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LOU DOBBS TONIGHT

America's Broken Borders; China Ripping Off American Companies?

Aired November 17, 2003 - 18:00   ET

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

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, November 17. Here now, Lou Dobbs.
LOU DOBBS, CNN ANCHOR: Good evening.

Tonight, our special report, "America's Broken Borders." Ten million illegal aliens live in this country, but many politicians -- in fact, most -- business leaders and union leaders are silent about this critically important issue. Bill Tucker will have our report on broken borders tonight.

And in our special report, "Exporting America," American companies being ripped off by China. Chinese counterfeiters, in one instance, have faked an American company's entire product line, right down to its Web site.

And middle class America under siege, hundreds of thousands of people forced to cash out of their 401(k) retirement plans to pay down their bills. Kitty Pilgrim will have the report.

And Rush Limbaugh says he hasn't been turned into a linguine- spined liberal after five weeks treatment for addiction to painkillers. Tonight, we'll tell Rush what he missed while he was in rehab.

But first tonight, U.S. troops have stepped up their bombardment of suspected enemy positions in Iraq. The U.S. military is using its massive firepower to destroy what it says are safe houses, training camps and firing points for mortars. It appears the Army is trying to intimidate the insurgents and terrorists with a huge show of force. But the attacks against coalition forces continue.

Terrorists today killed two American soldiers in separate attacks near the town of Balad, north of Baghdad.

Walt Rodgers reports from Baghdad.

(BEGIN VIDEOTAPE)

WALTER RODGERS, CNN SR. INTERNATIONAL CORRESPONDENT (voice-over): Punishing Iraqi insurgents for their increasingly deadly attacks on U.S. soldiers here -- two more killed Monday -- the 4th Infantry Division's big guns boom away around Tikrit. The U.S. military believes Tikrit to be a stronghold of Saddam Hussein loyalists and the anti-American resistance. These .155-millimeter shells are seeking out the hideouts of Iraqi paramilitary groups. Sometimes, they just shoot at patches of ground from which the Iraqis previously fired mortars at U.S. forces.

COL. JAMES HICKEY, U.S. ARMY: We fired two so far. Both hit. We should be firing about nine more over the course of the night.

RODGERS: Only a reduction in the number of attacks on U.S. forces in the weeks ahead will determine the success of this offensive, but its minimum goal is to keep the insurgents off balance.

HICKEY: This brigade and all the soldiers in Iraq are on a defensive footing, been that way since June. We think we have a pretty good handle on the enemy in this area. We're noticing a definite trend that it's getting weaker.

RODGERS: Still, the American offensive in and around Tikrit has also raised the wrath of many Iraqi civilians. This young Iraqi said, "The more they treat us this way, the more of us will join the resistance."

Part of this operation was the destruction of four houses belonging to Iraqi families whom the U.S. Army said had husbands or sons involved in the shootdown of a U.S. helicopter November 7.

"They blamed my son. My son is innocent, I swear to God," this woman said. She claimed someone is trying to settle an old score with her family and they told the Army her son was an insurgent. This Iraqi mocked the U.S. military offensive, saying: "The Americans came promising freedom. Now look what they've done to us."

On this Arab street, the sentiment clearly favored the Americans leaving. Unstated, however, is the real possibility an Iraqi Civil War would result if the Americans actually left.

(END VIDEOTAPE)

RODGERS: Like it or not, the U.S. force -- like it or not, U.S. forces now seem to be slipping into classic guerrilla warfare here. And the jury is still out on whether they can win the hearts and minds of the Iraqi people -- Lou.

DOBBS: Walt, the initiative here in what is called Operation Iron Hammer, first, are the -- are there concrete results, that is, insurgents or terrorists killed? And, secondly, has the United States regained the momentum in this guerrilla war?

RODGERS: The Army has not released a body count at this point, so we can't answer your first question.

As for momentum, the United States has such overwhelming armor and total air superiority that the initiative and the momentum is always in the hands of the Americans, if they seek to exercise it. The problem is, the Americans are slipping into this guerrilla war. And what we're seeing is the war spreading beyond the Sunni Triangle, the Tikrit, Baghdad area. Recall, last week, the Italians were attacked in the south, Nasiriyah area. And the Americans had a very serious incident with helicopters getting shot down over the weekend. That was up in Mosul, supposedly a safe area. And remember one other thing. The Americans are hunkering down behind barricades here. That does not send a very reassuring message to the Iraqi people. The American soldiers literally live behind concrete bunkers and sandbag bunkers. Not encouraging -- Lou.

DOBBS: Walt, thank you very much -- Walt Rodgers reporting live from Baghdad.

The U.S. offensive against the insurgents and terrorists did not prevent a bomb attack against an oil pipeline in northern Iraq. Saboteurs planted a bomb on that pipeline last night. This attack comes as the U.S. Army is about to deploy a new security force to protect Iraq's oil facilities, including pipelines. That force will be made up of American troops, contract personnel, and locals.

The CIA today said it cannot be sure that the latest audiotape attributed to Saddam Hussein was made by the former Iraqi leader. The agency said its analysis was inconclusive because the quality of the audiotape is so poor. An Arab television network aired that tape yesterday. The tape purportedly called upon Iraqis to wage holy war against the coalition in the name of Saddam Hussein.

The military's massive show of force in Iraq appears to be destroying some Iraqi real estate, at least. But as Walt Rodgers just reported, Central Command is unwilling or unable to release much information about the number of insurgents and terrorists the Army has killed.

Senior Pentagon correspondent Jamie McIntyre has the report -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, as you said, the U.S. military doesn't keep an official body count of the enemy killed.

But I can tell you, from checking with Pentagon sources, that the number of Iraqis killed since the beginning of Operation Iron Hammer is less than or fewer in number than the number of Americans killed. Since November 12, when Operation Iron Hammer kicked off, there have been 26 Americans killed in combat operations. Of course, 17 of them were in that collision between the two Black Hawk helicopters, which may have been the result of one of the helicopters trying to avoid enemy fire.

That pushed the number to 26. So far we can tell you that, from what the U.S. Central Command publicly admitted, we know at least 16 Iraqi insurgents are claimed to have been killed. But, of course, the U.S. Central Command also says that they have taken dozens and dozens -- in fact, nearly 100 -- people into custody. And they're very hopeful that, by taking those people off the street, by interrogating them and keeping them out of a place where they can inflict any harm against the U.S., that they are making progress against the anti- American forces.

And they're also hopeful that they're going to get new intelligence from these people that will lead them eventually to get Saddam Hussein. And that would be one of the biggest achievements yet -- Lou.

DOBBS: Jamie, that would be a big achievement. But we have been hearing that time was running out for Saddam Hussein, that the noose was tightening. Those words go from -- come back from about four months ago.

Exactly what is the Pentagon doing to find Saddam Hussein? And why is there the assumption that it is not important to the American people, apparently, to find out what the effectiveness is of Operation Iron Hammer?

MCINTYRE: Well, two parts to that question.

One is, to find Saddam Hussein, this -- Iron Hammer is not based on new intelligence about the whereabouts of Saddam Hussein. But it is based on a desire to get some of that new intelligence. And they believe, by doing this, they will. And as for why the Central Command doesn't release body count numbers, I think this is something that really goes back to the Vietnam War, when the United States did release body counts as an effort to try to show that they were winning the war in Vietnam.

And although the U.S. was killing far more enemy in Vietnam than they were sustaining in casualties, clearly, the U.S. wasn't winning that war. So the military argues that body counts is the wrong measure of success. It also would argue that, in this operation, the U.S. body count is distorted somewhat by this tragic incident, which could have been the result of hostile fire.

They're insisting that they're on track with their objectives, that their will is not going to be broken, and that they will continue the hunt for Saddam Hussein until they find him.

DOBBS: One would assume, Jamie, if I may say so, that the most powerful army on this planet would not have its will broken. So I don't know why the Pentagon would even bother to say such a thing.

But what I would be interested in the Pentagon saying is precisely how effective this operation is. And, if the purpose is to kill insurgents and terrorists, I can't imagine what other way there is to measure the effectiveness, can you?

MCINTYRE: Well, they would argue also that the number detained is also important, that the -- sometimes it is not precisely known how many enemies are killed in an area. But, again, it has traditionally not been something that the military keeps statistics on, the number of enemy killed in an operation.

DOBBS: Jamie McIntyre, as always, our senior Pentagon correspondent, thank you. Well, in this country, the White House today launched a major campaign to lobby support for its $400 billion Medicare prescription drug benefit. The country's largest seniors group lobbying group, the AARP, today endorsed the bill. However, the White House still faces opposition to the legislation from both sides of the aisle.

White House correspondent Dana Bash is at the White House with the report -- Dana.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, they got the deal. And as you said, the challenge now is to actually get this bill passed.

And there is resistance from both sides, both Democrats who say that this bill goes too far in privatizing Medicare, and then from conservative Republicans who say it simply doesn't go far enough. The White House senior aides here met all weekend with top congressional leaders in Congress, outside groups, to strategize on how to get this through quickly.

And the goal is to keep the momentum going. That's why you saw members of Congress here there you see with the president there today for a photo-op, so he could sit with them and say, before the cameras, get this bill passed.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I urge members of both political parties to study the legislation, to remember the promise we have made to America's seniors, and to vote yes for this legislation.

(END VIDEO CLIP)

BASH: Now, a key ingredient for the White House actually panned out for them today. And that is the strong endorse endorsement from AARP, a seniors group that has more than 35 million members. They put out a statement that reads in part: "The bill will provide a prescription drug benefit at little cost to those who need it most and people with very high drug costs and will provide modest relief for millions more."

Now, the White House knows that, as important as a presidential arm-twist is, this AARP endorsement is perhaps the most important in this debate. And they're also going to put their money where their mouth is. They have got a national ad campaign, both TV and print, ready to go tomorrow for three to four days. They're going blast away and say that it is important to get this done. They say it is because it is what their members want.

Now, there is, of course, opposition from Democrats. And the man who essentially helped write this bill 40 years ago has not ruled out blocking this on the Senate floor. That is Senator Ted Kennedy. And earlier today, he said that this legislation to essentially invite privatization, invite private insurance companies to compete with Medicare, is hogwash. (BEGIN VIDEO CLIP)

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: And that is what we are experimenting with. It has never has been tried. It has never been tested. And it is mandated, mandated, in this compromise that is coming over from the House of Representatives.

(END VIDEO CLIP)

BASH: Now, the problem for this White House in this push is that the president gets on a plane tomorrow morning to go to Great Britain. He's not going to be here to more actively push for -- to get this passed this week. They say at the White House that there are phones in Great Britain. He will be making some phone calls, if he has to. But they are planning for some presidential events when he gets back, just in case this doesn't get through this week -- Lou.

DOBBS: Dana, it is hard to imagine Senator Ted Kennedy, or any opposition, where the Democrat or Republican standing up against the support of AARP. Is that pretty much the view at the White House?

BASH: Well, certainly it is the hope at the White House. That is why they were elated when they got this AARP endorsement. And they've certainly been playing it up.

And on the other side, those close to Ted Kennedy and other Democrats who oppose this understand, the AARP is a very powerful force. And they do understand also that they are not only endorsing it, but they are actively pushing it through a grassroots campaign and that TV and print ad campaign, Lou.

DOBBS: Dana, thank you very much -- Dana Bash from the White House.

Coming up next; "Broken Borders," our special report tonight, policies that make it all too easy for illegal aliens to cross borders, to live and work undetected in this country. Bill Tucker will report.

And "Exporting America": Cheap Chinese imports are costing hundreds of thousands of jobs. Now the Commerce Department has a chance to change all of that. Lisa Sylvester will tell us about that.

And cashing out: record numbers of Americans forced to draw on the retirement savings just to make ends meet. Kitty Pilgrim will report.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: For months, we have devoted extensive investigation and reporting of the issue of illegal immigration in this country. As we have reported, illegal aliens support plantation economics in this country in the 21st century. And the lack of a national immigration policy carries huge social and economic costs. Tonight, many of the restrictions at the nation's borders remain unenforced.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): An estimated 10 million illegal aliens now live in this country. That's more than double the number only 10 years ago. The breakdown in our immigration system is taking a toll on the economy.

JOHN KEELEY, CENTER FOR IMMIGRATION STUDIES: We spend in excess of $7 billion a year in primary and secondary education for illegal alien children. You have health care costs. Hospitals in the Southwest spend hundreds of millions of dollars a year in providing emergency care services to illegal aliens. And I would say the cost of incarcerating illegal aliens are considerable, hundreds of millions of dollars a year.

DOBBS: In some states, Mexican identification cards can be used to obtain driver's licenses and open bank accounts. U.S. labor laws protect even illegal workers under the Fair Labor Standards Act.

And now some members of Congress are proposing legislation on behalf of illegal aliens, pushing for in-state tuition rights and citizen status for the children of illegal aliens. Mexican President Vicente Fox, meeting with border state governors, complained about U.S. treatment of his people in this country illegally.

Meanwhile, an estimated 700,000 illegal aliens cross our borders each year.

(END VIDEOTAPE)

DOBBS: And one of the problems tracking the millions of illegal aliens in this country is the nature of the work they do. The jobs are often low-paying. The laws covering their employment are poorly enforced, and one result, millions of illegal aliens whose presence in this economy and society is all but invisible.

Bill Tucker has the report.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Illegal immigrants don't wear signs. The industries which traditionally employ the most immigrants, construction, landscaping, hotels and restaurants, are positions that are low-paying and generally low-profile.

In the workplace, employers have to be careful about the questions they ask when hiring people, but not for the reasons you might expect.

JOHN GAY, ESSENTIAL WORKER IMMIGRATION COALITION: The employer cannot ask for too many documents or too few documents, too many from column A or too many from column B. And those documents are facially valid, the employer must accept them. They cannot ask a bunch of other questions of an applicant because the applicant speaks with an accent, for example. Otherwise, you begin to violate that applicant's civil rights. And the Department of Justice can prosecute you.

TUCKER: An employer simply must believe the documents presented by the worker are legal and then file a form known as I-9 for the immigrant workers.

Employers, who rated by ICE, Immigration and Customs Enforcement, rarely face legal liability. So employers get cheap labor and face no liability. It is a risk-reward ratio too good to pass up, argue those cynical about immigration policy. But it is a mistake to think there are not losers in this process.

VERNON BRIGGS, CORNELL UNIVERSITY: The losers are the American workers, the citizen workers, the permanent resident aliens, those people who are working in the United States whose wages are depressed or whose opportunities to be employed are denied, and the taxpayers of the United States.

TUCKER: In the end, workers and a clear immigration policy end up being held hostage by a strange group of lobbyists.

(END VIDEOTAPE)

TUCKER: And that coalition includes business leaders who are in search of cheap labor, politicians who are courting ethnic votes, and unions, Lou, who favor mass amnesty programs in the hope of drawing in new members.

DOBBS: And, again, the real losers are the hard-working millions of Americans each day who are watching their wages depressed in many cases. And this is only, of course, one of the influences on that result.

Bill Tucker, thank you.

Coming up next: "Exporting America" -- tonight, a Chinese company that is stealing U.S. technology. And all you have to do to prove it, check out a Web site. Peter Viles will have the report and the Web site.

And it is official: Governor Arnold Schwarzenegger sworn in, in California. Kimberly Osias reports from Sacramento, California, on a new day dawning

Stay with us.

(COMMERCIAL BREAK)

DOBBS: As the U.S. trade deficit with China swelled to an estimated $130 billion this year, China is stealing U.S. technology. This piracy is a problem that, around the globe, is costing American companies an estimated $200 billion a year.

An Oregon technology company is just one of China's victims. A Chinese company has stolen and counterfeited its entire product line, right down to its Web site.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Pop quiz, which company is the American original and which is the Chinese counterfeit? Videx makes data collection systems. So does Vdiax. Its Web site has an American flag in the corner and boasts -- quote -- "American technology." But look closely. The word "American" isn't even spelled correctly. Vdiax is the fake. Somewhere in China, it is counterfeiting the entire Videx line of handheld data machines.

ANDY HILVERDA, VICE PRESIDENT, VIDEX: This one is made by us here in Corvallis, Oregon. And this one here is made in China.

VILES: Videx is a growing company that employs 50 people in Oregon. It has known about the counterfeiting for a year. Its sales in China have collapsed, falling more than 80 percent. And now those fake products are showing up elsewhere in Asia.

REP. PETER DEFAZIO (D), OREGON: This is, unfortunately, not a new problem with China. It is a recurrent problem.

VILES: On behalf of Videx, DeFazio wrote to Commerce Secretary Don Evans and Trade Representative Robert Zoellick, asking them do something, anything, to stop the counterfeiting. One option, to file a complaint with the World Trade Organization. But a spokesman for Zoellick says the administration prefers to deal directly with China on the issue.

From time to time, the Chinese government does stage a symbolic destruction of pirated goods, but counterfeiting is still rampant. Despite agreements with Washington to protect intellectual property in 1992 and again in '95, the USTR said this year -- quote -- "China remains one of the last countries in the world that fails to use its criminal law to go after commercial copyright pirates and trademark counterfeiters."

(END VIDEOTAPE)

VILES: It is estimated, as much as one-fifth of Chinese economic output is counterfeit goods, including not just consumer products, but software, 90 percent of software, auto parts. And, perhaps most alarmingly, Lou, medicines, prescription drugs that are being exported from China in many cases are counterfeit.

DOBBS: And the fact is, American business is only beginning to awaken to the fact they're being played for fools in all of this. That's the remarkable part. And they fact that the U.S. government has not chosen to go to the WTO to seriously, aggressively work to stop this and hinge trade on it is remarkable.

VILES: For some reason, they think they will do better face to face with the Chinese. But they had an agreement in '92, another agreement in '95. The World Trade Organization is supposed to up their standards and be even more -- watch out for this kind of stuff. But it is just not happening. DOBBS: As the saying goes, so far so good?

VILES: So far so bad.

DOBBS: Exactly. Pete, thanks -- Peter Viles.

Well, the textile industry in this country has lost more than 300,000 jobs over the past two years. Now it is asking the Bush administration to put quotas on knit fabrics and finished clothing from China. And the White House could decide as early as tomorrow whether there will be a future for the American textile industry.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): When China joined the World Trade Organization in January 2002, the United States dropped a wide range of quotas on textiles from China. The result was a flood of imports that now threaten the American textile and apparel industry.

JIM SCHOLLAERT, AMERICAN MANUFACTURING TRADE ACTION COALITION: China gets the contract. China gets the jobs. And the U.S. workers are out of jobs. And the U.S. companies are out of orders and out of profits and out of businesses. And their communities are out of revenue.

SYLVESTER: From September 2002 to September of this year, Chinese imports of cotton brassieres shot up 53 percent. Synthetic brassieres from China jumped 78 percent. Dressing gowns from China increased 85 percent. And knit fabrics surged 39 percent.

The industry has asked the Bush administration to limit growth in these categories to 7.5 percent annually. China agreed before joining the World Trade organization that the United States could reinstate quotas if imports jumped significantly. But retailers, including giants like Wal-Mart and Target, argue, protections would mean higher prices for consumers.

ERIK AUTOR, NATIONAL RETAIL FEDERATION: It simply is a question of supply and demand. When you restrict the supply, prices go up. So we're talking about a significant restraint on the supply in this case.

SYLVESTER: But without the quotas, the industry argues, jobs will continue to be lost. Fruit of the Loom is closing a plant in Harlingen, Texas, eliminating nearly 800 jobs next month. And Levi Strauss will shut its factory in San Antonio, Texas, before the end of the year. It is the last plant to make Levi's Jeans in the United States.

(END VIDEOTAPE)

SYLVESTER: And if that's not enough, there is more bad news for the apparel and textile industry. Under World Trade Organization rules, quotas in place for the most sensitive clothing categories, shirts, trousers and blouses, will be eliminated by January 2005, unless the Bush administration decides otherwise.

And, Lou, at that point, there will be no more protections for the textile industry -- Lou.

DOBBS: And, most likely, no American textile industry at all.

SYLVESTER: Indeed.

DOBBS: Lisa, thanks -- Lisa Sylvester reporting from Washington.

The United States is not only exporting our jobs, our dollars, our intellectual property, but also our most advanced technology. And corporate America has now outsourced hundreds of thousands of jobs around the world, most of them to India, China and the Philippines.

My next guest is at the forefront of the fight against the shipment of high-paying, high-value jobs overseas. Marcus Courtney is the president of the Washington Alliance of Technology Workers, a union founded to protect the interests of American high-tech workers, who helped to found the organization, joining us tonight from Seattle.

Good to have you with us.

MARCUS COURTNEY, PRESIDENT, WASHINGTON ALLIANCE OF TECHNOLOGY WORKERS: Thank you, Lou. Good to be here.

DOBBS: You're trying, your organization is trying, to move through legislation that would prevent states from outsourcing state jobs, at least, state government jobs, overseas. How are you doing?

COURTNEY: Well, we have bills so far in Maryland and New Jersey. And we also will be introducing bills in Washington later this year. And we have a couple other bills in Michigan, as well as Colorado.

DOBBS: And what is the likelihood of any of those bills becoming law, in your judgment?

COURTNEY: Well, I think the next year is going to be a very tough legislative fight for us, because the high tech industry and corporate lobby and interests from India are lobbying very hard against these very basic protections in terms of not having tax dollars subsidize the elimination of our best-paying, best-skilled jobs.

But we're very optimistic that tens of thousands of high-tech workers are organizing for this fight across the country, putting grassroots legislative pressure on their representatives to make the proper changes to protect our jobs.

DOBBS: Marcus, obviously, the technology industry is not a union industry. There is no significant number of union members. But the fact is, you have a real opportunity here to make a statement on behalf of those workers. Are you back on your haunches and raising the dickens? Are you fire-breathing union people or are you just sort of white-collar, namby-pamby, we'll-talk-about-it folks?

COURTNEY: No, we're on the street, real trade unionists that are actively representing the interests of high-tech employees.

And let's just talk numbers, Lou. Since January, since WashTech has taken up the national fight about the issue of America's leading high-tech companies exporting our best-paying, best-skilled jobs, instead of software products, our listserv has grown. Our electronic membership list has grown from 2,000 to more than 16,000 people across the country. We have launched organizing committees

(CROSSTALK)

DOBBS: OK, Marcus, Marcus, that's very impressive. Now let's talk results, because American workers are watching their jobs fly out the door while you organize. And there is no question about that. And American business people are pretty smart. They're going figure out how to do this. They're going to act in what they see as their short-term interest. They're obviously doing so.

They have got McKenzie. They have got Accenture, all of the other consulting firms, working on behalf of outsourcing these jobs. When do you get smart? Who do you to align with? And how do you stop it?

COURTNEY: Well, how we stop it is, through organizing, we can get political action. We have got to get Congress to act on the interests of American workers.

(CROSSTALK)

DOBBS: Is there a single person in Congress right now -- we're going to start off easy here. Is there one person in Congress working in the behalf of workers on the outsourcing issue?

COURTNEY: I think there is a couple of members of Congress. One

(CROSSTALK)

DOBBS: Let's name names.

COURTNEY: Bernie Sanders from Vermont...

DOBBS: Right.

COURTNEY: ... is clearly an interest. I think Congressman Adam Smith has taken a lead in getting the GAO congressional study looking at the offshoring trend.

Now, we don't necessarily agree with Congressman Smith on every issue. But he's clearly not afraid of having the debate about the future of high-technology jobs and is very concerned about jobs getting exported overseas.

DOBBS: And that's two names.

COURTNEY: That's two names.

DOBBS: We got 533 to go.

COURTNEY: I agree. We have a very -- Dick Gephardt has also been concerned about...

DOBBS: Marcus, I apologize. We are just out of time. I apologize for the abrupt conclusion. But we thank you for being here. We wish you a lot of luck, obviously.

COURTNEY: Thank you very much, Lou. Glad to be here.

DOBBS: Thank you, Marcus.

Corporations are also, obviously, exporting manufacturing and agricultural jobs to other parts of the world, including Latin America. The problem could become even worse if trade negotiators meeting in Miami this week have their way. Negotiators from 34 countries are holding talks on the Free Trade Area of the Americas. It would eliminate tariffs for virtually every country in the Western hemisphere by 2005. That would create the largest free trade area in the world.

Critics say the agreement would cause more highly-paid Americans to lose their jobs to lower-paid foreign workers. Miami is now bracing for protests during the meetings it is hosting. The police department there has been preparing and training for months. The first victim of free trade, as it is now proposed, is the court system in Miami. The courts will be closed for a week.

Coming up next: cashing out. Record numbers of fellow Americans are borrowing from their future in order to survive an unemployed present. That story is next.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Arnold Schwarzenegger today sworn in as California's 38th governor. During his speech, Schwarzenegger positioned himself as a nonpolitician, saying he has Republicans, Democrats and independents in his administration. And he said he was elected on faith and hope and promised the people of California he wouldn't let them down.

Kimberly Osias reports from Sacramento -- Kimberly.

KIMBERLY OSIAS, CNN CORRESPONDENT: Good evening, Lou.

He also called on his Kennedy connections, his family connections, when he recalled the words of the late President Kennedy, saying, "I am an idealist, not with any illusions." He also reiterated his campaign promise to be a real governor of the people.

(BEGIN VIDEOTAPE)

ARNOLD SCHWARZENEGGER (R), CALIFORNIA GOVERNOR-ELECT: I Arnold Schwarzenegger...

UNIDENTIFIED MALE: Do solemnly swear.

SCHWARZENEGGER: Do solemnly swear.

OSIAS (voice-over): Wife Maria Shriver held the bible. His family looked on. And under a clear California sky, Arnold Schwarzenegger became the state's 38th governor.

SCHWARZENEGGER: I am humbled, I am moved, and I am honored beyond words to be your governor.

(CHEERING AND APPLAUSE)

OSIAS: While the event was closed to the public, the guest list included political types, as well as a sprinkling of Hollywood stars. As is tradition, outgoing Governor Gray Davis was there for the changing of the guard.

SCHWARZENEGGER: This election was not about replacing one man. It was not about replacing one party. It was about changing the entire political climate of this state.

OSIAS: As his first order of business, Schwarzenegger kept a campaign promise by signing a bill to repeal the tripling of the state vehicle license fee.

SCHWARZENEGGER: This is action, not just dialogue. This is action.

OSIAS: He's also attending a handful of luncheons before tomorrow's special legislative session. Schwarzenegger is expected to ask the legislature to consider new fiscal ideas, workers compensation change, and repealing a law that allows illegal immigrants to get driver's licenses.

SCHWARZENEGGER: Now I can go in there and do the things that I promised that I would do, clean house, clean house. That's what we need to do.

(CHEERING AND APPLAUSE)

(END VIDEOTAPE)

OSIAS: Another thing that we can expect from this first couple is an infusion of style here in Sacramento. For his part, Governor Schwarzenegger wore Prada and Maria Shriver wore Valentino.

Reporting live from Sacramento, Kimberly Osias -- back to you, Lou.

Thank you very much, Kimberly.

Verizon Communications is cutting its payroll of 220,000 by 10 percent. Those workers have accepted Verizon's buyout offers. More than 21,000 Verizon employees will accept early retirement by the end of this week, the move a way from the nation's largest phone company to cut costs quickly and to offset weak residential phone revenue. Verizon says it will take a significant charge in the fourth quarter to cover the costs of those buyouts; 401(k)s are supposed to be an insurance policy for the future, but the number of Americans saving for retirement is now at record lows.

A recent study found more that than 40 percent of Americans who change jobs are cashing out their 401(k)s and using the money now.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Times are so tough, some people are raiding their future, taking their 401(k) money intended for retirement years to live on now and hoping for the best.

BARBARA RAASCH, ERNST & YOUNG: The difficulty is that people's compensation hasn't necessarily kept up. And that's why you see people being forced to stop contributing to their 401(k) plan, also, if they lose their job, being forced to, at least for a temporary time period, withdraw moneys from their 401(k) distributions.

PILGRIM: Hewitt Associates found that 42 percent of Americans who changed or lost their jobs pocketed the cash and didn't roll the money over into a retirement account. If they were in their 20s, the percentage was even higher. Half took the money and ran.

Financial planners say cashing out is one of the worst things a mid-career person could do. Right up front are federally required holding taxes, 25 percent withheld automatically. Then there is a penalty of 10 percent on top of that if they do not roll over the money into another retirement account within 60 days. The number of Americans saving for the future is falling drastically.

TOM MILLER, NOP WORLD: It is going off a cliff. In fact, we're picking up the lowest number of Americans saving regularly for retirement in the past 30 years. Fewer than four in 10 Americans are putting money aside on a regular basis.

PILGRIM: For Americans in the 45- to 59-year-old range, only 41 percent are now saving for retirement, down from 58 percent two years ago, according to the Roper Organization.

(END VIDEOTAPE)

PILGRIM: Financial planners say one of the worst things they're seeing is people who can't even contribute enough to get the employer match. Basically, they're giving up free money, just because they're stretched so tight -- Lou.

DOBBS: Kitty, thank you very much -- Kitty Pilgrim.

Well, coming up next, one of the most notorious would-be assassins in American history has made a bold request. Justice correspondent Kelli Arena will report next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: In Virginia today, a jury found John Alan Muhammad guilty of capital murder in last year's sniper shootings in the Washington area. Muhammad was also found guilty of committing murder in an act of terrorism, conspiracy, and the use of a firearm to commit a felony. Those shootings resulted in 10 people being killed, three others wounded. The jury is now deciding whether Muhammad should be executed or spend the rest of his life in prison.

The man who shot President Reagan in 1981 is asking for unsupervised visits with his parents. An attorney for John Hinckley told a federal judge today his client is probably the least dangerous person on the planet. Prosecutors, however, don't agree.

Justice correspondent Kelli Arena is here with the report from Washington -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: Lou, Hinckley's lawyer was talking about how Hinckley is under the close watch of the Secret Service, even while roaming around on hospital grounds. So his point was, even if Hinckley is allowed out with only his parents, Secret Service is sure to be there, too, making sure he won't cause any trouble.

Now, what Hinckley wants is to visit his parents' home without formal supervision. Now, he has gone on public outings before, but he's always been accompanied by hospital staff. Now, his lawyer argued that the judge should grant him the right to unsupervised visits with his parents because mental health experts seem to agree that Hinckley no longer poses a danger to himself or those around him.

And they say that this is just the next step in his treatment. His lawyer told the judge that the government is motivated by fear. He said -- and I'm quoting here -- "Fear itself, irrational fear, is not a legal basis in denying the next step in treatment." But the government argued that it does have a basis for concern because Hinckley, they say, is still mentally ill and that he has a history of deception.

One of the government's lawyers told the judge that it is clear this individual has withheld information from his treaters. Now, only one witness, Hinckley's therapist, testified today. The hearing we're told could go as late as Thursday, Lou.

DOBBS: Kelli, thank you very much -- Kelli Arena reporting from Washington.

And that brings us to the subject of tonight's poll. The question, do you think John Hinckley Jr. should be released from a Washington institution, yes or no? Cast your vote at CNN.com/Lou. We'll have the results for you, of course, a little later in the broadcast. Severe storms tonight swept across Texas, bringing heavy rain and gale-force winds to the Houston area. Rescue workers in boats helped people out of school buses, where they were stranded. They had been stuck in the flood water for hours. At least 16 people were injured by the high winds. None is reported to be seriously injured tonight. Officials reported several tornadoes in the Houston area as well. Several buildings were badly damaged and a number of vehicles were overturned.

Coming up next, your thoughts on our continuing series of special reports on "Exporting America" and the devastating impact on American workers and their families.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: The investigation of mutual fund misconduct today resulted in a multimillion dollar settlement with one of Wall Street's top firms.

Christine Romans is here with the report -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, kickbacks and commissions and special partnerships, this is the latest in the outrage that is the mutual fund mess.

Morgan Stanley will pay $50 million to settle charges its brokers took kickbacks to push funds from 16 mutual funds, special partners, and didn't disclose all these special relationships. Morgan Stanley CEO Philip Purcell: "I regret that some of our sales and disclosure practices have been found inadequate."

Morgan Stanley did not admit any wrongdoing, and the SEC didn't require it to.

(BEGIN VIDEO CLIP)

STEPHEN CUTLER, SEC DIRECTOR OF ENFORCEMENT: The commission has a longstanding policy in connection with settlements that the settling party cannot deny, but need not admit, for purposes of the settlement, the findings the commission has made.

(END VIDEO CLIP)

ROMANS: So, Lou, new members of the mutual fund hall of shame are inducted every day. Last week, Fleet Boston, Wachovia, Pilgrim Baxter, Schwab, Legg Mason, Bank of New York, American Express, and Raymond James either confessed to wrongdoing or admitted that they're being probed. That's not all. There is also Bear Sterns, Fred Alger Management, Federated, Putnam, Alliance, Banc One, Janus, Strong, Merrill Lynch and Smith Barney, all drawn into this investigation.

And regulators, Lou, say we're still closer to the beginning of all of this than to the end. DOBBS: A mess, you could call it. It is also a shame. Tomorrow, the New York Stock Exchange is going to be voting on the future of the exchange, I guess you could say. What is expected?

ROMANS: It is expected to pass at this point. There is a little bit of grumbling from people who think it doesn't goes far enough, Lou.

And interesting that the Securities and Exchange Commission, Bill Donaldson today said that they are far from finished, the SEC, with the their efforts to reform the New York Stock Exchange and are taking particular aim at self-regulatory organizations and how well they do.

DOBBS: I would hope so, because this vote tomorrow amounts to the New York Stock Exchange voting on proposals made by the New York Exchange about what the New York Exchange will look like.

ROMANS: Absolutely.

DOBBS: It is probably a little too insular by any standard.

ROMANS: We'll see what happens.

DOBBS: Christine, thanks -- Christine Romans.

Let's take a look at your thoughts now.

From New York, New York: "Lou, thank you for your excellent reporting on 'Exporting America." This segment is a tremendous example of unbiased and candid reporting, which truly sets CNN apart from the other networks" -- that from Tom Schmidt.

From Conway, Arkansas: "Lou, you are sounding like a broken record. And thank you for that. I have lost one job to Mexico, one to Singapore. It's time to think United States again" -- from Larry Hicks.

And from Jacksonville, Florida: "Lou, I applaud you. It seems you are the only talking head left that is worthy of wearing the American flag on your lapel" -- George O'Neal.

Talking head, my foot.

From Matawan, New Jersey: "My husband and I are both in our early 50s and have worked more than 60 years between us. Now we have lost both our jobs and cannot find work. My husband was even turned down by Target. Thank you for talking about the employment problem every day. The politicians haven't seemed to become aware of it" -- that from Diane Cullen.

And from Lacey, Washington: "Thank you for standing up for the hard-working people in this country who are finding it more difficult to find and keep a job that will support their family" -- Chuck Onstott.

From Newbury, California: "Lou, thanks for taking on corporate greed. One statistic that doesn't find it way into the employment reports is that overtime has all but disappeared for anyone on an hourly wage. Three years ago, I was turning overtime down due to exhaustion. Today, the only thing that is getting exhausted is my savings" -- Brian O'Hop.

And we just want to remind you, we love hearing from you. E-mail us at LOUDOBBS@CNN.com.

The latest CNN/"USA Today"/Gallup poll shows a decline in the president's approval rating. Half of those polled said they approve of the president's job. That matches the all-time low since the beginning of his administration. And when asked if President Bush is in touch with the needs of the people, fewer than half of those polled said yes. But that's a sharp decline from last year; 66 percent then said the president empathized.

Tonight's thought is on the power of these public opinion polls: "Nothing is more dangerous in wartime than to live in the temperamental atmosphere of a Gallup poll, always feeling one's pulse and taking one's temperature" -- that from Sir Winston Churchill.

Coming up next: Rush Limbaugh returns to the airwaves after five weeks of rehab. And what a five weeks it has been for a man who has admittedly not kept up with the newspapers. We'll have that story for him and you next.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Results now of tonight's poll. The question: Do you think John Hinckley Jr. should be released from a Washington institution, yes or no? Twenty-nine percent of you said yes; 71 percent voted no.

Radio giant Rush Limbaugh today returned to the airwaves after five weeks of drug rehab. And he confided to his listeners that he hasn't read newspapers since his last broadcast in mid-October. Well, Rush, we thought we would help bring you up to date.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Well, Rush in the past five weeks, 92 more of our brave service men and women have died in Iraq. The Bush administration has begun to change its tactics and strategy.

PAUL BREMER, U.S. ADMINISTRATOR IN IRAQ: We would like to move forward to carry out the president's vision of a democratic, independent Iraq that is at peace with its neighbors. And that's one of the reasons we want to give them authority now.

DOBBS: You will be glad to hear that the Dow went up while you were gone, but not by very much. And, Rush, you'll be delighted to hear that the government reported, productivity of business soared in the third quarter. It is at a 10-year high now. And the economy grew at 7.2 percent, a pace not seen in almost two decades. And remember those corporate scandals, Rush? Well, they have scorched the mutual fund industry now. And California burned, you'll be saddened to hear, with more than 20 dead and thousands of homes lost. And U.S. senators, Rush, they snoozed over the president's blocked judicial appointments. And a state high court justice was yanked from his office in Alabama for refusing to remove the Ten Commandments.

And remember those nine dwarves you like to talked about so much, Rush? Well, they're still pretty much running in place. Makes you wonder, where is Hillary, another one of your favorites? And on this, your first day back from treatment, you said you have learned a lesson. "I am no longer trying live my life by making other people happy," you said. Well, Rush, we know one fellow who is pretty happy.

Guess what? The fellow you have described as overrated because he's black. Well, over the past five weeks with you in rehab, Philadelphia Eagles quarterback Donovan McNabb how has a perfect 5-0 record.

(END VIDEOTAPE)

DOBBS: Welcome back, Rush. We wish you all the very best.

That's our show for tonight. Thanks for being with us. Tomorrow, on our special report, "Broken Borders," we take a look at the Clear Act. It's legislation that would involve state and local law enforcement in the fight to keep illegal aliens out of this country. We'll be joined by Congressman Charlie Norwood, who proposed the legislation. Please join us.

Thanks for being with us. For all of us here, good night from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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