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Lou Dobbs Tonight

Border Food Scare; Has Obama's Iraq Policy Shifted?; California Wildfires Burning out of Control; Focus of Salmonella Outbreak Shifts to Mexico

Aired July 03, 2008 - 19:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LISA SYLVESTER, CNN ANCHOR: Thanks Suzanne.
Tonight, "LOU DOBBS TONIGHT" has learned the focus of the investigations into the nation's salmonella outbreak has shifted to Mexico. We'll have an exclusive report.

Also a devastating new blow for middle-class Americans; a sixth consecutive month of job losses. Nearly half a million jobs have been lost so far this year.

And as we celebrate the July 4th holiday, you won't believe where many of our flags come from -- not from this country -- but Communist China.

All that, all the day's news and much more, straight ahead here tonight.

Good evening, everybody.

We have exclusive new information tonight on the origins of the salmonella outbreak that has sickened nearly a thousand people. LOU DOBBS TONIGHT has learned that investigators are looking into a possible Mexican link to that outbreak. At least 922 people have become ill in 40 states and the District of Columbia.

Louise Schiavone is here with the report -- Louise.

LOUISE SCHIAVONE, CNN CORRESPONDENT: Tonight, the hot focus by federal investigators, Lisa, on imports from Mexico, although the cause of the outbreak remains unknown.

(BEGIN VIDEOTAPE)

SCHIAVONE: LOU DOBBS TONIGHT has learned that the focus of the investigation into the nation's salmonella outbreak is turning to the Mexican border. Sources familiar with the investigation say the Food and Drug Administration has alerted growers and the brokers who handle their products that as of Monday, inspectors will stop shipments from Mexico to the U.S. of ingredients common to Mexican cuisine.

Former Health and Human Services secretary Tommy Thompson says he's been informed of the plan and it's a straightforward process.

TOMMY THOMPSON, FORMER HEALTH & HUMAN SERVICES SECRETARY: At the border what they do is they take samples of these and they send them to their laboratories. And the laboratories examine them for any possible evidence of salmonella or E-coli. And then they make a determination.

SCHIAVONE: Thompson and others tell "LOU DOBBS TONIGHT" that the FDA's expanded probe includes the following products: cilantro, jalapeno peppers, Cyrano peppers, scallions and bulb onion.

This former director of FDA Import Operations says that while intriguing, the expanded search leaves many questions unanswered.

CARL NIELSEN, RETIRED FDA DIRECTOR, IMPORT OPERATIONS: Where is the contaminated product? How would you know?

And where along the supply chain did it happen? Was it at the retail level? Is somebody doing something to expose the product at the retail? Is that wholesale? Is it at the grower or is that at the processor? Is it in transport? Where is it? They don't know.

SCHIAVONE: All agree this still expanding outbreak has produced many casualties.

THOMPSON: $450 million alone for the tomato growers. That's just the tomato growers. You don't even take any considerations the thousands of people that have been sick and how much it's cost in drugs, loss of time and mental anguish for people that are sick from these.

SCHIAVONE: Meanwhile the Centers for Disease Control reports that the outbreak of salmonella Saint Paul has now sickened a recorded 922 persons in 40 states and the District of Columbia.

(END VIDEOTAPE)

SCHIAVONE: Former HHS secretary Thompson says federal officials are embarrassed that they've not been able to unravel this mystery. The food supply is vulnerable, he says and will remain so until the FDA has the resources it needs to protect the nation -- Lisa.

SYLVESTER: So three months into this, now they're saying possible cilantro, peppers. Are we certain that this is not tomatoes?

SCHIAVONE: Well, the truth is, they don't have a sample of anything with the fingerprint of salmonella Saint Paul.

An interesting story that cropped up at the end of this week, a woman at Rockport, Illinois -- and I spoke to the County Health official -- was tested positive for salmonella Saint Paul. She doesn't like tomatoes and she doesn't have any recollection of ever eating tomatoes leading into this illness.

SYLVESTER: That sounds like then that they're looking at something else other than tomatoes.

SCHIAVONE: They have to, they just have to.

SYLVESTER: OK, great job. Great job on that reporting Louise. Now we will be following this developing story right here on "LOU DOBBS TONIGHT." We'll bring you all the latest developments as soon as they come in.

Turning now to the presidential campaign, Senator Obama today tried to quash speculation that he may shift his policy on Iraq. At a hastily-called news conference, Obama insisted he will withdraw all our combat brigades from Iraq in 16 months.

Earlier, Obama said he will continue to refine his policy on Iraq.

Jessica Yellin reports from Washington -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Lisa, Barack Obama held that rare second press conference today and blamed the McCain campaign for fueling speculation that he's shifting his position on Iraq. He made it clear in emphatic terms that he stands by his pledge to withdraw troops fast if he becomes president.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESUMPTIVE PRESIDENTIAL NOMINEE: I have also said that I would be deliberate and careful in how we got out; that I would bring our troops home at a pace of one to two brigades per month. And at that pace we would have our combat troops out in 16 months.

That position has not changed. I have not equivocated on that position. I am not searching for maneuvering room with respect to that position. What I said this morning and what I will repeat --

(END VIDEO CLIP)

YELLIN: Now Obama went on to say that he would be willing to listen to his commanders about the specifics of a draw down. But that he remains committed to getting those combat troops out as soon as he gets into office. And he says that is no change from his earlier stances.

Now the McCain campaign insists that this is a significant change. They say that Obama has, quote, "reversed his position" and they're sayings his words do not matter.

Now there's a larger political reason why all of this is significant, Lisa, and that is because Barack Obama has promised to be a different kind of politician. And he cannot afford to be seen as flip-flopping on the key issue that has distinguished his campaign from the beginning -- Lisa.

SYLVESTER: Yes, Jessica. Thought as we know that that is a phrase that we've been hearing again and again, flip-flopping when it comes to Senator Obama. How much traction do you think all of this will have?

YELLIN: It will continue because the McCain campaign will fuel it. But Barack Obama did make significant strides today in tamping down accusations of flip-flopping on this issue in particular. Though he'll face charges on some of the other issues where he's allowed some wiggle room -- Lisa.

SYLVESTER: OK, Jessica. Thank you very much that report from Washington.

Now, a majority of voters believe Senators McCain and Obama have changed their political positions to win votes. Quite a contrast to the image the candidates are trying to present. McCain calls himself a straight talker and Obama says he's all about changing current policies.

Bill Schneider has our report.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL CORRESPONDENT: Welcome to the flip-flop primary. John McCain accuses Barack Obama of flip- flopping on campaign finance and gun rights and town halls. Obama accuses McCain of flip-flopping on immigration and offshore oil drilling and taxes.

Have voters noticed? Yes. 61 percent feel that McCain has changed his position for political reasons; but nearly as many believe Obama has done the same thing -- a pair of flip-floppers.

Shock? Horror? Maybe not.

In 2004 when George W. Bush called John Kerry a flip-flopper, the charge stuck. Sixty-five percent of voters that year called Kerry a flip-flopper. Bush -- no flip-flopper he, Mr. Resolve. But there's a fine line between resolve and stubbornness.

President Bush may have crossed that line. Now voters may welcome some flexibility in their leaders.

They seem to want a leader who can bring the country together -- Senator McCain?

SEN. JOHN MCCAIN, (R) PRESUMPTIVE PRESIDENTIAL NOMINEE: And I will, as I often have in the past, work with anyone of either party to get things done for our country.

SCHNEIDER: Senator Obama?

OBAMA: They say that the time has come to move beyond the bitterness and the partisanship and the pettiness and the anger that's consumed Washington for so long.

SCHNEIDER: Do voters believe either candidate can end partisan gridlock in Washington? No. By more than 2 to 1, voters don't think that Obama or McCain can end the partisan gridlock despite his reputation as a maverick.

Voters are a little more optimistic about Obama's ability to change Washington, but just over half don't believe he can do it either.

(END VIDEOTAPE)

SCHNEIDER: Cynicism of bitter experience? After all, both Bill Clinton and George W. Bush started out promising to be uniters and not dividers. And look where we are -- Lisa.

SYLVESTER: Bill, why are we seeing all of the shifting by both candidates, really here?

SCHNEIDER: Well we're moving into the general election campaign. And now they're more concerned with appealing to voters outside the base of their party than simply getting their party's nomination which requires them to hew the party line.

They have got to be careful, however. They don't any want trouble at their convention from their party bases who are being very watchful to see if they stray too far from the party line.

SYLVESTER: Courting the independent vote is what it sounds like.

SCHNEIDER: That is what they need to do, both of the, to win this election.

SYLVESTER: OK, Bill. Very good. Thank you for that report.

Senator McCain today was in Mexico pushing his so-called the free trade agenda and discussing our border security and illegal immigration crisis. McCain met with Mexican president Felipe Calderon in Mexico City. McCain is seeking Calderon's help to stem the flow of illegal aliens into this country.

McCain and his wife, Cindy also visited Mexico's holiest Catholic site, the Basilica de Guadalupe. The visit comes as McCain tries to win the support of Catholic and Hispanic voters in this country.

Senator McCain has consistently supported so called free trade with Latin America and other areas of the world. He says free trade is good for America and good for American workers despite compelling evidence to the contrary.

Last December, McCain said, quote, "I'm the biggest free marketer and free trader you will ever see."

Now whoever is elected president, the war in Afghanistan will remain a top priority for the United States. Today, new evidence that the war is escalating; the Pentagon extending the tour of 2,200 marines for another 30 days.

This after the bloodiest month of the entire war for our troops; 28 of our troops were killed in Afghanistan last month. Another one died yesterday. More than 32,000 of our troops are currently fighting in Afghanistan. Another 33,000 troops from NATO countries are also there.

By comparison, there are 145,000 of our troops in Iraq. President Bush spoke about the war in Afghanistan and other issues yesterday. He made no mention though of a visit to Communist China.

But today, the White House issued a statement saying the president will attend the opening of the Olympic Games in Beijing next month. Several other world leaders have turned down invitations to the opening ceremony because of China's crackdown on dissidents.

Still to come, our economy has lost nearly 500,000 jobs so far this is year. Presidential candidates have no new ideas to help our middle class. We'll have complete coverage.

And the Bush administration abruptly reverses course on the issue of solar power. We'll have a special report.

(COMMERCIAL BREAK)

SYLVESTER: America's middle class continues to struggle with the soaring price of gas; prices today hit another record high, $4.10 a gallon on average. Drivers in more than half the states are now paying over $4.00 a gallon for gas. Alaskans pay the most for gas, $4.70; drivers in Oklahoma are paying the least, $3.90 a gallon.

The high cost of fuel is not the only source for trouble of our struggling economy. Rising food costs and plummeting home values are all hurting America's embattled middle class.

And new employment figures out today give no reason for optimism.

Kitty Pilgrim has our report.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT: Nearly half a million jobs have been lost since the beginning of this year. 62,000 people lost their jobs in June, 33,000 of them factory workers.

It's the sixth month in a row the American economy has cut jobs and some economists say the outlook is bleak.

ROBERT MANNING, ROCHESTER INSTITUTE OF TECHNOLOGY: It's clear that in the next six months the economy is going to certainly contract substantially. And we're just beginning to see several hundred thousand jobs being shed from the American work force.

PILGRIM: Meanwhile the Bush administration says we are not in a recession and the next six months are going be fine.

HENRY PAULSON, TREASURY SECRETARY: I think there is a very strong possibility that we will be growing at the end of the year. We will have more stronger growth at end of the year than we have right now.

PILGRIM: But right now, Americans are faced with tough economic times. They're faced with sky high food prices and record gas prices and now, oil, near $150 a barrel will drive home energy costs higher. They're expected to double this winter.

Economists say the stimulus checks are already spent and they question the Bush administration's version of reality.

JOSH BIVENS, ECONOMIC POLICY INSTITUTE: I think some truth telling is in order as well. I mean, I have a hard time seeing how any unbiased observer of the economic data coming in over the past couple of months would be talking very happy about the second half of the coming year.

PILGRIM: Rising unemployment, falling wages, higher costs all point clearly to a recession.

(END VIDEOTAPE)

PILGRIM: Some of the jobs that were lost are in areas that were holding up until now. For example, the service sector for the first time lost 3,000 jobs in June. So in restaurants and hotel jobs, car dealerships, retail jobs are starting to be cut. Economists say that's a clear sign that consumer spending is not going to rescue this economy -- Lisa.

SYLVESTER: Kitty, when you hear Secretary Paulson. I mean, he just sounds completely tone deaf to what is going on. I mean, does he not see what's going on with the gas prices? What is the administration talking about?

PILGRIM: Some of the economists we spoke to today, said that that really is an old viewpoint. That earlier in the year, the stimulus checks were thought to be able to kick in and bring us into a growth period at the end of the year. And now many -- most economists have abandoned that theory. And yet the Bush administration is still clinging to it.

SYLVESTER: Unbelievable. Thank you, Kitty for that report.

Now the American public today is pretty evenly split on whether the environment a higher national priority than economic growth. A new CNN opinion research poll finds 49 percent of Americans polled say the environment should take precedence over the economy. But that gap has narrowed since the price of gas began to soar.

In 2000, 70 percent favored the environment over the economy. And an overwhelming number of Americans now favor off-shore drilling; 73 percent of those polled favor drilling for oil and natural gas off our coasts.

Coming up next, a stunning reversal tonight from the Bush administration on energy policy. We'll have that special report.

And flip-floppers in chief? What Americans think of the two leading candidates for president coming up.

(COMMERCIAL BREAK)

SYLVESTER: Coming up on LOU DOBBS TONIGHT raging wildfires burning out of control in California. We'll have the very latest, next.

(COMMERCIAL BREAK)

SYLVESTER: The popular tourist region of Big Sur, California is nearly evacuated tonight as a massive wildfire continues to spread. The fire is burning in the hillside along the Big Sur Coast. So far, it has burned nearly 65,000 acres in the Los Padres National Forest.

The Big Sur blaze is one of 600 active fires. Most of those fires were started by lightning two weeks ago. At least 17 homes have been destroyed.

A major shift on energy policy. Solar power advocates today cheering a reversal by the Bush administration. The Bureau of Land Management this week changed a policy that halted solar energy projects on federal land.

Bill Tucker has our report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: A weak economy, soaring gas prices and urgent calls for energy independence have worked their magic on Washington. That along with public outcry and old-fashioned political muscle; they all combined to create a change of mind and police at the Bureau of Land Management.

BLM had frozen all solar projects on federal lands to allow for a two-year environmental impact survey. Late Wednesday, the BLM director issued this statement -- We heard the concerns and we are taking action. By continuing to accept and process applications for solar energy projects, we will aggressively help meet growing interest in renewable energy."

Senate Majority Leader Senator Harry Reid of Nevada spoke out against the freeze while on a tour of the solar manufacturing plant on Monday. Congressman Mark Udall of Colorado also voiced objections.

Now BLM welcomes more project applications. The solar industry, understandably is happy with BLM's reversal of its policy.

FRED MORSE, AMENGOA SOLAR: I think that BLM is trying to do the right thing. Land is essential. So it's extremely important that federal lands be made available because they are in many cases the ideal locations for these large, clean, carbon-free power plants.

TUCKER: BLM currently has roughly 125 projects under consideration which potentially could provide power to 20,000,000 homes. What the bureau lacks now, in the opinion of the industry is the manpower needed to process the applications quickly enough.

(END VIDEOTAPE)

TUCKER: One other item on solar's wish list is the extension of the federal solar investment tax credit. That tax credit expires at the end of the year. And the industry says it needs the credits in order to attract investment, Lisa, and to help develop the technology in bringing the cost of generation down.

SYLVESTER: Bill, why does it seem that we -- it seems like we're seeing this reluctance to really push for renewable energy. What's going on?

TUCKER: Incredible as it seems, the tax law and the tax incentives still favor the oil industry. This is the first time that I can recall a policy being made and then changed so quickly in Washington, D.C. And I don't think they anticipated the outcry the people generated when they said you can't develop solar power.

SYLVESTER: $4.10 a gallon for gasoline will do that.

TUCKER: Will change a lot of things.

SYLVESTER: All right thanks for that great report.

Now, solar power today accounts for only a fraction of one percent of all of the electricity generated in the United States. The three primary fuels: coal, natural gas, and nuclear according to the Energy Department coal provides 49 percent of our electrical power; natural gas 20 percent; nuclear power 19 percent and hydroelectric only 7 percent.

Other renewables and miscellaneous energy sources such as wind power make up most of the remaining 5 percent of the country's power production.

State workers in Utah will begin working a four-day work week next month in an attempt to conserve fuel and cut commuting costs. Utah now joins Birmingham, Alabama and many other communities across the country in cutting the work week. Birmingham City workers began their four-day work week on Monday.

Coming up, Senator McCain in Mexico pushes his so-called free trade agenda. We'll talk with three of the brightest political thinkers of the nation about that and more next.

And later in the broadcast, you won't believe where many of the American flags flying over government buildings are made. We'll have all of that in a special report.

But we want to know first what you think in our poll tonight. Do you believe every U.S. flag flying over government buildings in this country should be made in the United States by American labor? Yes or no. Cast your votes at loudobbs.com. We'll bring you the results and that story later in the broadcast.

(COMMERCIAL BREAK)

SYLVESTER: Both senators McCain and Obama are trying to win over independently-minded voters. But a new CNN poll finds that majority of voters believe that they will change their views just to be elected.

Joining us for more on that and all the day's political news, three of the best political analysts and CNN contributors -- "New York Daily News" columnist Errol Lewis; syndicated columnist Miguel Perez and Professor Carol Swain of Vanderbilt University, Carol is the editor of Debating Immigrations and she also served as an adviser to Mike Huckabee's presidential campaign.

Thank you very much all three of you for joining us.

Let's first get started with Senator Obama today. He came out and he said look I'm going be refining my policy. And then he calls this late afternoon news conference trying to again redefine what he essentially said, saying no, I'm not backtracking. Is he flip- flopping or not?

ERROL LEWIS, "NEW YORK DAILY NEWS": Well, I think he's adjusting. He's trying to take the temperature. And he's doing it early on when he has a possibility of getting away with it, number 1.

I think also what we're going find is with him, more so than people might expect and certainly more so than with John Kerry four years ago, people like him because of who he is. So he's going to get a lot of leeway. I think his base is going cut him a lot of slack.

PROF. CAROL SWAIN, VANDERBILT UNIVERSITY: We don't know who he is.

LEWIS: I think they like him because he's young. I think they like him because he's not a career Washington politician as many, many policy once found Joe Biden, Hillary Clinton ultimately.

SYLVESTER: No Carol has a good point. I mean there are a lot of people that say Obama, who is this guy -- Carol?

SWAIN: It worries me because at least with Senator Clinton and with Senator McCain, you knew pretty much what you were going to get, status quo. With Senator Obama, I don't know who he is. I don't know if there's anything that he is willing to -- is there a principle that he's not willing to compromise.

I don't know that. I don't know him.

LOUIS: You're not an undecided voter. That's not...

SWAIN: I'm not supporting any of the candidates.

LOUIS: Right.

SWAIN: I'm an undecided voter. And if he and Senator McCain, if they're going flip-flop, I wish they would flip in my direction on the immigration issue.

PEREZ: I wish they wouldn't flip in her direction.

SYLVESTER: Let's stick to Iraq for a moment. Miguel, you think that we are seeing sort of a shifting of the goal post here?

PEREZ: All along, I've been saying on this program for months now that the Democrats are not going be able to keep the promises they've made about how fast they're going to pull out of Iraq. And I'm surprised, frankly, to see Senator Obama proving me right so soon. I thought he'd wait until he got elected, but he is proving me right. He is flip-flopping.

SYLVESTER: What Senator Obama is saying -- and we have some sound on this that I would like to run. He was asked the question this afternoon if he would pledge to not change the 16-month timetable if elected? Let's listen in to what he had to say.

(BEGIN VIDEO CLIP)

OBAMA: Here's what I can tell you. That I will bring our troops out at a pace of one to two brigades a month. And at that pace, we will have our combat troops out in 16 months. That is what I intend to do as president of the United States.

(END VIDEO CLIP)

SYLVESTER: You know, a number of voters, though, despite what everyone says -- and really, it's what the voters say that really counts and what matters here. A number of voters, though, believe that both candidates have flip-flopped and have and will change their mind and change their opinion on these issues for political reasons.

We have some numbers up. This is a new CNN/Opinion Research poll of registered voters, showing 61 percent believe McCain and 59 percent believe Obama change their minds on issues for political reasons. So what does this mean for both candidates who are trying to appeal to independent-minded voters -- Errol.

LOUIS: Again, I -- in some ways, I'm not entirely sure this early in the process why people would think that's a bad thing. I mean, that the idea behind policies is supposed to be give and take between the voters and the candidates. And presumably, you're trying to persuade him, you know, as we saw earlier in the broadcast, people are trying, even on Obama's own Web site, trying to persuade him to go this way or that way on one bill or another.

I mean, do you want them to listen or not?

SWAIN: We know the danger. But go ahead, Carol. It's very problematic, because he won the nomination over Senator Clinton, the person who had more experience, that really laid the groundwork, because he promised certain things that voters expected him to carry out his promises. And so he got an advantage.

LOUIS: That's not true. That's not true. You didn't hear -- you didn't people at those rallies saying, "Sixteen months, 16 months." They were cheering, "Yes, we can."

SWAIN: He was the candidate of change. He's like any other candidate. And I mean, I could see that early on. I had problems almost immediately with the inconsistencies. They troubled me.

And with the voters, you know, they're really seeing more about the man's character. They're seeing more about Senator McCain's character. I don't know how we ended up with the candidates we did.

SYLVESTER: Maybe the candidates, when they mean change, they mean change their views on these issues.

Miguel Perez, what do you think?

MIGUEL PEREZ, SYNDICATED COLUMNIST: He -- on campaign finance, he flip-flopped. He flip-flopped on the gun ban in Washington, D.C. You know, I mean, I was so shocked when I heard that he was trying to justify the Supreme Court decision. I expected him to condemn the Supreme Court decision.

All of these things are shocking now, so soon after all of this stuff that we've heard during the primaries.

You know, it really is -- you know, we have to also give credit to McCain. McCain has flip-flopped, especially on immigration. And for that reason, I think he's going to lose a lot of Hispanic voters. He's gone much further to the right on immigration than he should have.

SWAIN: I mean, he hasn't gone far enough to the right. Because he's not where the American people are. But in the case of Senator -- in the case of Senator McCain, I think that, given his experience, that he had practical reasons. The American people want something done about immigration. They have problems with blanket amnesty. And so I can understand Senator McCain's modest little shift in that particular issue.

PEREZ: He's saying that if, he's going to wait until we reinforce the borders. I think that's OK. She goes one inch further than that, he's going to lose the Hispanic vote, and he will not be president of the United States.

SWAIN: He needs to hear the American people.

SYLVESTER: Errol, I want you to jump in.

PEREZ: Latinos are part of the American people.

SWAIN: A lot of Latinos are not in favor of amnesty, that they, too, want the laws enforced.

PEREZ: I am not in favor of amnesty. I'm in favor -- neither do you. And legalization is the way to go. Even McCain recognizes that. Everybody recognizes that. You're the one who's out of the...

SYLVESTER: We're going go to have to stop right there. We're going to go to a quick break. But we are going to have so much more with our panel. It's just getting fun right now.

We'll have a new push -- new push to have American flags made right here in the United States. We'll have a story on that. Stay with us.

(COMMERCIAL BREAK) BECK: We're back now with Errol Louis, Miguel Perez and Carol Swain joining us now. We were just talking about senators Obama and McCain.

Now, here's a legitimate question. Is it all right -- I mean, obviously, this is a general election here, so what's so wrong with them moving to the center to attract independent voters?

LOUIS: The whole system is designed to do exactly that. I mean, look, there are going be upwards of 120 million people voting in this general election.

The notion that any one or two people could lay out a group of positions and just say, "Well, this will be good for 61 million people. And they can take it or leave it. And that's all our democracy is going to be." The system is not supposed to work that way. There's supposed to be debate. There's supposed to be interchange.

You want to see some maturity from these candidates. You want to see them develop as they go along. If voters, perhaps well-meaning, expect their candidates to be almost God-like, and sort of just announce what the position is and then never deviate from it. I mean, that's partly how we got into Iraq, No. 1.

But it's also, I think, just unrealistic. I mean, it's just not democracy. Because then what you get are candidates, they are foolish enough to fall into that trap, and they're going stick to a position, even a completely wrong position, simply because they said something five or six or seven months ago. Not...

SYLVESTER: Do independent voters want somebody to take a stand and stick to it?

SWAIN: Yes, I do. And I think even Senator Obama with the flag pin. When he decided he would wear a flag, I lost respect for him when he put one on. I think you should take a stand, and you should stand by it and that there should be some principles that you don't compromise on. Now, some of the issues...

LOUIS: Wearing a flag is a principle?

SWAIN: If he -- if there was a reason why he didn't want to wear a flag pin, he should not have allowed public pressure to cause him to put one on.

SYLVESTER: OK. We're going to -- you know, we want to know what the opinion of the public. We've got a poll here. Registered voters' opinion of the candidates. This is a CNN/Opinion Research Corporation poll. The latest showing registered voters have a favorable opinion of Obama, 63 percent, and McCain, 59 percent.

Miguel, your reaction?

PEREZ: It's -- it's to be expected. But I think, you know, it's a little bit hypocritical of the system, if that's what the system is. And what it's -- the American people don't expect our elected officials, somebody who wants to be the president, to be a hypocrite. And don't run to the middle and change his position so soon from the primaries until now. And that is what is basically happening in both candidates.

One example that, you know, with Colombia being so hot in the news right now, but Obama's statement yesterday on Colombia, where he said that he supports the policy of no concessions to the leftist guerrillas in Colombia.

Well, in fact, he's the one that's making the biggest concession by opposing the free trade agreement with Colombia. And Democrats holding up the free trade agreement with Colombia.

You know, I hope he opens his eyes and realize that President Uribe of Colombia, who has happened in Colombia yesterday, this is the only friend we have in Latin America. The strongest friend we have. We cannot turn our back on that country right now. And that's what the Democrats want to do.

SYLVESTER: You know, though, that there are -- we just saw the jobs reports, the job numbers, 62,000 people who have lost their jobs. So there are many people who would take issue that the free trade agreements are good for our country -- Errol.

LOUIS: That's right. That's one of the substantive issues that is going to get debated. You know, once -- here again, if people are going to announce up front they're going be impervious to any facts, any forecasts, any developments in this economy or the global economy, then yes, they'll lock into a position. They'll be perfectly consistent. And God help us if they actually get into office and, not having examined any of the facts, any of the trends, or any of the possibilities.

I mean, oil, you know, the oil shocks, the changes in oil, the soaring food prices. The fact that there could be instability in the Middle East that changes energy all over again. The unknown factor that's always out there, which is technology.

The notion that you would just say, well, this is going to be the energy policy. It will be the energy policy tomorrow, today and forever. That's -- it's not politics. It's not leadership, and it's not good for the country.

SYLVESTER: Let's go Carol in.

SWAIN: That is not the issue with Senator Obama. We expect presidents to have wisdom, hopefully experience. And they look at the facts, they make that decision. And if we trust them, we will abide by those decisions.

But in a campaign to shift that many times on issues, it's very troubling, because when a candidate has no -- very little experience, we have to make all sorts of -- we have to use the information available to determine the character of the person. And with Senator Obama, it's -- I mean, it's just really troubling. I don't know what's wrong with the American people that they...

LOUIS: The question is, do you think there should be dialogue? It sounds like what you're saying is, "Present me with a menu, and if I want it, I'll buy it. If I don't like it, then I won't." That's not -- that's not practical.

SWAIN: That's not true. I mean, I don't see -- I like to see consistency. I like to see principles. And I like to see people that are willing to take a position and stand by it, if it's one that -- if it's a value for them.

I don't like to see people that are flip-flopping and making statements about values and who they are and then acting totally contrary to that in other areas of their lives.

SYLVESTER: OK, Miguel. You get the last word.

PEREZ: A few months ago, Senator Obama was saying that he was going tell the generals what to do. Now he sounds more and more like he wants to listen to the generals and get them -- their opinion and then decide. Which one is he? He sounds a lot more like Bush nowadays.

SYLVESTER: OK. We are going to have to end there. We could go on for probably another 15 minutes. But time's up. So thank you very much. We appreciate your comments and your thoughts. Thank you for joining us.

Now coming up, should it be illegal to sell foreign-made American flags? New moves to ensure our flags are made right here in the U.S. We'll have the special report.

And what the Pentagon is doing to fight the escalating war in Afghanistan. One of the country's former commanders, General David Grange, joins us next.

(COMMERCIAL BREAK)

SYLVESTER: There are new efforts this Independence Day weekend to make sure American flags are made in America. Foreign-made American flags are flooding into this country, and now some lawmakers are pushing for all American flags flying over government buildings to be made in this country.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Old Glory has been a symbol of courage, inspiration and patriotism for more than 200 years. But many of those American flags are made not in the United States but in China.

MARK DARLING, VETERAN: It's a symbol of United States freedom. We fight for it in combat, and it's what we stand for. And they should be manufactured in the United States. SYLVESTER: Last year, $4.7 million worth of American flags were imported. Four point three million dollars million worth of those flags came from China, according to the U.S. Census Bureau.

MARTY CONATSER, AMERICAN LEGION: The major symbol of our country should absolutely be made in America. And it should show the pride we have in our country. As a military person, I have a great deal of pride for the flag I served under.

SYLVESTER: Congress is taking up the issue. One bill would require the federal government only buy flags that are 100 percent America-made. Another bill introduced last year, co-sponsored by U.S. Representative Brad Sherman, would outright prohibit foreign-made U.S. flags from being sold in the United States.

Sherman says it's disturbing to see an American flag with a Chinese label.

REP. BRAD SHERMAN (D), CALIFORNIA: It makes me remember this was and is a great country. But it's a country that was built on making things, built on middle class jobs. And that a made-in-China flag is just a symbol that we've made some very bad decisions over the last few years and that we're on the wrong road.

(END VIDEOTAPE)

SYLVESTER: Sherman says he recognizes the legislation does violate World Trade Organization rules. And he calls is largely symbolic. But the bill is designed to get the attention of the Chinese, who have not always played by the rules, and to highlight the growing trade deficit of $700 billion.

Nine states have introduced laws requiring flags purchased with state funds be made in the United States. West Virginia's state legislature passed its law in June by a vote of 98-0 in the state legislature. Jack Yost, a former Army reservist proposed the legislation after seeing foreign-made flags at a veterans memorial ceremony. He joins us now from Pittsburgh.

Now, you are not only a veteran, but as I understand it, you are also a former steelworker. So you saw what was going on. And why did you decide to introduce this legislation?

JACK YOST (D), WEST VIRGINIA STATE LEGISLATOR: Lisa, it was a two-part issue there with these foreign-made flags on our state buildings, our board of educations, and our memorials to our veterans.

I lost all of my pension that was promised to me and my health care that was promised to me, as did thousands of other steelworkers. And as a veteran, I feel that it is unpatriotic and disrespectful to put a foreign-made product on a veterans' memorial.

SYLVESTER: How worried are you about it? It sounds like you're saying the jobs leaving for other countries, for China, that that's something that is foremost on your mind? YOST: It definitely is foremost on my mind, Lisa. I've experienced it. I know exactly what it's like to wake up one morning and lose everything that you've worked 40 years for. And I have a great issue with illegal dumping of steel in this country and other products. And I firmly believe that our flags in West Virginia will now be flown, that are manufactured in this United States, Lisa.

SYLVESTER: We have some numbers that we want to share with our viewers. According to the U.S. Census, in 2007, we imported $4.7 million worth of American flags. A vast majority of those, $4.3 million, in fact, came from communist China alone.

On the other hand, we exported only about $2.5 million worth of U.S. flags.

You see these numbers, you've got to be outraged at what's going on here, where we are importing, essentially, more U.S. flags than we are exporting.

YOST: That's part of the issue: the imports and the exports and the disenfranchising there.

Lisa, my strong issue is, as a veteran, we must respect our military heroes that were made in this United States. And we cannot import Chinese flags or any flags and put on the memorials, those board of education buildings or those state buildings.

SYLVESTER: There are other states. In fact, this legislation was modeled on a Tennessee law, which was proposed in -- back in 2005. Other states have taken up similar proposals. We have a map of those states: Florida, Missouri, Oklahoma, Colorado, Wisconsin. Are you hopeful that other states will follow your lead on this?

YOST: Lisa, I am. Three states have spoken with me personally on the issue of flags being made in the United States on their capital buildings. And I strongly encourage those legislatures to look at my piece of legislation that we passed unanimously in West Virginia. And I encourage them, Lisa, to do the same in their respective states.

SYLVESTER: All right. Jack Yost, thank you very much for joining us. We want to wish you and your family all the best and a happy Fourth of July.

YOST: Happy Fourth of July to you, Lisa.

SYLVESTER: Thank you.

A reminder now to vote in tonight's poll: Do you believe every U.S. flag flying over government buildings in this country should be made in the United States by American labor?

Yes or no? Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

Coming up at the top of the hour, the "ELECTION CENTER" with Erica Hill. Erica, what are you working on?

ERICA HILL, CNN ANCHOR: Hi, Lisa.

Coming up at the top of the hour, Barack Obama on the defensive. He insists he has not changed his position on pulling troops out of Iraq. But what he said today has reporters asking questions, and it has the McCain campaign talking, too. We're going to bring you the latest on that.

And speaking of McCain's campaign, the new folks in charge over there tell us to look for changes and soon. So just what are those changes coming? We'll have that for you at the top of the hour, Lisa, in "THE ELECTION CENTER."

SYLVESTER: Hi, Erica. Thank you very much. Sounds good.

Now the country celebrates Independence Day with a special birthday party live from the Capitol tomorrow tonight. Right now, though, you are looking at live pictures of a special rehearsal, the 28th annual broadcast of a Capitol Fourth. You're looking at Huey Lewis performing right now. There he is on-stage.

Tomorrow's concert features a number of musical performances from some of the country's biggest stars. This year's show also includes a special tribute to this year's Olympics and ends with spectacular fireworks. The concert airs tomorrow on PBS stations beginning at 8. We'll be right back.

(COMMERCIAL BREAK)

SYLVESTER: As we reported, the Pentagon is extending the tour of 2,200 of our Marines in southern Afghanistan by another 30 days. June was the bloodiest month of the entire war for our troops. Twenty- eight of our troops were killed.

Joining me now for more on the escalating war in Afghanistan is CNN military analyst General David Grange.

What does all of this tell us about the situation right now in Afghanistan?

GEN. DAVID GRANGE (RET.), U.S. ARMY: Well, it's typical of all wars. When the ground differs from the plan, you have to go with the ground. Conditions change all the time. I mean, that's why the troops are extended.

The enemy now has pockets of surge where they're taking advantage of under-governed on non-governed areas where there may be drug trade or where there may be seams in the NATO coverage for operations. And that's what we see here.

SYLVESTER: You know, Secretary Gates had earlier said that this was something that he -- that was not an option on the table, extending their tour. But President Bush yesterday admitted that it was a tough month for the United States. And yesterday, joint chiefs chairman Admiral Michael Mullen said this. We have some sound of it. We'll listen to him now.

(BEGIN VIDEO CLIP)

ADMIRAL MICHAEL MULLEN, JOINT CHIEFS CHAIRMAN: I am and have been for some time now deeply troubled by the increasing violence there. The Taliban and their supporters have without question grown more effective and more aggressive in recent weeks. And as the casualty figures clearly demonstrate.

The United States and NATO leadership, I had the chance to meet with my NATO counterparts last week in Boston.

(END VIDEO CLIP)

SYLVESTER: General Grange, many people want to know, how is it possible, seven years after this, after we overthrew the Taliban regime, that we are still seeing an escalation in the violence?

GRANGE: Afghanistan has really been what you may call a holding action. It's been done on the cheap. The surge -- there's been a little bit of a surge with military, but we have not put the resources -- informational resources, economic resources, the other components of power that are necessary -- to maintain a momentum to win. And that's what we're experiencing now.

SYLVESTER: Is it because of the war in Iraq that we just don't have the resources that are necessary for Afghanistan?

GRANGE: Well, Iraq was the -- was the priority, was the main effort. And that's part of the issue.

But there are ways to solve this. There are ways to tap into our nation's private sector, using for profit and not for profit capabilities to augment government agencies. And that could be cleverly put together to solve this problem as you go into the end of 2008 and 2009.

SYLVESTER: General Grange, on a lighter note, I know that this is a project that's near and dear to your heart. The Welcome Back Vets initiative. Tell us about it as we go into this Fourth of July weekend.

GRANGE: Well, it's an initiative that really takes advantage of collaborative partnerships. Again, a good example of private and nonprofit working together.

This case, Major League Baseball and our foundation and some other entities to try to complement the government services and Department of Defense and Veterans Affairs to take care of veterans who return from Iraq and Afghanistan and actually all other wars, especially in regards to mental health injuries, families in duress, job placement and awareness.

And the biggest part of the whole program is to raise the awareness of the American people that this is a nation's responsibility to take care of our veterans. And we're going to do that. We're going to mobilize and do that with this effort.

SYLVESTER: So we're going to see, what, special baseball caps this weekend?

GRANGE: That's a small part of it, but yes. All 30 teams wearing the same kind of baseball cap. Tell me that's not a coalition of elements of the American game. And so yes, that's part of it. But everybody can donate. There are many ways to support this effort.

SYLVESTER: OK. We want to also make sure that our viewers have that web address. It's www.welcomebackveterans.org. It sounds like it's a wonderful cause. We hope people -- and also they can go to our Web site if they want more information about this initiative.

Thank you very much and a happy Fourth of July to you, General Grange.

GRANGE: Thank you. My pleasure.

SYLVESTER: Thanks.

Tonight's poll results -- 98 percent of you believe every U.S. flag flying over government buildings in this country should be made in the United States by American labor.

Time now for some of your thoughts.

Ken in Kansas: "Lou, of course the so-called leaders in the FDA hierarchy will get their bonuses. They are doing what this administration and their corporate American CEOs and their crooked lobbyists demand of them, which is little to nothing."

Catherine in New Jersey: "I am tired of our government leaders still pushing for free trade. It's not their jobs that are being given away."

Ruth in Oklahoma: "Dear Lou, nearly every night we hear about the one corporation or another requesting more and more 'guest workers.' When does enough become enough? Thanks for giving us a voice, Lou, and for providing us with the truth, as unpalatable as it is."

Phil in New Hampshire: "I'm getting tired of hearing the term 'free trade.' There is nothing free about our free trade policies. The cost to Americans is too much. When will our leadership lead?"

And Bob in Pennsylvania: "Lou, today I became an ex-Democrat. I registered as an Independent today in Pennsylvania. Thank you for making me see the light."

We love hearing from you. Send us your thoughts at loudobbs.com.

And please join Lou on the radio, Monday through Friday, for "The Lou Dobbs Show." Go to loudobbsradio.com to find local listings for "The Lou Dobbs Show" on the radio. Thanks for being with us tonight. For all of us here, good night from New York.

The "ELECTION CENTER" starts right now. Here's Erica Hill, filling in for Campbell Brown -- Erica.