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Lou Dobbs Tonight

Hillary Clinton Under Fire; America's Middle Class Under Siege

Aired November 01, 2007 - 18:00   ET


LOU DOBBS, CNN ANCHOR: Senator Hillary Clinton on the defensive over her support of New York Governor Eliot Spitzer's outrageous proposal to give driver's licenses to illegal aliens. Her campaign trying to do damage control over the senator's apparent inability to give a straight answer.
Also, America's middle class under siege. Mortgage foreclosures are rising dramatically. Layoffs are up. Salaries are flat or falling, and the worst is not over.

Disturbing new evidence tonight of the federal government's failure to protect American consumers from unsafe imported products. A GAO report says the Food and Drug Administration will inspect less than 2 percent of China's drug facilities exporting their products to the United States.

All of that, all the day's news, and a lot more, with a somewhat strong emphasis on politics tonight straight ahead here.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Thursday, November 1.

Live from New York, Lou Dobbs.

DOBBS: Good evening, everybody.

Congressional Democrats celebrating their victory of a year ago. But the American people aren't joining in. They are, in fact, fed up. Anti-Washington sentiment across this country is at record levels and a weakened president is taking advantage of an even weaker Congress. President Bush pressuring Congress to confirm his attorney general nominee and chastising Congress for holding up war spending bills.

We begin tonight with Jessica Yellin on Capitol Hill -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Lou, Democrats celebrated by touting their accomplishments and then quickly branding Republicans obstructionists.


YELLIN (voice-over): It was a campaign-style rally for Democrats marking the first anniversary of their return to power.

REP. RAHM EMANUEL (D), ILLINOIS: In one short year, we have made real progress and won real victories for the American people. YELLIN: The anniversary comes as Democratic leaders are stymied on almost every issue before them, including children's health insurance, the wiretap law, and spending bills. But they offer a ready explanation for the gridlock.

REP. STENY HOYER (D-MD), MAJORITY LEADER: This do-something, new-direction Congress has been blocked far too often by a do-nothing president and his Republican congressional accomplices.

YELLIN: And today Senator Leader Harry Reid echoed that message, saying of the president, "Never have we had anyone so unwilling to negotiate on anything."

Americans' approval of Congress is at historic lows. Even Speaker Pelosi has suffered. According to a new Field poll, in her home state of California, her approval rating has fallen 13 percent since March. But Democrats insist polls show they are doing much better than their Republican counterparts.

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Which party can bring needed change? Forty-eight percent Democratic, 26 percent Republican.

YELLIN: Republicans maintain these internal fights hurt both parties.

REP. JOHN BOEHNER (R-OH), HOUSE MINORITY LEADER: At the end of the day, if the American people see us working together, Democrats and Republicans, on their behalf, all of our numbers will go up.

YELLIN: But right now there is not a lot of working together on Capitol Hill. And blaming Republicans for the deadlock could actually be a winning strategy for the Democrats.


YELLIN: Now, Lou, even as the Democrats acknowledge and celebrate this anniversary, they are clearly positioning themselves for the next election. Party officials say they know that Americans now realize Democrats need a larger majority to get things done in Congress, and they plan to use that as an argument to elect more Democrats in 2008 -- Lou.

DOBBS: Well, it looks like both parties are setting themselves up for a massive failure, the Democrats apparently not understanding that their desire for comprehensive immigration reform against the wishes and interests of American middle class, and the Republican Party looking for any opportunity to serve their corporate masters, irrespective of the American middle class interests.

Don't these parties and their leaders have any comprehension that the American people both desire passionately and deserve representation in the nation's capital, even to the exclusion of those corporate lobbyists spending over $2 billion a year? What's so tough for them to comprehend about all of that?

YELLIN: Well, Lou, even Nancy Pelosi today said she, too, is disappointed in Congress, especially on the issue of Iraq.

DOBBS: For crying out loud, she is Congress.

YELLIN: Well, she points out that she cannot get enough done without a larger majority.


DOBBS: You know, it scares me that either of these parties would have a significant majority, personally. But we will let them prattle on with their propaganda and spin.

Thank you very much, Jessica Yellin.

President Bush on the offensive today, blasting Congress for their inaction on critical issues facing the country, this president urging Congress to quickly approve the nomination of his attorney general nominee and to pass spending legislation in the name of the war on terror.

Suzanne Malveaux has our report from the White House.


SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT (voice-over): In the battle to save his attorney general's general's nomination, President Bush pulled out a familiar weapon from his arsenal. He invoked the horrors of September 11 and introduced the possibility of a fresh attack.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The terrorists who struck America that September morning intend to strike us again.

MALVEAUX: The message to the Democratically-controlled Congress was simple. Approve his nominee, Judge Michael Mukasey, or potentially take the fall for not providing his administration with the people and tools needed to prevent another attack.

BUSH: The job of the attorney general is essential to the security of America.

MALVEAUX: Mr. Bush also called on Congress to renew legislation to give his administration broader leeway to wiretap potential terrorists without a warrant.

The president went even further, accusing lawmakers of not only shirking their responsibilities, but kowtowing to anti-war groups, some who gathered outside the speech site.

BUSH: Some in Washington should spend more time responding to the warnings of terrorists like Osama bin Laden and the requests of our commanders on the ground, and less time responding to the demands of bloggers and CodePink protesters.

(CHEERING AND APPLAUSE) MALVEAUX: Mukasey's nomination is being held up over his refusal to say whether the interrogation technique of simulating drowning, or water-boarding, is legal or whether it is tantamount to torture. Mr. Bush says it's a question Mukasey can't answer because he's not yet qualified to be briefed on top-secret interrogation methods. But the president insists, it's all legal.

BUSH: The procedures used in this program are safe. They are lawful. And they are necessary.


MALVEAUX: Now, the president is trying so hard to save his nomination, he did something very rare today, holding an on-the-record off-camera preview for reporters of his speech.

Now, his press secretary said he was recently inspired by a photo that he saw of President Eisenhower conducting a traditional kind of pen-and-pad session in the Oval Office.

But, Lou, considering this is six-and-a-half years into his administration, it certainly suggests that this is a president that is not only willing to do something very different; he needs to do something different to push this nomination through -- Lou.

DOBBS: Willing to do something different. This has been, it seems to me, if I may say, Suzanne, one of the most intractable and stubborn presidents in pursuing policies, without clear articulation of either objectives or the processes and means by which to get to those rather nebulous executives. I mean, what are we talking about?

MALVEAUX: Well, one of the strategies that the White House has used time and time again is if they can frame the issue around national security, whether or not it is pushing forward intelligence surveillance, whether or not it is moving forward in actually blocking troop withdrawals. This is the kind of thing that they have been very successful at in the past, and this is what they are using today.

DOBBS: And, as the president talks about pandering and pursuing the interests of and CodePink, he left out from the side of the Republican Party pursuing the agendas of the U.S. Chamber of Commerce and the Business Roundtable.

That gives us a certain symmetry, if we do include those other elements as well, doesn't it?

MALVEAUX: Well, Lou, as you know, another advantage the White House tries to seek here is, it tries to frame this as a partisan fight.

But you are right. There are many times when the Republicans who are siding with the Democrats against the White House.

DOBBS: Thank you very much, Suzanne Malveaux from the White House. Thank you, Suzanne. Insurgents in Iraq killed three more of our troops, those soldiers killed by roadside bombs outside Baghdad, 40 of our troops killed in the month of October, the lowest monthly total since March of a year ago; 3,847 of our troops have been killed since this war began, 28,385 of our troops wounded, 12,831 of them seriously.

Roadside bomb attacks in Iraq have sharply declined over the past few months. General Ray Odierno, the Army's top commander in Iraq, today said it is still unclear whether that is because Iran is slowing its weapons shipments to Iraq.

Joining me now to discuss that and the president's war on terror speech, General David Grange, General Grange one of the country's most decorated military commanders.

Is the surge working, General? Is that the reason in your best judgment that American deaths are declining?

BRIGADIER GENERAL DAVID GRANGE (RET.), CNN MILITARY ANALYST: Yes, it is starting to work, Lou. And the assessments that I receive from commanders on the ground that they are making progress in certain areas and it is starting to gain momentum.

And what's refreshing about that, it's a positive thing to report, instead of normally the defeatist attitude that we normally hear about.

DOBBS: Well, General Ray Odierno today said that part of the success is the significant improvement in Iraqi forces. Do you conclude from that it is significant enough to start a significant withdrawal of American forces?

GRANGE: No, I do not. I think that the significant withdrawal of American forces is too early. I think the Iraqis are picking up their pace on well-trained units taking over some of these missions.

But when you have success, doctrinally, what you do is reinforce that success. We don't want to withdraw American troops too soon.

DOBBS: Iran continues to play a significant role in both supplies and attacks on supplies for the insurgency and attacks on American troops and killing some of our troops. At the same time, Turkey now threatening to attack northern Iraq and the Kurds there.

What is your judgment as to what will happen in the north and the intentions of the Turks?

GRANGE: Well, the intentions of the Turks, I don't think they really want to go into northern Iraq with any size forces. That may end up happening.

The recommendation from here would be to set up some type of zone of separation, 10 kilometers into northern Iraq from the border of Turkey, put severe restrictions on an area, put a coalition force in there to patrol that, and you have a buffer zone that may keep this from happening. On the Iraqi side, you do the same thing with more severe action to Iranian infiltration across that border.

DOBBS: General Dave Grange, as always, good to talk with you. Thank you.

GRANGE: My pleasure.

DOBBS: Coming up next, a disturbing report on just how ineffective the federal government is in protecting American consumers from dangerous imported drugs.

Lisa Sylvester will have the report -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Most of the ingredients in the medicines that you take, guess where they come from? Not the United States. China and India. And FDA insiders will tell you there's a lot to worry about.

DOBBS: Lisa, thank you. We will look forward to your report coming up here next.

Oklahoma is forced to take action on illegal immigration because of the federal government's unwillingness to deal with the immigration, the illegal immigration crisis. Oklahoma's new law the toughest in the nation. And guess what? It went into effect today. We will have that special report.

And more troubles for this nation's embattled middle class, mortgage foreclosures soaring across the country, job layoffs mounting. We will have that report and, of course, tell you about what your federal government, your national leaders are doing about it.

Stay with us. We will be right back.


DOBBS: Today, hundreds of people turned out in Oklahoma. They're protesting one of the toughest state laws in the country against illegal immigration. Their law went into effect today, that after a federal judge late yesterday dismissed a last-minute lawsuit trying to block it.

Casey Wian now reports on what is a clear-cut victory for the state in its fight against illegal immigration and for border security.


CASEY WIAN, CNN CORRESPONDENT (voice-over): It's a new era in Oklahoma. State law now makes it clear illegal aliens are no longer welcome, that after a federal judge denied a second motion to block the law by advocates of expanded illegal alien rights.

RANDY TERRILL (R), OKLAHOMA STATE REPRESENTATIVE: I couldn't be more pleased. The reason why I say that is because it is a great day for the citizens and taxpayers of Oklahoma.

WIAN: The law prohibits illegal aliens from receiving driver's licenses or state welfare benefits. State contractors are prohibited from employing illegal aliens. Private businesses must not terminate a citizen or legal resident while continuing to employ an illegal alien in a similar job.

UNIDENTIFIED FEMALE: Nobody is going to be working in here. Everything is going to be looking empty, like a ghost town. And I don't think it is going to be right. It's made me very sad on my heart.

WIAN: It is also now a crime in Oklahoma to transport or harbor illegal aliens. The only exception is where there is a conflict with federal law, such as transportation for medical care or school.

REVEREND MIGUEL RIVERA, NATIONAL COALITION OF LATINO CLERGY: You are guilty of ethnic cleansing in this community. You are going against my community. That's my people, my Latino friends and family, who aren't afraid of your words, who aren't afraid of your actions.

WIAN: Police officials say the fear is unwarranted because they will only check the immigration status of suspects arrested for violent crimes.

RON PALMER, TULSA POLICE CHIEF: If we are doing a violent crime of arresting a suspect and then we find during the booking of that person that they are in violation of their status, certainly we are going to assist with that. But the roundups and going out and checking papers and what have you, we aren't going to be involved in that.

WIAN: Reverend Rivera claims 25,000 or more Latinos have already fled Oklahoma because of the new laws, some leaving the country entirely.

If true, it is just what many illegal immigration opponents have predicted. Once state and local governments begin cracking down, illegal aliens will return to their home countries on their own.


WIAN: Now, legal hurdles do remain. Another court hearing on the constitutionality of Oklahoma's law is scheduled next week. And opponents say they will fight this all the way to the Supreme Court, if necessary.

Meanwhile, supporters say that they hope the Oklahoma crackdown will become a model for other states -- Lou.

DOBBS: And after so many defeats in communities around the country of their ordinances trying to deal with the impact of illegal immigration, why is the Oklahoma law being upheld?

WIAN: The crafters of the law say they drew it up very carefully to withstand court challenges. So far, it has withstood two of them. Others are coming. They say they are 99.9 percent certain that this will remain in law.

States have had a little bit better luck trying to crack down on illegal immigration. Arizona is another example that has had some success recently.

DOBBS: Right.

WIAN: Cities are having a little bit more trouble -- Lou.

DOBBS: Yes. And it is interesting that there is an argument about what is the purview of federal government and what is the purview of state, county and local government, because in point of fact on a whole range of issues, whether it be drug trafficking, terrorism, local, county and state jurisdictions all have significant roles in enforcing those laws against those crimes.

WIAN: Absolutely. It just takes a little political will and a little attention to detail, and Oklahoma is showing they can get it done.

DOBBS: All right. Well, thank you very much, Casey Wian.

That brings us to the subject of our poll. Do you believe your state should be adopting anti-illegal immigration laws similar to that of Oklahoma? Yes or no. Cast your vote at We will have the results here later in the broadcast.

Time now for some of your thoughts.

Brandon in New York wrote in to say: "My governor, Spitzer, may have forgotten the word illegal. But I am remembering the word impeachment."

Catherine in North Carolina: "Lou, I now realize that the greatest threat we have to America is our own U.S. government. We can forget what other countries want to do to us."

Laurel in Maine said: "Lou, you have won over two more for the independent party. My husband, Chuck, and I are so tired of the standard old party line."

Aren't we all, all of us who are thinking about what these two parties have done to this country over the last 20 years?

We will have more of your thoughts here later in the broadcast. And thanks for being an independent.

Disturbing testimony in Washington today. Former FDA employees testified that their agency just simply doesn't have adequate resources to protect American consumers from dangerous drug imports. This year, the United States will inspect fewer than 2 percent of China's drug facilities that export to the United States.

Lisa Sylvester reports now on the government's repeated failures to protect American consumers.


SYLVESTER (voice-over): It was a sugarless cough medicine. It took the lives of more than 100 people in Panama last year. Glycerin is a key ingredient of this medicine. But, in this case, a poison called diethylene glycol was substituted for glycerin imported from China.

During a congressional hearing, a former FDA insider testified the same thing could happen here.

CARL NIELSEN, FORMER DIRECTOR, FOOD AND DRUG ADMINISTRATION: FDA knows very little about the actual condition of manufacture of most imported drugs. And that should be found totally unacceptable in a professed risk-based approach.

SYLVESTER: Eighty percent of the active pharmaceutical ingredients in U.S. drugs come from abroad, primarily India and China. Yet, the FDA inspects only about 7 percent of the known foreign drug importers a year, according to the Government Accountability Office.

And the agency doesn't even have an accurate count of how many foreign firms are shipping drugs to the United States. Another former FDA employee who worked at the agency for 30 years testified, commissioners have not had the resources for adequate testing of food and drug imports.

WILLIAM HUBBARD, COALITION FOR A STRONGER FDA: And all of them were forced to play this public health version of the kids game Whac- A-Mole, in which they were forced to ship resources to whatever the squeakiest wheel was of the day and try to fix that. And the result was that nothing ever seemed to get fixed.

SYLVESTER: The FDA says it has begun updating its databases and is considering posting inspectors in foreign countries.

ANDREW VON ESCHENBACH, FDA COMMISSIONER: We have been and are the world's gold standard, and we intend to continue to maintain that standard of excellence. But it will require change.

SYLVESTER: The problem is not new. The GAO issued a critical report outlining similar problems in 1998. Congress held hearings in 2000. But the same problems persist, with potential for toxic medicines ending up in American medicine cabinets.


SYLVESTER: Domestic firms are required to be inspected every two years, but there is no similar law for foreign inspections. Domestic inspections are also unannounced. That it is not the case with foreign inspections.

And, finally, language has been a barrier, with FDA inspectors having to rely on company representatives for translation, instead of using independent translators -- Lou.

DOBBS: Well, Lisa, I will say one. This broadcast has been reporting on this issue, the safety of communist Chinese exports to this country, literally for years, and we can take heart in one thing. Mainstream media is beginning to follow our coverage on these issues. It makes you feel pretty good about your coverage, right?

SYLVESTER: Well, I have got to tell you, Lou, the testimony that we heard today was absolutely frightening. It was terrifying. Many lawmakers are very much aware of this issue. And now they want to do something about it.

DOBBS: Hallelujah is all I can say. And much is to be done.

Thank you very much, Lisa Sylvester, from Washington.

Coming up next: Senator Hillary Clinton, she is standing by Governor Spitzer's plan to give licenses, driver's licenses, to illegal aliens. But support for her friend in New York is apparently costing her a lot of political capital. We will that special report.

And record foreclosures in this country, skyrocketing oil prices, this is a continuation, an intensification of the war on our middle class. And guess what? This government wants to save financial institutions, not families.

Stay with us. We will have that report here next.


DOBBS: Home foreclosures hit a new record high in November, nearly every state in this country reporting an increase in foreclosures, those foreclosures more than doubling since last year.

The number of people losing their homes expected to rise in the months ahead, as our middle-class families struggle against stagnant wages, soaring costs of living.

Christine Romans has the report.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Companies are slashing jobs. Energy prices are skyrocketing. Wages are barely keeping up with inflation. And the housing market is in recession.

A survey of almost two-thirds of the nation's counties found at least 446,000 properties in trouble, default notices, auction sale notices, and bank repossessions.

According to RealtyTrac, the highest foreclosure rates are in Nevada, California and Florida, and Michigan, Ohio, Colorado, Arizona, Georgia, Indiana, and Texas. Foreclosures soared 30 percent during the summer. That's almost one for every 200 properties.

RAY HOOPER, CONSUMER CREDIT COUNSELING: Many people bought more house than they could afford, and they bought them on ARMs or other adjustable-rate kind of programs. And now that those are beginning to adjust, they are having some serious problems in making ends meet. ROMANS: Some $50 billion in mortgages adjusted higher last month. One liberal think tank estimates some 2.8 million families will see their mortgage payments rise 37 percent over the next two years.

And just as the housing recession deepens, more companies are beginning to lay off workers, more pink slips at the real estate office, at the lumber mill, and on Wall Street, which financed that housing boom. Layoffs in financial services are running triple last year. And Chrysler is slashing up to 12,000 more jobs, cutting four models from its lineup, and eliminating shifts at five plants, job losses many Americans simply can't afford.

JOHN CHALLENGER, CEO, CHALLENGER GRAY & CHRISTMAS INC.: There's rising concern that the consumer is losing confidence, losing purchasing power, with adjustable mortgages going up, the high price of gasoline.

ROMANS: At the same time, experts predict $100-a-barrel crude oil and $3 gasoline. The government says Americans will spend on average 10 percent more to heat their homes this winter, worse in the Midwest and Northeast.


ROMANS: Americans for years have not been saving and spending more money than they earn. The housing market was like a giant piggy bank for years, filling bank coffers with fees and allowing consumers to tap into their equity to drive other spending, like college tuition, medical bills. All that has changed. Many economists think we are just seeing the beginning of the fallout from it, Lou.

DOBBS: Yes, I'm afraid they're right.

Thank you very much, Christine Romans.

Up next here, the author of a provocative new book telling us how to fix our broken borders. Imagine that, a solution.

And Democratic presidential candidate Senator Hillary Clinton stumbles mightily over the issue of giving away driver's licenses to illegal aliens. What a sorry place to punt.

And presidential hopefuls slowly realizing they might need to go after what they're calling now Lou Dobbs voters. Some of them seem to think there are just a few. We will tell them just a little bit more about how many there might be in this country when we come back.

Stay with us.


DOBBS: Senator Clinton's rivals stepping up their attacks in the Democratic race for president. They believe Clinton is vulnerable after she fumbled away a very important issue in the debate Tuesday night. As Bill Schneider now reports, Clinton is taking a beating. She's beginning to fight back, but she's still taking a beating.


WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): If her rivals want to stop Hillary Clinton, they have to do it in Iowa -- where the Democratic race is a dead heat.

Did her performance in the debate this week hurt her?

David Yepsen of "The Des Moines Register" thinks so, but not primarily because of her position.

DAVID YEPSEN, "THE DES MOINES REGISTER": What gets her in trouble is waffling, is equivocating, is not being clear.

SCHNEIDER: John Edwards is releasing a new TV ad in Iowa drawing an obvious contrast.


JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: It is time for our party, the Democratic Party, to show a little backbone, to have a little guts.


SCHNEIDER: The criticism of Clinton has resonance with Democratic caucus-goers because it reinforces their one big doubt about her -- is she electable?

YEPSEN: Any time anything happens that reinforces Clinton's negatives or bad perceptions of her will raise questions anew about, well, maybe she can't win in November.

SCHNEIDER: Clinton is fighting back by accusing her opponents -- all men -- of piling on.

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I seem to be the topic of great conversation and consternation, and that's for a reason.

SCHNEIDER: On Wednesday, when a government workers union endorsed her, the president of the union said this.

GERALD MCENTEE, AFSCME PRESIDENT: Some of you may have seen last night's debate -- six guys against Hillary. And I'd call that a fair fight.


SCHNEIDER: On Thursday, she made this comment when she visited Wellesley College, her alma mater.

CLINTON: In so many ways, this all women's college prepared me to compete in the all-boys club of presidential politics.


SCHNEIDER: Could playing the gender card pay off in Iowa?

YEPSEN: When Senator Clinton plays that gender defense, I think that's something a lot of women caucus-goers can relate to and understand. They have all been in situations where the men were kind of ganging up on them.


SCHNEIDER: In 2004, just over half of the Democratic caucus participants here in Iowa were women, according to the state party. That's a pretty big voting group -- Lou

DOBBS: Well, Bill, you know, lost in all of this -- now, there's no question Senator Clinton fumbled away that answer and just about as badly as you could. But five of the men on that stage with her basically did the same doggoned thing. The Democratic Party has a huge problem on this issue. Only Senator Chris Dodd handled it with any kind of character and integrity and forthrightness. Girl, boy, do the count any way you want to, it looks to me like the Democratic Party has six idiots on the issue.

SCHNEIDER: Well, when I spoke to David Yepsen of "The Register," he pointed out that Democrats are asked about this issue -- illegal immigration -- which is a very serious problem here in Iowa, right in the heart of the country -- nowhere near the border. He said Democrats and Republicans, they're all asked about that issue. It is a big voter concern across party lines.

But he made the point that among Democrats, you don't find the passionate opposition to a path to citizenship or amnesty that you find among Republicans. So he made the point you (INAUDIBLE)...


DOBBS: ...but what we did see is on the issue of illegal driver's licenses...


DOBBS: your moist recent report, that Democrats opposed it by a two to one margin.

SCHNEIDER: That's right.

DOBBS: That's a pretty serious split, even among Democrats, is it not?

SCHNEIDER: Yes. They do. They do oppose it. By my -- his point was -- and I haven't been to these meetings -- but his point was you don't find the passion among Democrats that you do among Republicans. They do worry about the issue and they worry about their ability to win. DOBBS: Tell him to stay tuned because everything we're seeing in this country right now says if he's detecting the passion now, he soon will be.

Bill Schneider, thank you very much.

SCHNEIDER: Well, among Democrats, he said.

DOBBS: Yes. And I'm saying among Democrats, too.

Thank you very much.


DOBBS: Senator Hillary Clinton still under fire tonight for trying to have it both ways on the Eliot Spitzer plan to give driver's licenses to illegal aliens in New York. During Tuesday night's Democratic debate, she first supported the Spitzer plan, then she opposed it -- accused by her fellow Democratic rivals of flip-flopping on the issue, the Clinton campaign issued a statement to clear things up. And here we go. Here's the clear-up: "Senator Clinton supports governors like Governor Spitzer who believed they need such a measure to deal with the crisis caused by this administration's failure to pass comprehensive immigration reform."

No direct reference there about rewarding illegal aliens with driver's license. But pressed on that question, Clinton campaign advisers today finally said Clinton ultimately supports the driver's license proposal. Senator Clinton's repeated dodging is not reinforcing confidence among the nation's politicians and perhaps not among the voters. In fact, disgust with all politicians is near all time either highs or lows, depending on how you look at it.

A "USA Today"/Gallup Poll today released shows 70 percent of those surveyed are simply fed up with Washington. Or as I always put it, they've had a belly full. And more evidence that Americans have had belly full of politicians who pander to socio-ethnic centric special interest groups and not the interests of the American people -- Americans are fed up with everything from the millions of illegal aliens crossing our borders to the lopsided trade deals that are destroying millions of middle class jobs -- exactly the issues we've been reporting here now for years.

Those running for office are beginning to realize these issues perhaps need to be confronted honestly and directly.

We learned that one conference call this morning, by the way, for the Clinton campaign actually discussed the issues that attract what they called ""Lou Dobbs voters"." It's not the first time, of course, that we've heard the reference to ""Lou Dobbs voters"." In fact, we're hearing a lot of these politicians now trying to attract what they call the "Lou Dobbs voters" or the "Lou Dobbs crowd." In point of fact, they're finding out that's a far larger group of Americans than they ever dreamed.

Joining me now, Democratic strategist Hank Sheinkopf. Ed Rollins, Republican strategist, former White House political director.

Gentlemen, thanks for being here.

What in the world is Hillary Clinton going to do with this mess?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: It's a mess. Anybody who gets near immigration is touching the third rail of 2008 politics, whether you talk about driver's licenses or anything else. And what happened the other night is partially her fault and partially not. She was set upon. She's the frontrunner. And when you're the frontrunner, everyone runs after you.

DOBBS: This business of always -- it's a conspiracy, somebody crying foul, her supporters suggesting that Tim Russert should be shot.

I mean good grief, what in the world kind of response is that?

SHEINKOPF: Not an appropriate response (INAUDIBLE)...

DOBBS: By the way, I want to just say for the record, I thought Tim Russert did an outstanding job.

SHEINKOPF: Well, my job in life is not to comment on what journalists do. What I can talk about is politics.

DOBBS: Right.

SHEINKOPF: Politics here is a new ideology being formed that is very different from anything we've seen in some time and will harden and have new steps put it to when the Chrysler layoffs begin to take hold, announced this morning, by the way.

DOBBS: Absolutely.


ED ROLLINS, REPUBLICAN STRATEGIST: One of the great weaknesses of her husband is he was a pleaser. He was tagged with being a pander bear by the late Paul Tsongas in the -- in the campaigns and he...

DOBBS: That's one of the great lines, by the way -- pander bear.


SHEINKOPF: My ex-partner, Jerry Austin (ph), wrote that, by the way.

ROLLINS: And what's happening now is she's starting to pander to the special interests. She's a frontrunner. She doesn't want to displease anybody. And she's tried to portray herself as someone who has a core, a real belief system. And I think the other night, basically, she was waffling all over the place and giving multiple answers. I think it shows a chink in the armor and I think, you know, it's one -- it's one night, but it shows a pattern that I think certainly can effectively be challenged.

DOBBS: But the fact of the matter is the Republican candidates are doing no better, really.

ROLLINS: No. They're pandering, too.

DOBBS: It is disgusting to watch two candidates -- and I'm specifically referring to Romney and Giuliani -- who absolutely supported sanctuary cities. Romney reaching a conversion late in his term -- very late in his term -- on the issue. But this is really...

ROLLINS: Well, Romney, in four years, has had many conversions. And, you know, you always -- you always hope people improve their thought process. But usually by 60, you've pretty much decided what your positions are. Giuliani...


ROLLINS: Giuliani obviously took great pride in having a sanctuary city. And I think, to a certain extent, those are things that are going to be exploited in the course of this campaign.

DOBBS: You know, you mentioned the third rail here, Hank. This -- you know, my God, if the issues that are most affecting the American people's lives are third rails and candidates of both parties haven't got the courage, the capacity to deal with those issues, we're in a hell of a mess in this country.

SHEINKOPF: What we have is government by poll and campaign by poll -- good news and bad news...

DOBBS: We should run every one of those chicken lily livered candidates off every stage, whether Democrat, Republican, whatever stripe. I mean the idea that these parties can continue to triangulate, serve their corporate masters, serve socio-economic and socio-ethnic centric interests without regard for the welfare of American working people -- our middle class -- I mean it's -- 2008, I'm praying, is the year it begins to change.

Am I -- am I...


DOBBS: ...futile in my dream?

SHEINKOPF: Lou, we have seen a response by voters in this country. The voting turnouts continue to decline, except in the last midterm election, where they somewhat up. But they've been declining overall. That tells you that people are angry and not voting as a response.

What will happen here, as the economy starts to do what it is doing and what we have talked about on this program and in other places...

DOBBS: Right. SHEINKOPF: ...more people are going...


DOBBS: It looks to be headed toward recession, even with strong growth in the third quarter.

ROLLINS: Well, one of the things that you're finding is someone like Mike Huckabee, who doesn't have the resources and doesn't have the fame...

DOBBS: Right.

ROLLINS: starting to pick up some momentum because he's very consistent. He's a man who basically tells you exactly what he believes and he hasn't tried to waffle all over the place and is now in second place in most polls in Iowa and is ahead of Romney now in some of the national polls. And that's all about a guy who's speaking straight talk.

And I think, to a certain extent, the country is desperately looking for that.

DOBBS: One of the things that it's going to be interesting to watch is how this administration, this Congress, both parties with an opportunity here. Foreclosures are just doubling, up 30 percent in the past month. They are looking toward saving the large money center banks, the major financial institutions, infusions of cash and creating deals, rather than going directly to the homeowners who face foreclosure -- and more than two million of them in this country. And this is going to be a very big test, in my opinion.

Either this federal government and these candidates for president, this president and this Congress reach out to help people in their homes or they reach out to the institutions on the issue of moral hazard.


DOBBS: And whichever choice they make, I think, will define much of the issues for 2008.

ROLLINS: You know what the answer is...


ROLLINS: ...when it's the savings and loans crisis, they bail out the savings and loans. In this case, those two million people that are hurting, who are basically giving up something that's a sacred right of every American, which is to own a home and...


DOBBS: It's the American dream.

ROLLINS: And they're hurting. They're hurting. That if the Congress and the president doesn't reach out, they're going to (INAUDIBLE)...

SHEINKOPF: Well, look, the American dream -- there's more than the American dream at risk. It's the nature of our politics. If the voting booth doesn't work and you can't own your own home, then why be an American?

When that starts to kick in, the voter revolt will start, either by turning out or not turning out, one way or the other.

DOBBS: I hope that Americans right now are figuring out it's time to register as Independent. Push back against both of these silly parties who are really, as I've been saying, just simply opposing wings of the same bird.

ROLLINS: You're seeing it more and more. More and more people are self-identifying -- particularly younger people -- they don't think the parties are relevant. They don't think there's a dime's worth of difference between them.

DOBBS: Ed Rollins, Hank Sheinkopf.

Gentlemen, thanks for being here.

ROLLINS: Thank you.

DOBBS: Up next, mounting opposition to Governor Spitzer's just wonderful proposal to give licenses to illegal aliens. I used the word idiot again. I want to retract it. I was talking about those people and their idiotic proposals. I've got to come up with a new word. Please help me. I've got to come up with a new word. These are not idiots. They're something similar, perhaps, but they're not idiots.

And a new book offers solutions on how to fix our immigration problem. I'll be talking with one of the book's authors.

Stay with us.

We'll be right back.


DOBBS: Opposition continues to mount tonight against New York's governor's outrageous proposal to give away driver's licenses to illegal aliens. One of the earliest critics and opponents is James Tedisco, the Republican minority leader in the state assembly. He's filed suit against Spitzer. They're trying to force the governor to withdraw that proposal.

James Tedisco joins us here tonight.

Thanks for being here.


DOBBS: Any reaction from the governor's office? TEDISCO: To the lawsuit we filed today?

We haven't heard a word from him. You know, he's -- the governor is just digging himself in deeper and deeper. I mean he's not using a shovel now, but, you know, he's using a backhoe and a bulldozer.


DOBBS: Right.

TEDISCO: I mean...

DOBBS: And this -- this statement from the immigrant rights activist groups taking on you and the senate majority leader, Joe Bruno, saying -- if we can pull up this full screen, because this is the language we're hearing.


DOBBS: "It's time for Assemblyman Tedisco and Senator Bruno to stop using immigrants -- immigrants -- not illegal immigrants -- immigrants as red meat to foment xenophobic hysteria for their own political gain."

Your reaction?

TEDISCO: Well, they use terms like rabid right-wingers...

DOBBS: Right.

TEDISCO: ...anti-immigration, partisan, fearmongers. And, clearly, since the governor put out this proposal six weeks ago, he has not wanted to broach the issue of security or legality. So he has segued with his group of supporters into race baiting. We're not going there, Lou.

DOBBS: He used race here. He's used anti-immigrant, if you oppose this. He has conflated, confused and obfuscated the difference between illegal immigrants and immigrants in this country.

TEDISCO: Oh, absolutely.

DOBBS: Are you pro-immigrant?

TEDISCO: Oh, absolutely. We know this country is the great mosaic.

DOBBS: So am I. Let's be clear.


DOBBS: And the good governor doesn't even know that we bring in more than the two million legal immigrants into this country every year. I am so tired of their lying ignorance that -- I don't know about you, I can't stand it. But let's go to this other issue. Senator Clinton weighing in. She -- I'm going to do my best to interpret what she said. She supports the need for illegal aliens to have driver's licenses. Let's leave it at that.

TEDISCO: I haven't seen a flip-flop like that since John Kerry said he voted against the war before he voted for the war. In fact, in her honor this morning -- I usually don't eat a big breakfast, but in her honor, I bought a big stack of pancakes this morning, OK, and waffles to go with it, because she has waffled unbelievably...

DOBBS: I wondered where you were going with that.


DOBBS: All right, let me ask you about this...

TEDISCO: Pancakes and waffles together.

DOBBS: What's the outcome of the lawsuit, in your judgment, and how soon will we know?

TEDISCO: In my judgment, I think we've got a great case -- the separation of executive and legislative branches. He's trying to unilaterally overturn Section 502, which says you need a Social Security card...

DOBBS: Of the state law.

TEDISCO: The Social Security law, yes.

DOBBS: All right.

TEDISCO: Thanks, Lou.

DOBBS: James Tedisco, thanks for being here.

TEDISCO: A pleasure to be here with you.

DOBBS: Coming up at the top of the hour, "THE SITUATION ROOM" and Wolf Blitzer -- Wolf.


The New York City mayor, Michael Bloomberg, right here in "THE SITUATION ROOM". He's talking about guns, driver's licenses and whether he's running for president. This is an interview I think you're going to want to see.

Also, millions of pages of Hillary Clinton's White House documents all under lock and key. It's causing some controversy right now.

Why is it taking so long for them to be released?

And heated moments over at the State Department. American diplomats get very angry with their bosses over a decision to force some of them to work in Iraq. You're going to hear their impassioned arguments.

All that, Lou, coming up in "THE SITUATION ROOM".

DOBBS: Looking forward to it, Wolf.


Coming up here next, Stephen Malanga.

He is the co-author of the provocative new book and important new book, "The Immigration Solution: Ideas To Solve This Country's Illegal Immigration Crisis."

That's next.

Stay with us.

We're coming right back for that and more.


DOBBS: A provocative, important new book -- "The Immigration Solution". It says what many of us already know, but our public policy makers simply ignore -- amnesty is not the answer to our illegal immigration crisis. Open borders not the answer, either.

One of the book's co-authors, Steven Malanga, joins me now.

Stephen, good to have you here. I want to make sure we show that book in bold relief there. We want to -- you said in this -- that we Americans are having, really, the wrong immigration debate couched in the wrong terms.

Why? What do you mean?

STEPHEN MALANGA, "THE IMMIGRATION SOLUTION": Absolutely. Because the immigration system that we have today, born in the 1960s, which is a system born in the civil rights era -- nothing to do with our economic needs. As a result of that, not only are illegal immigrants -- but many of our legal immigrants are low wage, low skill immigrants without a lot of education. And a lot of the latest research, which we cite in the book, shows these immigrants are not succeeding the way immigrants traditionally have in our culture.

DOBBS: Right. And you demonstrate clearly that our immigration policy is not a conscious public policy, but de facto, it is being run by Vicente Fox, now Felipe Calderon, principally, through illegal immigration -- most of the Mexican citizens of low skill, low education...


DOBBS: ...and the United States is not pursuing its needs through a conscious immigration policy with an effective and efficient immigration citizenship and immigration service.

MALANGA: Right. And one of the consequences of that, which people don't understand, is that it isn't just that immigrants are having trouble succeeding today because they're so far outside the mainstream, but their children are going to have trouble succeeding (INAUDIBLE)...

DOBBS: And are having trouble.

MALANGA: And are having -- and the economic research is very clear on this. We are -- we are creating a generation -- a next generation that's going to be problematic, too.

DOBBS: Yes. And I want to be clear, because there are a bunch of idiots out there that want to misconstrue (INAUDIBLE) to their advantage to do so.


DOBBS: We're not saying that Hispanic or Asian children can't succeed in our public school systems. What we're saying is that this government is not following conscious public policy that provides resources to alleviate the burden on local schools, on communities, on cities and states -- and, indeed, are providing private profits to the illegal employers of illegal aliens without public benefit.

MALANGA: Right. And we're not doing what some other first world countries are doing, which are actually attracting better immigrants who can succeed, who can actually boost your economy and who won't be a burden on society years from now.

DOBBS: And the solution is?

MALANGA: Well, the solution is to think about our economy and our needs, not about the needs of immigrants. And we go through detailed solutions in the book based on that.

DOBBS: And a reminder to all who would like to think this is a racial issue, who would like to think it is sort of hemispheric issue, let's be clear -- this is the most socially, ethnically diverse society on the face of the Earth, bringing in more -- more legal immigrants than the rest of the world combined each year.

MALANGA: Absolutely. You just said it.

DOBBS: And your -- the book is wonderful. It's a read that I hope all of our elected officials and public policy makers and everyone else who is confronted by that issue -- and that's just about everybody -- will read.

MALANGA: I appreciate it.

DOBBS: Stephen Malanga, thank you very much.

MALANGA: Thank you.

DOBBS: "The Immigration Solution".

The results of our poll are next.

Stay with us.

DOBBS: Well, your poll results -- 97 percent of you -- only 97 percent of you say your state should adopt anti-illegal immigration laws similar to that of Oklahoma's.

Time now for some of your thoughts.

Edith and Russell in Florida said: "Thanks to you, Lou, today is our independence day. We've registered Independent. We've also written to Senators Clinton, Schumer, Reid and House Speaker Pelosi, telling them that they've abandoned the legal citizens of this country in favor of the illegals."

You couldn't be more correct.

And Bob in New York: "Great job, Lou. The people love you. The politicians hate you."

You know what?

That's a breakdown I kind of like.

Thanks for being with us tonight.

Join us here tomorrow.

Thank you for watching.

Good night from New York.

"THE SITUATION ROOM" begins now with Wolf Blitzer -- Wolf.