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Lou Dobbs Tonight
Government Failing to Protect Americans From Dangerous Imports?; Wild Day on Wall Street
Aired August 16, 2007 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KITTY PILGRIM, CNN ANCHOR: Tonight, a wild day in the markets, as the housing crisis escalates. We will have complete coverage.
Also, rising anger over the failure of our government and corporate America to protect us from dangerous imports.
And disturbing new evidence that the Mexican drug traffickers are operating deep inside the United States. We will have exclusive video.
All of that and the day's news, much more, straight ahead tonight.
ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, August 16.
Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.
PILGRIM: Good evening, everybody.
The Bush administration tonight faces a new showdown over its conduct of the war in Iraq. Congressional Democrats are accusing the White House of trying to influence a key report on the progress of the war. The top U.S. official in Iraq, General David Petraeus, and Ambassador Ryan Crocker are due to present the report to Congress next month.
Suzanne Malveaux reports from near President Bush's ranch in Crawford, Texas -- Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Kitty, this really is all about credibility. What you're seeing here is the White House and Congress jockeying over trying to present a case that is most palatable to the American people, most credible to the American people. That is why we saw the White House put out Tony Snow today and that is why we have this emerging debate.
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): The White House says now is a time of choosing.
TONY SNOW, WHITE HOUSE PRESS SECRETARY: The decision will influence the entire world and it's going to stamp future generations of Americans, for good or ill. They will recall this either as America's finest hour or its final hour as a nation of consequence. MALVEAUX: Waiting for the president's own mid-September Iraq progress report and Congress' return from recess, the White House put its chief spokesman forward, not at a briefing to reporters, but at a speech to a friendly crowd. Press Secretary Tony Snow launched a defiant message aimed at both sides of the aisle.
SNOW: Democrats and Republicans on Capitol Hill soon are going to have to make a choice. Will they permit troops in Iraq to continue pursuing their missions, or will they try under various guises and disguises to walk away regardless?
MALVEAUX: Anticipating wary Republicans will join the Democrats in challenging the president's war strategy, the White House is laying the groundwork for framing September's make-or-break debate. The White House was quick to deny reports that it was trying to limit the publicity of the administration's war assessment.
GORDON JOHNDROE, NATIONAL SECURITY SPOKESMAN: General Petraeus and Ambassador Crocker will testify in both open as well as closed sessions prior to the September 15 report. That has always been our intention.
MALVEAUX: But Democrats are skeptical. House Democratic Caucus Chairman Rahm Emanuel said the war in Iraq has seen too many reports and rosy assessments that put spin first and fact second.
(END VIDEOTAPE)
MALVEAUX: And, Kitty, the White House is also trying to downplay the fact that it will not be General Petraeus nor Ambassador Crocker who are actually going to be the authors or write this Iraq progress report. Rather, it's going to be written by the staff of the White House and the National Security Council.
But Johndroe said today that that's the way it happened with the interim report in July, and that that was a fairly critical report -- Kitty.
PILGRIM: Suzanne, let's be really clear here, though. President Bush frequently says he acts on the advice of the commanders on the ground in Iraq, but is the White House saying that that advice won't be available to Congress in September without going through the White House first?
MALVEAUX: There are two things that are going to happen. Obviously, he's going to testify before Congress and that is before they are going to officially release this report, which, of course, is going to go through the White House.
But, Kitty, let's be very clear here. This report Congress that asked for is from the White House, is from the president. So, there will be input from General Petraeus and Crocker, but it will go through the White House, the White House will write it, and then they will present it to the public.
PILGRIM: Thanks very much, Suzanne Malveaux. Well, insurgents in Iraq killed two more of our troops. Both were killed north of Baghdad. A third soldier died in a non-combat incident. And that death raises the number of coalition fatalities in this war to 4,000; 44 of our troops have been killed so far this month; 3,702 of our troops have been killed since the war began, 27,409 troops wounded, 12,297 wounded seriously.
Now, a new CNN poll shows that a majority of Americans do not trust General David Petraeus to report honestly on the war in Iraq. The general is one of the architects of the surge strategy.
Bill Schneider has this report.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice over): Washington is anxiously anticipating next month's report by the top U.S. commander in Iraq.
SEN. MITCH MCCONNELL (R), MINORITY LEADER: People on both sides expect policy post-September to be based in large measure on -- on what General Petraeus and Ambassador Crocker have to say.
SCHNEIDER: But the report may not have much impact, because most Americans have formed firm opinions about this war.
Twenty-one percent say they favor the war and their minds are made up. More than twice as many say they oppose the war and will not change their minds. Only 17 percent say they oppose the war but could change their minds.
SEN. TRENT LOTT (R), MISSISSIPPI: Let's give General Petraeus and our men and women and the Iraqi government a chance to meet some of these guide posts to improve the situation. And come September, we will have to see how they're doing and we will have to make an assessment.
SCHNEIDER: Suppose General Petraeus reports that the U.S. is making progress in Iraq. Would that have much impact on public opinion? Apparently not.
Seventy-two percent of Americans say it would not affect their view of the war at all. Only 28 percent say it would make them more likely to support the war. And most of those already favor the war.
The White House says it's not surprised by the public's response.
TONY SNOW, WHITE HOUSE PRESS SECRETARY: Of course people are skeptical about what's going on with the war, which is why I think it's important for them to listen to what commanders have to say. What ought to be determined ultimately in this debate are what the facts are on the ground.
SCHNEIDER: But does the public trust the top commander to report what's really going on? Only 43 percent say yes. A majority of Americans say they do not expect a completely objective report. (END VIDEOTAPE)
SCHNEIDER: And that public skepticism is certain to be reinforced by the fact that the report will actually be compiled by the White House. Any document that is submitted by the White House is bound to seen as a political document -- Kitty.
PILGRIM: Thanks very much, Bill Schneider.
Well, the Bush administration today also focused on rising concern about the state of the economy. The White House declared it expects continued economic growth. But the markets were fairly unconvinced and stocks were deep in negative territory for much of the day, before staging a late recovery.
Now, Susan Lisovicz reports from the New York Stock Exchange -- Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Kitty, Wall Street has never been accused of subtlety, but today the drama was especially rich.
Four weeks to the day that the Dow closed at 14000 for the first time, the blue chips officially entered into a correction, a decline of 10 percent from recent highs. So did the Nasdaq and S&P 500. The Dow's sixth straight sell-off was fuelled by more bad news from the housing sector. New home construction in July dropped more than 6 percent, worse than expected, to the lowest level in 10 years.
Meanwhile, the nation's largest mortgage lender, Countrywide Financial, said it was forced tap into an $11.5 billion line of credit, this as a result of the rising defaults and delinquencies the company had already disclosed.
But the drama didn't end there. The Dow, which had plunged as many as 342 points, entered into positive territory in the final moments of trading. A veteran trader had told me earlier today that Wall Street is the only business in the world where you can have a fire sale with no interest from buyers.
Well, clearly, some intrepid bargain-hunters ventured out late today. And the stocks that were -- they were buying were financial stocks, among the most beaten down, due to loan losses and credit concerns. The blue chips ultimately could not hold the gains, closing down 16, but emerged from correction mode. The Nasdaq pared most of its losses, but ended down eight.
And, Kitty, the drama begins all over again at 9:30 a.m. Eastern time with the opening bell -- Kitty.
PILGRIM: Susan, I know you don't have a crystal ball down there, but you do talk to a lot of people on Wall Street. Is there the thinking this may be somewhat contained and come to a conclusion fairly soon, or it might ripple through for a while?
LISOVICZ: Well, I think that's the reason why you're seeing a such a pronounced sell-off, Kitty, is that we just don't really know how widespread this problem that began with the defaults in housing and then spread to Wall Street with these commoditized loans that are bundled up as securities, where it's going to end.
Bear Stearns laying off a couple hundred people we found out today in the loans department. I think that you can take some solace from the fact that we did have a rally late in the session, when the market will typically roll over when you're hearing bad news, and that financials, which are a very important part -- the biggest part of the S&P 500 is in the financial sector -- that financials led the way.
And, remember, they were a big part of the big bull rally we saw in the '90s. So, I would say that there was some optimism that we saw this reversal, but I think that all news may not be -- all the bad news may not be out there just yet, Kitty.
PILGRIM: Thanks very much, Susan Lisovicz. Thanks, Susan.
And coming up: more on what the market turmoil and the housing crisis means for middle-class Americans. Lisa Sylvester has the report -- Lisa.
LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Kitty Pilgrim
There credit crunch that we have talked about is having a ripple effect throughout the economy. First-time homeowners are having a harder time qualifying for loans. And, for others, they have a home, but they are just having a heck of a time trying to hold onto it because of adjustable-rate mortgages. And we will have more on this story coming up -- Kitty.
PILGRIM: Thanks very much, Lisa.
Also still to come: Mexican drug traffickers are operating deep inside the United States. We will have exclusive video of that.
Also, our illegal immigration crisis takes center stage in the race for the Republican presidential nomination.
And the death toll in the Peruvian earthquake rises sharply. We will have a live report from Peru.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: New concerns today about the escalating housing crisis. Now, those concerns intensified after news that that Countrywide Financial has drawn down an entire credit line of more than $11 billion. This is another indication of the huge threat facing hard- pressed middle-class homeowners.
Lisa Sylvester reports.
(BEGIN VIDEOTAPE)
SYLVESTER (voice-over): Wall Street woes are hitting middle- class pocketbooks. At a recent news conference, families who took out subprime mortgage loans shared their horror stories.
JOHN TANKERSLY, INDEPENDENT CONTRACTOR: I was able to keep up with the payments, but the interest rate kept going up along with the monthly payments. It went from 9.75, 11.75. Eventually, I was paying 14 percent interest on my home.
SYLVESTER: According to the firm RealtyTrac, 82 of the top 100 metro areas saw an increase in foreclosure rates this year. Adjustable-rate mortgages are resetting. Payments are increasing on first mortgages and home equity loans. Some homeowners owe more than their home is worth.
EILEEN ANDERSON, COMMUNITY DEVELOPMENT CORP.: So, we are seeing people coming in who are just starting to get that effect. Those are people who bought either at 100 percent or refinanced up to the limit of what the house value was. The house values have dropped some.
SYLVESTER: The credit crunch that is dragging down the stock market is having a ripple effect. People who planned on tapping into their home equity to pay for a student's college tuition will have a harder time. And so are first-time homebuyers. They have a tougher time qualifying for a loan.
Economists say it could get a lot worse before it gets better.
DOUG ELMENDORF, BROOKINGS INSTITUTION: It also Could spread to make it more difficult to borrow money to buy cars. And it could spread to businesses. It could make it more difficult for businesses to get financing for investment projects they want to undertake.
SYLVESTER: While others are very worried, the White House doesn't seem particularly rattled. When asked about the economic slump, a spokesman responded -- quote -- "As President Bush has said, the U.S. economy is fundamentally sound. And so we expect to see continued economic growth, not for me to comment on the daily movements of the market."
(END VIDEOTAPE)
SYLVESTER: According to RealtyTrac, Stockton, California; Detroit; and Las Vegas have the highest foreclosure rates in the country. In Stockton, one of every 27 households is facing foreclosure -- Kitty.
PILGRIM: That is a very disturbing statistic.
Thanks very much, Lisa Sylvester.
Time now for some of your thoughts.
And Teri in Wisconsin wrote to us: "Your show should be required viewing for all the politicians in Washington. It is the only one that cares enough to find out how the American people feel about the issues facing us today. Keep up the good work."
And thank you for the compliment. Terry in Illinois wrote to us: "The only way Americans will get governmental change is by voting for an independent president."
We will have more of your e-mails later in the broadcast.
Mexican drug traffickers are responsible for most of the illegal drugs brought into this country and now they are producing many of their products in the United States. Mexican criminal organizations have built methamphetamine super labs in California. Now, these organizations are responsible for around 80 percent of the meth used in the United States.
And the Drug Enforcement Administration says the Mexican drug gangs are growing high-potency marijuana in this country. Most of their large growing sites are in California.
And, as Christine Romans reports, the Mexican drug gangs are brazenly growing the marijuana in our national parks and forests.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): California's Sierra National Forest is home to more than 1.3 million acres of pristine mountain scenery. It is also home to marijuana growing operations, with miles of irrigation, fertilizer, and armed camped of cultivators.
Law enforcement put this plot out of business earlier this week.
SCOTT BURNS, OFFICE OF NATIONAL DRUG CONTROL POLICY: Right here alone is over $300,000, at a minimum, worth of marijuana. And they are all relating to Mexican drug trafficking organizations.
ROMANS: Some 300 plants here, there are a least a half-dozen other plots connected to it. Surrounded by forest on all sides, it's the perfect location for what state and federal officials call marijuana gardens.
MICHAEL JOHNSON, CALIFORNIA DEPARTMENT OF JUSTICE: Profit. I mean, it's pure profit. This is pure money out here.
ROMANS: Drug trafficking organizations are prepared to protect their crop at all costs.
JOHNSON: We have a half-a-dozen at least of incidents within the last three or four years where people were shot and killed. I have people every year that are confronted, like I say, by armed individuals in these gardens.
ROMANS: It is a dangerous situation, to say nothing of the deforestation, the trash and the chemicals washing into mountain streams.
According to the Office of National Drug Control Policy, Mexican drug traffickers cultivate marijuana in national parks and forests in at least eight states. Right now, late summer is high season in the battle against illegal marijuana on public lands.
SCOTT HINSON, NATIONAL PARK SERVICE: These are lands set aside by Congress for the American people to enjoy for generations. And they're being desecrated by these Mexican national drug traffic negotiations.
ROMANS: One plant at a time, law enforcement is trying to take back the public's land. And the deputy drug policy chief has a message for Americans.
BURNS: People in America that are buying and smoking dope, they should know that this is where it comes from. It doesn't come from some nice little garden in somebody's backyard. It comes from drug traffickers. And there's violence involved, weapons involved, shootings every year.
ROMANS: Law enforcement officials say the same brutal organizations that move billions of dollars of drugs through American ports and borders are becoming more entrenched inside the border as well.
(END VIDEOTAPE)
ROMANS: Authorities made one arrest at the site we visited. But often by the time the helicopters land, the workers have scattered, moving onto the next location.
Officials say the drug traffickers often smuggle people into the country, who then work several seasons to pay back their smuggling fees -- Kitty.
PILGRIM: Those are astonishing pictures, Christine. Thanks.
ROMANS: They really are.
PILGRIM: Yes. Thanks very much.
And the DEA today announced the breakup of an international drug trafficking ring that operated along the Texas/Mexico border. More than 30 people were arrested in what was called Operation Puma. Now, authorities seized more than 20 tons of marijuana, millions of dollars of drug-related assets from the Mexican-based organization. The DEA says the bust followed a 2.5-year investigation.
The National Center on Addiction and Substance Abuse today released the results of its survey on teens and drug and alcohol abuse. Now, the center's president and chairman, Joseph Califano, will join me later in the broadcast to discuss this critical issue.
The debate over illegal immigration is taking center stage in the race for the Republican presidential nomination. Florida Republican Senator Mel Martinez yesterday blasted Mitt Romney and Rudy Giuliani for their opposition to the Senate's compromise on immigration. Martinez was one of the architects of the bill.
And Senator John McCain is feeling the consequences of his support of the Senate bill. Senator McCain said his position hurt him with the Republican Party base. And the senator said he had received death threats over his position on illegal immigration.
Coming up next: recall after recall of dangerous imports from communist China. So why isn't our government doing more to protect Americans?
Also still head, hundreds of people killed in a massive earthquake in Peru. We will have a live report.
So, stay with us.
(COMMERCIAL BREAK)
PILGRIM: Well, there are new allegations the federal government and corporate America are not doing enough to protect Americans from dangerous Chinese imports. Now, despite the massive recall of products ranging from toothpaste to toys, imports from communist China are still flooding into the United States unchecked.
Bill Tucker reports.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNN CORRESPONDENT (voice-over): A chemical used in antifreeze found in toothpaste, lead in toys, high levels of contaminates in seafood, counterfeit drugs, all products made in China.
Add to that list reports of pigs suffering a highly infectious virus, which the Chinese have been reluctant to be open about as they were in the SARS epidemic. Then there are counterfeit diabetes testing strips which give users a false reading, potentially leading to an inaccurate dose of insulin.
One group that opposes what it calls corporate globalization says:
LORI WALLACH, GLOBAL TRADE WATCH: We are now importing huge amounts of goods which we are increasingly finding out are not safe. So we have sent out good jobs. We're importing unsafe products. And the Bush administration is basically fiddling while Rome is burning.
TUCKER: There are tires which had to be recalled because they could literally come apart on the highway. Then there's the Chinese Chery car, which is to be imported into the United States and distributed by Chrysler.
Consumer advocates are worried that our reliance on Chinese products will not be addressed until:
PETER PITTS, MEDICINES IN THE PUBLIC INTEREST: I'm here to tell you a kid is going to die, a person is going to overdose, a diabetes monitor is going to send somebody into insulin shock, and then there will be people held accountable, and those people are going to be the politicians. And it's unfortunate that people are going to have to die and suffer before Congress gets off their behinds and gets something done. But that is unfortunately what makes things happen.
TUCKER: The driving factor in moving production out of America, whether it be a manufacturing line or a food product, is cost. Labor is cheap in China. Activists say the string of incidents in China underscore the true cost.
TOM BUIS, NATIONAL FARMERS UNION: The middle class is rapidly disappearing. And it's all over this free trade agenda, this race to the bottom to see who can produce the products the cheapest. You look at the pet food and the wheat gluten and the pig feed and the cattle feed that they were bringing in here, they were using products that we're not allowed to use here. No wonder they are cheaper.
TUCKER: Politicians are starting to respond. Senator Chris Dodd, a Democratic presidential candidate, is now calling for an immediate suspension of all toy and food imports from China.
(END VIDEOTAPE)
TUCKER: And New York's senior senator, Charles Schumer, today called for an import czar to coordinate all of the different agencies overseeing all of the imports that we are bringing into this country.
And Senator Sherrod Brown has already introduced a bill that would give a tax credit to companies, Kitty, who produce their products here in America using American workers. So, we will see what happens. At least Congress is starting to make some noise on this issue.
PILGRIM: You know, Bill, it's becoming very apparent that cheap imports have a hidden price tag. And that's at the very least worry over what you're bringing into your own home.
TUCKER: And there's a lot of discussion that they also have a not-so-hidden cost, in that we're going to have hire more people, going to have put them at ports, because, if we want to ensure the safety of the American public, we are going to have to spend money to do that.
PILGRIM: That's a fair point.
Thanks very much, Bill Tucker.
Well, time now for tonight's poll: Do you believe the federal government is doing enough to hold companies responsible for the dangerous products that they import from China? Cast your vote at LouDobbs.com. And we will bring you the results a little bit later in the broadcast.
Coming Up: Our troops in Iraq face a rising threat from massive house bombs. We will have a special report on that.
Also, there are hopes that six trapped miners in Utah may still be alive. We will have the story.
And a devastating earthquake in Peru kills hundreds of people. We will have a live import from Peru.
(COMMERCIAL BREAK)
PILGRIM: In Utah, hopes are still strong to find six miners trapped in a coal mine. Now, they have been trapped now for 10 days.
And, today, the mine's co-owner said that oxygen levels in parts of the collapsed mine are high enough to support life indefinitely.
Brian Todd is in Huntington, Utah, watching the very latest developments.
BRIAN TODD, CNN CORRESPONDENT: Kitty, it seems every time there's some encouraging news regarding this rescue effort it's accompanied by another setback.
Case in point, what you just talked about -- the one chamber that they've discovered recently that they showed us pictures of just a short time ago. This is a chamber from the third drill hole that was put into this mountain. It's about 1,400 feet down.
When they got there, they lowered a camera in showing these images -- water dripping from the ceiling, wire mesh holes.
I interviewed the owner of the mine a short time ago.
Robert Murray talked to me about survivable conditions inside that chamber.
(BEGIN VIDEO CLIP)
BOB MURRAY, PRESIDENT, MURRAY ENERGY CORPORATION: If those miners are in the same general area as that air, they'll have air -- an atmosphere that will sustain life. They will have potable water and they've will have plenty of void space. And that is why we have decided, based on hole number three, to drill where we are, hole number four, nearby that location to see if the men would have gone there and barricaded themselves to preserve that air, that 16 percent oxygen air. If they did, they're alive.
(END VIDEO CLIP)
TODD: But the problem with that particular chamber in that video image is that officials say there's no evidence right now that the miners went to that chamber.
Now, he talked about the fourth hole that they're drilling. That's going on right now. And that's based on sounds that they picked up. This came out late last night.
What they say is that these so-called geophones, these listening devices that they place on the surface of the mountain, sometimes a mile apart, picked up sounds, possibly, from inside the mountain, sounds that they say were in a pattern, about five minutes' worth of sounds in intervals of about a second-and-a-half. But the problem with that is that those sounds could have been from anything below the surface or even things above the surface, like animals moving around. So that's what they're dealing with -- encouraging news mixed with a little bit of news that may not be so encouraging.
Another aspect of that, the digging in the main tunnel, Kitty, is progressing at a very slow pace still. They've got -- they've gotten about 800 or so feet in, not even halfway to where they believe these miners are. But that also has been set back by so-called mountain bumps. So that's going very slow, as well.
PILGRIM: Thanks very much.
Brian Todd.
Thanks, Brian.
Well, recovery crews are finding more human remains beneath the rubble of the collapsed bridge in Minnesota. Drivers recovered two bodies from two submerged cars since Wednesday. Eleven people died when the interstate bridge collapsed into the Mississippi River during the evening rush hour on August 1st.
Two people are still missing.
The severe weather system that was classified as a tropical storm, Erin, has claimed its first casualty. One person died in Houston today when a water soaked roof collapsed at a storage unit. Now, the storm dumped more than six inches of rain on Houston and the deluge caused widespread flooding, with several roads under water.
But forecasters are already closely watching Hurricane Dean, churning through the Atlantic, packing winds of 100 miles an hour. Now, this storm's strength is expected to increase as it moves through the Caribbean and possibly makes landfall in Yucatan Peninsula.
At least 400 people have died in a devastating earthquake in Peru. Witnesses report dead bodies littering the streets of flattened towns and at least 1,500 people were injured in Wednesday night's 8.0 magnitude earthquake.
Harris Whitbeck joins us live from Pisco, Peru -- Harris.
HARRIS WHITBECK, CNN CORRESPONDENT: Kitty, it's been nearly 24 hours since that devastating earthquake hit the Ica region in Southern Peru. And we just landed at the airport in Pisco, which is one of the cities that were most severely hit.
It is very, very quiet here. There are lots of aircraft that are taking off and landing, but you don't see many people around.
These (INAUDIBLE) are part of an airlift that was organized by the Peruvian Air Force out of Lima.
Since this morning, about 3:00 in the morning, airplanes and been landing and taking off, shuttling injured back to Lima and bringing in supplies. (AUDIO GAP)
PILGRIM: We've been listening to Harris Whitbeck in Peru.
We've, unfortunately, lost contact with him and we will continue to bring you reports throughout the evening.
Now, the State Department is asking people -- inquiring about Americans in Peru to call this toll-free hotline -- 1-888-407-4747.
Tonight, astronauts are waiting for a decision on whether or not to repair a deep gouge in the under belly of the Space Shuttle Endeavour. Now, that decision could be made any moment. We will bring it to you when it happens.
Astronauts ran through possible repair methods today to plan a potential maneuver to patch the hole. NASA is concerned that extremely hot gases may seep through that hole during the shuttle -- into the shuttle during re-entry and it would weaken the shuttle frame at that spot.
Coming up, insurgents in Iraq are employing increasingly savage tactics to kill our troops.
Former military commanded General David Grange joins us to discuss that. Also, a shocking new report that exposes drug abuse in our nation's schools.
All of that, when we return.
(COMMERCIAL BREAK)
PILGRIM: Insurgents in Iraq are stepping up of their use of a deadly tactic against our troops. Military commanders say insurgents are using more house bombs to kill our soldiers and Marines.
Now, Barbara Starr reports from the Pentagon.
(BEGIN VIDEO TAPE)
BARBARA STARR, PENTAGON CORRESPONDENT (voice-over): As solders continue their house-to-house search in the volatile city of Baquba, insurgents are increasingly turning to a deadly tactic -- IEDs, often loaded with massive amount of homemade explosives that detonate inside buildings when U.S. troops enter.
LT. GEN. CARTER HAM, DIRECTOR FOR OPS, JOINT CHIEFS: It's been -- been probably more prevalent in the past week -- weeks and months than we had seen previously. A very, very dangerous threat, obviously, to our solders.
STARR: CNN has learned that in the last several weeks, U.S. troops have found 39 house bombs in Baquba, all but two dismantled without incident. But last week, four U.S. troops were killed in an explosion south of Baghdad when they entered a building.
A U.S. senior U.S. military commander tells CNN the house bombs had most sophisticated detonators than typical booby traps. They're set off remotely by insurgents or pressure switches stepped on by shoulders.
Meanwhile, commanders say they expect more attacks like the one that killed hundreds in northern Iraq on Tuesday because insurgents will be watching Washington closely this fall, as Congress debates the war.
HAM: Al Qaeda in Iraq and others are cognizant of the timing of recommendations and decisions. And so I think it is prudent to expect them to try to influence the decision makers.
(END VIDEO TAPE)
STARR: The Pentagon also acknowledged today that troop levels in Iraq are going to rise again, to 171,000 this coming fall, from the current level of 162000. Now, that's due to troop rotations -- units moving in and out of the Iraq. And the Pentagon insists it will be a temporary increase -- Kitty.
PILGRIM: Barbara, as the whole country waits for the sort of assessment in September, what are we hearing from General Petraeus about the upcoming report?
STARR: Well, you know, people very close to him, his military aides have been watching this debate today in Washington -- will there be White House spin on the report to Congress?
Will General Petraeus' comments have to go through the White House political machine?
Here's the bottom line. According to people very close to him, he will not tolerate, they say, any White House spin on his assessment to Congress. When he goes up there to testify with Ambassador Ryan Crocker, the words will be General Petraeus'. It will be what he believes. He says, his aides say he will not be influenced by any White House spin operation -- Kitty.
PILGRIM: Thanks very much.
Barbara Starr.
Well, joining me now in the studio is General David Grange.
And he's one of our most decorated former military commanders.
And we rely on you on you for a real assessment of what's going on on the military side of this war.
Barbara just did a very disturbing report about house bombs.
What do you think about this tactic and how dangerous is it for our troops?
BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, it's very dangerous. The use of house bombs or a booby trapping -- setting up some type of explosive device in urban areas is an old tactic that's used not only in built-up areas, cities, but it's also used in rural areas, like in Vietnam, going inside a grass hooch to search out a hut, you might say. And it's a great tactic for the enemies to use.
And that's for two reasons -- it causes hesitation in moving in with speed and balance of action, which you want to do when you clear a building. And the other, is, of course, to lure soldiers in, maybe from a sniper firing, and then kill more during that activity.
PILGRIM: And is this a new tactic or is it more prevalent at this point?
GRANGE: Well, it's picking up in Iraq because they know it's an economy of force measure. It does work. But as you saw from the number of dismantled booby traps that have happened in the past in Iraq, our troops are very successful, most often, in neutralizing these threats.
PILGRIM: You know, these mass suicide bombings that we're seeing in Iraq now, I mean despite the surge, how can we protect our troops from that?
GRANGE: Well, you know, most of the suicide bombings -- some troops are involved, but mostly they're going after soft targets -- civilians.
And why?
Because they can. They know they can kill innocent civilians. The way to go after them is get the Iraqi people to turn the bombers in. Most of them are foreign -- foreigners. They're not Iraqis. And so the Iraqi people know who they are in most cases.
PILGRIM: You know, I would like to get your assessment. General Petraeus is considering pulling back -- or reportedly considering pulling back troops from the areas that are stabilized at this point. And Al-Anbar, Mosul, maybe Nineveh Province.
What do you think of that, because the U.S. -- commander of the U.S. forces in al-Anbar has suggested that perhaps persistent presence of U.S. troops would be better for stability?
What do you think about this debate about pulling troops out of the stable areas?
And do we have enough troops to cover all the areas?
GRANGE: Well, we don't have enough troops to cover all of the areas. And when they talk about persistent presence, it's both U.S. and any other allies we have, which could be former insurgent groups, headed by sheikhs. That could happen.
No, I don't think it would be 100 percent. I think there would be a partial pullback in order to reinforce areas where we are short troops now or could use reinforcement to accomplish certain missions. It won't be 100 percent, I don't believe.
PILGRIM: You know, the U.S. admits that there are six Iraqi battalions that are competent to take over, down from 10.
Does it occur to you that perhaps the Iraqis are just not going to be able to step into this void that's being left if U.S. troops withdraw?
GRANGE: No, I don't think so. Whether it goes from 10 to six, or six to 12, 12 to 10, you know, the same thing happens in our Army. We don't report that publicly because it's classified. Readiness is classified.
But we have organizations in our military that go through the same thing. We have 10 ready for combat one day and a week later it may only be six. This shouldn't surprise anybody. This is normal military rating procedures.
PILGRIM: General Grange, we're going to get an avalanche of reports in September, not only the one that we're talking about from General Petraeus and Ambassador Crocker. We've got the Joint Chiefs making their own assessment. We have a GAO report on Iraqi political reconciliation and reconstruction. We have General James Jones talking about training and capability of Iraqi forces.
We will have an avalanche of new information coming in to Washington.
How can you make sense of this?
How can any policymaker make sense of this?
And do you believe that they may be conflicting reports?
GRANGE: I believe they will be conflicting to some degree. There will be some common threads. I think every citizen should take the opportunity to listen to all of the reports. Then you can make an informed decision by yourself on where you think the progress of Iraq is today during the reporting period.
I think they will be, for the most part, honest reports. I don't think they will be overly rosy. I think some of the bad parts, the things that are lacking will come out.
But you have to look at all of the reports to get a good picture.
PILGRIM: You have an opinion about General Petraeus and his ability to wade through this political morass in Washington in September?
GRANGE: Well, remember, he has to remember through his chain of command. He has to report through the Joint Chiefs up to the secretary and the president. I mean that's his duty. I think he's a straight shooter. I think he'll say what he means and is a boots on the ground guy in country.
I think that you'll find that the ambassador should have a lot to say because he handles all those other elements of power that we're trying to work on -- the economic, the social, the political, as well as the infrastructure and the construction.
Those -- most of those things come under the ambassador. So people should listen to the ambassador very closely, too, not just General Petraeus.
But he'll be a straight shooter.
PILGRIM: In Washington in the last week, we've heard considerable discussion about the role of Iran in Iraq and the special forces supplying equipment and meddling, basically, is the word that's used. I think meddling is a euphemism for what's going on.
How do you think that it will be assessed, Iran's role in Iraq?
And how will that factor into the decision on what to do next?
GRANGE: Well, because of their role in Iraq, Iran's role in Iraq, and, really, the influence in Basra now and how they've supported rogue organizations -- see, any time power -- there's a power vacuum, someone is going to take over. And that's what happened in Basra.
So I think that you'll see continued pressure put on Iran, as it should be, for them meddling into Iraq.
But, I mean, that's their strategy. I mean I respect Iran for their strategy. It's very clever. In many in cases it's working. And we just have to be smarter than they are with our strategy. And I think we're picking up on that a little bit.
PILGRIM: I think we are. You know, one U.S. official is quoted as saying the British have been defeated in Basra.
Is that your assessment?
GRANGE: I don't know about defeated, but there's so much influence down there with the Iranian government and others. I mean, in fact, the Iranian money, I understand, is used in some areas. But you don't that to happen all over Iraq.
But I don't know if defeat is the right word. That's pretty severe. But there's a heck of a lot of influence.
PILGRIM: Thank you very much, General David Grange.
GRANGE: My pleasure.
PILGRIM: A reminder now to vote in tonight's poll -- do you believe the federal government is doing enough to hold companies responsible for the dangerous products that they import from China?
Cast your vote at loudobbs.com.
We'll bring you the results in just a few moments.
And up next, an alarming new report raises serious concerns about drug abuse in our nation's schools. We'll talk to Joseph Califano, president of The National Center on Addiction and Substance Abuse about those disturbing statistics.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: There is an alarming new report on drug abuse in our nation's schools. Now, according to The National Center on Addiction and Substance Abuse, an astonishing 80 percent of high school students are exposed to drugs and alcohol.
The president and chairman of CASA, Joseph Califano, joins me now for more on these disturbing findings.
And thanks very much for being with us.
JOSEPH CALIFANO, AUTHOR, "HIGH SOCIETY": Oh, thank you for the coverage you give these subjects.
PILGRIM: It's so important and any parent in the audience is deeply concerned about the prevalence of drugs in schools.
Let's put up some statistics that you have in your study.
This is middle schoolers, drugs used, kept in their schools, classmates drunk and/or on high school or middle school grounds.
And there you see 80 percent high school students, 44 percent of middle school students.
Middle school students.
CALIFANO: Think about that, you know?
And what that means is that we're talking about 11 million high school students and five million middle school student that will return this September to high schools and middle schools where drugs will be used, dealt. They'll see students drunk and high. And we can't have a situation like that.
PILGRIM: You know, the next -- the next statistics I would like to show our audience and share, which the research on this is quite good, the frequency that students encounter drugs at school -- four million high school students, one million middle school students.
Millions of kids are just encountering the drugs in the school.
CALIFANO: Every week. I mean that's every single week they're going to see that. And, you know, in this country, where you have to send your kid to school -- it's against the law. The kids are truants in middle school and high school, what the states are doing is saying you must send your kid to a school even though it's riddled with drugs, even though it's infested with drugs.
PILGRIM: It's very disturbing. Now, you often hear the excuse, oh, there were always drugs around, you know, the previous generations dabbled extensively with drugs, that this is not -- but look at the statistics on this. And, again, this research is definitive.
You had, in 1979, 3.3 million. It went down and now it is back up again. In 2005, 2.6 million people -- six million teens -- illegal drug users in the country.
CALIFANO: And teenage illegal drug users.
PILGRIM: Teenagers.
Why are we seeing, do you know -- have you done some guesses on why this is really blossoming again?
CALIFANO: Well, I think -- I think drugs are -- marijuana, particularly, is much more available. Our -- what our survey showed was that 17 percent of the kids that in high school and middle school, the 12- to 17-year-olds in this country, can buy marijuana in an hour on their school grounds. Thirty-seven percent can buy it within a day.
PILGRIM: As a mother two of teenagers, I find this extremely disturbing.
You wrote a book, "High Society."
CALIFANO: Yes.
PILGRIM: It was released in May. And you focus on preventing drugs and alcohol use among our children.
Let me just take a quote from that. And if they would put it up.
"Parent power is the most potent, least appreciated and most under utilized resource available in the struggle to raise children free of drugs and alcohol abuse."
And you go on to say: "The front line for America's drug problem is not only in legislative hearing rooms, it is in living rooms, dining rooms and in the hands of parents and families."
Give some advice to everyone listening here.
What can they really do?
CALIFANO: OK. Well, Kitty, here's what they can do.
One, they can be engaged in their kids' lives. They could have frequent dinners with their kids. We know that the more often kids have dinner with their parents, the less likely they are to smoke, drink and use drugs.
And they can raise hell about the situation in the schools their kids go to. Now, if there's asbestos in the ceiling of the school, parents wouldn't send their kids to school until all the dust is out. Well, why don't they get as angry about drugs in school as they are about asbestos in school?
I think they've got to put pressure on the school authorities, the teachers, the school boards to clean the drugs out of the schools.
And I think, also, I mean we know that every level of parental engagement is important. And kids read them. And they also have to send a clear message to their kids. And the message is basically Nancy Reagan's message -- no. You just say no to drugs.
And, also, incidentally, interestingly for these teenagers, a sense that it is not moral for a kid their age to use drugs is more important for them than a sense that it's illegal.
PILGRIM: The illegality of it does not impress them?
CALIFANO: At that age. When you get toward high school -- toward college students, they begin to worry about the illegality. But for these kids, it's, you know, the greatest influence on these kids is parents. This is a mom and pop operation. And if you're engaged with your kids, you greatly reduce the likelihood.
But, also, you've got to say to your state and your city and your school board, you cannot put my kids in a situation where they have to spend six hours a day, five days a week in an environment where they're going to see students high, students drunk, drugs dealt, drugs used, drugs kept.
PILGRIM: So the peer pressure balance has to go from those who use to skew it toward those who don't and don't think it's appropriate?
CALIFANO: That's exactly right. And if your kids is in a school where there are drugs like that, and unfortunately that's most high schools in this country and almost half of the middle schools, then we -- you've got to -- your risk of that kid is way up because he's going to be exposed to this stuff.
And our surveys also showed that in those kinds of schools, the popular kids are the kids most likely to use drugs, to get drunk at least once a month. We've got to change this world.
PILGRIM: It's an extraordinarily disturbing report. And we applaud your efforts in pushing on this. And we encourage every parent out there to join the fight.
Thanks very much.
CALIFANO: Thank you.
PILGRIM: Joseph Califano.
CALIFANO: Thank you, Kitty.
PILGRIM: And still ahead, the results of tonight's poll, more of your thoughts.
Stay with us.
(COMMERCIAL BREAK)
PILGRIM: Now we have the results of tonight's poll.
Now, 99 percent of you do not believe that the federal government is doing enough to hold companies responsible for the dangerous products that they import from China. Only 1 percent of you say the federal government is doing enough.
Well, we do have some more time for some e-mails.
And we love hearing from you.
So here -- thousands of you are e-mailing us about the Elvira Arellano case.
So John in Tennessee wrote to us: "When I can sympathize with Mrs. Arellano's wishes and her hard work in seeking a better life for her son, she has no legal right to lobby Congress for a change in this country, as I would have no legal right to lobby in, for example, France."
And Carol wrote to us from Ohio: "Instead of going to Washington, perhaps Mrs. Arellano's needs would be better served if she went back to Mexico and she protested to her own government and to creating a country she wouldn't want to leave."
Larry in Texas wrote to us: "Elvira Arellano needs to get back on the bus, back to Mexico. Since when did the church become the government of the United States?"
That, of course, a reference to sanctuary she has taken in the church.
Karen in Texas writes: "Elvira Arellano is making a mockery of our existing laws. Elvira Arellano was found and required by federal law to be deported for illegally entering and working without approved work visa and ICE needs to step up and do its assigned requirement to deport her back to her country of origin."
Now, each of you whose e-mail is read will receive a copy of Joseph Califano's important book, "High Society."
Thanks for being with us tonight.
Please join us tomorrow.
For all of us here, thanks for watching.
Good night from New York.
"THE SITUATION ROOM" starts right now with Miles O'Brien.
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