn't growing as fast as we might like, consumption held up very strong and even the consumption of the middle class.
And I think recent studies out of Princeton suggest this is because the president's tax cuts gave people money, exactly when they needed it. Economy.com just did a report that suggested the recession was almost two years shorter because of these tax cuts. So, I think looking back the tax cuts help the middle class through some tough times. I think going forward what we expect is that the president is going lay out his agenda for the second term next week at the convention. Right now he's laid out some broad guidelines but hasn't made specific proposals yet.
DOBBS: Kevin, do you agree that there is a perception abroad in the country that this administration has represented the interest of business and broader macro policies, but has not focused on the individual, the working man and woman of this country, who by any definition over the past four years has been through some very tough times.
HASSETT: You know, I agree with you that there have been some tough times and times are a lot better now. You know, the last 12 months the economy grew 4.8 percent. And it never grew faster in the eight years Clinton was in office. And so, I think Americans recognize that we've had some tough times and we've turned the corner and are moving upward. But the president said quite tellingly recently that he wasn't satisfied with the job picture. I think the real question is, what is he going to propose next week that directly addresses that. And not being a deep insider, I'm not sure where they are on that. But I expect to see some discussion of that.
DOBBS: Gene Sperling, your candidate focusing on the middle class making it one of the tenants of his campaign. What do you think is the most important thing that he has proposed to this point that will be helpful to working men and women?
GENE SPERLING, KERRY CAMPAIGN SR. ECON. ADVISER: Well, Lou, there's no question the difference is night and day. Senator Kerry puts the middle class first in every single thing he proposes. I mean, the middle class isn't feeling strained, Lou, because they're not getting the good spin from the Bush administration. They're feeling strained for the reasons you just saw in your previous story. People are not finding good jobs. This has been -- we all know, this has been the worst jobs period for a president since 1930s even if you don't count the recession. Real wages are down since December -- December 2001. They are down over the last year. And at the same time, people have seen their healthcare costs, the typical family healthcare cost typical family healthcare go up by $2,600, energy, tuition.
But the key thing, Lou, is that all of these things are things policy matters on. President Bush did nothing on healthcare. Yet Senator Kerry puts forward a dramatic health care plan that not only covers 27 million more Americans, but deals with the spiraling healthcare costs that are squeezing families, squeezing businesses from hiring. Senator Kerry puts forward pro jobs tax credits. He gets rid of the incentives to move jobs overseas. Has a new tax credit for small business for manufacturing. He offers to cut the corporate rate by 5 percent for those who are investing here. Compare that to President Bush, nothing in terms of job creation.
And in fact, contrary to what Kevin just said the economy.com study showed that Bush tax cuts had 0 impact on shortening the recession. They had no impact in 2001 at all. The recession ended in November 2001 and their own study says it had zero impact. Compare that to the new jobs and jobs first emphasis of Senator Kerry's tax cuts.
DOBBS: Kevin, your response?
HASSETT: Yes, I disagree with a lot that Gene said. But I guess, that's his job, right. You know, I think you can read the economy.com study yourself and decide what you think. But, you know, there really has been a difficult time a few years ago. But a lot of the numbers are looking better. I think that it's not as black and white as Gene suggests.
You know, in 1996 when President Clinton was running for re- election, there were 5 million people in the economy that had part- time jobs, that they said because of economic reason, they'd like to work full-time. Today, that number is 4.3 million. You know, back then only 65 percent or so of Americans owned homes, today it's about 69 percent. There are a lot of numbers that are looking very positive.
And economists Ray Fair of Yale University, has tried to predict voting behavior which is the best indicator of whether people think they're doing better or not. And has found the best measure of voting behavior, that predicts voting behavior has been GDP and income growth. And that's been better over the last 12 months than it ever was during the Clinton administration. I think that,s really the best net of all the economic data out there. The Kerry team points to the things that could be better, and a lot of their facts are correct. Some of them I disagree with. But the fact is there are a lot of other things that are great that they're not mentioning. And I think on net, GDP is a good measure of how we're doing. And it's been doing very, very as you know, Lou.
DOBBS: Gene.
SPERLING: Lou, I have to respond...
DOBBS: Sure.
SPERLING: Lou, I have to respond to the notion that things are the same they were in 1996. Do you know that at this point in the economy in July, August of 1996 the economy had created 10 million jobs. Now it's lost 1.1 million. Lou, do you think it makes a difference in the U.S. Economy whether you've created 10 million jobs or you've lost 1 million jobs and are on your way to being the first president to lose jobs since Herbert Hoover. Take the state of Ohio, by this point in president Clinton's first term, Ohio created 411,000 jobs, now they're down 230,000. I bet those 600,000 jobs matter to the people in Ohio. Investment, business investment had been up over 9 percent per year. Now it's actually, down. The difference is night and day. It's just what you said, Lou. Let's look at energy. Perfect example. We could have had bipartisan leadership on energy. We could have alternative fuels being explored now. Why didn't it happen, because they had the secret energy process. They wouldn't pass an energy bill, because they were too beholden to those who wanted to drill in the arctic refuge. This is not the type of putting the middle class first policies that Senator Kerry is proposing.
DOBBS: Gene, just in fairness I think we should point out that administrations and Congresses over a quarter century have failed to come up with an energy policy that mitigates this country's dependence on foreign oil.
But I'd like to go to something and ask both of you this. I think, as you both know, I'm very concerned about trade policies that I think are having an extraordinarily deleterious effect on economy. I'm concerned about outsourcing, the Bush administration not only supports it, but in some quarters advocates it.
Gene, your candidate has been -- we've been told, after talking about Benedict Arnold CEOs, in of it's self, Roger Altman saying this, opposed to outsourcing. Can we get a clear statement about how outsourcing and the trade -- free trade policies that have resulted in 28 years of trade deficits in this country and nearly a $4 trillion external trade debt, how important those are and what you see of the impact of working men in this country and what either of your candidates will do about it? And let me begin with you, if I may, Kevin.
KEVIN HASSETT, BUSH CAMPAIGN ECONOMIC ADVISER: You know, Lou, I think there's a lot that you've said over the month that I disagree with about outsourcing.
DOBBS: Don't get me.
HASSETT: But one of the things they agree about is that we haven't done as good a job as we could at getting other countries to be very open and allowing our goods to sell in those markets. And so the reason that trade is successful in the economic models is that as countries grow wealthier, then they start buying Johnson's Baby Shampoo and they start buying golf clubs.
DOBBS: Kevin, I really wanted less in economy theory, but we've heard a lot of theory from Democrats and Republicans. What I want to hear is what in the world are you guys going for the folks who make this country work, the middle class?
HASSETT: Right, and you know, but we're relating it to outsourcing at the moment. And the fact is, that what we're going to do is push for a trade agenda that opens up those markets and also allows our firms to operate wherever it's best for them to operate.
I think one of the big interesting questions is, why is it that firms are deciding to operate overseas? Take for example semiconductor manufacturers, they only have about 5 percent of their total costs in labor costs and yet many of them have decided to locate in Asia. And if you sort of peel the onion, and look back at why they're doing it, they're doing it because the U.S. is such a high tax country. And so there are things that we can do to make the place a better place.
DOBBS: So the idea is to take away the job of the taxpayer. Gene, go ahead.
GENE SPERLING, KERRY CAMPAIGN SR. ECONOMIC ADVISER: Well, listen, Senator Kerry certainly understands we have to engage in a global economy. We can't keep every single job here. But, there is a dramatic difference between him and President Bush.
No. 1, Senator Kerry fundamentally believes we should have nothing in our tax code that actually encourages companies to move jobs overseas. How amazing that you can have two companies in Columbus, Ohio and if one wants to move to the Cook Islands, and the other wants to expand in Columbus, Ohio, we actually give the one in -- our tax code gives the one that moves overseas a tax incentive. How can the American people ever understand how President Bush supports that?
Secondly, if you're going to have trade you want to have a level playing field. Now I ask you, Lou, over these last three year, President Bush has brought less cases, less WTO cases to enforce our trade agreements in 3 years than president Clinton used to do each year. Now, have we just suddenly nobody trading unfair with us as we've had this massive trade deficit?
Next, look at the fact that...
DOBBS: Jim, I am awfully sorry. And in the interest of equity, I would like to let you finish that question, but we are literally out of time. Gene Sperling we thank you very much. And Kevin, we thank you very much. I hope you both will come back.
HASSETT: Thanks. Great to be here.
DOBBS: I hope you both will come back as voters try to make up their mines on the economic policies of the two candidates. Of course, no one in this country is a single issue voter, but these are critical issues to all of us. Thank you both.
Still ahead here, "Broken Borders" new evidence tonight that illegal aliens are taking a staggering amount of money out of the pockets of hardworking American taxpayers every year. This is immigration policy? We'll have the report next. Stay with us.
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DOBBS: In "Broken Borders" tonight, a study released today details the financial burden that illegal aliens are putting on this nation's taxpayers. It's conclusions are stunning, yet simple: Illegal aliens are draining much of the nation's finances, and stronger enforcement of immigration laws is the only practical solution. Casey Wian reports from Los Angeles. (BEGIN VIDEOTAPE)
CASEY WIAN, CNN CORRESPONDENT (voice-over): It's a question that is central to the debate over what to do about the 10 million illegal aliens in the United States. Are they an economic benefit? The answer is a resounding no, according to a detailed analysis by the Center for Immigration Studies. Titled "The High Cost of Cheap Labor," it calculates the taxes paid by illegal aliens and the costs they impose. It concludes that illegal aliens take more than $10 billion a year out of the pockets of taxpayers or $2700 per illegal household.
STEVEN CAMAROTA, CENTER FOR IMMIGRATION STUDIES: With nearly two-thirds of illegal aliens lacking a high school degree, the primary reason they create a fiscal deficit is their low education levels, and resulting low incomes and tax payment, not their legal status or even particularly heavy use of most social services. Nor is it caused by an unwillingness to work, a vast majority of adult illegals, in fact, hold jobs.
WIAN: Among the report's startling findings, illegal aliens make up about 17 percent of federal prison population, even though they're only 3 percent of the general population. And they consume 13 percent of federal spending on medical care for the uninsured.
The study also estimates the financial impact of an amnesty program, like those proposed by both President Bush and Senator Kerry. The taxpayer burden would nearly triple to $29 billion a year. That's more the federal government's entire budget for the Department of Homeland Security.
ROBERT RECTOR, HERITAGE FOUNDATION: A society which has an advanced welfare state for the economically disadvantaged will incur considerable cost when it imports large numbers of low skilled individuals.
WIAN: The study concludes the only practical way to avoid those costs is to enforce the law, and reduce the number of illegal aliens in this country. And the centerpiece of that strategy should be cracking down on employers who continue to hire illegal aliens.
(END VIDEOTAPE)
WIAN: We contacted the offices of several members of the Senate and Congress who are sponsoring illegal alien amnesty bills, none were available to discuss the study. Also the study did not calculate the impact of illegal aliens on state and local governments, but the authors say those are probably even higher -- Lou.
DOBBS: The study is remarkable in that it clearly sets out that the taxpayer in this country is paying for those companies and businesses and homeowners who are hiring illegal aliens and who get all the benefits of illegal alien labor while the taxpayer pays all of the costs. Casey Wian thank you -- yes, go ahead, Casey.
WIAN: You wonder how many lawmakers are going to continue to support illegal alien amnesty bills given these cost estimates -- Lou.
DOBBS: A very good point. Casey Wian, thank you very much for an excellent report. Coming up next here, it is the worst drought to hit this country in as many as 500 years. It's threatening millions of people across the western part of this country. Tonight, warnings that the worst is yet to come. We'll have that special report next. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Something of a rally on Wall Street today. The Dow up 83 points, the NASDAQ up 24, almost, the S&P 500 up nearly 9.
A successful stock market debut today for a company profiting, and profiting handsomely from outsourcing. Christine Romans with the story -- Christine.
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Lou, it's India's largest IPO ever. Shares of Tata Consultancy Services jumped 16 percent on their first day of trading in the Indian stock market. With a market value of $10 billion, Tata Consultancy, the third biggest publicly traded company now in India.
Among the American companies, shipping jobs to Tata, American Express, Boeing, AT&T, IBM, GM and Microsoft, not to mention the governments of Montana and Pennsylvania. General Electric also a very big customer. It accounts for 17 percent of Tata Consultancy revenue.
Ironically, as Tata started trading, IT workers in Bangalore braced for a work shutdown after the arrest of a popular politician. Now, some outsourcing offices will shut their doors for the day, others will work with contingency plans. Political and religious unrest, Lou, one of those unintended consequences of shipping jobs overseas. They'll have to close some offices tomorrow.
DOBBS: What happens to all of those call centers? The folks at Dell have got to be nervous, right?
ROMANS: OH, but the business is done so much more cheaply, Lou. It's worth it?
DOBBS: Not to me, and not to millions of other Americans. That's amazing. I guess we'll know tomorrow.
ROMANS: We'll know tomorrow.
DOBBS: All right. Christine, thank you.
Still ahead, the severe drought in the Western United States threatening millions of our fellow citizens. That story is next. Please stay with us.
(COMMERCIAL BREAK)
DOBBS: The West is battling what could be the worst drought in 500 years. It may be worsening. Casey Wian reports. (BEGIN VIDEOTAPE)
WIAN (voice-over): Three wildfires blackened 26,000 acres of Northern California last week. Near Las Vegas, Lake Meade has lost nearly half its water. Farther north, Lake Powell is drying up even faster, threatening water and power is supplies. Throughout the West, farmers are abandoning crops and selling water rights to increasingly thirsty cities. It's all the result of a persistent 6 year drought.
MICHAEL HAYES, NATL DROUGHT MITIGATION CENTER: We still have a lot of severe and extreme drought conditions across most of the West. Only in a few areas of the West have we had some easing of the conditions this summer. I would say the front range of Colorado and Northeastern New Mexico. The rest of the West has either stayed about the same or gotten a little bit worse.
WIAN: For some places, the worst is yet to come. Southern California's wildfire season peaks in October. The National Weather Service predicts drought will either persist or intensify, and Southern California and most of Arizona, Nevada and Utah through November.
A growing number of western cities are restricting water use and raising rates. Costs are also rising for utilities that depend on water for power. The Western Area Power Administration delivers hydroelectric power to 15 states. The drought has cut its supply 25 percent.
BOB FULLERTON, WESTERN AREA POWER ADMINISTRATION: We expect that we're going to be expending about $315 million in purchase power in order to make up for the lack of hydrogenration in this fiscal year. So it's a significant impact.
WIAN: Scientists aren't sure if the drought is part of a normal weather pattern reoccurring every few decades, or an event that hasn't happened in centuries. But they know it won't end until there's an unusually heavy winner snow.
(on camera): The Pacific Institute on Monday released a study warning that water shortages, not just in the West but throughout the world, pose a multibillion dollar threat to businesses. The think tank also predicted that access to water will replace access to oil as the world's critical economic issue this Century. Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
DOBBS: Still ahead, we'll have the rules of tonight's poll and a preview of what's ahead tomorrow. Stay with us.
(COMMERCIAL BREAK)
DOBBS: Our survey: 69 percent of you say jobs and the economy are the most important issues in this campaign, only 2 percent of you think the candidate's lives 35 years ago. Thanks for being with us. Please join us tomorrow. The head of one company tells us why he's not sending American jobs to cheap overseas labor markets. For all of us here, good night from New York. "ANDERSON COOPER 360" next.
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