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Lou Dobbs Tonight

Congress Hears Testimony on Border Security; Immigration Officials Crack Down on Illegal Alien Gangs; Tensions Across the Taiwan Strait

Aired March 14, 2005 - 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, "America the Vulnerable": shocking testimony today on Capitol Hill about the terrorist threat from massive illegal immigration, the absence of any border security and the federal government's failure to enforce our immigration laws. The chairman of the Senate's immigration subcommittee is our guest.
Violent gang crackdown. Federal agents arrest more than 100 members of the biggest and most violent Hispanic gang in this country, most of them illegal aliens. Could it only be a matter of time before the gang turns to terrorism?

And America's middle class under siege: jobs exported to cheap overseas labor markets, incomes are stagnant and debt is rising. At the same time the United States is literally exporting our wealth and know-how overseas. Two of this country's most respected economists will join us.

ANNOUNCER: This is Lou Dobbs for news debate and opinion, tonight.

DOBBS: Good evening.

Red star rising. China escalating its campaign against Taiwan. Vital U.S. national security interests are at stake. One of the world's top geostrategic experts will be here to discuss China's challenge and what the United States must do.

Selling America's image, the Bush administration calling in one of the president's most trusted advisers to improve our image in the Muslim world and to win global battle for ideas against radical Islamists.

And "America's Bright Future," tonight the story of a remarkable teenager who's already written and published five books and become a powerful advocate of aid for children who suffer from disease and hunger around the world.

Good evening. Tonight more than three years after the September 11 attacks, chilling testimony on Capitol Hill to Congress about the gaping holes in our border security and the threat of a new terrorist attack against this country.

A September 11th Commission terrorism expert testified today that our current border security measures remain woefully inadequate. She declared we must upgrade our border security now to stop terrorists from entering the United States.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Millions of people about whom we know next to nothing are melting into everyday American life.

JANICE KEPHART, COUNSEL TO 9/11 COMMISSION: I think that although we're talking a very good talk right now about border security being national security, we have it very buried in DHS right now.

ROMANS: Three and a half years after September 11, the southwestern United States land border with Mexico is a sieve.

SEN. JOHN CORNYN (R-TX), CHAIRMAN, IMMIGRATION SUBCOMMITTEE: Several al Qaeda leaders believe operatives can pay their way into the country through Mexico and also believe that illegal entry is more advantageous than the legal entry for operational security reasons.

ROMANS: Last year, almost 48,000 people other than Mexicans were stopped at that border, and then allowed to stay in this country.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: If I were a terrorist and I wanted to come into the United States, this is the way I would do it.

ROMANS: The visa waiver program allows millions into the country, but still no one knows if these visitors ever leave. Morale is low among border agents, and it's still too easy for terrorists to get U.S. government-issued I.D.

KEPHART: The hijackers acquired a total of 34 U.S. I.D.s: 13 driver's license, two of which were duplicates, and 21 U.S.A. or state-issued I.D. cards. It highlights the importance of verifying identity and immigration status when issuing those documents.

ROMANS: A former INS commissioner testified enforcing the border is impossible.

DORIS MEISSNER, FORMER INS COMMISSION: If there is always the pressure and the availability of a job in this country for people able to get past the border, no matter what you do at the border is not going to be sufficient.

ROMANS: All these agencies continue to talk about keeping an open-door policy, at the same time securing our borders. It's a balance Washington so far has utterly failed to achieve.

(END VIDEOTAPE)

ROMANS: Now, Janice Kephart, the 9/11 counsel, says immigration border security needs to be, maybe its own department, unshackled altogether from homeland security, with its own cabinet-level access to the president. Lou, that was essentially dismissed as impractical.

DOBBS: And a former INS commissioner saying it's impossible?

ROMANS: She said that's just the symptom of the problem, all of these people coming across the border. She said there are all kinds of cross-currents of laws in this country and there are jobs, a lot of jobs that are here to be had for illegal immigrants. They're going...

DOBBS: Does it occur to her perhaps that border is meant to be enforced by law and by historical tradition?

ROMANS: As long as there's a job, she said someone's going to come after them.

DOBBS: Not if we have border security. Christine Romans, thank you.

Later in this broadcast, Senator John Cornyn, chairman of that committee, will join us to talk about his fight to strengthen border security and to enforce our immigration laws.

We'll also have a special report about the rising anger over Home Depot's apparent support of policies that now favor illegal aliens and open borders.

Immigration and Customs Enforcement today announced a nationwide crackdown against the Latino gang MS-13. Federal agents have already arrested dozens of gang members. MS-13 is one of this country's largest and most violent street gangs, and most of its members are illegal aliens.

Bill Tucker has the report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Agents from Immigration and Customs Enforcement arrested 103 members of the violent Hispanic gang MS-13. All but a handful, illegal aliens. Fourteen have been previously deported.

The arrest announced Monday is part of a new anti-gang initiative called Operation Community Shield. Thirty arrests in the New York metropolitan area, 25 in the Washington, D.C., metro area, 17 in Los Angeles, 10 each in Baltimore, Newark, and Miami, and one in Dallas.

The operation involved not only federal agencies from ICE, but local law enforcement, as well.

MICHAEL GARCIA, ASSISTANT SECRETARY, DEPARTMENT OF HOMELAND SECURITY: I think this is a perfect example if we're talking about state and local cooperation on immigration issues. This is a perfect example of where we should put our resources.

TUCKER: People who work with and study gang activity agree.

HEATHER MACDONALD, MANHATTAN INSTITUTE: What we need to do is take it to the next step and have cities like Los Angeles and New York throw out their sanctuary laws, give the police their authority to use immigration violations to target felons and get them off the street.

TUCKER: Sanctuary laws prohibit local police from arresting people only because they're illegal aliens.

MS-13 is a gang which has a reputation of being extremely violent and is active in Central America, as well as here. Its founding members were trained guerrilla fighters from El Salvador. Because of the military connection, some observers have speculated MS-13 would be willing and able to smuggle in terrorists.

GARCIA: If you have a large-scale criminal organization operating in the United States, one that is reported to be smuggling: smuggling contraband, smuggling people, exploiting border vulnerabilities, you have to accept that as a homeland security risk, as well, and we do that.

(END VIDEOTAPE)

TUCKER: Now Garcia says his agency has yet to find evidence connecting any terrorism group to MS-13, but, Lou, he says it is not a question of ability, just perhaps a matter of time and money.

DOBBS: Well, while he may not have, Admiral Loy and the CIA have made it very clear in direct testimony before Congress that that is the connection they fear most at our southern border.

The idea that cities would be passing these sanctuary laws that would prevent law enforcement from working effectively with immigration, what in the world is their reasoning?

TUCKER: Well, their feeling is they want to keep the immigration community -- the immigrant community from being persecuted.

DOBBS: Persecuted.

TUCKER: Lou, simply because someone is illegally here...

DOBBS: The immigrant community?

TUCKER: Well, that's the -- that's the language of the activists involved.

DOBBS: With 20 million illegal immigrants in this country, it would seem that to be appropriate now to perhaps enforce those laws, wouldn't it? And it appears that that's what we're watching happen, at least at the beginning.

TUCKER: Yes.

DOBBS: Bill Tucker, thank you.

Another critical security shortfall in this country is the continuing threat of suicide attacks by radical Islamist terrorists in hijacked aircraft. Tonight there's word that government investigators now believe our aviation system is still vulnerable to al Qaeda, more than three years after September 11.

The federal government reports, as terrorists may by targeting noncommercial aircraft and helicopters, because they are less well- protected than commercial airliners. But the investigators also say commercial aircraft remain vulnerable to attack, despite billions of dollars spent on security upgrades.

Turning to the fight against radical Islamists and their government sponsors overseas, hundreds of thousands of protesters today held a massive protest in Beirut against Syria and its radical Islamist supporters in Lebanon.

Those protesters held a huge rally in the center of Beirut. It was the biggest demonstration in the city since the assassination of a former Lebanese prime minister in Beirut last month. In fact, an estimated 800,000 protesters turning out, those protesters demanding the immediate withdrawal of all Syrian troops from Lebanon.

A major new initiative tonight in the battle to improve America's image in the Muslim world. The Bush administration has tapped long- time Bush adviser Karen Hughes to lead the State Department's public diplomacy campaign overseas. Condoleezza Rice declared the United States must do a better job in engaging the Muslim world.

Senior White House correspondent John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): A fiercely loyal defender of the president's image will now try to improve her country's image overseas, especially in an Arab world with no shortage of anti-American and anti-Bush sentiment.

KAREN HUGHES, UNDERSECRETARY OF STATE DESIGNATE: This job will be difficult. Perceptions do not change quickly or easily. This is a struggle for ideas.

KING: Former top White House aide Karen Hughes will get the rank of ambassador, and as undersecretary of state for public diplomacy is charged with trying to reverse what the 9/11 Commission and her new boss call a major government failing.

CONDOLEEZZA RICE, SECRETARY OF STATE: Too few know of our deep respect for the history and traditions of others and our respect for the religions of all.

KING: Not that the administration hasn't tried.

UNIDENTIFIED MALE: There is the possibility of meetings here on the White House grounds with an Iraqi expat.

KING: The White House Office of Global Communications was established at Hughes' direction. The annual State Department budget for public diplomacy is nearly $700 million, and the government also launched a taxpayer-financed Arab language network. But Al-Jazeera and other Pan Arab networks have a far greater reach, were highly critical of the Iraq war, and usually accuse Mr. Bush of taking Israel's sides in disputes with the Palestinians. The president earlier this year called them part of the problem.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The propagandists have done a better job of depicting America as a hateful place, a place wanting to impose our form of government on people and our religion on people.

KING: Madison Avenue executive Charlotte Beers and veteran State Department hand Margaret Tutwiler held the post in the first Bush term. Administration critics say a new ad campaign alone won't turn around public opinion in the Muslim world.

SUSAN RICE, FMR. ASSISTANT SECRETARY OF STATE: There were no weapons of mass destruction, no links to al Qaeda, and they doubt our motives. Our motives and our credibility have been called into question. And you can't fix that simply by marketing.

KING: This morning's White House meeting was part of an effort to make clear Mr. Bush's personal investment in a woman he calls both trusted adviser and friend.

(END VIDEOTAPE)

KING: And given the depth of Hughes' loyalty to the president, her first big challenge may be coming to terms with just how personal this anti-American sentiment is against a president she calls wonderful and compassionate, but, Lou, a president who is often portrayed, as you know, across the Arab world as a bully and a warmonger.

DOBBS: Any indication, John, as to what Karen Hughes will do differently, what her strategy will be?

KING: Well, certainly they believe they have an opening with this pro-democracy move in Lebanon, with other political reforms across the Middle East. And most principally, everyone at the White House and Karen Hughes recognizes that the greatest source of this anti-American sentiment is what the Arabs say has been the president's indifference to the Palestinian-Israeli dispute.

They will put a lot of emphasis in that. Secretary Rice taking the lead, but Karen Hughes also taking the lead not only as Secretary Rice plays out with the diplomacy, Karen Hughes trying to promote that, especially in the Arab world, to prove that this administration is trying a hands-on effort to bring peace to the Middle East.

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

Still ahead here, red star rising. China's new challenge to the United States. A vital U.S. national security interest is at stake.

And is Home Depot supporting the massive invasion of illegal aliens into this country? Does the company encourage people to break our immigration laws? Does the company favor open borders? Some are making that charge. We'll have a special report for you next.

(COMMERCIAL BREAK)

DOBBS: China today ignored warnings from the United States about its growing military aggression toward Taiwan. China's parliament passed a law that would authorize an attack against Taiwan should it make any move toward independence. The White House called the development unfortunate.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): China, the second largest military spender in the world, has just passed a law that authorizes force against Taiwan. Secretary of State Condoleezza Rice is headed to Asia this week, her first trip to the region as secretary of state.

RICE: We have concerns about the Chinese military buildup, we have concerns about the cross-straits tensions between China and Taiwan.

PILGRIM: Adding to the concern, Chinese President Hu Jin Tao was just voted head of the Central Military Commission on Sunday. He spoke of stepping up preparations for possible military struggle.

PETER BROOKES, HERITAGE FOUNDATION: This certainty does roil the waters of the Pacific. And so people are very concerned that this is just a first step by China towards taking some sort of military action down the road to settle Taiwan's political future.

PILGRIM: The European Union, anxious to established increased trade relations with China, has been talking of lifting a 15-year-old ban on selling arms to China. But U.S. officials say lifting the ban would accelerate China's access to military technology at a time when it is showing its muscle.

Europe has been arguing that China is now a member of the global trading system and the ban should be lifted. Today, the U.S. State Department said it's time to reconsider that position.

RICHARD BOUCHER, STATE DEPT. SPOKESMAN: Certainly the prospect that China would use non-peaceful means to try to resolve differences with Taiwan should be disturbing to them, to the Europeans, as it is to us.

(END VIDEOTAPE)

PILGRIM: And China experts hope the passing of the anti-secession law against Taiwan may make Europe realize the consequences of lifting the arms embargo. With China speaking of Taiwan being its own internal affair, with no influence from outside forces, China's rhetoric and intent are pretty clear -- Lou. DOBBS: In the interest of maintaining absolute truth as our standard here, when we call this an anti-secession law -- that is what the Chinese call it -- perhaps we should call it what it is. It's a declaration that they would go to war should Taiwan insist upon codifying its independence.

PILGRIM: That's exactly right. That's exactly right, Lou. And it could get a lot worse, because Taiwan's President Chen has asked for a rally on March 26 of a million people. So we could see this escalate.

DOBBS: Well, the fact of the matter is, this last one, look, Taiwan is an independent nation with sovereign powers despite the geopolitical games that surround that island nation.

Kitty Pilgrim, thank you very much.

We'll have much more ahead here on China's rising military threats and its impact on our staggering trade relationship with China. Two of this country's leading economists will be our guests to assess the threat and the opportunity.

We reported here for years now on the exporting of American jobs to cheap foreign labor markets and the devastating impact it has on working Americans. The outsourcing booms in China and India are well- established. Now Vietnam is emerging as the latest cheap foreign labor market of choice for many American companies.

Mike Chinoy reports from Ho Chi Minh City, Vietnam.

(BEGIN VIDEOTAPE)

MIKE CHINOY, CNN CORRESPONDENT (voice-over): It's English-only day at TMA Solutions. None of the workers allowed to speak Vietnamese. Just one way TMA is trying to maintain its edge as the leading high- tech outsourcing company in Vietnam.

DR. NGUYEN HUU LE, CHAIRMAN, TMA SOLUTIONS: These are the greatest assets that Vietnam has in terms of young people...

CHINOY: Dr. Nguyen Huu Le runs TMA. Now an Australian citizen, he left Vietnam at the height of the war 36 years ago and spent 22 years working for Nortel before coming back.

NGUYEN: I was lucky to have the opportunity to come back to Vietnam, applying, you know, the experience that I got, you know, from overseas and help to build something that I hope that would be a legacy, you know, for my family and also for, you know, for my people as well.

CHINOY: TMA's 400 code writers and engineers develop and test software for a half-dozen American firms, including Lucent and Nortel. The average wage, $500 a month, a fortune here.

Vietnam's universities are turning out 20,000 IT graduates every year to fill these jobs. Disciplined, well-trained, with ambitions for themselves and their country. "When I graduate, I'm going to work for a foreign high-tech firm," says Ho Chi Minh City University senior Tran Kong Lin (ph). "Then I'll set up my own company and use high tech to serve Vietnam."

So attractive is Vietnam's outsourcing potential that Nortel reportedly plans to make it one of its main overseas software testing locations.

NGUYEN: Oh, the outlook, the potential is really, really great. So for TMA, for example, we are looking at continuing doubling, you know, the business every year.

CHINOY: For now, that means building a new nine-story operation center in the heart of Ho Chi Minh City.

(on camera): In a matter of months, there will be 500 new programmers working in this building, but that's not enough. And already, the company has plans for a new facility to accommodate 3,000 more.

Mike Chinoy, CNN, Ho Chi Minh City, Vietnam.

(END VIDEOTAPE)

DOBBS: And coming up next here, protesting Home Depot, why demonstrators say the store aids and abets illegal aliens. That story's next.

(COMMERCIAL BREAK)

DOBBS: As we've reported, Home Depot is facing rising anger over company policies that appear, to some, to condone massive illegal immigration into this country. Critics blast Home Depot for its ties with groups that support open borders and drivers' licenses for illegal aliens, and Home Depot's sponsorship of day laborer sites. This weekend some critics held a protest at a Home Depot in southern California.

Casey Wian has the story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Illegal alien alert! Illegal alien alert!

CASEY WIAN, CNN CORRESPONDENT (voice-over): Several dozen protesters gathered outside the Home Depot in Rancho Cucamonga, California, this weekend. They're angry about the hardware chain's ties to illegal aliens and tried to persuade customers to shop elsewhere.

UNIDENTIFIED FEMALE: Hey, hey, ho, ho, do your shopping down at Lowe's.

UNIDENTIFIED MALE: Hey, hey, ho, ho, do your shopping down at Lowe's.

UNIDENTIFIED FEMALE: Hey, hey, ho, ho, do your shopping down at Lowe's.

WIAN: Last month Hope Depot announced a Spanish hiring initiative that will rely on groups such as the National Council of La Raza, which advocates drivers' licenses, amnesty and discounted college tuition for illegal aliens.

BARBARA COE, PROTESTER: Home Depot has aided and abetted illegal aliens for quite some time. And we are hoping that by educating them, that they will no longer come here, that they will no longer support a company who betrays Americans.

WIAN: Home Depot also has paid for day laborer facilities at or near some of its stores.

JOSEPH TURNER, SOS.ORG: Studies have shown that day laborers are overwhelmingly illegal, and so we're out here to basically stand up against that. We're tired of this nonsense.

WIAN: They hope to hurt this Home Depot's businesses for a day by making large numbers of small purchases, such as a single screw, or returning items for refunds. The store brought in extra staff and says it saw no disruptions to its operations.

The protesters wants Home Depot to renounce its deal with La Raza and to close its day laborer centers. Home Depot says it only opens them in response to requests by local communities.

The company recently added former Homeland Security Secretary Tom Ridge to its board of directors. Even that move drew criticism from protesters, who said Ridge did little to stop illegal immigration.

(END VIDEOTAPE)

WIAN: Organizers say they will continue to put pressure on Home Depot at other stores in the future until, in their words, either Home Depot changes its policies or they bring Home Depot to its knees -- Lou.

DOBBS: Well, the fact of the matter is, it's stunning that Home Depot would be putting day laborer sites, knowing specifically that they were for illegal aliens. Does the company have any statement on that?

WIAN: Well, they won't give us a statement directly on it, but they'll tell us on background that all of these day laborer centers are in response to requests from local communities. Some communities, some cities have actually required Home Depot to open these day laborer centers, pay for them in order to get a permit to operate in the city -- Lou.

DOBBS: That's remarkable. We should certainly explore more of the city governments that would demand that, and I know you will, Casey. Thank you very much. Casey Wian. Appreciate it.

Coming up next here, absolutely shocking testimony on Capitol Hill today about the appalling lack of security along our nation's borders.

And China's rising economic and military threat, why Washington may not be willing to respond to Beijing's challenge. That story is next.

(COMMERCIAL BREAK)

DOBBS: In a moment, strengthening our nation's borders the focus of a critically important hear today on Capitol Hill. The chairman of the committee is our guest.

Now here are some of the other important stories we're following tonight.

The suspect in Atlanta's courthouse murders is being held at the city's federal penitentiary while officials figure out how those charges will be handled. The prosecutor in that case said Brian Nichols appears to be proud of his actions.

Meanwhile, two children have been injured in shootings across the country. A second-grader in Columbus, Ohio, was shot in the hand when a gun that he brought to school went off.

In Houston, Texas, a 2-year-old boy is in critical condition tonight after being shot in the head by his 4-year-old brother.

And in Brookfield, Wisconsin, police say they still don't know why a gunman shot and killed seven people during a church service this weekend before killing himself.

And in California, a Superior Court judge today ruled the states ban on gay marriage is unconstitutional. If this ruling were upheld after appeal, California would follow Massachusetts in allowing same- sex couples to marry.

Turning now to our top story, alarming testimony today on Capitol Hill about the lack of security along our nations borders, as we have been reporting here for the past several years.

My next guest co-chairs the joint subcommittee hearing which wrapped up just a short time ago. Senator John Cornyn of Texas is chairman of Subcommittee on Immigration, Border Security and Citizenship, joining us tonight from Capitol Hill.

Senator, thanks for being here.

SEN. JOHN CORNYN (R), TEXAS: Thanks, Lou.

DOBBS: How shocked are you at what you heard today about the amazing gaps in our border security and the lack of enforcement on immigration -- of immigration laws?

CORNYN: Well, unfortunately, Lou, like you, I -- this is something I've been exposed to quite a while, and something you've been exposing your listeners to. But frankly, I don't think most of America has fully appreciated how vulnerable we really are at our borders. And how easy it is for people to come up through Mexico's Southern border say, lets say from Central America or elsewhere up across our U.S./Mexico border. And if they want to come here to do us harm, they pretty much have a free run.

DOBBS: Senator, let me ask you this, do you have a sense as to why the United States government, the Department of Homeland Security, can put out all sorts of press releases about aerial surveillance, and talk about what it's doing. And talk about what is now being referred to by Bonner, the head of enforcement as operational control of the border? How can people sleep at night with those kinds of fictions being created by their actions and their words?

CORNYN: Well, Lou, I don't know what "operational control" of the border means, but I do understand the English language. And as I understand that phrase, that's not true. We do not have operational control. I flew in a Border Patrol helicopter along the Rio Grande River between Mexico and Texas just a few weeks ago, and saw with my own eyes people coming across pretty much at will. And while many of them come across to work and don't at least represent a physical threat to the United States, obviously that pathway, that avenue toward coming to the United States is available to anyone who does want to come do us harm. And it concerns me greatly, and I know, you and your listeners as well.

DOBBS: Absolutely. And the House has passed Congressman Sensenbrenner's real I.D. bill. What's taking the Senate so long to act?

CORNYN: Well, that's going to come across on the war supplemental, which will be in April. That's the vehicle it's coming over on it's -- but the fact is, I do think we need to deal with document integrity. That was one of the issues we heard testimony on today, how terrorists can get false documents and use those to give the appearance that they're here legally in the United States, and travel basically anywhere they want. So, we simply have to crack down on that. But Lou, the thing is, we can't just stop there. We've got a lot more to do before we're safe.

DOBBS: What is the most, in your view, what, senator, are the most important things that must be done and soon, if not now?

CORNYN: Well, we need to beef up on our border security. We need to use the technology that's available to us, including UAVs that have now been deployed through the Air National Guard in Texas and Arizona. But you know, Lou, we have to do the interior enforcement as well. We have to give a means for employers to document and confirm the status of people who want to come to work for them. They don't even have that capability now, because the laws don't provide for it. But I think it's absolutely critical.

DOBBS: And is it your judgment, at least, at the margin -- at the beginning, that Congressman Sensenbrenner's bill will be passed by the Senate and actually become law this year?

CORNYN: I do think -- yes, I think we do need to pass document integrity bill, like the Real I.D. Act. The question is, and this -- I won't bog you down in this, is that whether it belongs in the war supplemental, whether that will attract a bunch of other immigration bills really before we're ready to talk about those in an intelligence fashion and thus be counterproductive. But certainly, we do need to do something about that document integrity. But here again, Lou, I hope that if that passes, that we don't pat ourself on the back and say we've fixed the problem, because clearly we have not.

DOBBS: We have not, and I think most of us are hoping, senator, that the Senate leadership does not play games again with this bill, and actually, does get, at least, this passed, which is, at least, at the margin beginning on the many issues that you've highlighted here tonight.

Senator Cornyn, we thank you for being here.

CORNYN: Thanks, Lou.

DOBBS: Tonight, an alarming story out of Florida, that highlights the danger of our porous borders. Officials say at least three -- three illegal aliens from Mexico used fake Social Security numbers to gain access to a power plant. At least one of them worked near the plant's nuclear reactor.

The illegal aliens worked as painters for a contractor at the Crystal River Energy Complex in Citrus County. Both the contractor and the plant officials say there was never a breach of security, and they claim they followed all required hiring procedures. Local reports say the three men were arrested by immigration officials. The nuclear Regulatory Commission is now investigating.

Taking a look at some of "Your Thoughts" now.

Mary Nitkowski of Maryville, Tennessee, "Instead of enforcing the border laws that are on the books, our government officials have turned their backs, closed their eyes, and lost their voice. Illegal immigrants cross our borders daily and our government's answer: give them amnesty and write new laws. What has happened to a government 'for the people' in this country?"

Ingolf Hack, Hopatcong, New Jersey, "As a legacy customs senior special agent now with ICE, I applaud your efforts to highlight the illegal alien crisis and the shame known as the Department of Homeland Security. I just hope the American people wake up in time to do something about it because Congress and this administration sure won't."

And John Aubrey of Sierra Vista, Arizona, "Immigrants need to come in through the front door, not the back door. I am second generation French descent, my grandparents came through Ellis Island."

We love hearing "Your Thoughts." E-mail us at loudobbs@cnn.com. Each of you who's e-mail is read on the broadcast gets a copy of my book, "Exporting America." And if you'd like to receive our e-mail newsletter, sign up on the Web site, loudobbs.com

Next, red star rising. Why the United States may not be willing to stand up to China over its latest geopolitical challenge. Stay with us.

(COMMERCIAL BREAK)

DOBBS: China, as we've reported, has passed a resolution authorizing use of military force against Taiwan. The Bush administration calls the measure "unhelpful," but my next guest says the United States may have a difficult time taking a stand against Beijing, because China is literally financing much of our mounting twin deficits. Niall Ferguson is the author of "Colossus: The Price of America's Empire," professor of history at Harvard University, joining us tonight from Boston.

Good to have you with us.

NIALL FERGUSON, AUTHOR, "COLOSSUS": It's good to be back on the show, Lou.

DOBBS: Is it your judgment that because of the capital that China gains by exporting to the United States simply gives it too much leverage in our markets?

FERGUSON: Well, think of it like this, China is essentially bankrolling the United States, a very large proportion of the federal budget deficit and of the current account deficit is being financed by Chinese purchases of U.S. dollars and U.S. bonds, and these are accumulating in the hundreds of billions.

So if you pick a fight with your bank manager and you happen to have a large overdraft, I'm not so sure you're going to stand a chance of winning that fight.

DOBBS: In winning that fight, it's unclear what winning looks like on a certain level. Certainly if it moved to a military confrontation, that's starkly clear. But in terms of Taiwan, we have a one China policy, while acknowledging the fact that Taiwan is a sovereign nation, the language and the artifice, the terms of art get to be just a little too cute for reality, don't you think?

FERGUSON: Yes. I think it's very worrying. I think Taiwan is one of these issues that we've slightly forgotten about that could take us all by surprise. Economically the United States and China have a very benign, interdependent relationship at the moment. But there is a sense in which things could fall apart quite quickly if China does push its harder line on Taiwan. And I think it's very difficult for the United States to stand up to that given the extent of U.S. dependency on China.

Of course, both sides stand to lose, the Chinese would take an economic hit if the dollar were suddenly to dive against the Chinese currency. Their exports would become more expensive for American consumers. So you might call it a -- indeed, the phrase has been used, a kind balance of financial terror, but it's those sorts of situations that can quite quickly spiral out of control and lead to financial crises.

DOBBS: Taiwan, the Bush administration in the fall suggesting it was one China, even sending signals, Secretary of State Colin Powell at that time, making it clear in one statement -- it was never quite clear whether or not he was simply misquoted or misspoke, but basically saying the United States would not defend Taiwan. And most recently Secretary of State Condoleezza Rice making it clear that we would. What do you take to be the reality?

FERGUSON: I think it's very hard to imagine the United States going to a full-scale war against the People's Republic of China over Taiwan. But then if you would ask people 100 years ago, will the British Empire go to war with Germany over Belgium, I think most people would have said, it's unlikely. It's very often these small often forgotten diplomatic anomalies that can lead to the greatest crises in international affairs.

DOBBS: Syria, while it did not make the axis of evil, as styled by the Bush administration, has certainly become the focal point of the Bush administration's policy in the Middle East of late. What's your judgment? Will Syria in point of fact leave Lebanon altogether, intelligence as well as military?

FERGUSON: Well, it's conceivable. It would be nice if this story had a fairy tale ending, a little bit like the story in Ukraine, but Lebanon is not Ukraine. And this is a state that had one of the most violent civil wars of the late 20th Century. These crowds that are gathering to demonstrate in Beirut today could quite quickly be at one another's throats.

It's far from clear to me that this is going to end peacefully. While I would love to see the Bush administration's policy of democratization in the Middle East work out, and I would be delighted if Syria did withdraw from Lebanon, I don't think anybody should be confident that Lebanon will then live happily ever after.

DOBBS: Confidence aside, could you have imagined that democratization would have at least this much of a beachhead in the Middle East, if you will, just several years ago?

FERGUSON: Well, I tried to argue in recent years in this book, "Colossus," and in previous books that a lot could be achieved by American intervention against rogue regimes like Saddam Hussein's Iraq. So I'm not by any means taken aback by the fact that this sends a signal that has reverberated throughout the region. But the key thing is that things can roll forward and then they can quite quickly roll back. Democratization can be a flash in the pan event. We saw that after all in Europe after World War I.

DOBBS: Ah, the validation of an author and the pride to which it leads. Niall Ferguson, thank you very much. And deserving pride...

FERGUSON: I'm not too proud, Lou.

DOBBS: Excellent analysis.

FERGUSON: Thanks very much.

DOBBS: We thank you for being here. Niall Ferguson, the book is "Colossus."

CNN will have special coverage on the developments from Syria and Lebanon. Our Anderson Cooper is in Beirut and will be reporting live from Beirut throughout the week.

Next, middle class families under siege, why the economy may not be doing as well as it seems to some. Stay with us. We'll be discussing the threats to American prosperity and our future, next.

(COMMERCIAL BREAK)

DOBBS: The American middle class is clearly under assault. Personal savings are near record lows, demand for mortgages, higher credit card debt, continuing to rise from record levels. Nationally the U.S. trade deficit, the second-highest ever in January. Our deficit with China continues to explode, our estimated trade deficit for 2004 estimated to be a record $650 billion, and the dollar of course under assault by both the euro and the yen.

Joining me tonight to try to put in perspective what's really going on with this economy, two of the most respected economists in this country. Stephen Roach, he's the chief economist for Morgan Stanley; and John Lipsky, he's vice chairman of investment banking at J.P. Morgan.

Good to have you both with us. As anyone looks at these numbers, and as one hears dollar, you know, you can almost hear the dials, right now, as I said dollar, they're switching off because this is boring dull stuff, but the fact of the matter is this economy is under considerable assault, is it not, Stephen?

STEPHEN ROACH, MORGAN STANLEY: Well, we do have a problem. And you put your finger on several symptoms of those problems, Lou. The low savings in the United States, which is not just a personal savings issue, but also a government dissavings issue, leaves us with a big hole, and so we fill that hole by importing surplus savings from abroad, and running these massive trade deficits to attract the savings from abroad.

And that does leaves us with pressures on the dollar and a lot of debt. So far we've been able to finesse it, but so far is never a promise of how it's going to end.

DOBBS: Well, as you look out, John, we've been $650 billion last year, we've got better than $3 trillion in external debt, $8 trillion in national debt and we've got the Bush administration saying, hey, everything is just fine. Is it just fine?

JOHN LIPSKY: Well, let's put it in perspective. The U.S. economy is growing at about 4 percent, inflation is at 40-year lows, household net worth is at all-time highs, corporate profitability is at all-time highs. So it's hard to start from the premise that something is desperately wrong here.

The trade deficit reflects, more than anything else, first, that our G3 partners, Japan and the euro area, are growing at less than half the pace of the U.S. economy. The three together constitute two- thirds of world GDP, and secondly we have a special relationship with Asia, but part of that...

DOBBS: Wait, wait, wait, wait. I'm not going to let you get away with "special relationship." What is the "special relationship?" I thought that was with the U.K.?

LIPSKY: Well, you're talking politics. In economic terms, the east Asian economy, principally China, has pegged their currency to the dollar, by and large. And as a result, they have -- they are committed to a prospect for restoring their growth after the problems in '97 and '98 that have been largely successful, but commit them to accumulating dollar assets.

DOBBS: You persuaded?

ROACH: No. It's really an insane way to run the world, Lou. If we buy DVD players in China, and China does a quid pro quo and buys Treasury bonds made in Washington. Meanwhile, they subsidize our interest rates in doing that, that jacks up our housing values, and we keep spending out of our assets. I mean, John's point on net worth is right, but it's supported by artificially low interest rates, subsidized by the Chinese and the Federal Reserve. The special relationship is between China and the Fed.

DOBBS: What is the principal component of higher household net worth. Is it housing?

LIPSKY: Housing, but also equity values, of course, have gone up more recently.

DOBBS: Skyrocketed, I think, is the word.

LIPSKY: But basically the big picture on what has happened to net worth over the past decade, is that inflation has come down unexpectedly in the 1990s and again in this decade. That has lowered interest rate, and raised long-term value. Secondly we have an accelerated of productivity growth in this economy, that is keep our growth faster than elsewhere.

DOBBS: All right, we've heard all the big words. And we sort of danced around...

UNIDENTIFIED MALE: Not all of them.

DOBBS: Not all of them, but a lot of them. So, let's put this in real terms. How many people in this country right now, in your judgment, can count on -- and I'm talking about the middle class, can count on significantly higher wages in the next decade?

How many of them can count on their children making more money than they will, that is, having a higher standard of living, given the amount of indebtedness that we have, the deficits we have, and the anemic, anemic job creation, with the exception of last year, 2.2 million jobs created, but now we're seeing a slowdown again.

What's your best answer, John?

LIPSKY: Well, the -- it seems to me, the answer is most likely, yes, almost certainly, yes. And the keys, do we keep inflation low? Do we keep productivity growth strong? If those two are correct, then I think there's very little risk that the -- that future generations or our children or however you want to couch that question, are definitely going to do better.

DOBBS: Steve.

ROACH: Well, I think we've been through a remarkable run over the -- in the last 15 years. But these past three years, Lou, I think there's -- there's some warning signs that we can no longer ignore. The weakest job recovery, even with the 2.2 million last year in any recovery on record. The wage rate, the hourly pay rate is no higher adjusted for inflation today than it was when the economy bottomed out.

Very powerful forces globally, as you have stressed in your program, bearing down on workers both head count and reward. So, the pressure is really on us to come up with new and creative ways to push ourselves into new markets, new technologies. If we can stay the course of the product activity curve that John alluded to it will be fine. But you know, a lot of the easy work on productivity is now behind us. We've converted from one technology platform to another. It's going to be tougher going forward, I suspect.

LIPSKY: I'm not sure that that's right. I suspect we're just in the middle of this product activity revolution. Certainly past performance suggests that when we have these periods of acceleration of productivity, they do carry on for longer than just the decade. We've seen it.

DOBBS: Do you look for brighter prospects over the next five years, Steve Roach?

ROACH: I think the next five years are going to be tough for the U.S. We have lived beyond our means for a long time.

DOBBS: John Lipsky.

LIPSKY: I don't agree. And I think the next five years are going to be better still.

DOBBS: And in case you're wondering, with two economists we don't -- I don't even have to say on the one hand or the other, we thank you both for being here. Steven Roach, John Lipsky, thank you, gentlemen.

ROACH: Thank you.

LIPSKY: Thank you.

DOBBS: Now, "America's Bright Future" our series of special reports on some of this country's most inspiring young people, and there are many. Tonight, we have for you the story of a 15-year-old girl who's launched a worldwide effort to help others.

Katharine Barrett has her story.

(BEGIN VIDEOTAPE)

SONDRA CLARK: And can anyone guess while it's called a blue line?

KATHARINE BARRETT, CNN CORRESPONDENT (voice-over): It might not be surprising to see a 15-year-old attending a career workshop. High school freshman, Sondra Clark is conducting one -- on writing and publishing books. She has five to her name, on everything from crafts to careers.

CLARK: And it does take a lot of hard work and effort.

BARRETT: The secret of her success, grownup skills of goal- setting and self-discipline.

CLARK: I have done a lot, but I've been given a lot of opportunities. And the thing, I think, that makes me different is that I've actually taken those opportunities. And I have put in a lot of hard work and effort.

BARRETT: Like signing a contract last summer with her mother to spend three hours a day writing her latest book, rather than hanging out at the mall. Sondra's commercial success is balanced by global citizenship. At 11 she became a spokesperson for aid group Child Care International visiting missions in Africa and Latin America. In 2002, she crisscrossed the United States for the charity raising $75,000.

MAX LANGE, PRESIDENT, CHILD CARE INTERNATIONAL: I have never seen anybody like this. I know, when I was her age, I certainly had no idea of helping people help themselves, but she has this gift.

CLARK: I think that's kind of what motivates me to going, that I can actually make a difference in someone's life. And I have been given so many great things from other people, that I kind of I want to give others that chance.

BARRETT: Thanks to her charity work, Sondra was selected to bare the Olympic torch in 2002.

(on camera): And in case any parents or children might feel discouraged by the overwhelming amount Sondra has accomplished in her young life, it might be reassuring to know that she still faces at least one struggle -- with spelling.

(voice-over): And Sondra has yet decided what she wants to be when she grows up.

CLARK: Anything is possible with hard work and effort. So, you can set your dreams. And I think there was a quote of "build your castles in the sky and then build foundations under them. Katharine Barrett, CNN, Tacoma, Washington.

(END VIDEOTAPE)

DOBBS: Coming up next, a preview of what's ahead tomorrow. There's a great deal in store. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Thanks for being with us tonight, please join us here tomorrow. We'll be live from Washington D.C., a former 9/11 Commission terrorism expert will be our guest, who says, we must upgrade border security now to stop terrorist from entering this country. Please join us. Senator Chuck Hagel will be our guest. He says he's going to enlighten me about his plan to reform Social Security. You want to be with us for that. We'll hope you'll be with us. For all of us here, good night from New York.

"ANDERSON COOPER 360" is coming up next, live from Lebanon.

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Aired March 14, 2005 - 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, "America the Vulnerable": shocking testimony today on Capitol Hill about the terrorist threat from massive illegal immigration, the absence of any border security and the federal government's failure to enforce our immigration laws. The chairman of the Senate's immigration subcommittee is our guest.
Violent gang crackdown. Federal agents arrest more than 100 members of the biggest and most violent Hispanic gang in this country, most of them illegal aliens. Could it only be a matter of time before the gang turns to terrorism?

And America's middle class under siege: jobs exported to cheap overseas labor markets, incomes are stagnant and debt is rising. At the same time the United States is literally exporting our wealth and know-how overseas. Two of this country's most respected economists will join us.

ANNOUNCER: This is Lou Dobbs for news debate and opinion, tonight.

DOBBS: Good evening.

Red star rising. China escalating its campaign against Taiwan. Vital U.S. national security interests are at stake. One of the world's top geostrategic experts will be here to discuss China's challenge and what the United States must do.

Selling America's image, the Bush administration calling in one of the president's most trusted advisers to improve our image in the Muslim world and to win global battle for ideas against radical Islamists.

And "America's Bright Future," tonight the story of a remarkable teenager who's already written and published five books and become a powerful advocate of aid for children who suffer from disease and hunger around the world.

Good evening. Tonight more than three years after the September 11 attacks, chilling testimony on Capitol Hill to Congress about the gaping holes in our border security and the threat of a new terrorist attack against this country.

A September 11th Commission terrorism expert testified today that our current border security measures remain woefully inadequate. She declared we must upgrade our border security now to stop terrorists from entering the United States.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Millions of people about whom we know next to nothing are melting into everyday American life.

JANICE KEPHART, COUNSEL TO 9/11 COMMISSION: I think that although we're talking a very good talk right now about border security being national security, we have it very buried in DHS right now.

ROMANS: Three and a half years after September 11, the southwestern United States land border with Mexico is a sieve.

SEN. JOHN CORNYN (R-TX), CHAIRMAN, IMMIGRATION SUBCOMMITTEE: Several al Qaeda leaders believe operatives can pay their way into the country through Mexico and also believe that illegal entry is more advantageous than the legal entry for operational security reasons.

ROMANS: Last year, almost 48,000 people other than Mexicans were stopped at that border, and then allowed to stay in this country.

SEN. DIANNE FEINSTEIN (D), CALIFORNIA: If I were a terrorist and I wanted to come into the United States, this is the way I would do it.

ROMANS: The visa waiver program allows millions into the country, but still no one knows if these visitors ever leave. Morale is low among border agents, and it's still too easy for terrorists to get U.S. government-issued I.D.

KEPHART: The hijackers acquired a total of 34 U.S. I.D.s: 13 driver's license, two of which were duplicates, and 21 U.S.A. or state-issued I.D. cards. It highlights the importance of verifying identity and immigration status when issuing those documents.

ROMANS: A former INS commissioner testified enforcing the border is impossible.

DORIS MEISSNER, FORMER INS COMMISSION: If there is always the pressure and the availability of a job in this country for people able to get past the border, no matter what you do at the border is not going to be sufficient.

ROMANS: All these agencies continue to talk about keeping an open-door policy, at the same time securing our borders. It's a balance Washington so far has utterly failed to achieve.

(END VIDEOTAPE)

ROMANS: Now, Janice Kephart, the 9/11 counsel, says immigration border security needs to be, maybe its own department, unshackled altogether from homeland security, with its own cabinet-level access to the president. Lou, that was essentially dismissed as impractical.

DOBBS: And a former INS commissioner saying it's impossible?

ROMANS: She said that's just the symptom of the problem, all of these people coming across the border. She said there are all kinds of cross-currents of laws in this country and there are jobs, a lot of jobs that are here to be had for illegal immigrants. They're going...

DOBBS: Does it occur to her perhaps that border is meant to be enforced by law and by historical tradition?

ROMANS: As long as there's a job, she said someone's going to come after them.

DOBBS: Not if we have border security. Christine Romans, thank you.

Later in this broadcast, Senator John Cornyn, chairman of that committee, will join us to talk about his fight to strengthen border security and to enforce our immigration laws.

We'll also have a special report about the rising anger over Home Depot's apparent support of policies that now favor illegal aliens and open borders.

Immigration and Customs Enforcement today announced a nationwide crackdown against the Latino gang MS-13. Federal agents have already arrested dozens of gang members. MS-13 is one of this country's largest and most violent street gangs, and most of its members are illegal aliens.

Bill Tucker has the report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Agents from Immigration and Customs Enforcement arrested 103 members of the violent Hispanic gang MS-13. All but a handful, illegal aliens. Fourteen have been previously deported.

The arrest announced Monday is part of a new anti-gang initiative called Operation Community Shield. Thirty arrests in the New York metropolitan area, 25 in the Washington, D.C., metro area, 17 in Los Angeles, 10 each in Baltimore, Newark, and Miami, and one in Dallas.

The operation involved not only federal agencies from ICE, but local law enforcement, as well.

MICHAEL GARCIA, ASSISTANT SECRETARY, DEPARTMENT OF HOMELAND SECURITY: I think this is a perfect example if we're talking about state and local cooperation on immigration issues. This is a perfect example of where we should put our resources.

TUCKER: People who work with and study gang activity agree.

HEATHER MACDONALD, MANHATTAN INSTITUTE: What we need to do is take it to the next step and have cities like Los Angeles and New York throw out their sanctuary laws, give the police their authority to use immigration violations to target felons and get them off the street.

TUCKER: Sanctuary laws prohibit local police from arresting people only because they're illegal aliens.

MS-13 is a gang which has a reputation of being extremely violent and is active in Central America, as well as here. Its founding members were trained guerrilla fighters from El Salvador. Because of the military connection, some observers have speculated MS-13 would be willing and able to smuggle in terrorists.

GARCIA: If you have a large-scale criminal organization operating in the United States, one that is reported to be smuggling: smuggling contraband, smuggling people, exploiting border vulnerabilities, you have to accept that as a homeland security risk, as well, and we do that.

(END VIDEOTAPE)

TUCKER: Now Garcia says his agency has yet to find evidence connecting any terrorism group to MS-13, but, Lou, he says it is not a question of ability, just perhaps a matter of time and money.

DOBBS: Well, while he may not have, Admiral Loy and the CIA have made it very clear in direct testimony before Congress that that is the connection they fear most at our southern border.

The idea that cities would be passing these sanctuary laws that would prevent law enforcement from working effectively with immigration, what in the world is their reasoning?

TUCKER: Well, their feeling is they want to keep the immigration community -- the immigrant community from being persecuted.

DOBBS: Persecuted.

TUCKER: Lou, simply because someone is illegally here...

DOBBS: The immigrant community?

TUCKER: Well, that's the -- that's the language of the activists involved.

DOBBS: With 20 million illegal immigrants in this country, it would seem that to be appropriate now to perhaps enforce those laws, wouldn't it? And it appears that that's what we're watching happen, at least at the beginning.

TUCKER: Yes.

DOBBS: Bill Tucker, thank you.

Another critical security shortfall in this country is the continuing threat of suicide attacks by radical Islamist terrorists in hijacked aircraft. Tonight there's word that government investigators now believe our aviation system is still vulnerable to al Qaeda, more than three years after September 11.

The federal government reports, as terrorists may by targeting noncommercial aircraft and helicopters, because they are less well- protected than commercial airliners. But the investigators also say commercial aircraft remain vulnerable to attack, despite billions of dollars spent on security upgrades.

Turning to the fight against radical Islamists and their government sponsors overseas, hundreds of thousands of protesters today held a massive protest in Beirut against Syria and its radical Islamist supporters in Lebanon.

Those protesters held a huge rally in the center of Beirut. It was the biggest demonstration in the city since the assassination of a former Lebanese prime minister in Beirut last month. In fact, an estimated 800,000 protesters turning out, those protesters demanding the immediate withdrawal of all Syrian troops from Lebanon.

A major new initiative tonight in the battle to improve America's image in the Muslim world. The Bush administration has tapped long- time Bush adviser Karen Hughes to lead the State Department's public diplomacy campaign overseas. Condoleezza Rice declared the United States must do a better job in engaging the Muslim world.

Senior White House correspondent John King reports.

(BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): A fiercely loyal defender of the president's image will now try to improve her country's image overseas, especially in an Arab world with no shortage of anti-American and anti-Bush sentiment.

KAREN HUGHES, UNDERSECRETARY OF STATE DESIGNATE: This job will be difficult. Perceptions do not change quickly or easily. This is a struggle for ideas.

KING: Former top White House aide Karen Hughes will get the rank of ambassador, and as undersecretary of state for public diplomacy is charged with trying to reverse what the 9/11 Commission and her new boss call a major government failing.

CONDOLEEZZA RICE, SECRETARY OF STATE: Too few know of our deep respect for the history and traditions of others and our respect for the religions of all.

KING: Not that the administration hasn't tried.

UNIDENTIFIED MALE: There is the possibility of meetings here on the White House grounds with an Iraqi expat.

KING: The White House Office of Global Communications was established at Hughes' direction. The annual State Department budget for public diplomacy is nearly $700 million, and the government also launched a taxpayer-financed Arab language network. But Al-Jazeera and other Pan Arab networks have a far greater reach, were highly critical of the Iraq war, and usually accuse Mr. Bush of taking Israel's sides in disputes with the Palestinians. The president earlier this year called them part of the problem.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The propagandists have done a better job of depicting America as a hateful place, a place wanting to impose our form of government on people and our religion on people.

KING: Madison Avenue executive Charlotte Beers and veteran State Department hand Margaret Tutwiler held the post in the first Bush term. Administration critics say a new ad campaign alone won't turn around public opinion in the Muslim world.

SUSAN RICE, FMR. ASSISTANT SECRETARY OF STATE: There were no weapons of mass destruction, no links to al Qaeda, and they doubt our motives. Our motives and our credibility have been called into question. And you can't fix that simply by marketing.

KING: This morning's White House meeting was part of an effort to make clear Mr. Bush's personal investment in a woman he calls both trusted adviser and friend.

(END VIDEOTAPE)

KING: And given the depth of Hughes' loyalty to the president, her first big challenge may be coming to terms with just how personal this anti-American sentiment is against a president she calls wonderful and compassionate, but, Lou, a president who is often portrayed, as you know, across the Arab world as a bully and a warmonger.

DOBBS: Any indication, John, as to what Karen Hughes will do differently, what her strategy will be?

KING: Well, certainly they believe they have an opening with this pro-democracy move in Lebanon, with other political reforms across the Middle East. And most principally, everyone at the White House and Karen Hughes recognizes that the greatest source of this anti-American sentiment is what the Arabs say has been the president's indifference to the Palestinian-Israeli dispute.

They will put a lot of emphasis in that. Secretary Rice taking the lead, but Karen Hughes also taking the lead not only as Secretary Rice plays out with the diplomacy, Karen Hughes trying to promote that, especially in the Arab world, to prove that this administration is trying a hands-on effort to bring peace to the Middle East.

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

Still ahead here, red star rising. China's new challenge to the United States. A vital U.S. national security interest is at stake.

And is Home Depot supporting the massive invasion of illegal aliens into this country? Does the company encourage people to break our immigration laws? Does the company favor open borders? Some are making that charge. We'll have a special report for you next.

(COMMERCIAL BREAK)

DOBBS: China today ignored warnings from the United States about its growing military aggression toward Taiwan. China's parliament passed a law that would authorize an attack against Taiwan should it make any move toward independence. The White House called the development unfortunate.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): China, the second largest military spender in the world, has just passed a law that authorizes force against Taiwan. Secretary of State Condoleezza Rice is headed to Asia this week, her first trip to the region as secretary of state.

RICE: We have concerns about the Chinese military buildup, we have concerns about the cross-straits tensions between China and Taiwan.

PILGRIM: Adding to the concern, Chinese President Hu Jin Tao was just voted head of the Central Military Commission on Sunday. He spoke of stepping up preparations for possible military struggle.

PETER BROOKES, HERITAGE FOUNDATION: This certainty does roil the waters of the Pacific. And so people are very concerned that this is just a first step by China towards taking some sort of military action down the road to settle Taiwan's political future.

PILGRIM: The European Union, anxious to established increased trade relations with China, has been talking of lifting a 15-year-old ban on selling arms to China. But U.S. officials say lifting the ban would accelerate China's access to military technology at a time when it is showing its muscle.

Europe has been arguing that China is now a member of the global trading system and the ban should be lifted. Today, the U.S. State Department said it's time to reconsider that position.

RICHARD BOUCHER, STATE DEPT. SPOKESMAN: Certainly the prospect that China would use non-peaceful means to try to resolve differences with Taiwan should be disturbing to them, to the Europeans, as it is to us.

(END VIDEOTAPE)

PILGRIM: And China experts hope the passing of the anti-secession law against Taiwan may make Europe realize the consequences of lifting the arms embargo. With China speaking of Taiwan being its own internal affair, with no influence from outside forces, China's rhetoric and intent are pretty clear -- Lou. DOBBS: In the interest of maintaining absolute truth as our standard here, when we call this an anti-secession law -- that is what the Chinese call it -- perhaps we should call it what it is. It's a declaration that they would go to war should Taiwan insist upon codifying its independence.

PILGRIM: That's exactly right. That's exactly right, Lou. And it could get a lot worse, because Taiwan's President Chen has asked for a rally on March 26 of a million people. So we could see this escalate.

DOBBS: Well, the fact of the matter is, this last one, look, Taiwan is an independent nation with sovereign powers despite the geopolitical games that surround that island nation.

Kitty Pilgrim, thank you very much.

We'll have much more ahead here on China's rising military threats and its impact on our staggering trade relationship with China. Two of this country's leading economists will be our guests to assess the threat and the opportunity.

We reported here for years now on the exporting of American jobs to cheap foreign labor markets and the devastating impact it has on working Americans. The outsourcing booms in China and India are well- established. Now Vietnam is emerging as the latest cheap foreign labor market of choice for many American companies.

Mike Chinoy reports from Ho Chi Minh City, Vietnam.

(BEGIN VIDEOTAPE)

MIKE CHINOY, CNN CORRESPONDENT (voice-over): It's English-only day at TMA Solutions. None of the workers allowed to speak Vietnamese. Just one way TMA is trying to maintain its edge as the leading high- tech outsourcing company in Vietnam.

DR. NGUYEN HUU LE, CHAIRMAN, TMA SOLUTIONS: These are the greatest assets that Vietnam has in terms of young people...

CHINOY: Dr. Nguyen Huu Le runs TMA. Now an Australian citizen, he left Vietnam at the height of the war 36 years ago and spent 22 years working for Nortel before coming back.

NGUYEN: I was lucky to have the opportunity to come back to Vietnam, applying, you know, the experience that I got, you know, from overseas and help to build something that I hope that would be a legacy, you know, for my family and also for, you know, for my people as well.

CHINOY: TMA's 400 code writers and engineers develop and test software for a half-dozen American firms, including Lucent and Nortel. The average wage, $500 a month, a fortune here.

Vietnam's universities are turning out 20,000 IT graduates every year to fill these jobs. Disciplined, well-trained, with ambitions for themselves and their country. "When I graduate, I'm going to work for a foreign high-tech firm," says Ho Chi Minh City University senior Tran Kong Lin (ph). "Then I'll set up my own company and use high tech to serve Vietnam."

So attractive is Vietnam's outsourcing potential that Nortel reportedly plans to make it one of its main overseas software testing locations.

NGUYEN: Oh, the outlook, the potential is really, really great. So for TMA, for example, we are looking at continuing doubling, you know, the business every year.

CHINOY: For now, that means building a new nine-story operation center in the heart of Ho Chi Minh City.

(on camera): In a matter of months, there will be 500 new programmers working in this building, but that's not enough. And already, the company has plans for a new facility to accommodate 3,000 more.

Mike Chinoy, CNN, Ho Chi Minh City, Vietnam.

(END VIDEOTAPE)

DOBBS: And coming up next here, protesting Home Depot, why demonstrators say the store aids and abets illegal aliens. That story's next.

(COMMERCIAL BREAK)

DOBBS: As we've reported, Home Depot is facing rising anger over company policies that appear, to some, to condone massive illegal immigration into this country. Critics blast Home Depot for its ties with groups that support open borders and drivers' licenses for illegal aliens, and Home Depot's sponsorship of day laborer sites. This weekend some critics held a protest at a Home Depot in southern California.

Casey Wian has the story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Illegal alien alert! Illegal alien alert!

CASEY WIAN, CNN CORRESPONDENT (voice-over): Several dozen protesters gathered outside the Home Depot in Rancho Cucamonga, California, this weekend. They're angry about the hardware chain's ties to illegal aliens and tried to persuade customers to shop elsewhere.

UNIDENTIFIED FEMALE: Hey, hey, ho, ho, do your shopping down at Lowe's.

UNIDENTIFIED MALE: Hey, hey, ho, ho, do your shopping down at Lowe's.

UNIDENTIFIED FEMALE: Hey, hey, ho, ho, do your shopping down at Lowe's.

WIAN: Last month Hope Depot announced a Spanish hiring initiative that will rely on groups such as the National Council of La Raza, which advocates drivers' licenses, amnesty and discounted college tuition for illegal aliens.

BARBARA COE, PROTESTER: Home Depot has aided and abetted illegal aliens for quite some time. And we are hoping that by educating them, that they will no longer come here, that they will no longer support a company who betrays Americans.

WIAN: Home Depot also has paid for day laborer facilities at or near some of its stores.

JOSEPH TURNER, SOS.ORG: Studies have shown that day laborers are overwhelmingly illegal, and so we're out here to basically stand up against that. We're tired of this nonsense.

WIAN: They hope to hurt this Home Depot's businesses for a day by making large numbers of small purchases, such as a single screw, or returning items for refunds. The store brought in extra staff and says it saw no disruptions to its operations.

The protesters wants Home Depot to renounce its deal with La Raza and to close its day laborer centers. Home Depot says it only opens them in response to requests by local communities.

The company recently added former Homeland Security Secretary Tom Ridge to its board of directors. Even that move drew criticism from protesters, who said Ridge did little to stop illegal immigration.

(END VIDEOTAPE)

WIAN: Organizers say they will continue to put pressure on Home Depot at other stores in the future until, in their words, either Home Depot changes its policies or they bring Home Depot to its knees -- Lou.

DOBBS: Well, the fact of the matter is, it's stunning that Home Depot would be putting day laborer sites, knowing specifically that they were for illegal aliens. Does the company have any statement on that?

WIAN: Well, they won't give us a statement directly on it, but they'll tell us on background that all of these day laborer centers are in response to requests from local communities. Some communities, some cities have actually required Home Depot to open these day laborer centers, pay for them in order to get a permit to operate in the city -- Lou.

DOBBS: That's remarkable. We should certainly explore more of the city governments that would demand that, and I know you will, Casey. Thank you very much. Casey Wian. Appreciate it.

Coming up next here, absolutely shocking testimony on Capitol Hill today about the appalling lack of security along our nation's borders.

And China's rising economic and military threat, why Washington may not be willing to respond to Beijing's challenge. That story is next.

(COMMERCIAL BREAK)

DOBBS: In a moment, strengthening our nation's borders the focus of a critically important hear today on Capitol Hill. The chairman of the committee is our guest.

Now here are some of the other important stories we're following tonight.

The suspect in Atlanta's courthouse murders is being held at the city's federal penitentiary while officials figure out how those charges will be handled. The prosecutor in that case said Brian Nichols appears to be proud of his actions.

Meanwhile, two children have been injured in shootings across the country. A second-grader in Columbus, Ohio, was shot in the hand when a gun that he brought to school went off.

In Houston, Texas, a 2-year-old boy is in critical condition tonight after being shot in the head by his 4-year-old brother.

And in Brookfield, Wisconsin, police say they still don't know why a gunman shot and killed seven people during a church service this weekend before killing himself.

And in California, a Superior Court judge today ruled the states ban on gay marriage is unconstitutional. If this ruling were upheld after appeal, California would follow Massachusetts in allowing same- sex couples to marry.

Turning now to our top story, alarming testimony today on Capitol Hill about the lack of security along our nations borders, as we have been reporting here for the past several years.

My next guest co-chairs the joint subcommittee hearing which wrapped up just a short time ago. Senator John Cornyn of Texas is chairman of Subcommittee on Immigration, Border Security and Citizenship, joining us tonight from Capitol Hill.

Senator, thanks for being here.

SEN. JOHN CORNYN (R), TEXAS: Thanks, Lou.

DOBBS: How shocked are you at what you heard today about the amazing gaps in our border security and the lack of enforcement on immigration -- of immigration laws?

CORNYN: Well, unfortunately, Lou, like you, I -- this is something I've been exposed to quite a while, and something you've been exposing your listeners to. But frankly, I don't think most of America has fully appreciated how vulnerable we really are at our borders. And how easy it is for people to come up through Mexico's Southern border say, lets say from Central America or elsewhere up across our U.S./Mexico border. And if they want to come here to do us harm, they pretty much have a free run.

DOBBS: Senator, let me ask you this, do you have a sense as to why the United States government, the Department of Homeland Security, can put out all sorts of press releases about aerial surveillance, and talk about what it's doing. And talk about what is now being referred to by Bonner, the head of enforcement as operational control of the border? How can people sleep at night with those kinds of fictions being created by their actions and their words?

CORNYN: Well, Lou, I don't know what "operational control" of the border means, but I do understand the English language. And as I understand that phrase, that's not true. We do not have operational control. I flew in a Border Patrol helicopter along the Rio Grande River between Mexico and Texas just a few weeks ago, and saw with my own eyes people coming across pretty much at will. And while many of them come across to work and don't at least represent a physical threat to the United States, obviously that pathway, that avenue toward coming to the United States is available to anyone who does want to come do us harm. And it concerns me greatly, and I know, you and your listeners as well.

DOBBS: Absolutely. And the House has passed Congressman Sensenbrenner's real I.D. bill. What's taking the Senate so long to act?

CORNYN: Well, that's going to come across on the war supplemental, which will be in April. That's the vehicle it's coming over on it's -- but the fact is, I do think we need to deal with document integrity. That was one of the issues we heard testimony on today, how terrorists can get false documents and use those to give the appearance that they're here legally in the United States, and travel basically anywhere they want. So, we simply have to crack down on that. But Lou, the thing is, we can't just stop there. We've got a lot more to do before we're safe.

DOBBS: What is the most, in your view, what, senator, are the most important things that must be done and soon, if not now?

CORNYN: Well, we need to beef up on our border security. We need to use the technology that's available to us, including UAVs that have now been deployed through the Air National Guard in Texas and Arizona. But you know, Lou, we have to do the interior enforcement as well. We have to give a means for employers to document and confirm the status of people who want to come to work for them. They don't even have that capability now, because the laws don't provide for it. But I think it's absolutely critical.

DOBBS: And is it your judgment, at least, at the margin -- at the beginning, that Congressman Sensenbrenner's bill will be passed by the Senate and actually become law this year?

CORNYN: I do think -- yes, I think we do need to pass document integrity bill, like the Real I.D. Act. The question is, and this -- I won't bog you down in this, is that whether it belongs in the war supplemental, whether that will attract a bunch of other immigration bills really before we're ready to talk about those in an intelligence fashion and thus be counterproductive. But certainly, we do need to do something about that document integrity. But here again, Lou, I hope that if that passes, that we don't pat ourself on the back and say we've fixed the problem, because clearly we have not.

DOBBS: We have not, and I think most of us are hoping, senator, that the Senate leadership does not play games again with this bill, and actually, does get, at least, this passed, which is, at least, at the margin beginning on the many issues that you've highlighted here tonight.

Senator Cornyn, we thank you for being here.

CORNYN: Thanks, Lou.

DOBBS: Tonight, an alarming story out of Florida, that highlights the danger of our porous borders. Officials say at least three -- three illegal aliens from Mexico used fake Social Security numbers to gain access to a power plant. At least one of them worked near the plant's nuclear reactor.

The illegal aliens worked as painters for a contractor at the Crystal River Energy Complex in Citrus County. Both the contractor and the plant officials say there was never a breach of security, and they claim they followed all required hiring procedures. Local reports say the three men were arrested by immigration officials. The nuclear Regulatory Commission is now investigating.

Taking a look at some of "Your Thoughts" now.

Mary Nitkowski of Maryville, Tennessee, "Instead of enforcing the border laws that are on the books, our government officials have turned their backs, closed their eyes, and lost their voice. Illegal immigrants cross our borders daily and our government's answer: give them amnesty and write new laws. What has happened to a government 'for the people' in this country?"

Ingolf Hack, Hopatcong, New Jersey, "As a legacy customs senior special agent now with ICE, I applaud your efforts to highlight the illegal alien crisis and the shame known as the Department of Homeland Security. I just hope the American people wake up in time to do something about it because Congress and this administration sure won't."

And John Aubrey of Sierra Vista, Arizona, "Immigrants need to come in through the front door, not the back door. I am second generation French descent, my grandparents came through Ellis Island."

We love hearing "Your Thoughts." E-mail us at loudobbs@cnn.com. Each of you who's e-mail is read on the broadcast gets a copy of my book, "Exporting America." And if you'd like to receive our e-mail newsletter, sign up on the Web site, loudobbs.com

Next, red star rising. Why the United States may not be willing to stand up to China over its latest geopolitical challenge. Stay with us.

(COMMERCIAL BREAK)

DOBBS: China, as we've reported, has passed a resolution authorizing use of military force against Taiwan. The Bush administration calls the measure "unhelpful," but my next guest says the United States may have a difficult time taking a stand against Beijing, because China is literally financing much of our mounting twin deficits. Niall Ferguson is the author of "Colossus: The Price of America's Empire," professor of history at Harvard University, joining us tonight from Boston.

Good to have you with us.

NIALL FERGUSON, AUTHOR, "COLOSSUS": It's good to be back on the show, Lou.

DOBBS: Is it your judgment that because of the capital that China gains by exporting to the United States simply gives it too much leverage in our markets?

FERGUSON: Well, think of it like this, China is essentially bankrolling the United States, a very large proportion of the federal budget deficit and of the current account deficit is being financed by Chinese purchases of U.S. dollars and U.S. bonds, and these are accumulating in the hundreds of billions.

So if you pick a fight with your bank manager and you happen to have a large overdraft, I'm not so sure you're going to stand a chance of winning that fight.

DOBBS: In winning that fight, it's unclear what winning looks like on a certain level. Certainly if it moved to a military confrontation, that's starkly clear. But in terms of Taiwan, we have a one China policy, while acknowledging the fact that Taiwan is a sovereign nation, the language and the artifice, the terms of art get to be just a little too cute for reality, don't you think?

FERGUSON: Yes. I think it's very worrying. I think Taiwan is one of these issues that we've slightly forgotten about that could take us all by surprise. Economically the United States and China have a very benign, interdependent relationship at the moment. But there is a sense in which things could fall apart quite quickly if China does push its harder line on Taiwan. And I think it's very difficult for the United States to stand up to that given the extent of U.S. dependency on China.

Of course, both sides stand to lose, the Chinese would take an economic hit if the dollar were suddenly to dive against the Chinese currency. Their exports would become more expensive for American consumers. So you might call it a -- indeed, the phrase has been used, a kind balance of financial terror, but it's those sorts of situations that can quite quickly spiral out of control and lead to financial crises.

DOBBS: Taiwan, the Bush administration in the fall suggesting it was one China, even sending signals, Secretary of State Colin Powell at that time, making it clear in one statement -- it was never quite clear whether or not he was simply misquoted or misspoke, but basically saying the United States would not defend Taiwan. And most recently Secretary of State Condoleezza Rice making it clear that we would. What do you take to be the reality?

FERGUSON: I think it's very hard to imagine the United States going to a full-scale war against the People's Republic of China over Taiwan. But then if you would ask people 100 years ago, will the British Empire go to war with Germany over Belgium, I think most people would have said, it's unlikely. It's very often these small often forgotten diplomatic anomalies that can lead to the greatest crises in international affairs.

DOBBS: Syria, while it did not make the axis of evil, as styled by the Bush administration, has certainly become the focal point of the Bush administration's policy in the Middle East of late. What's your judgment? Will Syria in point of fact leave Lebanon altogether, intelligence as well as military?

FERGUSON: Well, it's conceivable. It would be nice if this story had a fairy tale ending, a little bit like the story in Ukraine, but Lebanon is not Ukraine. And this is a state that had one of the most violent civil wars of the late 20th Century. These crowds that are gathering to demonstrate in Beirut today could quite quickly be at one another's throats.

It's far from clear to me that this is going to end peacefully. While I would love to see the Bush administration's policy of democratization in the Middle East work out, and I would be delighted if Syria did withdraw from Lebanon, I don't think anybody should be confident that Lebanon will then live happily ever after.

DOBBS: Confidence aside, could you have imagined that democratization would have at least this much of a beachhead in the Middle East, if you will, just several years ago?

FERGUSON: Well, I tried to argue in recent years in this book, "Colossus," and in previous books that a lot could be achieved by American intervention against rogue regimes like Saddam Hussein's Iraq. So I'm not by any means taken aback by the fact that this sends a signal that has reverberated throughout the region. But the key thing is that things can roll forward and then they can quite quickly roll back. Democratization can be a flash in the pan event. We saw that after all in Europe after World War I.

DOBBS: Ah, the validation of an author and the pride to which it leads. Niall Ferguson, thank you very much. And deserving pride...

FERGUSON: I'm not too proud, Lou.

DOBBS: Excellent analysis.

FERGUSON: Thanks very much.

DOBBS: We thank you for being here. Niall Ferguson, the book is "Colossus."

CNN will have special coverage on the developments from Syria and Lebanon. Our Anderson Cooper is in Beirut and will be reporting live from Beirut throughout the week.

Next, middle class families under siege, why the economy may not be doing as well as it seems to some. Stay with us. We'll be discussing the threats to American prosperity and our future, next.

(COMMERCIAL BREAK)

DOBBS: The American middle class is clearly under assault. Personal savings are near record lows, demand for mortgages, higher credit card debt, continuing to rise from record levels. Nationally the U.S. trade deficit, the second-highest ever in January. Our deficit with China continues to explode, our estimated trade deficit for 2004 estimated to be a record $650 billion, and the dollar of course under assault by both the euro and the yen.

Joining me tonight to try to put in perspective what's really going on with this economy, two of the most respected economists in this country. Stephen Roach, he's the chief economist for Morgan Stanley; and John Lipsky, he's vice chairman of investment banking at J.P. Morgan.

Good to have you both with us. As anyone looks at these numbers, and as one hears dollar, you know, you can almost hear the dials, right now, as I said dollar, they're switching off because this is boring dull stuff, but the fact of the matter is this economy is under considerable assault, is it not, Stephen?

STEPHEN ROACH, MORGAN STANLEY: Well, we do have a problem. And you put your finger on several symptoms of those problems, Lou. The low savings in the United States, which is not just a personal savings issue, but also a government dissavings issue, leaves us with a big hole, and so we fill that hole by importing surplus savings from abroad, and running these massive trade deficits to attract the savings from abroad.

And that does leaves us with pressures on the dollar and a lot of debt. So far we've been able to finesse it, but so far is never a promise of how it's going to end.

DOBBS: Well, as you look out, John, we've been $650 billion last year, we've got better than $3 trillion in external debt, $8 trillion in national debt and we've got the Bush administration saying, hey, everything is just fine. Is it just fine?

JOHN LIPSKY: Well, let's put it in perspective. The U.S. economy is growing at about 4 percent, inflation is at 40-year lows, household net worth is at all-time highs, corporate profitability is at all-time highs. So it's hard to start from the premise that something is desperately wrong here.

The trade deficit reflects, more than anything else, first, that our G3 partners, Japan and the euro area, are growing at less than half the pace of the U.S. economy. The three together constitute two- thirds of world GDP, and secondly we have a special relationship with Asia, but part of that...

DOBBS: Wait, wait, wait, wait. I'm not going to let you get away with "special relationship." What is the "special relationship?" I thought that was with the U.K.?

LIPSKY: Well, you're talking politics. In economic terms, the east Asian economy, principally China, has pegged their currency to the dollar, by and large. And as a result, they have -- they are committed to a prospect for restoring their growth after the problems in '97 and '98 that have been largely successful, but commit them to accumulating dollar assets.

DOBBS: You persuaded?

ROACH: No. It's really an insane way to run the world, Lou. If we buy DVD players in China, and China does a quid pro quo and buys Treasury bonds made in Washington. Meanwhile, they subsidize our interest rates in doing that, that jacks up our housing values, and we keep spending out of our assets. I mean, John's point on net worth is right, but it's supported by artificially low interest rates, subsidized by the Chinese and the Federal Reserve. The special relationship is between China and the Fed.

DOBBS: What is the principal component of higher household net worth. Is it housing?

LIPSKY: Housing, but also equity values, of course, have gone up more recently.

DOBBS: Skyrocketed, I think, is the word.

LIPSKY: But basically the big picture on what has happened to net worth over the past decade, is that inflation has come down unexpectedly in the 1990s and again in this decade. That has lowered interest rate, and raised long-term value. Secondly we have an accelerated of productivity growth in this economy, that is keep our growth faster than elsewhere.

DOBBS: All right, we've heard all the big words. And we sort of danced around...

UNIDENTIFIED MALE: Not all of them.

DOBBS: Not all of them, but a lot of them. So, let's put this in real terms. How many people in this country right now, in your judgment, can count on -- and I'm talking about the middle class, can count on significantly higher wages in the next decade?

How many of them can count on their children making more money than they will, that is, having a higher standard of living, given the amount of indebtedness that we have, the deficits we have, and the anemic, anemic job creation, with the exception of last year, 2.2 million jobs created, but now we're seeing a slowdown again.

What's your best answer, John?

LIPSKY: Well, the -- it seems to me, the answer is most likely, yes, almost certainly, yes. And the keys, do we keep inflation low? Do we keep productivity growth strong? If those two are correct, then I think there's very little risk that the -- that future generations or our children or however you want to couch that question, are definitely going to do better.

DOBBS: Steve.

ROACH: Well, I think we've been through a remarkable run over the -- in the last 15 years. But these past three years, Lou, I think there's -- there's some warning signs that we can no longer ignore. The weakest job recovery, even with the 2.2 million last year in any recovery on record. The wage rate, the hourly pay rate is no higher adjusted for inflation today than it was when the economy bottomed out.

Very powerful forces globally, as you have stressed in your program, bearing down on workers both head count and reward. So, the pressure is really on us to come up with new and creative ways to push ourselves into new markets, new technologies. If we can stay the course of the product activity curve that John alluded to it will be fine. But you know, a lot of the easy work on productivity is now behind us. We've converted from one technology platform to another. It's going to be tougher going forward, I suspect.

LIPSKY: I'm not sure that that's right. I suspect we're just in the middle of this product activity revolution. Certainly past performance suggests that when we have these periods of acceleration of productivity, they do carry on for longer than just the decade. We've seen it.

DOBBS: Do you look for brighter prospects over the next five years, Steve Roach?

ROACH: I think the next five years are going to be tough for the U.S. We have lived beyond our means for a long time.

DOBBS: John Lipsky.

LIPSKY: I don't agree. And I think the next five years are going to be better still.

DOBBS: And in case you're wondering, with two economists we don't -- I don't even have to say on the one hand or the other, we thank you both for being here. Steven Roach, John Lipsky, thank you, gentlemen.

ROACH: Thank you.

LIPSKY: Thank you.

DOBBS: Now, "America's Bright Future" our series of special reports on some of this country's most inspiring young people, and there are many. Tonight, we have for you the story of a 15-year-old girl who's launched a worldwide effort to help others.

Katharine Barrett has her story.

(BEGIN VIDEOTAPE)

SONDRA CLARK: And can anyone guess while it's called a blue line?

KATHARINE BARRETT, CNN CORRESPONDENT (voice-over): It might not be surprising to see a 15-year-old attending a career workshop. High school freshman, Sondra Clark is conducting one -- on writing and publishing books. She has five to her name, on everything from crafts to careers.

CLARK: And it does take a lot of hard work and effort.

BARRETT: The secret of her success, grownup skills of goal- setting and self-discipline.

CLARK: I have done a lot, but I've been given a lot of opportunities. And the thing, I think, that makes me different is that I've actually taken those opportunities. And I have put in a lot of hard work and effort.

BARRETT: Like signing a contract last summer with her mother to spend three hours a day writing her latest book, rather than hanging out at the mall. Sondra's commercial success is balanced by global citizenship. At 11 she became a spokesperson for aid group Child Care International visiting missions in Africa and Latin America. In 2002, she crisscrossed the United States for the charity raising $75,000.

MAX LANGE, PRESIDENT, CHILD CARE INTERNATIONAL: I have never seen anybody like this. I know, when I was her age, I certainly had no idea of helping people help themselves, but she has this gift.

CLARK: I think that's kind of what motivates me to going, that I can actually make a difference in someone's life. And I have been given so many great things from other people, that I kind of I want to give others that chance.

BARRETT: Thanks to her charity work, Sondra was selected to bare the Olympic torch in 2002.

(on camera): And in case any parents or children might feel discouraged by the overwhelming amount Sondra has accomplished in her young life, it might be reassuring to know that she still faces at least one struggle -- with spelling.

(voice-over): And Sondra has yet decided what she wants to be when she grows up.

CLARK: Anything is possible with hard work and effort. So, you can set your dreams. And I think there was a quote of "build your castles in the sky and then build foundations under them. Katharine Barrett, CNN, Tacoma, Washington.

(END VIDEOTAPE)

DOBBS: Coming up next, a preview of what's ahead tomorrow. There's a great deal in store. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Thanks for being with us tonight, please join us here tomorrow. We'll be live from Washington D.C., a former 9/11 Commission terrorism expert will be our guest, who says, we must upgrade border security now to stop terrorist from entering this country. Please join us. Senator Chuck Hagel will be our guest. He says he's going to enlighten me about his plan to reform Social Security. You want to be with us for that. We'll hope you'll be with us. For all of us here, good night from New York.

"ANDERSON COOPER 360" is coming up next, live from Lebanon.

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