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Lou Dobbs Tonight

Suspected Radical Islamist Terrorists Launch Attacks in Israel, Russia, Iraq

Aired August 31, 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, HOST: Tonight, suspected radical Islamist terrorists launch bloody attacks against Israel and Russia. Radical Islamists in Iraq slaughter their hostages.
A day after saying the war on terror may be unwinnable, President Bush declares a clarification.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Make no mistake about it, we are winning, and we will win.

(END VIDEO CLIP)

DOBBS: Former presidential candidate Patrick Buchanan says neoconservatives have hijacked the Bush presidency. He's the author of "Where the Right Went Wrong," and he's our guest.

Also tonight, the Democrats fight back. The national co-chairman of the Kerry campaign, Congressman Harold Ford, joins us.

A dramatic discovery in deep space. Astronomers find two planets that are more similar to earth than any other planets outside our solar system.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a milestone. We've crossed a hurdle, finally.

(END VIDEO CLIP)

DOBBS: And guess who makes the most money when American middle- class jobs are exported to cheap overseas labor markets? CEOs. What a way to make a buck. Our special report, Exporting America.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, August 31. Here now for an hour of news, debate, and opinion is Lou Dobbs.

DOBBS: Good evening.

Today, bloody attacks against civilians in Israel and Russia, sheer butchery in Iraq. The global war on terror is one of the critical issues in this presidential campaign and election. And the importance of winning the war against radical Islamist terrorists was demonstrated in three nations today.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): As emergency personnel dealt with the aftermath of another Palestinian suicide bombing in Israel, Muslim leaders took to loudspeakers in Gaza City, proclaiming the terrorist attacks a heroic operation.

Two buses in Bersheva blew up just 15 seconds apart, killing at least 16, plus the two terrorists. More than 90 were wounded. The Islamic terrorist group Hamas claimed responsibility, saying the bombings were in retaliation for Israel's killing of two Hamas leaders.

MUSHIR AL-MASRI, HAMAS SPOKESMAN (through translator): Today, they are operations to show the enemy that the factions of the resistance can reach anyplace it wants, and it is a lesson that the enemy should not forget.

WIAN: Israeli Prime Minister Ariel Sharon said the attacks would not stop Israel's ongoing construction of a barrier separating it from the West Bank in Gaza, nor would it affect Israel's planned withdrawal of settlers and troops from Palestinian territory.

ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): Israel will continue to fight terror, and this issue has nothing to do with the disengagement plan, but with only one thing, the murder by Palestinian terrorists. And we will fight it with all our might.

WIAN: A few hours later, outside a subway station in Moscow, terror strikes again. At least 10 dead and 33 wounded. Russian officials say there is a high probability it was a terrorist attack. The bombing comes just a week after the suspected terrorist attacks against two Russian commercial jets, killing 90 passengers and crew. That, and several other recent attacks, have been linked by Russian investigators to rebels from Chechnya, where Russian troops have been battling separatists for a decade.

Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: Radical Islamists in Iraq also engaged in a savage campaign of terror. Today they slaughtered 12 Nepalese hostages that they've held for more than a week. This is the largest number of hostages to be killed at one time since the fall of Saddam Hussein's regime.

The radical Islamists cut off the head of one of their hostages while the others were forced to watch. Then they shot the remaining 11 hostages as they lay on the ground.

Yesterday, President Bush said the war on terror may be unwinnable. Today, President Bush said the United States will win. The president's leadership is, of course, the focus of the Republican convention this week in New York. Tonight, First Lady Laura Bush and Governor Arnold Schwarzenegger of California will be among the prime- time speakers.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: In a little, Governor Schwarzenegger and the first lady will speak here in the convention hall from the podium. But the most important speech of the day was delivered by the president himself, not here in New York, but in Nashville.

As you noticed, Mr. Bush created a bit of a dust-up of his own making, if you will, a diversion from the carefully planned convention script, by saying, "I don't think the war is winnable." White House aides said the president simply meant it was not a conventional war, there would be no peace treaty. Mr. Bush, in a speech to the American Legion in Nashville today, tried to make crystal clear exactly what he meant.

(BEGIN VIDEO CLIP)

BUSH: In this different kind of war, we may never sit down at a peace table. But make no mistake about it, we are winning, and we will win.

(END VIDEO CLIP)

KING: Now, Democrats had criticized the president, saying he was all but admitting he could not win the war on terror. The White House believes this strong speech today will put that debate to rest.

From the podium tonight, more praise of the president's leadership since the September 11 attacks nearly three years ago, with a bit of star quality. Arnold Schwarzenegger, the movie star turned governor of California, will deliver a speech in prime-time, and he will say America is back. The defense of the homeland has improved, the economy is coming back because of the perseverance and character of President Bush.

First Lady Laura Bush also will deliver a prime-time address in which she will offer her personal insights on the president's leadership since the tragic terrorist attacks of three years ago, and she will also offer a defense of the president's limits on so-called embryonic stem cell research. That has become an issue in the campaign debate as well. Mrs. Bush turned the podium with her two daughters, Jenna and Barbara Bush. They also will have a brief role in the convention proceedings here tonight.

Now, earlier today, I sat down with the president's top political adviser, Karl Rove. It is rare for him to give a television interview. Among the topics we discussed, Republicans steal a bit of momentum. They are feeling pretty good coming into this convention. But I asked him, what is the president's number one liability?

(BEGIN VIDEO CLIP) KARL ROVE, BUSH POLITICAL STRATEGIST: What we face is a highly polarized electorate, and that's the biggest difficulty the president faces.

But, look, I mean, he's got, he is the president. He can talk about the -- on the, on the biggest issues facing America, the war, the economy, the values of our country. He's in synch with the American people. His opponent is not. His opponent is the most liberal member of the United States Senate. That's saying a lot, when your fellow seatmate from Massachusetts is Ted Kennedy.

(END VIDEO CLIP)

KING: Karl Rove also saying the president will lay out a detailed domestic agenda in his speech Thursday night, in addition to explaining and defending his leadership in the war on terrorism. Lou, that domestic agenda, a lesson learned from his father. This president does not believe his father back in 1992 spent enough time at his convention talking about what he would do if given four more years.

This president, Karl Rove insists, will do that in this hall Thursday night, Lou.

DOBBS: John King, thank you very much.

Dozens of Democrats are also in New York City, ensuring their party quickly responds to Republican attacks during this convention.

Meanwhile, vice presidential candidate Senator John Edwards was in West Virginia today campaigning. Senator Edwards accused the Republicans of launching negative attacks against the Democrats.

Ed Henry reports.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice-over): Democrats are blasting the fact that some delegates wore Band-Aids with small purple hearts to mock John Kerry's wounds in Vietnam. Korean War vet and Democratic Congressman Charlie Rangel accused these delegates of dishonoring the Purple Heart.

REP. CHARLES RANGEL (D), NEW YORK: This symbol, it's a very moving one, because many of the people that earned it never came back home.

UNIDENTIFIED MALE: I think we should offer a bounty to any of those Band-Aid wearers who's ever seen combat.

HENRY: Democrats say the buck stops with President Bush.

TERRY MCAULIFFE, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: George Bush's boots never went to Vietnam, and that's his right. He had the right not to go. But he does not have the right to smear our veterans. HENRY: The White House chief of staff denied any coordination with the delegates who wore the Band-Aids.

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: Not to my knowledge. I can tell you this, I have great respect for anyone who wears the uniform of the armed services, and I certainly have great respect for people who have made sacrifice and earned the Purple Heart.

HENRY: One man who handed out the Band-Aids, Morton Blackwell, insists he acted on his own. But Democrats point out the conservative activist has been closely aligned with White House aide Karl Rove.

MORTON BLACKWELL, GOP CONVENTION DELEGATE: It's a fantasy. I haven't spoken to Karl Rove in a couple of months, and our last conversation had to do with the issue of judicial appointments. There was certainly no disrespect intended to the Purple Heart. After all, who has been disrespectful of the Purple Heart? As I recall, John Kerry is the guy who admitted throwing those, and bragged about throwing those decorations...

HENRY: The controversy comes as Swift Boat Veterans for Truth unveil a new ad called "Medals."

(BEGIN VIDEO CLIP, SWIFT BOAT VETERANS FOR TRUTH AD)

(BEGIN VIDEO CLIP, November 6, 1971)

JOHN KERRY: ... renounce the symbols which this country gives, and that was the medals themselves. I gave back, I counted number six, seven, eight, nine.

(END VIDEO CLIP)

ANNOUNCER: How can the man who renounced his country's symbols now be trusted?

(END VIDEO CLIP)

HENRY: Democratic Senator Zell Miller, who will be the Republicans' keynote speaker on Wednesday night, said Democrats should not claim the swift boat vets are doing the president's dirty work.

SEN. ZELL MILLER (D), GEORGIA: I don't think I'd have the nerve to say that, not when I have George Soros tied around my neck.

(END VIDEOTAPE)

HENRY: Republicans were hoping that on opening night, they would appeal to independent voters and moderates. But Kerry campaign officials charged today that, in fact, these attacks on John Kerry, especially by Rudy Giuliani last night, as well as these Band-Aids, might backfire with swing voters, Lou.

DOBBS: Ed, thank you very much. It's becoming hard -- I'm just curious, Ed, just how does one make the distinction between negative campaigning and attack campaigning? HENRY: Well, I can tell you, I was on a conference call this morning with Kerry campaign officials, and they were talking a lot about these negative attacks at the convention. They say the tone has been very negative already from the Republican convention.

But I pointed out that people like Senator Edward Kennedy last month in Boston also had a lot of negative attacks on the president. So I think it's up to which side you're talking to, as you mentioned. And as you noted, both sides are getting their licks in. And there are going to be a lot more between now and November 2, Lou.

DOBBS: Ed Henry, thank you.

Later in this hour, I'll be talking with the national co-chairman of the Kerry campaign, Congressman Harold Ford, about the direction, the momentum, and perhaps problems of the Kerry campaign.

Some senior Democrats are concerned that Senator Kerry's campaign is losing ground against the president. Those Democrats are calling for a shakeup in Senator Kerry's campaign staff.

I'm joined now by E.J. Dionne, political columnist for "The "Washington Post," senior fellow, the Brookings Institution.

Good to have you here.

E.J. DIONNE, POLITICAL COLUMNIST, "THE WASHINGTON POST": Good to be with you always, Lou.

DOBBS: The missteps that have been alleged of the Kerry campaign, are they, in your judgment, first, significant, and do they rise to the level that it would be necessary to shake up the campaign?

DIONNE: Well, I think there are going to be changes in the campaign. I think that the campaign itself is not going to call it a shakeup. But I think within Democratic circles, there's been this criticism that the Kerry campaign is a little bit too much like an ocean liner, and if you'll forgive the metaphor, not enough like a swift boat.

And there are going to be a lot of attacks coming at them in this fall, and so I think there's a lot of talk about creating a war room, a rapid response team. And I think they're going to do some of that stuff. Joe Lockhart, formerly of the Clinton administration, is coming onto the campaign. So I think there will be some changes.

The swift boat thing put them in a very difficult position, because they made the judgment that, if they responded too quickly, too early, they would build up the story. But the thing has received -- gotten so much momentum that now Democrats are saying you should have hit back harder and pushed this back earlier.

DOBBS: Shoulda, coulda, woulda, as you put it. The fact is that a number of ranking Democrats are very unhappy with the direction this campaign has taken, either tied with or lagging or within the margin of error with an incumbent president that they had a lead on a month ago. How high up would the so-called shakeup go?

DIONNE: My sense is they're not going to throw a lot of people out. I think they're going to reorganize and bring some new people in.

I mean, there are two facts here. One fact is that Kerry seems to have lost a little bit of ground since his -- since the modest bounce he got at the convention. The other fact, which this convention is about, is that President Bush really hasn't been able to get himself out of the 40s. I think the key is, does George Bush ever get to the point where 50 percent or more of the public are willing to say they're voting for him?

For an incumbent to be below 50 percent is difficult. And that's why I think the Bush campaign has decided they may not be able to get to that 50 without tough attacks on John Kerry, and that was Rudy Giuliani's speech.

It was interesting. John McCain could have chosen to throw the hatchet, and he didn't. He gave a very mild speech, a kind of intellectual defense of the war. But Rudy Giuliani went all out there, and I think is trying to win support from the Republican base for 2008.

DOBBS: And tonight, E.J., the first lady will be speaking, Governor Schwarzenegger. In contrast to last night, apparently, the effort to be a kinder, gentler party, if you will, compassionate conservatism on display. Can that be pulled off?

DIONNE: I don't know. They pulled it off pretty well four years ago. They're really trying to do the same thing again. I was talking to Amo Houghton, a veteran moderate Republican congressman, who is retiring this year. And he said, you know, they seem to use the moderates as the salesmen, but they use the right-wingers, the conservatives, as the policy makers.

And I think that's the contradiction they're dealing with here. The Republicans have a problem in the polls among moderate independents. That group has been lately for John Kerry by a margin of around 3 to 2. Bush has to tighten that up if he's going to win the election.

DOBBS: E.J. Dionne, thank you.

DIONNE: Thank you.

DOBBS: Still ahead, former presidential candidate Patrick Buchanan says the right has lost its way. Neoconservatives, have they hijacked the Bush presidency? Pat Buchanan is my guest.

New protests in New York City today against the Republican National Convention. We'll have live reports.

And Republicans tonight praising President Bush's leadership and character. I'll be joined by three of the country's top political journalists live from the scene of the Republican National Convention, Madison Square Garden.

(COMMERCIAL BREAK)

DOBBS: Former presidential candidate Patrick Buchanan has written a new book that blasts President Bush and his administration. It is called "Where the Right Went Wrong: How Neoconservatives Subverted the Reagan Revolution and Hijacked the Bush Presidency."

Given that criticism, I asked Buchanan whether he wants the president to win reelection.

PATRICK BUCHANAN, AUTHOR, "WHERE THE RIGHT WENT WRONG": Well, I think, if you come down to a choice who you would like to appoint the next four Supreme Court justices, which we could get in the next term, I definitely would prefer George Bush to John Kerry. I think Bush is better on taxes. One judges on sovereignty and on values.

But the president is wrong on trade, he's wrong on deficits, he will not control and defend America's borders, and he's wrong on this Wilsonian foreign policy. On those four issues, unfortunately, he agrees with Kerry, and I take the conservative line.

DOBBS: Pat, as you lay out those broad, profound issues, I mean, that is the bulk of what governance is about, foreign policy, controlling borders, our trade. And he wins on what particular issue, in your mind?

BUCHANAN: Judges, taxes, values, and sovereignty. And (UNINTELLIGIBLE)...

DOBBS: Sovereignty without borders?

BUCHANAN: Well, no, this is -- you get to a very good point there. If you remove all your borders, and you have global free trade, what you get then is a global governance gradually growing, and you get world government. And the truth is, both parties are leading us to world government.

Lou, when I was back there fighting against NAFTA and GATT and the WTO in those days, you found Clinton and Gingrich and Dole all together, Brookings Institution and the Heritage Foundation all together, Cato and "The Washington Post" together.

So what we got is, I think, is, is, we are moving toward world government. We are losing our sovereignty. We are losing our national economic independence. And both parties are moving in that direction. And the question is -- and Kerry's wrong on everything.

DOBBS: What happened to the Republican Party? Because when you talk about budget deficits, you talk about free trade, the issues of, fundamentally, national security, these were Republican issues and important tenets of the Republican philosophy even 10 years ago, perhaps 15.

BUCHANAN: Right.

DOBBS: What happened?

BUCHANAN: The Beltway right has entered into a civil union with big government. The Beltway right and the conservative scholars in Washington, these conservative writers and thinkers and policy analysts, I think, have basically sold their souls for power. I think they believe that big government is here to stay, that the country wants it, and that therefore, if they want power, they're going to have to go along with that.

I don't understand, Lou, on open borders, because it is quite clear that the president of the United States, in his Thursday night speech, got up and said, I believe in immigration, that we're a nation of immigrants, but I also believe we are a nation of laws, and I am going to defend that border. And people who break in are going to have to go back. If you break in line and break the law and break into our country, you cannot stay. And I'm constitutionally obligated to uphold the laws, and I'm going to do it, and I will defend the border with troops if necessary.

I think he would wrap up the Southwestern states, which are now imperiled for him. I don't know, for the life of me, I don't know why he doesn't do that, because that is an issue, and I know you've dealt with it, it is an issue on which overwhelming majorities want that done.

DOBBS: Do you find it striking, Pat, that in this country, on critical issues, border security, immigration, education, there is no national referendum, if you will? There is so little representation of middle-class working men and women and their families in Washington right now. These issues that are so important, upon which survey after survey shows the American people feel a certain way, legislators in Washington, the executive branch, all but ignore their views.

BUCHANAN: It, it, well, I think what is going on is nothing less than economic treason against the middle class of this country. Their jobs are being exported, technology, industry, factories, and the future of their children is being (UNINTELLIGIBLE).

And I'll tell you why I believe it is, and both parties are doing it. Of the 100 most powerful economic institutions in the world, by the GDP, 51 of them are corporations. All of these corporations, many of which used to be America first, let's protect America's market, this is our market, all of them have become globalists.

And so this huge economic force is for breaking down barriers, opening borders, being allowed to move their factories wherever they want, jobs wherever they want. They've put the bottom line first, and for them it is profits and corporate salaries and all the rest. And that is why you need a strong, traditional, conservative government to structure the taxes and trade policies so that the economic incentives force these corporations to come back into the United States and create jobs here.

And nobody in either party is really talking about that, except, I will say, my old friend Ralph Nader, who understands it.

DOBBS: Well, Pat Buchanan, my old friend, thanks for being here. And good luck with your new book.

BUCHANAN: Thank you very much, Lou. It's good to be back.

DOBBS: Still ahead, a crisis in our nation's classrooms. Tonight, our special report on the middle class squeeze. The president's plans to fix education in this country.

Also ahead, dozens more protesters are arrested in New York, demonstrators, many of them causing havoc in parts of Manhattan. We'll have a live report for you on day two of the Republican National Convention.

Three of the nation's leading political journalists join me. Stay with us.

(COMMERCIAL BREAK)

DOBBS: All this week, we're reporting on President Bush's plans to address the many concerns of this country's middle class. Tonight, we're focusing on education. Much of the president's education policy centers around a controversial program that many schools say is just simply impossible to fulfill.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Use the data to make two stem and leaf plots...

BILL TUCKER, CNN CORRESPONDENT (voice-over): Spending on education has risen 36 percent under President Bush, half of that money going to fund the president's initiative on education, No Child Left Behind.

UNIDENTIFIED FEMALE: And the reason they came?

TUCKER: The broad goals of the act are to set performance standards for schools and to hold schools accountable for federal monies given to them.

However, No Child Left Behind is controversial. Its critics charge that the law is underfunded, that it imposes standards without providing funds to meet those standards, and that it lacks incentives for getting good, experienced teachers to work in poorly performing schools.

JACK JENNINGS, CENTER ON EDUCATION POLICY: Well, I'm not aware of any major group that's asking for the repeal of this law. They're asking to fix it. They're asking to make improvements in it so it measures students' success better than a single test. They're asking for different ways to improve the law, not to repeal it.

TUCKER: One of the sharpest areas of disagreement over education between the Republicans and the Democrats is the question of school choice. The Republicans believe that public schools can best be fixed by forcing them to compete with other types of schools, such as charter and private.

And Republicans favor vouchers for parents who want to take their children out of public schools in favor of private choices.

But recent studies show that charter schools are not a raging success.

KATHY CHRISTIE, EDUCATION COMMITTEE OF THE STATES: We've seen in study after study since charter schools began that there really isn't any big correlation with improved student achievement. They're as uneven in their performance as the public schools are uneven in their performance.

(END VIDEOTAPE)

TUCKER: The point that educators are in total agreement on is that the more the politicians discuss it, the more attention the issue gets. And, Lou, ultimately the better it is for the state of education in this country.

DOBBS: Well, one would hope that would be the case. But we've been focusing on education in this country for the past 20 years to little, if any, effect. Bill Tucker, thank you.

An estimated half a million demonstrators are in New York City now, protesting the war in Iraq, amongst other issues, during this Republican National Convention. Police have arrested already nearly 600 protesters. Today, demonstrators blocked traffic around the city.

Jason Carroll joins us from Madison Square Garden. Jason?

JASON CARROLL, CNN CORRESPONDENT: And Lou, this is the point where a rally is set to begin just about an hour from now. Police are going to be keeping an eye on that and the group behind it, A-31, a loose coalition of activists.

But first, let's get to what has already happened today. Down at ground zero, police arrested at least 200 demonstrators down there, or antiwar demonstrators. Apparently, they asked the crowd to disperse, the crowd did not, so they began making arrests.

In addition to that, at a park not far from Madison Square Garden, police made several arrests there as well. That protest by a group called the Organization Representing Homeless and Health Care Issues.

Also today, hundreds rallied and marched earlier today at New York's Bureau of Immigration and Customs Enforcement, speaking out for immigration rights and against the war in Iraq.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We're doing it specifically in New York at the end of August coming into September, coming close to the anniversary of the 9/11 attacks, to exploit the grief of 9/11, to pursue this agenda of war in the world. (END VIDEO CLIP)

CARROLL: The most unruly protests came last night. Police are looking for that man that you saw there in the white T-shirt in the baseball cap, who apparently beat a plainclothes police officer into unconsciousness. That officer at this point in stable condition. Again, police still trying to find that man.

And they're still waiting to see how many people will end up showing up here at this protest tonight, again by a group called A-31. Some of those people who were arrested down at ground zero, Lou, actually planned on coming up here for this demonstration. So unclear what the numbers will be for the rally at 7:00 p.m., Lou.

DOBBS: Jason, thank you.

Inside the convention tonight, the theme is compassion. Joining me now, some of the most compassionate top political journalists in the country, Karen Tumulty, national political correspondent, Time Magazine, Roger Simon, political editor, U.S. News and World Report, Ron Brownstein, national and political correspondent, Los Angeles Times, all at Madison Square Garden. Thank you, all three for being here. I want to start with you, Karen, if I may. The president saying today that the war is winnable, after yesterday telling NBC's Matt Lauer it isn't. What's going on?

KAREN TUMULTY, CNN NATIONAL POLITICAL CORRESPONDENT: Well, I guess after Ron on this program gave him points for being truthful and frank -- the fact is that, you know, the last thing that he wants to be doing in a moment when his poll numbers on measures like commander in chief and national security and strong leader are going up is to start looking as though he is uncertain at all on the war on terror, which after all is his trump card in this election.

DOBBS: And former Mayor Rudy Giuliani, Ron, he backed away from talking about winning the war on terror because of the president's statements yesterday. How did Rudy Giuliani and Senator McCain do in your judgment last night in prime-time?

RON BROWNSTEIN, NATIONAL AND POLITICAL CORRESPONDENT, LOS ANGELES TIME: Boy, you climb out on a limb, and the president just saws it off right behind you. It's just not a good year to be realistic and measured and nuanced, I think. I thought that last night was a very -- it was an unusually clear public expression of the private strategy of the campaign. Both McCain and Giuliani in their speeches, I think, reflected a core calculation of the Bush team, which is they believe there are going to be voters out there who support President Bush even if they disagree with him on a lot of individual policies because they believe he is a strong leader. And, Lou, I thought you got the clearest sort of signal of their thinking when Rudy Giuliani said when we elect a president, we don't really elect just a Democrat or a Republican, a liberal or a conservative, we elect a leader, especially in times like these. And what he was saying to Americans was, even if you disagree with many of President Bush's choices, you can still support him because you feel that you can count on him in a crunch. I thought that was a pretty effective message even though I thought his overall speech kind of wandered around a little bit.

DOBBS: Roger tonight, Governor Schwarzenegger, the first lady can against the back drop of last night's presentations, can they succeed in establishing the aura of compassionate conservatism around the Republican party?

ROGER SIMON, POLITICAL EDITOR, U.S. NEWS AND WORLD REPORT: Yeah, I think they're going to make a good go at it. Brigadoon like, compassionate conservatism reappears tonight after four years of not or three and-a-half years of not hearing about it very much. But Arnold Schwarzenegger is a popular figure. He goes beyond party politics. He's a superstar. We all know his background. And he is going to tell us about his life growing up in Austria and how much better it was to come to the United States, a poor boy with hardly any money in his pocket and make a great success.

And Arnold Schwarzenegger is a great success story, and he's going to talk about the kind of America that George Bush has built to make that possible. And, of course, Mrs. Bush is going to tell us about George Bush as a human being, as a warm husband and loving father. The twins are going to come out and do five minutes of humor. I don't know if George Bush ever resuscitated a hamster, but we're likely to hear that kind of story from them. And then there's going to be a little surprise. George Bush is going to do a live TV hook-up from the road and address the delegates very briefly.

TUMULTY: But may I say how ironic this is? I mean, if a year ago you would have told somebody that Arnold Schwarzenegger was going to be coming out as the figure of compassion, I mean, this is a guy who, however compelling his life story is, the picture most Americans have of him is with a ray gun in his hand blasting away aliens. So it just tells you how quickly and how dramatically politics can change your image.

BROWNSTEIN: And we'll see how heavily he leans on the compassion theme. I mean, as we talked about last week, they had those disappointing numbers on poverty and the uninsured that came out from the census last week. The president has tried to argue that he is more concerned about these problems than Republicans have had a reputation for traditionally. But it's a little tougher this year, Lou, because, of course, he does have a record. In 2000, it was perspective. Now he has to defend the question on why he hasn't made more progress on these problems during a full presidential term.

DOBBS: And outside your venue there at Madison Square Garden, Senator Kerry's campaign, the subject of a lot of rumor and speculation that a shake-up is in the offing, disappointment. What is the reaction within Madison Square Garden to the rumored problems and the appearance, at least, of some problems within the Kerry campaign. Roger?

SIMON: Well, we all love shake-up stories. He added new staff today. But the stories that make the headlines aren't the addition of staff, but the firing of existing staff. I doubt if anybody at the top will be thrown from the sled, but the fact is John Kerry has not had a good August. The swift vote story just hung around too long. Even though it has not seemed to have damaged him in the horse race polls, it has damaged him in certain areas of those polls. And the campaign -- don't forget John Kerry switched campaign managers once before, and I doubt if he's going to switch campaign managers this time. I think he would love to bring in a figure like Bill Daly, who was Gore's campaign manager, campaign chairman. We'll see.

DOBBS: Roger?

SIMON: At the end of the day, it's the candidate who's running the campaign.

DOBBS: Roger, Karen, Ron, thank you for being with us tonight. And we look forward to hearing from you tomorrow evening. That brings us to the subject of tonight's poll. Who is running the most effective campaign, President Bush or Senator Kerry? Cast your vote at cnn.com/Lou. We'll have the results later in the broadcast.

Tonight's thought is a bet on the future. It's on elections, rather. An election is a bet on the future, not a popularity test of the past. Those are the words of American journalist James Reston.

Taking a look now at your thoughts, many of you wrote in about the appearance of Congresswoman Anne Northrup, Republican of Kentucky here last night. Sharon in Lovely, Kentucky. "I'd like to ask the representative from Kentucky how are we going to buy the products from GE and other companies if we continue losing our jobs to overseas workers?"

Debra in Chicago, Illinois, "I especially enjoyed the banter between you and the female politician from Kentucky. I'm glad you told her how it is for the workers in the United States. If the current administration had their way, we'd be making $10 a day and obviously no benefits. Thanks, Lou."

And Marsha Newman of Carol Stream, Illinois. "I loved your interview with Representative Anne Northup. I wished our elected officials cared as much about the shrinking middle class as you do."

And Paul Dowsey in Silver Hill, Alabama, "I'm at a loss as to why you invite guests who have a different opinion than you. You do your show a disservice as well as the guests by your combative attitude towards them."

And on our series of special reports on the middle class squeeze. Penny in Alpharetta, Georgia, "thank you for being a voice for the middle class. Courage." We love hearing from you. Send us your thoughts at Loudobbs@cnn.com. Please include your full name and address along with your comments because beginning this evening, the author of each e-mail that is read here during the broadcast will be receiving a copy of my new book, "Exporting America."

Still ahead, some Democrats are concerned about the direction of the Kerry campaign, as we reported to you. I'll be talking with Kerry campaign co-chairman, Congressman Harold Ford.

And swept away by Tropical Storm Gaston, heavy rains, flooding, devastating parts of Virginia. And another more powerful storm is on its way toward the Southeastern United States.

And then tonight, an astonishing discovery in the great beyond. Scientists, American scientists have found new planets very similar, they say, to our own. That story, a great deal more still ahead here tonight. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, some Democratic leaders are concerned the Kerry campaign isn't responding appropriately or quickly enough to the swift vote controversy and other attacks from President Bush. These Democratic leaders are urging a shake-up at campaign headquarters before Labor Day. Sources tell us here at CNN that major changes could be in the offing at the campaign's highest level. Joining me now is national co-chairman of the Kerry campaign Congressman Harold Ford joining us tonight from Memphis, Tennessee. Congressman, good to have you here.

REP. HAROLD FORD (D-TN), NATIONAL CO-CHAIRMAN, KERRY CAMPAIGN: Good evening. Thanks for having me.

DOBBS: Are you hearing from your colleagues in Congress and the House of Representatives and the Senate and the Democratic party of any concerns and apprehension about the direction of the Kerry campaign?

FORD: You know, naturally, all campaigns go through these phases. There's a desire on the part of many in the party and many voters rank and file for the campaign to respond more swiftly to some of the attacks that have come our way, and even a desire to have the candidate articulate more and more his vision for the future. We'll be fine. Whatever changes John Kerry wants to make, he should make. But we in the party have a responsibility as well to continue to carry the candidate's message and to even counter what's being said about not only his Vietnam record, but to counter what's being said about some of the ideas and policies he's putting forward. I'm confident that after tonight or tomorrow night, the candidate will be comfortable with his team and comfortable with whatever changes he may or may not make.

DOBBS: So you're suggesting these changes are coming within the next 24 hours?

FORD: I don't know. I just know John Kerry, and I trust that he and the team around him, including his finance team, are aware of the things that need to be done. And I don't sense that will be significant shake-up, but I do sense that he wants to get more comfortable, and he needs to put those around him who can help him fashion and counter as quickly as possible.

DOBBS: You're sitting tonight in Memphis, Tennessee, Tennessee, a state that Vice President Al Gore lost in 2000. He lost it -- people focus on Florida, but the fact is if he had won your state and his, his home state, he'd be president of the United States. What's going to happen in Tennessee this year? FORD: Two years after my dear friend, Al Gore lost the state, Democrats here -- we elected a Democrat as governor. We picked up a congressional seat in a very conservative district here in the state. And we retained the majorities in both the state house and state senate. Recent independent polls show a dead heat here in this state. Like many Americans, we're concerned about the shrinking middle class, which you touched on. We're concerned about the high cost of health care and tuition and gas prices. And whichever candidate, and I believe John Kerry will, is able to, again, give us some hope and provide us a different direction, voters in this state will vote for that person. John Kerry can win this state. He knows it. George Bush knows it. He has spent a lot of time here. And we Democrats and independents in this state know, if we work hard over the next 60 days, 62 days, we can provide the kind of surprise that George Bush exacted on my friend Al Gore, and we could surprise George Bush and win this state for John Kerry and John Edwards.

DOBBS: Your fellow Tennessean, Senator Bill Frist, the Senate majority leader, an important role, obviously, in this national convention. The platform is adopted his candidate moving toward official nomination come Thursday. What is your sense about how well the Republican National Convention is going this week?

FORD: You know, I listened last night to my dear friend, and he is, John McCain and Mayor Giuliani. And there was somewhat of a disconnect. I heard their speeches, and they were strong on the foreign policy, but they've missed out on the fact that so many Americans aren't enjoying the prosperity that George Bush and John McCain and Rudy Giuliani bragged about last night. So many in my district are worried about why the poverty numbers are rising. They're worried why the middle class is paying more in taxes than the upper class in this country. They're concerned as to why college tuition and, again, gas prices and property taxes at the local level are going up while the president is bragging and promising us that we're turning a corner.

There is a disconnect between their rhetoric and their euphoria and the reality of how many Americans are living, which is why as John Kerry continues to travel the country and offer his ideas and plan, the more likely it is he will win states like mine and even some other southern and mid-western states which have traditionally gone Republican.

DOBBS: Congressman Harold Ford, we thank you for being with us here tonight.

FORD: Thanks for having me.

DOBBS: A reminder to vote in tonight's poll. The question is who is running the most effective campaign, President Bush or Senator Kerry. Cast your vote at cnn.com/lou. We'll have the results later here in the broadcast. Coming up next, Exporting America. We'll tell you who is making the most money for themselves as a result of shipping those middle class American jobs to cheap foreign labor markets. Christine Romans will have the story for us. And Tropical Storm Gaston causes deadly flooding in Virginia, the third major hurricane of the season closing in now on the Southeastern U.S. We'll have a full report for you. And planet hunters have made an astonishing discovery in outer space. It might just be a little more crowded beyond our solar system than originally believed. We'll have that story and a great deal more and some spectacular images. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Devastating flooding sweeping through Virginia early today. Five people were killed in that flooding. Tropical Storm Gaston flooded 20 blocks of downtown Richmond, much of the surrounding area as well. 60,000 people are without power tonight. More than 180 roads have been washed out. Virginia's Governor Mark Warner has declared a state of emergency.

Meanwhile, Hurricane Frances is racing toward the Bahamas tonight. Winds in excess of 140 miles an hour. If that storm stays on its current path, it should strike the U.S. mainland within the next few days. The storm could strike anywhere, we're told by the National Hurricane Center, from Florida all the way to the Carolinas. The National Hurricane Center also says it's just much too early to tell exactly where Francis might make land fall.

Scientists today announced thrilling new findings beyond the limits of our solar system. Astronomers have discovered two new planets that are more similar to our own than any other planets previously discovered outside our solar system. This latest finding gives scientists new hope that life may be found beyond earth. Lisa Sylvester has the story from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Scientists have been on a quest to find a planet with similar conditions to earth one that is about the right temperature and the right size. They have found 135 planets outside of our solar system, but they've all been large, about the size of Jupiter, and not solid, but made up of gasses, but this is the first time scientists have discovered smaller planets the size of Neptune.

R. PAUL BUTLER, CARNEGIE INSTITUTE: It puts us in that transition region where we can't quite see the earth-like planets yet, but we are seeing their big brothers.

SYLVESTER: While they haven't quite seen the planets, but they know they're there, and they have been able to detect their sizes.

GEOFF MARCY, UNIVERSITY OF CALIFORNIA, BERKELEY: We watch the star, and, of course, it's orbited by a planet. The planet pulls gravitationally on the star, and it makes the star wobble. We watch the star wobble with the so-called Doppler effect that police officers use to measure the speed of cars.

SYLVESTER: One of the new planets was found among three others circling a star called 55 Kankri. This makes it the first known four- planet system that is very similar to our own solar system. BARBARA MCARTHUR, UNIVERSITY OF TEXAS, AUSTIN: I believe it's very possible there are more planets in this system. We might not have the technology yet to be able to detect them.

SYLVESTER: Future NASA missions will look for more planets and try to determine what they are made of. But in the meantime, if you look up in your backyard, gaze up at the constellation cancer, you can see star 55 and know that there are four planets circling it.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Coming up next, outsourcing means big paydays. We'll tell you for whom. Christine Romans will be here.

And is there a lighter side to the exporting of American jobs? Hollywood seems to think perhaps there is. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Stocks today rose on Wall Street. The Dow gained 51 points. The Nasdaq little changed. The S&P up 5 points.

Tonight a new report, an outrageous finding on the shipment of American jobs to cheap foreign labor markets. Christine Romans is here with the story -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, now we know why American CEOs are just so eager to ship American jobs overseas. When hundreds of thousands of Americans are losing their jobs, multi- millionaire CEOs are making even more money. Top executives at the 50 largest outsourcers made an average of $10.4 million last year. That was a hefty pay race. Their pay rose 46 percent from 2002. Apparently, these CEOs are not content to make just 300 times what their average worker earns. They're shipping jobs overseas and making 3,300 times what their average Indian worker earns. The study concludes companies led by CEOs who outsource American jobs are channeling those profits not into new U.S. jobs and new technologies, but right into the pockets of chief executives. Is it any wonder that consumer confidence is so shaky? The conference board today said Americans are finding it harder to get jobs. They think there are fewer jobs out there for them, Lou.

DOBBS: It is difficult right now to explain the stubborn job market and the failure of this economy right now to generate new jobs. Let's turn to the issue of the WTO, though. Deciding that they're going to apply sanctions against the United States for enforcing our laws against dumping foreign products in this country?

ROMANS: Absolutely. The European Union's seven countries got permission to impose $150 million in sanctions on U.S. goods because the U.S. won't revoke its own anti-dumping laws. The WTO says that we are punishing the dumpers too severely by passing along those fines to the companies that are hurt in the first place. DOBBS: I don't know what's wrong with Washington. Do they think the U.S. government has sovereignty over this country? Don't they understand it's the WTO? Christine, thanks very much. Christine Romans.

In Exporting America tonight, leave it to Hollywood to see the humor in lost jobs. That's just what's happening in Hollywood as Daily Variety reported today. Comedy stars Vince Vaughn and Owen Wilson are now attached to a new comedy film entitled, yes, "Outsourced." The story will sound familiar to too many of our viewers. An American factory is shut down, moved to Mexico. In the upcoming Hollywood version, Wilson and Vaughn play two factory workers who decide not to simply take outsourcing lying down. The movie is "Outsourced." We'll see.

Still ahead, the results of tonight's poll, a preview of what's ahead here tomorrow. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In tonight's poll, almost three quarters of you say Senator Kerry's campaign is the most effective. Thanks for being with us tonight. Please join us tomorrow. Among our guests, Senate Intelligence Committee Chairman Republican Senator Pat Roberts and the chairman of the Democratic National Committee, Terry McAuliffe. Thanks for being with us tonight. Good night from New York.

"ANDERSON COOPER 360" is next.

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Aired August 31, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, HOST: Tonight, suspected radical Islamist terrorists launch bloody attacks against Israel and Russia. Radical Islamists in Iraq slaughter their hostages.
A day after saying the war on terror may be unwinnable, President Bush declares a clarification.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Make no mistake about it, we are winning, and we will win.

(END VIDEO CLIP)

DOBBS: Former presidential candidate Patrick Buchanan says neoconservatives have hijacked the Bush presidency. He's the author of "Where the Right Went Wrong," and he's our guest.

Also tonight, the Democrats fight back. The national co-chairman of the Kerry campaign, Congressman Harold Ford, joins us.

A dramatic discovery in deep space. Astronomers find two planets that are more similar to earth than any other planets outside our solar system.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is a milestone. We've crossed a hurdle, finally.

(END VIDEO CLIP)

DOBBS: And guess who makes the most money when American middle- class jobs are exported to cheap overseas labor markets? CEOs. What a way to make a buck. Our special report, Exporting America.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, August 31. Here now for an hour of news, debate, and opinion is Lou Dobbs.

DOBBS: Good evening.

Today, bloody attacks against civilians in Israel and Russia, sheer butchery in Iraq. The global war on terror is one of the critical issues in this presidential campaign and election. And the importance of winning the war against radical Islamist terrorists was demonstrated in three nations today.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): As emergency personnel dealt with the aftermath of another Palestinian suicide bombing in Israel, Muslim leaders took to loudspeakers in Gaza City, proclaiming the terrorist attacks a heroic operation.

Two buses in Bersheva blew up just 15 seconds apart, killing at least 16, plus the two terrorists. More than 90 were wounded. The Islamic terrorist group Hamas claimed responsibility, saying the bombings were in retaliation for Israel's killing of two Hamas leaders.

MUSHIR AL-MASRI, HAMAS SPOKESMAN (through translator): Today, they are operations to show the enemy that the factions of the resistance can reach anyplace it wants, and it is a lesson that the enemy should not forget.

WIAN: Israeli Prime Minister Ariel Sharon said the attacks would not stop Israel's ongoing construction of a barrier separating it from the West Bank in Gaza, nor would it affect Israel's planned withdrawal of settlers and troops from Palestinian territory.

ARIEL SHARON, ISRAELI PRIME MINISTER (through translator): Israel will continue to fight terror, and this issue has nothing to do with the disengagement plan, but with only one thing, the murder by Palestinian terrorists. And we will fight it with all our might.

WIAN: A few hours later, outside a subway station in Moscow, terror strikes again. At least 10 dead and 33 wounded. Russian officials say there is a high probability it was a terrorist attack. The bombing comes just a week after the suspected terrorist attacks against two Russian commercial jets, killing 90 passengers and crew. That, and several other recent attacks, have been linked by Russian investigators to rebels from Chechnya, where Russian troops have been battling separatists for a decade.

Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: Radical Islamists in Iraq also engaged in a savage campaign of terror. Today they slaughtered 12 Nepalese hostages that they've held for more than a week. This is the largest number of hostages to be killed at one time since the fall of Saddam Hussein's regime.

The radical Islamists cut off the head of one of their hostages while the others were forced to watch. Then they shot the remaining 11 hostages as they lay on the ground.

Yesterday, President Bush said the war on terror may be unwinnable. Today, President Bush said the United States will win. The president's leadership is, of course, the focus of the Republican convention this week in New York. Tonight, First Lady Laura Bush and Governor Arnold Schwarzenegger of California will be among the prime- time speakers.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN SENIOR WHITE HOUSE CORRESPONDENT: In a little, Governor Schwarzenegger and the first lady will speak here in the convention hall from the podium. But the most important speech of the day was delivered by the president himself, not here in New York, but in Nashville.

As you noticed, Mr. Bush created a bit of a dust-up of his own making, if you will, a diversion from the carefully planned convention script, by saying, "I don't think the war is winnable." White House aides said the president simply meant it was not a conventional war, there would be no peace treaty. Mr. Bush, in a speech to the American Legion in Nashville today, tried to make crystal clear exactly what he meant.

(BEGIN VIDEO CLIP)

BUSH: In this different kind of war, we may never sit down at a peace table. But make no mistake about it, we are winning, and we will win.

(END VIDEO CLIP)

KING: Now, Democrats had criticized the president, saying he was all but admitting he could not win the war on terror. The White House believes this strong speech today will put that debate to rest.

From the podium tonight, more praise of the president's leadership since the September 11 attacks nearly three years ago, with a bit of star quality. Arnold Schwarzenegger, the movie star turned governor of California, will deliver a speech in prime-time, and he will say America is back. The defense of the homeland has improved, the economy is coming back because of the perseverance and character of President Bush.

First Lady Laura Bush also will deliver a prime-time address in which she will offer her personal insights on the president's leadership since the tragic terrorist attacks of three years ago, and she will also offer a defense of the president's limits on so-called embryonic stem cell research. That has become an issue in the campaign debate as well. Mrs. Bush turned the podium with her two daughters, Jenna and Barbara Bush. They also will have a brief role in the convention proceedings here tonight.

Now, earlier today, I sat down with the president's top political adviser, Karl Rove. It is rare for him to give a television interview. Among the topics we discussed, Republicans steal a bit of momentum. They are feeling pretty good coming into this convention. But I asked him, what is the president's number one liability?

(BEGIN VIDEO CLIP) KARL ROVE, BUSH POLITICAL STRATEGIST: What we face is a highly polarized electorate, and that's the biggest difficulty the president faces.

But, look, I mean, he's got, he is the president. He can talk about the -- on the, on the biggest issues facing America, the war, the economy, the values of our country. He's in synch with the American people. His opponent is not. His opponent is the most liberal member of the United States Senate. That's saying a lot, when your fellow seatmate from Massachusetts is Ted Kennedy.

(END VIDEO CLIP)

KING: Karl Rove also saying the president will lay out a detailed domestic agenda in his speech Thursday night, in addition to explaining and defending his leadership in the war on terrorism. Lou, that domestic agenda, a lesson learned from his father. This president does not believe his father back in 1992 spent enough time at his convention talking about what he would do if given four more years.

This president, Karl Rove insists, will do that in this hall Thursday night, Lou.

DOBBS: John King, thank you very much.

Dozens of Democrats are also in New York City, ensuring their party quickly responds to Republican attacks during this convention.

Meanwhile, vice presidential candidate Senator John Edwards was in West Virginia today campaigning. Senator Edwards accused the Republicans of launching negative attacks against the Democrats.

Ed Henry reports.

(BEGIN VIDEOTAPE)

ED HENRY, CNN CORRESPONDENT (voice-over): Democrats are blasting the fact that some delegates wore Band-Aids with small purple hearts to mock John Kerry's wounds in Vietnam. Korean War vet and Democratic Congressman Charlie Rangel accused these delegates of dishonoring the Purple Heart.

REP. CHARLES RANGEL (D), NEW YORK: This symbol, it's a very moving one, because many of the people that earned it never came back home.

UNIDENTIFIED MALE: I think we should offer a bounty to any of those Band-Aid wearers who's ever seen combat.

HENRY: Democrats say the buck stops with President Bush.

TERRY MCAULIFFE, CHAIRMAN, DEMOCRATIC NATIONAL COMMITTEE: George Bush's boots never went to Vietnam, and that's his right. He had the right not to go. But he does not have the right to smear our veterans. HENRY: The White House chief of staff denied any coordination with the delegates who wore the Band-Aids.

ANDREW CARD, WHITE HOUSE CHIEF OF STAFF: Not to my knowledge. I can tell you this, I have great respect for anyone who wears the uniform of the armed services, and I certainly have great respect for people who have made sacrifice and earned the Purple Heart.

HENRY: One man who handed out the Band-Aids, Morton Blackwell, insists he acted on his own. But Democrats point out the conservative activist has been closely aligned with White House aide Karl Rove.

MORTON BLACKWELL, GOP CONVENTION DELEGATE: It's a fantasy. I haven't spoken to Karl Rove in a couple of months, and our last conversation had to do with the issue of judicial appointments. There was certainly no disrespect intended to the Purple Heart. After all, who has been disrespectful of the Purple Heart? As I recall, John Kerry is the guy who admitted throwing those, and bragged about throwing those decorations...

HENRY: The controversy comes as Swift Boat Veterans for Truth unveil a new ad called "Medals."

(BEGIN VIDEO CLIP, SWIFT BOAT VETERANS FOR TRUTH AD)

(BEGIN VIDEO CLIP, November 6, 1971)

JOHN KERRY: ... renounce the symbols which this country gives, and that was the medals themselves. I gave back, I counted number six, seven, eight, nine.

(END VIDEO CLIP)

ANNOUNCER: How can the man who renounced his country's symbols now be trusted?

(END VIDEO CLIP)

HENRY: Democratic Senator Zell Miller, who will be the Republicans' keynote speaker on Wednesday night, said Democrats should not claim the swift boat vets are doing the president's dirty work.

SEN. ZELL MILLER (D), GEORGIA: I don't think I'd have the nerve to say that, not when I have George Soros tied around my neck.

(END VIDEOTAPE)

HENRY: Republicans were hoping that on opening night, they would appeal to independent voters and moderates. But Kerry campaign officials charged today that, in fact, these attacks on John Kerry, especially by Rudy Giuliani last night, as well as these Band-Aids, might backfire with swing voters, Lou.

DOBBS: Ed, thank you very much. It's becoming hard -- I'm just curious, Ed, just how does one make the distinction between negative campaigning and attack campaigning? HENRY: Well, I can tell you, I was on a conference call this morning with Kerry campaign officials, and they were talking a lot about these negative attacks at the convention. They say the tone has been very negative already from the Republican convention.

But I pointed out that people like Senator Edward Kennedy last month in Boston also had a lot of negative attacks on the president. So I think it's up to which side you're talking to, as you mentioned. And as you noted, both sides are getting their licks in. And there are going to be a lot more between now and November 2, Lou.

DOBBS: Ed Henry, thank you.

Later in this hour, I'll be talking with the national co-chairman of the Kerry campaign, Congressman Harold Ford, about the direction, the momentum, and perhaps problems of the Kerry campaign.

Some senior Democrats are concerned that Senator Kerry's campaign is losing ground against the president. Those Democrats are calling for a shakeup in Senator Kerry's campaign staff.

I'm joined now by E.J. Dionne, political columnist for "The "Washington Post," senior fellow, the Brookings Institution.

Good to have you here.

E.J. DIONNE, POLITICAL COLUMNIST, "THE WASHINGTON POST": Good to be with you always, Lou.

DOBBS: The missteps that have been alleged of the Kerry campaign, are they, in your judgment, first, significant, and do they rise to the level that it would be necessary to shake up the campaign?

DIONNE: Well, I think there are going to be changes in the campaign. I think that the campaign itself is not going to call it a shakeup. But I think within Democratic circles, there's been this criticism that the Kerry campaign is a little bit too much like an ocean liner, and if you'll forgive the metaphor, not enough like a swift boat.

And there are going to be a lot of attacks coming at them in this fall, and so I think there's a lot of talk about creating a war room, a rapid response team. And I think they're going to do some of that stuff. Joe Lockhart, formerly of the Clinton administration, is coming onto the campaign. So I think there will be some changes.

The swift boat thing put them in a very difficult position, because they made the judgment that, if they responded too quickly, too early, they would build up the story. But the thing has received -- gotten so much momentum that now Democrats are saying you should have hit back harder and pushed this back earlier.

DOBBS: Shoulda, coulda, woulda, as you put it. The fact is that a number of ranking Democrats are very unhappy with the direction this campaign has taken, either tied with or lagging or within the margin of error with an incumbent president that they had a lead on a month ago. How high up would the so-called shakeup go?

DIONNE: My sense is they're not going to throw a lot of people out. I think they're going to reorganize and bring some new people in.

I mean, there are two facts here. One fact is that Kerry seems to have lost a little bit of ground since his -- since the modest bounce he got at the convention. The other fact, which this convention is about, is that President Bush really hasn't been able to get himself out of the 40s. I think the key is, does George Bush ever get to the point where 50 percent or more of the public are willing to say they're voting for him?

For an incumbent to be below 50 percent is difficult. And that's why I think the Bush campaign has decided they may not be able to get to that 50 without tough attacks on John Kerry, and that was Rudy Giuliani's speech.

It was interesting. John McCain could have chosen to throw the hatchet, and he didn't. He gave a very mild speech, a kind of intellectual defense of the war. But Rudy Giuliani went all out there, and I think is trying to win support from the Republican base for 2008.

DOBBS: And tonight, E.J., the first lady will be speaking, Governor Schwarzenegger. In contrast to last night, apparently, the effort to be a kinder, gentler party, if you will, compassionate conservatism on display. Can that be pulled off?

DIONNE: I don't know. They pulled it off pretty well four years ago. They're really trying to do the same thing again. I was talking to Amo Houghton, a veteran moderate Republican congressman, who is retiring this year. And he said, you know, they seem to use the moderates as the salesmen, but they use the right-wingers, the conservatives, as the policy makers.

And I think that's the contradiction they're dealing with here. The Republicans have a problem in the polls among moderate independents. That group has been lately for John Kerry by a margin of around 3 to 2. Bush has to tighten that up if he's going to win the election.

DOBBS: E.J. Dionne, thank you.

DIONNE: Thank you.

DOBBS: Still ahead, former presidential candidate Patrick Buchanan says the right has lost its way. Neoconservatives, have they hijacked the Bush presidency? Pat Buchanan is my guest.

New protests in New York City today against the Republican National Convention. We'll have live reports.

And Republicans tonight praising President Bush's leadership and character. I'll be joined by three of the country's top political journalists live from the scene of the Republican National Convention, Madison Square Garden.

(COMMERCIAL BREAK)

DOBBS: Former presidential candidate Patrick Buchanan has written a new book that blasts President Bush and his administration. It is called "Where the Right Went Wrong: How Neoconservatives Subverted the Reagan Revolution and Hijacked the Bush Presidency."

Given that criticism, I asked Buchanan whether he wants the president to win reelection.

PATRICK BUCHANAN, AUTHOR, "WHERE THE RIGHT WENT WRONG": Well, I think, if you come down to a choice who you would like to appoint the next four Supreme Court justices, which we could get in the next term, I definitely would prefer George Bush to John Kerry. I think Bush is better on taxes. One judges on sovereignty and on values.

But the president is wrong on trade, he's wrong on deficits, he will not control and defend America's borders, and he's wrong on this Wilsonian foreign policy. On those four issues, unfortunately, he agrees with Kerry, and I take the conservative line.

DOBBS: Pat, as you lay out those broad, profound issues, I mean, that is the bulk of what governance is about, foreign policy, controlling borders, our trade. And he wins on what particular issue, in your mind?

BUCHANAN: Judges, taxes, values, and sovereignty. And (UNINTELLIGIBLE)...

DOBBS: Sovereignty without borders?

BUCHANAN: Well, no, this is -- you get to a very good point there. If you remove all your borders, and you have global free trade, what you get then is a global governance gradually growing, and you get world government. And the truth is, both parties are leading us to world government.

Lou, when I was back there fighting against NAFTA and GATT and the WTO in those days, you found Clinton and Gingrich and Dole all together, Brookings Institution and the Heritage Foundation all together, Cato and "The Washington Post" together.

So what we got is, I think, is, is, we are moving toward world government. We are losing our sovereignty. We are losing our national economic independence. And both parties are moving in that direction. And the question is -- and Kerry's wrong on everything.

DOBBS: What happened to the Republican Party? Because when you talk about budget deficits, you talk about free trade, the issues of, fundamentally, national security, these were Republican issues and important tenets of the Republican philosophy even 10 years ago, perhaps 15.

BUCHANAN: Right.

DOBBS: What happened?

BUCHANAN: The Beltway right has entered into a civil union with big government. The Beltway right and the conservative scholars in Washington, these conservative writers and thinkers and policy analysts, I think, have basically sold their souls for power. I think they believe that big government is here to stay, that the country wants it, and that therefore, if they want power, they're going to have to go along with that.

I don't understand, Lou, on open borders, because it is quite clear that the president of the United States, in his Thursday night speech, got up and said, I believe in immigration, that we're a nation of immigrants, but I also believe we are a nation of laws, and I am going to defend that border. And people who break in are going to have to go back. If you break in line and break the law and break into our country, you cannot stay. And I'm constitutionally obligated to uphold the laws, and I'm going to do it, and I will defend the border with troops if necessary.

I think he would wrap up the Southwestern states, which are now imperiled for him. I don't know, for the life of me, I don't know why he doesn't do that, because that is an issue, and I know you've dealt with it, it is an issue on which overwhelming majorities want that done.

DOBBS: Do you find it striking, Pat, that in this country, on critical issues, border security, immigration, education, there is no national referendum, if you will? There is so little representation of middle-class working men and women and their families in Washington right now. These issues that are so important, upon which survey after survey shows the American people feel a certain way, legislators in Washington, the executive branch, all but ignore their views.

BUCHANAN: It, it, well, I think what is going on is nothing less than economic treason against the middle class of this country. Their jobs are being exported, technology, industry, factories, and the future of their children is being (UNINTELLIGIBLE).

And I'll tell you why I believe it is, and both parties are doing it. Of the 100 most powerful economic institutions in the world, by the GDP, 51 of them are corporations. All of these corporations, many of which used to be America first, let's protect America's market, this is our market, all of them have become globalists.

And so this huge economic force is for breaking down barriers, opening borders, being allowed to move their factories wherever they want, jobs wherever they want. They've put the bottom line first, and for them it is profits and corporate salaries and all the rest. And that is why you need a strong, traditional, conservative government to structure the taxes and trade policies so that the economic incentives force these corporations to come back into the United States and create jobs here.

And nobody in either party is really talking about that, except, I will say, my old friend Ralph Nader, who understands it.

DOBBS: Well, Pat Buchanan, my old friend, thanks for being here. And good luck with your new book.

BUCHANAN: Thank you very much, Lou. It's good to be back.

DOBBS: Still ahead, a crisis in our nation's classrooms. Tonight, our special report on the middle class squeeze. The president's plans to fix education in this country.

Also ahead, dozens more protesters are arrested in New York, demonstrators, many of them causing havoc in parts of Manhattan. We'll have a live report for you on day two of the Republican National Convention.

Three of the nation's leading political journalists join me. Stay with us.

(COMMERCIAL BREAK)

DOBBS: All this week, we're reporting on President Bush's plans to address the many concerns of this country's middle class. Tonight, we're focusing on education. Much of the president's education policy centers around a controversial program that many schools say is just simply impossible to fulfill.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Use the data to make two stem and leaf plots...

BILL TUCKER, CNN CORRESPONDENT (voice-over): Spending on education has risen 36 percent under President Bush, half of that money going to fund the president's initiative on education, No Child Left Behind.

UNIDENTIFIED FEMALE: And the reason they came?

TUCKER: The broad goals of the act are to set performance standards for schools and to hold schools accountable for federal monies given to them.

However, No Child Left Behind is controversial. Its critics charge that the law is underfunded, that it imposes standards without providing funds to meet those standards, and that it lacks incentives for getting good, experienced teachers to work in poorly performing schools.

JACK JENNINGS, CENTER ON EDUCATION POLICY: Well, I'm not aware of any major group that's asking for the repeal of this law. They're asking to fix it. They're asking to make improvements in it so it measures students' success better than a single test. They're asking for different ways to improve the law, not to repeal it.

TUCKER: One of the sharpest areas of disagreement over education between the Republicans and the Democrats is the question of school choice. The Republicans believe that public schools can best be fixed by forcing them to compete with other types of schools, such as charter and private.

And Republicans favor vouchers for parents who want to take their children out of public schools in favor of private choices.

But recent studies show that charter schools are not a raging success.

KATHY CHRISTIE, EDUCATION COMMITTEE OF THE STATES: We've seen in study after study since charter schools began that there really isn't any big correlation with improved student achievement. They're as uneven in their performance as the public schools are uneven in their performance.

(END VIDEOTAPE)

TUCKER: The point that educators are in total agreement on is that the more the politicians discuss it, the more attention the issue gets. And, Lou, ultimately the better it is for the state of education in this country.

DOBBS: Well, one would hope that would be the case. But we've been focusing on education in this country for the past 20 years to little, if any, effect. Bill Tucker, thank you.

An estimated half a million demonstrators are in New York City now, protesting the war in Iraq, amongst other issues, during this Republican National Convention. Police have arrested already nearly 600 protesters. Today, demonstrators blocked traffic around the city.

Jason Carroll joins us from Madison Square Garden. Jason?

JASON CARROLL, CNN CORRESPONDENT: And Lou, this is the point where a rally is set to begin just about an hour from now. Police are going to be keeping an eye on that and the group behind it, A-31, a loose coalition of activists.

But first, let's get to what has already happened today. Down at ground zero, police arrested at least 200 demonstrators down there, or antiwar demonstrators. Apparently, they asked the crowd to disperse, the crowd did not, so they began making arrests.

In addition to that, at a park not far from Madison Square Garden, police made several arrests there as well. That protest by a group called the Organization Representing Homeless and Health Care Issues.

Also today, hundreds rallied and marched earlier today at New York's Bureau of Immigration and Customs Enforcement, speaking out for immigration rights and against the war in Iraq.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We're doing it specifically in New York at the end of August coming into September, coming close to the anniversary of the 9/11 attacks, to exploit the grief of 9/11, to pursue this agenda of war in the world. (END VIDEO CLIP)

CARROLL: The most unruly protests came last night. Police are looking for that man that you saw there in the white T-shirt in the baseball cap, who apparently beat a plainclothes police officer into unconsciousness. That officer at this point in stable condition. Again, police still trying to find that man.

And they're still waiting to see how many people will end up showing up here at this protest tonight, again by a group called A-31. Some of those people who were arrested down at ground zero, Lou, actually planned on coming up here for this demonstration. So unclear what the numbers will be for the rally at 7:00 p.m., Lou.

DOBBS: Jason, thank you.

Inside the convention tonight, the theme is compassion. Joining me now, some of the most compassionate top political journalists in the country, Karen Tumulty, national political correspondent, Time Magazine, Roger Simon, political editor, U.S. News and World Report, Ron Brownstein, national and political correspondent, Los Angeles Times, all at Madison Square Garden. Thank you, all three for being here. I want to start with you, Karen, if I may. The president saying today that the war is winnable, after yesterday telling NBC's Matt Lauer it isn't. What's going on?

KAREN TUMULTY, CNN NATIONAL POLITICAL CORRESPONDENT: Well, I guess after Ron on this program gave him points for being truthful and frank -- the fact is that, you know, the last thing that he wants to be doing in a moment when his poll numbers on measures like commander in chief and national security and strong leader are going up is to start looking as though he is uncertain at all on the war on terror, which after all is his trump card in this election.

DOBBS: And former Mayor Rudy Giuliani, Ron, he backed away from talking about winning the war on terror because of the president's statements yesterday. How did Rudy Giuliani and Senator McCain do in your judgment last night in prime-time?

RON BROWNSTEIN, NATIONAL AND POLITICAL CORRESPONDENT, LOS ANGELES TIME: Boy, you climb out on a limb, and the president just saws it off right behind you. It's just not a good year to be realistic and measured and nuanced, I think. I thought that last night was a very -- it was an unusually clear public expression of the private strategy of the campaign. Both McCain and Giuliani in their speeches, I think, reflected a core calculation of the Bush team, which is they believe there are going to be voters out there who support President Bush even if they disagree with him on a lot of individual policies because they believe he is a strong leader. And, Lou, I thought you got the clearest sort of signal of their thinking when Rudy Giuliani said when we elect a president, we don't really elect just a Democrat or a Republican, a liberal or a conservative, we elect a leader, especially in times like these. And what he was saying to Americans was, even if you disagree with many of President Bush's choices, you can still support him because you feel that you can count on him in a crunch. I thought that was a pretty effective message even though I thought his overall speech kind of wandered around a little bit.

DOBBS: Roger tonight, Governor Schwarzenegger, the first lady can against the back drop of last night's presentations, can they succeed in establishing the aura of compassionate conservatism around the Republican party?

ROGER SIMON, POLITICAL EDITOR, U.S. NEWS AND WORLD REPORT: Yeah, I think they're going to make a good go at it. Brigadoon like, compassionate conservatism reappears tonight after four years of not or three and-a-half years of not hearing about it very much. But Arnold Schwarzenegger is a popular figure. He goes beyond party politics. He's a superstar. We all know his background. And he is going to tell us about his life growing up in Austria and how much better it was to come to the United States, a poor boy with hardly any money in his pocket and make a great success.

And Arnold Schwarzenegger is a great success story, and he's going to talk about the kind of America that George Bush has built to make that possible. And, of course, Mrs. Bush is going to tell us about George Bush as a human being, as a warm husband and loving father. The twins are going to come out and do five minutes of humor. I don't know if George Bush ever resuscitated a hamster, but we're likely to hear that kind of story from them. And then there's going to be a little surprise. George Bush is going to do a live TV hook-up from the road and address the delegates very briefly.

TUMULTY: But may I say how ironic this is? I mean, if a year ago you would have told somebody that Arnold Schwarzenegger was going to be coming out as the figure of compassion, I mean, this is a guy who, however compelling his life story is, the picture most Americans have of him is with a ray gun in his hand blasting away aliens. So it just tells you how quickly and how dramatically politics can change your image.

BROWNSTEIN: And we'll see how heavily he leans on the compassion theme. I mean, as we talked about last week, they had those disappointing numbers on poverty and the uninsured that came out from the census last week. The president has tried to argue that he is more concerned about these problems than Republicans have had a reputation for traditionally. But it's a little tougher this year, Lou, because, of course, he does have a record. In 2000, it was perspective. Now he has to defend the question on why he hasn't made more progress on these problems during a full presidential term.

DOBBS: And outside your venue there at Madison Square Garden, Senator Kerry's campaign, the subject of a lot of rumor and speculation that a shake-up is in the offing, disappointment. What is the reaction within Madison Square Garden to the rumored problems and the appearance, at least, of some problems within the Kerry campaign. Roger?

SIMON: Well, we all love shake-up stories. He added new staff today. But the stories that make the headlines aren't the addition of staff, but the firing of existing staff. I doubt if anybody at the top will be thrown from the sled, but the fact is John Kerry has not had a good August. The swift vote story just hung around too long. Even though it has not seemed to have damaged him in the horse race polls, it has damaged him in certain areas of those polls. And the campaign -- don't forget John Kerry switched campaign managers once before, and I doubt if he's going to switch campaign managers this time. I think he would love to bring in a figure like Bill Daly, who was Gore's campaign manager, campaign chairman. We'll see.

DOBBS: Roger?

SIMON: At the end of the day, it's the candidate who's running the campaign.

DOBBS: Roger, Karen, Ron, thank you for being with us tonight. And we look forward to hearing from you tomorrow evening. That brings us to the subject of tonight's poll. Who is running the most effective campaign, President Bush or Senator Kerry? Cast your vote at cnn.com/Lou. We'll have the results later in the broadcast.

Tonight's thought is a bet on the future. It's on elections, rather. An election is a bet on the future, not a popularity test of the past. Those are the words of American journalist James Reston.

Taking a look now at your thoughts, many of you wrote in about the appearance of Congresswoman Anne Northrup, Republican of Kentucky here last night. Sharon in Lovely, Kentucky. "I'd like to ask the representative from Kentucky how are we going to buy the products from GE and other companies if we continue losing our jobs to overseas workers?"

Debra in Chicago, Illinois, "I especially enjoyed the banter between you and the female politician from Kentucky. I'm glad you told her how it is for the workers in the United States. If the current administration had their way, we'd be making $10 a day and obviously no benefits. Thanks, Lou."

And Marsha Newman of Carol Stream, Illinois. "I loved your interview with Representative Anne Northup. I wished our elected officials cared as much about the shrinking middle class as you do."

And Paul Dowsey in Silver Hill, Alabama, "I'm at a loss as to why you invite guests who have a different opinion than you. You do your show a disservice as well as the guests by your combative attitude towards them."

And on our series of special reports on the middle class squeeze. Penny in Alpharetta, Georgia, "thank you for being a voice for the middle class. Courage." We love hearing from you. Send us your thoughts at Loudobbs@cnn.com. Please include your full name and address along with your comments because beginning this evening, the author of each e-mail that is read here during the broadcast will be receiving a copy of my new book, "Exporting America."

Still ahead, some Democrats are concerned about the direction of the Kerry campaign, as we reported to you. I'll be talking with Kerry campaign co-chairman, Congressman Harold Ford.

And swept away by Tropical Storm Gaston, heavy rains, flooding, devastating parts of Virginia. And another more powerful storm is on its way toward the Southeastern United States.

And then tonight, an astonishing discovery in the great beyond. Scientists, American scientists have found new planets very similar, they say, to our own. That story, a great deal more still ahead here tonight. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, some Democratic leaders are concerned the Kerry campaign isn't responding appropriately or quickly enough to the swift vote controversy and other attacks from President Bush. These Democratic leaders are urging a shake-up at campaign headquarters before Labor Day. Sources tell us here at CNN that major changes could be in the offing at the campaign's highest level. Joining me now is national co-chairman of the Kerry campaign Congressman Harold Ford joining us tonight from Memphis, Tennessee. Congressman, good to have you here.

REP. HAROLD FORD (D-TN), NATIONAL CO-CHAIRMAN, KERRY CAMPAIGN: Good evening. Thanks for having me.

DOBBS: Are you hearing from your colleagues in Congress and the House of Representatives and the Senate and the Democratic party of any concerns and apprehension about the direction of the Kerry campaign?

FORD: You know, naturally, all campaigns go through these phases. There's a desire on the part of many in the party and many voters rank and file for the campaign to respond more swiftly to some of the attacks that have come our way, and even a desire to have the candidate articulate more and more his vision for the future. We'll be fine. Whatever changes John Kerry wants to make, he should make. But we in the party have a responsibility as well to continue to carry the candidate's message and to even counter what's being said about not only his Vietnam record, but to counter what's being said about some of the ideas and policies he's putting forward. I'm confident that after tonight or tomorrow night, the candidate will be comfortable with his team and comfortable with whatever changes he may or may not make.

DOBBS: So you're suggesting these changes are coming within the next 24 hours?

FORD: I don't know. I just know John Kerry, and I trust that he and the team around him, including his finance team, are aware of the things that need to be done. And I don't sense that will be significant shake-up, but I do sense that he wants to get more comfortable, and he needs to put those around him who can help him fashion and counter as quickly as possible.

DOBBS: You're sitting tonight in Memphis, Tennessee, Tennessee, a state that Vice President Al Gore lost in 2000. He lost it -- people focus on Florida, but the fact is if he had won your state and his, his home state, he'd be president of the United States. What's going to happen in Tennessee this year? FORD: Two years after my dear friend, Al Gore lost the state, Democrats here -- we elected a Democrat as governor. We picked up a congressional seat in a very conservative district here in the state. And we retained the majorities in both the state house and state senate. Recent independent polls show a dead heat here in this state. Like many Americans, we're concerned about the shrinking middle class, which you touched on. We're concerned about the high cost of health care and tuition and gas prices. And whichever candidate, and I believe John Kerry will, is able to, again, give us some hope and provide us a different direction, voters in this state will vote for that person. John Kerry can win this state. He knows it. George Bush knows it. He has spent a lot of time here. And we Democrats and independents in this state know, if we work hard over the next 60 days, 62 days, we can provide the kind of surprise that George Bush exacted on my friend Al Gore, and we could surprise George Bush and win this state for John Kerry and John Edwards.

DOBBS: Your fellow Tennessean, Senator Bill Frist, the Senate majority leader, an important role, obviously, in this national convention. The platform is adopted his candidate moving toward official nomination come Thursday. What is your sense about how well the Republican National Convention is going this week?

FORD: You know, I listened last night to my dear friend, and he is, John McCain and Mayor Giuliani. And there was somewhat of a disconnect. I heard their speeches, and they were strong on the foreign policy, but they've missed out on the fact that so many Americans aren't enjoying the prosperity that George Bush and John McCain and Rudy Giuliani bragged about last night. So many in my district are worried about why the poverty numbers are rising. They're worried why the middle class is paying more in taxes than the upper class in this country. They're concerned as to why college tuition and, again, gas prices and property taxes at the local level are going up while the president is bragging and promising us that we're turning a corner.

There is a disconnect between their rhetoric and their euphoria and the reality of how many Americans are living, which is why as John Kerry continues to travel the country and offer his ideas and plan, the more likely it is he will win states like mine and even some other southern and mid-western states which have traditionally gone Republican.

DOBBS: Congressman Harold Ford, we thank you for being with us here tonight.

FORD: Thanks for having me.

DOBBS: A reminder to vote in tonight's poll. The question is who is running the most effective campaign, President Bush or Senator Kerry. Cast your vote at cnn.com/lou. We'll have the results later here in the broadcast. Coming up next, Exporting America. We'll tell you who is making the most money for themselves as a result of shipping those middle class American jobs to cheap foreign labor markets. Christine Romans will have the story for us. And Tropical Storm Gaston causes deadly flooding in Virginia, the third major hurricane of the season closing in now on the Southeastern U.S. We'll have a full report for you. And planet hunters have made an astonishing discovery in outer space. It might just be a little more crowded beyond our solar system than originally believed. We'll have that story and a great deal more and some spectacular images. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Devastating flooding sweeping through Virginia early today. Five people were killed in that flooding. Tropical Storm Gaston flooded 20 blocks of downtown Richmond, much of the surrounding area as well. 60,000 people are without power tonight. More than 180 roads have been washed out. Virginia's Governor Mark Warner has declared a state of emergency.

Meanwhile, Hurricane Frances is racing toward the Bahamas tonight. Winds in excess of 140 miles an hour. If that storm stays on its current path, it should strike the U.S. mainland within the next few days. The storm could strike anywhere, we're told by the National Hurricane Center, from Florida all the way to the Carolinas. The National Hurricane Center also says it's just much too early to tell exactly where Francis might make land fall.

Scientists today announced thrilling new findings beyond the limits of our solar system. Astronomers have discovered two new planets that are more similar to our own than any other planets previously discovered outside our solar system. This latest finding gives scientists new hope that life may be found beyond earth. Lisa Sylvester has the story from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Scientists have been on a quest to find a planet with similar conditions to earth one that is about the right temperature and the right size. They have found 135 planets outside of our solar system, but they've all been large, about the size of Jupiter, and not solid, but made up of gasses, but this is the first time scientists have discovered smaller planets the size of Neptune.

R. PAUL BUTLER, CARNEGIE INSTITUTE: It puts us in that transition region where we can't quite see the earth-like planets yet, but we are seeing their big brothers.

SYLVESTER: While they haven't quite seen the planets, but they know they're there, and they have been able to detect their sizes.

GEOFF MARCY, UNIVERSITY OF CALIFORNIA, BERKELEY: We watch the star, and, of course, it's orbited by a planet. The planet pulls gravitationally on the star, and it makes the star wobble. We watch the star wobble with the so-called Doppler effect that police officers use to measure the speed of cars.

SYLVESTER: One of the new planets was found among three others circling a star called 55 Kankri. This makes it the first known four- planet system that is very similar to our own solar system. BARBARA MCARTHUR, UNIVERSITY OF TEXAS, AUSTIN: I believe it's very possible there are more planets in this system. We might not have the technology yet to be able to detect them.

SYLVESTER: Future NASA missions will look for more planets and try to determine what they are made of. But in the meantime, if you look up in your backyard, gaze up at the constellation cancer, you can see star 55 and know that there are four planets circling it.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

DOBBS: Coming up next, outsourcing means big paydays. We'll tell you for whom. Christine Romans will be here.

And is there a lighter side to the exporting of American jobs? Hollywood seems to think perhaps there is. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Stocks today rose on Wall Street. The Dow gained 51 points. The Nasdaq little changed. The S&P up 5 points.

Tonight a new report, an outrageous finding on the shipment of American jobs to cheap foreign labor markets. Christine Romans is here with the story -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, now we know why American CEOs are just so eager to ship American jobs overseas. When hundreds of thousands of Americans are losing their jobs, multi- millionaire CEOs are making even more money. Top executives at the 50 largest outsourcers made an average of $10.4 million last year. That was a hefty pay race. Their pay rose 46 percent from 2002. Apparently, these CEOs are not content to make just 300 times what their average worker earns. They're shipping jobs overseas and making 3,300 times what their average Indian worker earns. The study concludes companies led by CEOs who outsource American jobs are channeling those profits not into new U.S. jobs and new technologies, but right into the pockets of chief executives. Is it any wonder that consumer confidence is so shaky? The conference board today said Americans are finding it harder to get jobs. They think there are fewer jobs out there for them, Lou.

DOBBS: It is difficult right now to explain the stubborn job market and the failure of this economy right now to generate new jobs. Let's turn to the issue of the WTO, though. Deciding that they're going to apply sanctions against the United States for enforcing our laws against dumping foreign products in this country?

ROMANS: Absolutely. The European Union's seven countries got permission to impose $150 million in sanctions on U.S. goods because the U.S. won't revoke its own anti-dumping laws. The WTO says that we are punishing the dumpers too severely by passing along those fines to the companies that are hurt in the first place. DOBBS: I don't know what's wrong with Washington. Do they think the U.S. government has sovereignty over this country? Don't they understand it's the WTO? Christine, thanks very much. Christine Romans.

In Exporting America tonight, leave it to Hollywood to see the humor in lost jobs. That's just what's happening in Hollywood as Daily Variety reported today. Comedy stars Vince Vaughn and Owen Wilson are now attached to a new comedy film entitled, yes, "Outsourced." The story will sound familiar to too many of our viewers. An American factory is shut down, moved to Mexico. In the upcoming Hollywood version, Wilson and Vaughn play two factory workers who decide not to simply take outsourcing lying down. The movie is "Outsourced." We'll see.

Still ahead, the results of tonight's poll, a preview of what's ahead here tomorrow. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In tonight's poll, almost three quarters of you say Senator Kerry's campaign is the most effective. Thanks for being with us tonight. Please join us tomorrow. Among our guests, Senate Intelligence Committee Chairman Republican Senator Pat Roberts and the chairman of the Democratic National Committee, Terry McAuliffe. Thanks for being with us tonight. Good night from New York.

"ANDERSON COOPER 360" is next.

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