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LOU DOBBS TONIGHT

Dems Call Bush's Budget a 'Hoax'; Pentagon Faces Program Cuts Despite Budget Increase; Two U.N. Officials Suspended over Scandal

Aired February 7, 2005 - 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, February 7. Here now for an hour of news, debate, and opinion is Lou Dobbs.
LOU DOBBS, HOST: Good evening.

President Bush today presented a $2.5 trillion federal budget for next year that includes dozens of politically sensitive spending cuts. That budget eliminates or reduces spending on a wide range of programs, including farm subsidies, education and environmental protection.

The White House says those cuts are necessary to reduce the federal government's record budget deficit by half over the next four years, but the president's plan is likely to face tough opposition from both Democratic and Republican lawmakers.

Senior White House correspondent John King reports -- John.

JOHN KING, CNN CORRESPONDENT: And Lou, the president voiced confidence today that he can rally public support and the congressional vote for this budget. He called himself called it lean. It proposes the biggest spending cuts since the Reagan administration.

As you noted, more than $2.5 trillion in federal spending proposed next year, a record $427 million deficit called for in the Bush budget. Democrats say even at that, the president's numbers doesn't add up. They call this budget reckless.

(BEGIN VIDEOTAPE)

REP. JOHN SPRATT (D-SC), BANKING COMMITTEE: We do not get out of the deficit. The deficit only gets bigger and deeper.

KING: Winners include homeland security and the Pentagon, which gets a nearly five percent boost in spending. Bush campaign promises mean more money for Pell Grants and community health clinics, and mandatory programs like Social Security and Medicare will cost more.

Republican leaders label the Bush blueprint a good starting point, a polite but hardly enthusiastic reception that underscores the president's challenge, cutting programs that are popular in Congress.

Twelve of the 23 major government agencies would get less money, because 150 government programs are slated for elimination or significant cuts, including trimming the Medicaid health program for the poor, health benefits for more affluent veterans, more that $8 billion from agriculture programs, including $1 billion from food stamps, federal subsidies for Amtrak, and grants for school literacy and anti-drug programs.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The important question that needs to be asked for all constituencies is whether or not the programs achieve a certain result.

KING: Democrats say the president's promise to cut the deficit in half is dishonest, because his budget doesn't include costs for the Iraq war next year, money to pay for the Social Security changes Mr. Bush proposes, and hides the cost of making the big Bush tax cuts permanent.

SEN. KENT CONRAD (D-ND), BUDGET COMMITTEE: None of this adds up. I mean, this isn't even close. None of this adds up. And the result is, I think, going to be very, very serious damage to the fiscal strength of our country.

(END VIDEOTAPE)

KING: Still, the White House says the president will keep his promise to cut the budget deficit in half over the next four years.

And Lou, this budget document does predict that the deficit will go down next year to about $390 billion, but officials here concede the red ink next year actually could eclipse this year's projected record. And again, that record projection, $427 billion. Officials say it could be higher next year, because they don't know how much the Iraq war will cost, and most expect here it will cost roughly as much as it did this year -- Lou.

DOBBS: And we should point out clearly and unequivocally that this budget does not include spending for both the war in Iraq and Afghanistan, correct, John?

KING: It includes in a projected deficit number the $80 billion the administration will request soon, but it does not include what the administration will request for next year, fiscal 2006. That is not in the budget document.

Other programs are in the budget, but the administration says it will ask for a supplemental or emergency spending request again next year. So if it comes anywhere close to the $80 billion the president needs this year, add that to those projected deficit figures. Up they will go.

DOBBS: And as we look at the projections, the -- some would call it heroic assumptions and projections in economic growth and a reduction in the federal - in the U.S. trade deficit. A lot of speculative aspects to this budget, as there always is, so we will, as they say, wait and see.

John King, thank you very much.

Well, as John reported, the president's budget includes a five percent increase in military spending next year to $419 billion, but that total rises to half a trillion, if you include the additional costs of the wars in Iraq and Afghanistan.

Our senior Pentagon correspondent, Jamie McIntyre, has the report.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): The centerpiece of the Pentagon spending plan is Defense Secretary Donald Rumsfeld's pet project to transform the military into a lighter, more mobile force.

DONALD RUMSFELD, DEFENSE SECRETARY: I've noticed people have thought that when someone uses the words "agile," "lethal," "expeditionary," they think that means smaller. It doesn't. It isn't the size of the force that was wrong. It's the shape of the force and the capability of the force.

MCINTYRE: Rumsfeld has already increased the size of the Army by some 30,000 troops using his emergency authority, and the Army is hinting it may want that change to be permanent as it reorganizes from 10 divisions into 43 independently deployable brigades.

The budget puts $4 billion into counter terrorism and special operations, white slashing some big-ticket weapons systems like the expensive F-22 Raptor fighter plane. A $12.5 billion cut in the F-22 acquisition program will reduce the number of planes bought from 277 to about 180.

Ending production of the J model of the venerable C-130 cargo plane will save another $5 billion.

Both planes are built by Lockheed Martin, which says it may have to lay off workers at its Marietta, Georgia plant, if Congress approves the cuts.

Missile defense will take a $1 billion hit, as spending drops to about $9 billion. And the Navy is cutting one carrier from its fleet of 12 aircraft carriers, but insists its new deployment plan will actually make the smaller fleet more able to respond to world crises.

(END VIDEOTAPE)

MCINTYRE: The Bush administration budget also proposes giving military personnel bigger pay raises than their civilian counterparts, 3.1 percent, compared to 2.3 percent.

And perhaps one of the politically most sensitive items is $1.9 billion for another round of base closures. The Pentagon insists it's got about 20 percent extra capacity in U.S. bases -- Lou.

DOBBS: Thank you very much. Jamie McIntyre.

Later here, we'll have a special report for you on the budget's failure to address the huge holes in our national security, specifically our border security. And I'll be talking with the chairman of the Senate Appropriations Committee, Senator Thad Cochran. We'll be discussing whether the president can convince Congress to approve this budget.

Turning now to the war in Iraq, CNN has learned that Iraqi insurgents made two unsuccessful attempts to shoot down American cargo aircraft over the weekend.

Military sources said insurgents fired at a C-130 plane at an airbase west of Baghdad Friday and a C-17 plane at Baghdad International Airport yesterday. Neither plane was hit.

Insurgents today launched more bomb attacks against Iraqi security forces. A suicide bomber killed 12 Iraqi policemen outside a hospital in the northern city of Mosul. Four other police officer were wounded in that attack.

And a car bomb outside a police state in Baqubah today killed 15 civilians. Sixteen people were wounded in that attack. The Iraqis were waiting to apply for jobs at the police station.

U.N. Secretary-General Kofi Annan today took disciplinary action against two senior U.N. officials in the escalating multi-billion dollar oil-for-food scandal. Those U.N. officials were accused of serious misconduct by the U.N. commission investigating the scandal.

Senior United Nations correspondent Richard Roth reports.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN CORRESPONDENT (voice-over): After a 40-year U.N. career, Benon Sevan, the former director of the Iraq oil-for-food program, was suspended by the United Nations. Sevan stands accused by U.N. investigator Paul Volcker of committing grave acts of conflict of interest for steering lucrative oil sales to a Mideast trading company.

Sevan, who denies receiving a penny, was suspended by his former boss and U.N. colleague, U.N. Secretary-General Kofi Annan.

KOFI ANNAN, U.N. SECRETARY-GENERAL: I think we acted on the -- we acted on the report as soon as it came out. And this is not the end, it's the beginning. And we will act on the other reports, the findings of the report, as they come out.

ROTH: Also suspended, Joseph Stephanides, now a Security Council officer, who, according to the Volcker report, improperly influenced the awarding of a contract for Lloyd's Register to inspect humanitarian goods flowing into Iraq.

Stephanides also denies Volcker's allegations.

Both men will remain on the payroll under U.N. procedures while appealing their suspensions. Sevan is effectively retired, working for $1 a year while helping with the investigation. The symbolic amount also allows him to keep his visa and remain in the U.N.

Now, though, the U.N. is off-limits. FRED ECKHARD, U.N. SPOKESMAN: It means that they should not come into -- onto the premises here unless it's in connection with summoning their defense, which they have 14 days to present in writing.

ROTH: Sevan may have more than the U.N. to worry about. He is also the subject of a criminal probe by the U.S. Justice Department, led by the U.S. attorney's office in New York.

The U.N. vows to lift his diplomatic immunity if criminal charges are filed.

(END VIDEOTAPE)

ROTH: And the Manhattan district attorney's office may be also looking at Benon Sevan. Paul Volcker, Lou, is able to use that office for subpoena power, which he lacks under his jurisdiction.

DOBBS: And do we know whether or not he has used that at all?

ROTH: We do not know. He doesn't have -- but he says it's not been a problem, because he's getting good cooperation from overseas and inside the U.S., not from the Homeland Security Department, he noted last week.

DOBBS: Not from the Homeland Security Department. And gave we noted precisely what has been unearthed by this report, because it doesn't seem like much, frankly.

ROTH: Interesting that you say that. I know. So far, after weeks and months of people saying oil-for-food is so corrupt and scandal ridden, we have Benon Sevan, according to the report, may be making $160,000. And still to come, companies, businesses and journalists, former diplomats. But we don't know where it's going to lead, how severe it really in the end will be.

DOBBS: Precisely why many are calling for a greater vigor on the part of the Senate investigation and, of course, that of the U.S. attorney's office.

Thank you very much.

Richard Roth.

Next here, why the president's budget may be shortchanging our national security.

(COMMERCIAL BREAK)

DOBBS: The intelligence reform bill that President Bush signed into law in December of last year calls for 2,000 additional Border Protection agents to be added to the force every year for the next five years, but the president's budget for 2006 provides funding only for 210 new Border Patrol agents.

Bill Tucker reports. (BEGIN VIDEOTAPE)

BILL TUCKER, CNN FINANCIAL CORRESPONDENT (voice-over): When it comes to the borders, the administration is placing a premium on technology and discounting the people charged with guarding them.

The bulk of the budget contains dollars for technology enhancements, money for replacing planes, adding boats, improving sensors and surveillance equipment, yet it provides for only a slight increase in the number of agents charged with patrolling the 6,000 miles along the Canadian and Mexican borders and the 2,000 miles of coastal waters surrounding Florida and Puerto Rico.

T.J. BONNER, PRESIDENT, NATIONAL BORDER PATROL COUNCIL: I'm not sure that they really are that interested in controlling the border. This administration seems incapable of grasping the connection between border security and Homeland Security. Their commitment to funding border security initiatives is almost nonexistent.

TUCKER: Bonner points out that technology can help see or hear who's coming across the borders, but that it takes people to arrest them, and, instead of living up to the commitments called for in the Intelligence Reform Act, only 210 agents will be added to the Border Patrol, not the 2,000 called for.

Not everyone is unhappy. The Department of Homeland Security released a statement today praising the budget and highlighting the proposed $100 million increases in monies for detaining arrested illegal aliens, a spokesman saying these funds will provide a boost for bed space and alternative to detention programs to more effectively manage detained aliens.

There's also an additional $3-1/2 million for lawyers to help prosecute the cases.

(END VIDEOTAPE)

TUCKER: But critics of the administration keep going back to the central point that the border union is raising. Without a serious commitment to enough agents, Lou, there just aren't simply enough people to arrest them and all the resources in the world will go for naught.

DOBBS: This is beginning to look, if I may say, like a preamble to not only budget games, but games with border security that we're going to be treated to in Congress and on the part of the administration over the course of the next year as they try to grasp the relationship between national security and border security.

Thank you very much.

Bill Tucker.

That brings us to the subject of our poll tonight, and the question is phrased rather indelicately, but, nonetheless, it is the question. Do you believe President Bush's proposal to add 210 Border Patrol agents is sufficient to secure our national border? We thought the vote would be important. Please cast your vote, yes or no, at loudobbs.com. We'll have results later here in the broadcast.

The millions of illegal aliens already in this country often use Mexico's matricula consular cards as identification. They are now widely accepted at U.S. commercial banks, hospitals and even airlines, and they are easily forged documents.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Los Angeles County Supervisor Michael Antonovich knew there was something wrong with Mexico's matricula consular I.D. car when a constituent obtained one using the supervisor's name and a photo from his Web site. It says he was born in Tijuana, Mexico.

Now Antonovich is trying to convince his fellow county supervisors to stop accepting the cards.

MICHAEL ANTONOVICH, L.A. COUNTY SUPERVISOR: This provides an open door to criminals because there are no background checks and it's open to fraud and abuse, from traveling on airlines to opening bank accounts.

WIAN: In places like Los Angeles, matricula consular cards are accepted by law-enforcement officers and health-care workers as viable identification, even though the FBI says they're easily counterfeited and are not reliable.

RUBEN BELTRAN, MEXICAN CONSUL GENERAL, LOS ANGELES: Supervisor Antonovich matricula shown today are cheap copies that can be spotted immediately. Anybody can obtain cheap copies of any officials document.

WIAN: Antonovich's proposal was also met with hostility by the local Spanish language press.

UNIDENTIFIED FEMALE: Do you have something to say for the people who think that you don't like Mexican or Hispanic people?

ANTONOVICH: First of all, I don't like criminals. I don't like criminals who defraud the system. I don't like criminals who open up bank accounts to transfer money. I don't want to have criminals flying on airplanes jeopardizing the safety of fellow passengers.

WIAN: This reporter got in on the act by showing the new and improved matricula card that's less susceptible to forgery. Antonovich responded by pointing out that 90 percent of existing cards don't have those safeguards.

(on camera): Antonovich says counterfeit matricula consular cards are easily obtained in this neighborhood near downtown Los Angeles. All it takes is $30 and about two hours. The County Board of Supervisors will vote tomorrow on whether to continue accepting the Mexican consular I.D.s.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: Britain is also the subject of an invasion of illegal aliens, and, today, the British government announced immigration reform, much tougher immigration controls. The crackdown targets low- skilled immigrants who take jobs in Britain and who falsely claim political asylum.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: Public concern about this is very simple. It's a play-by-the-rules concern. It's a concern that people, for example, who come in to claim asylum should be genuine refugees. The people who come in to work or study here should genuinely be coming in to work or study. And, therefore, what you need in place are strict controls that work in the interest of the country that mean that only people who play by the rules come in and those that don't, don't.

(END VIDEO CLIP)

DOBBS: Uh-oh. Illegal means illegal, at least in the United Kingdom. The British government says only skilled workers who can support themselves financially and speak English will now be allowed to remain in Britain permanently.

A surprising new study for parents tonight. Research shows sweet drinks, including fruit juice, may be causing your children to become obese. The study was completed by the Centers for Disease Control and Prevention, and it clearly shows pudgy 3- and 4-year-olds drinking something sweet once or twice a day double their risk of becoming seriously overweight. Those sweet drinks had little effect on children of normal weight. Nutritionists say, although fruit juice has vitamins, fresh fruit, whole fruit, is far, far better.

Coming up next, why one of this country's most vocal and consistent critics says he wants a new relationship with the United States of America.

(COMMERCIAL BREAK)

DOBBS: President Bush has invited the Israeli prime minister and the Palestinian president to the United States for separate peace talks this spring. Secretary of State Condoleezza Rice today completed two days of talks with the Israeli and Palestinian leaders and Israel and the West Bank. Those leaders are expected to announce a cease-fire at a summit meeting tomorrow.

Guy Raz reports from Ramallah in the West Bank.

(BEGIN VIDEOTAPE)

GUY RAZ, CNN CORRESPONDENT (voice-over): This was the first high-level U.S. convoy to roll into Ramallah in nearly three years.

CONDOLEEZZA RICE, SECRETARY OF STATE: This is a time of hope, a time when we can hope for a better day for the Palestinian and the Israeli people both.

RAZ: A signal of the Bush administration's confidence in the new Palestinian leadership and a message the U.S. is back in the game.

RICE: The United States will do its part. We will be active in this process with our partners.

RAZ: Palestinian President Mahmoud Abbas, pleased with the high- level visit, spoke about the upcoming meeting in Egypt with his Israeli counterpart.

MAHMOUD ABBAS, PRESIDENT, PALESTINE (through translator): We hope that the outcome of this summit will be positive, so we can build on it and so that there will be other meetings between us and the Israeli prime minister.

RAZ: With the mutual truce announcement, that meeting is likely to be as substantive as it will be symbolic.

(on camera): Condoleezza Rice pledged to take an active role in helping to revive the peace process. She joins a long list of U.S. envoys who have tried to do the same, but with a new Palestinian government and an Israeli commitment to withdraw from Gaza, the prospects for peace appear closer than they have in the past four years.

Guy Raz, CNN, Ramallah.

(END VIDEOTAPE)

DOBBS: Secretary of State Rice will visit France, a country that has strongly criticized U.S. policies around the world and firmly opposed the war in Iraq. Today, the French foreign minister, Michel Barnier, called for a fresh start in relations between the United States and France, but he said an alliance doesn't signify allegiance. In an interview with a French newspaper, Barnier declared, "A renewed transatlantic alliance must be based on two pillars" -- Europe and America.

Next, how gaping holes in security at our nation's dams are putting millions of American lives at risk.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Here now for more news, debate and opinion, Lou Dobbs.

DOBBS: In just a moment, the head of the Senate Appropriations Committee will be joining us to talk about the president's new budget proposal.

But, first, let's look at tonight's leading stories. NASA received a 2-1/2 percent boost in the president's 2006 budget, but that's not enough to save the Hubble telescope. NASA has no plans to repair the aging telescope, which would die in orbit under this proposed budget. Hubble was the first telescope to take pictures of space outside earth's atmosphere, launched in April of 1990.

Disgraced former Catholic Priest Paul Shanley today was convicted on four counts of sexually abusing a boy in the 1980s. Shanley's case was one of several that rocked the Boston archdiocese. His sentencing is scheduled for next year.

And in California, a landslide is threatening a $2-1/2 million home and other nearby homes in a gated community. Heavy rain last month triggered the slide, which is now moving about two feet a day. Residents of the home and two neighboring homes have been evacuated.

Tonight, we begin a new series of special reports here on "America's Security Risks." Critical infrastructure all across this country in a dangerous state of disrepair and vulnerable to terrorist attack. Thousands of this country's dams are considered dangerous. In spite of that fact, the president's new budget plan actually calls for cuts in federal funding for dams.

Christine Romans reports.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): America's dams are crumbling, consistently rated a D for safety by the American Society of Civil Engineers.

PATRICIA GALLOWAY, AMERICAN SOCIETY OF CIVIL ENGINEERS: There's a potential that they could fail. They're beyond their design life, and they're beyond their maintenance, and their deterioration is continuing every single year. So they could fail at any moment.

ROMANS: There are more than 10,000 high-hazard dams. As many as 3,000 are dangerous. North Carolina, Ohio, Texas and Colorado have the largest number of unsafe dams. After September 11, security was dramatically improved at high-profile federal dams like the Hoover dam, but elsewhere, progress has been slow at best.

(on camera): Federal funding is limited to federally owned dams, but that represents just about 6 percent of the 78,000 dams in this country. The majority are privately owned and regulated by the state, but state funding for maintenance and repair is tight.

(voice-over): It would cost more than $30 billion to bring all U.S. dams to safety compliance, $10 billion to repair the most critical dams. Legislation pending in Congress only calls for $350 million to repair the nation's unsafe public dams. Hardly enough.

MEG CALLOWAY, STATE DAM SAFETY OFFICIAL: We've been building dams as long as there've been people in the nation. Some of the dams in the country are well over 200 years old. There are probably close to half of the inventory is approaching over 50 years old. ROMANS: They're old, they're in remote areas, often difficult to protect from trespassers or terrorists. And downstream urban sprawl puts millions of Americans in the path of potential disaster.

Experts say the dam safety crisis gets little attention, because dams are taken for granted. In fact, dam-irrigated crop land produces 60 percent of our vegetables and 25 percent of our fruits and nuts. Dams also provide up to 12 percent of America's energy. Without them, we'd have to burn another 121 million tons of coal, 27 million barrels of oil, and 741 billion cubic feet of natural gas.

(END VIDEOTAPE)

ROMANS: So dam safety is an economic necessity, to say nothing of the potential loss of life if one of these dams breaks. Lou, the money in this has been elusive. After September 11th, there were some funding put forward for dam safety, $5.5 million a year for dam safety. That's just to hire and train personnel, not to actually fix anything, and there's a lot that needs to be fixed.

DOBBS: And the president's budget, at least in this iteration, calling for actually what are effectively cuts rather than increases to provide either for infrastructural repair, dams critically in need of it, or further -- and/or further security, and of course this week we're going to continue to focus on crumbling infrastructure throughout the country and the highly vulnerable targets they represent to potential terrorists.

Christine, thank you. Christine Romans.

As we've reported, President Bush today sent Congress a $2.5 trillion budget plan for 2006. The president's plan calls for deep spending cuts across 150 programs, and aims to reduce the federal budget deficit to $390 billion in 2006.

Senator Thad Cochran is chairman of the Senate Appropriations Committee, and joins us tonight from Capitol Hill. Senator, good to have you with us.

SEN. THAD COCHRAN (R-MS), APPROPRIATIONS COMMITTEE CHAIRMAN: Good evening.

DOBBS: Well, this is already a budget that is engaged. The Democratic leadership calling this reckless. Your reaction?

COCHRAN: Well, I think the president has clearly submitted us a tight budget, but it's what's called for if we're going to get spending under control and keep the economy moving in the right direction, with economic growth and job creation activity.

DOBBS: The president wants to cut, amongst other things, federal subsidies for agriculture, and significant cuts. Do you think those are warranted at this time, and what do you perceive the impact of such cuts, if they were implemented, to be?

COCHRAN: The president's budget does recommend that the agriculture committees take a look at the farm program. The problem with that program, though, is it's a matter of law, and if you're eligible for a benefit, a payment under that law, then the payment is made, automatically. We don't have any discretion under the law. So he's suggesting changes in the law, in the farm bill that was passed in 2002 that has been working well. That is going to be a tough sell, but I think the president has let us know he's serious about cutting spending and controlling the deficit, and I think he's providing strong leadership generally on this subject.

DOBBS: Strong leadership in terms of the military budget, the Defense Department, 5 percent increase in spending. You met with Defense Secretary Rumsfeld today. You're satisfied this is adequate, even though those numbers do not include the projection for spending on the war in Iraq and Afghanistan?

COCHRAN: I'm satisfied that this is the highest priority we have as a nation, and that is to win the war on terror, to take care of the needs of our military forces who are engaged in operations in Iraq, and that supplemental appropriations request will come probably next week, after we've had an opportunity to look more at the budget for the fiscal year 2006. That will be a separate account. It's about $80 billion is what's expected, $75 billion will be for defense needs, about $5 billion in other programs, such as the State Department programs.

DOBBS: Senator, the cuts in veterans' benefits, the cuts in education, the cuts in health care. Senator Harry Reid, the minority leader in the Senate, says that these cuts send all the wrong messages and put the Bush administration's priorities in entirely the wrong place. What's your response to Senator Reid?

COCHRAN: Well, I think he's overlooked the fact that the president has called for constructing health centers in every county in America that needs a health center. He's calling for increases in some education programs. He's calling for increases in some programs that he thinks are very seriously needed. And I think we're going to have a healthier and a better educated workforce if the president's budget requests for increases are approved.

DOBBS: Well, let me turn to border security, because a number of critics are saying that this administration and, frankly, this Congress does not understand nor grasp, nor at least want to deal with the relationship between border security and homeland security. In this instance, after signing the law that enacted intelligence reform, the president's budget calls for only an increase of 210 border patrol agents. What is your reaction to that -- that -- to that?

COCHRAN: Well, there is more way -- there are more ways to do the job of border security than just hiring more agents. We're developing technologies, new ways of making sure that the credentials that people have who are coming across the border are not counterfeit, that they are accurate in terms of the information that is contained in them. There are many other things that this president has done, organize a new Department of Homeland Security. We have a new director who probably is going to be confirmed tomorrow...

DOBBS: Senator, can I ask you a question? Can I just ask you one question?

COCHRAN: There are a lot of things you can make...

(CROSSTALK)

DOBBS: How in the world do three million illegal aliens enter the country?

COCHRAN: ... on the subject of homeland security.

DOBBS: Senator, let me just ask you one question. How did three million illegal aliens enter the country last year if we're doing so well?

COCHRAN: Well, I'm not saying that we're solving every problem or arresting every person that ought to be arrested and deported, but we're doing a better job than has been done in the past. And we're making the changes needed in government organizations, in funding programs, developing technologies that we need to solve this problem.

DOBBS: Senator, let me ask you, last year, President Bush proposed cuts in 65 -- 65 programs. In the end, only four programs were ultimately cut in cooperation with the United States Congress. How well do you think he'll do this year with the number reaching 150?

COCHRAN: Well, I think the president is going to do well in terms of his influence for positive change here in the Congress, making sure that we don't overspend, making sure that we spend for only those programs that are justified. He's calling on Congress to be restrained and to join him in this effort to restore health to the economy.

DOBBS: And, Senator, we just -- our latest CNN/"USA Today"/Gallup poll shows President Bush with a surge in popularity, his approval rating surging to 57 percent. As the president says, he's going to spend that political capital. He's had an injection of it here, it looks like, of about 6 percent. He's going to need that for Social Security reform, to get through a Congress that is always intent on preserving as much of its prerogatives as it possibly can in spending. Let me ask you...

(CROSSTALK)

DOBBS: Go ahead.

COCHRAN: I think Congress is going to join him in saving Social Security and creating new options for those who are entering the workforce and who worry about having any benefits left under the current system. We need to have reform. He's leading the way for reform. He's showing courage on that subject, and I think Congress is going to respond to that. I hope we do.

DOBBS: All right. Senator Thad Cochran, we appreciate you being here.

COCHRAN: Thank you. DOBBS: And we're going to count the number of programs that are ultimately cut by the United States Congress, Senator.

Thank you very much.

Take a look now at some of your thoughts on the immigration crisis in this country and President Bush's proposed guest worker program.

Pam Nuckles of Metamora, Michigan: "I'm tired of politicians and so-called experts telling us that illegal aliens take jobs we Americans don't want. I don't remember ever being offered a job for any of these positions."

And Marv Johnson of Wheaton, Illinois: "Lou, despite all the positive spin politicians give us to validate the presence of illegal aliens in this country, they are by no means 'guests' as the president would like us to believe. They are criminals. Why should we give them the status of being guest workers when they should be prosecuted and deported for trespassing?"

C. Moore in Winter Park, Florida: "Lou, it would seem this issue would be a no-brainer. As American citizens, we are required to obey the laws of the land. By allowing any type of benefit to anyone who has entered this country illegally, we are saying, you don't have to obey our laws. How can we then expect them to obey our laws at any other time?"

And Chuck in Leonardo, New Jersey: "Lou, maybe all of us in the middle class should renounce our American citizenship and become illegal aliens so we can get free health care, free schooling for our kids, and not pay taxes."

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

Next, an immigration expert who says President Bush is shortchanging our nation's border security.

(COMMERCIAL BREAK)

DOBBS: As we reported, the president's budget calls for only 210 new border protection agents instead of the 2,000 new agents that were supposed to be added. My guest tonight says we are shortchanging immigration enforcement and leaving our country vulnerable to terrorism through the policies we're pursuing in both immigration and border security. Michael Cutler is a former special agent in the Immigration and Naturalization Service joining us here in New York. Michael, this is a seemingly small number to add to add to our border protection.

MICHAEL CUTLER, FMR. INS SPECIAL AGENT: It's an almost negligible number. Congress talked about adding 2,000 more special agents for each of the next five years. We're talking about a 10 percent increase that doesn't address the problem of attrition, agents who leave, and the agency does have a high attrition rate. DOBBS: How many agents do we need? We've got about 2,500 along the border, right now, right, north and south?

CUTLER: Well, there's 10,000 and change altogether, but then you have shifts and days off and so forth.

DOBBS: About 2,500 on a daily basis?

CUTLER: Probably on a daily basis. Maybe a little bit more. We need many more than that.

DOBBS: Give us an estimate as to how many.

CUTLER: Goodness gracious, we probably could use five times as many, but you know what we also need that no one really talks about is interior enforcement. The Congress had said we were supposed to get 800 new special agents to enforce the laws from within the interior and no one is even talking about that.

DOBBS: Maybe the reason they're not talking about is they're overcome with laughter and just numb at the absurdity of even that number. How many criminal aliens are in the country right now at any one time?

CUTLER: The estimates that I've read runs at 80,000 to 100,000. I think it might even be higher. So what we are doing is encouraging more people to come here and violate the laws. You get one opportunity for first impression. The immigration laws are supposed to be instructive and show people how seriously we take our laws. What's the message?

DOBBS: The estimated 100,000 illegal aliens -- and by that, criminal illegal aliens...

CUTLER: Drug traffickers and so forth.

DOBBS: People who have committed crimes in this country and who are also illegal aliens, how many do we have in interior enforcement as it is so delicately put?

CUTLER: Right now about 2,000 people dedicated to that mission. I've made the analogy before, we have 38,000 cops policing New York, which is why the 8 million people who live here live in the safest big city. We should have a comparable number of special agents to cover the interior of the United States.

DOBBS: The idea that illegal aliens some 3 million estimated entered the country last year, an estimated 20 million at the higher end of the range but 20 million illegal aliens, the fact is no one wants to say straightforwardly, there is no way in the world the United States government can enforce its immigration laws even if there was a will in the U.S. Congress and at 1600 Pennsylvania Avenue to do so.

CUTLER: No resources, no mission, no motive. You know, it's just crazy. DOBBS: Let me show you something that may strike you -- if you did not see this at the beginning of the broadcast -- if we could show everyone again and Michael Cutler what the prime minister of the United Kingdom had to say today on immigration.

(BEGIN VIDEO CLIP)

TONY BLAIR, BRITISH PRIME MINISTER: The public concern about this is very simple. It's a play by the rules concern. It's a concern that people, for example, who come in to claim asylum should be genuine refugees, that people who come in to work or study here should genuinely be coming in to work or study, and therefore what you need in place are strict controls that work in the interest of the country that mean that only the people who play by the rules come in, and those that don't, don't.

(END VIDEO CLIP)

DOBBS: Can you imagine, Michael Cutler, President George W. Bush saying such a thing as Prime Minister Blair said?

CUTLER: I wish we would hear him say that. When he talks about a guest worker program for people who have already come here illegally, what he's saying is 180 degrees in the opposite direction of what we just heard Mr. Blair say. If we're going to have to have a guest worker program, and I don't know that we need it, then it ought to be open only to those people who apply from overseas from their home countries who aren't already in the United States in violation of our laws.

DOBBS: But you can't pursue an immigration policy that would bring specific skills or talents to this country, because you simply are swamped with illegal immigration, and there is no way to track what is happening unless someone, actually a foreign citizen, surrenders to the immigration protocols of the country, which is very difficult to reason, if you think about 3 million people entering illegally each year. It seems we're just creating the problem and reinforcing it and reinforcing it.

CUTLER: Well, we do, and we did this before with the amnesty of 1986. We supposedly had cleaned the swamp out, we said, OK, we're going to start from scratch, we're going to have everybody accounted for, and we'll go from there, and what we wound up with is so many more people now because...

DOBBS: Well, here's where we are right now though, Michael, as you well know. We have a president who says he's basically going to give amnesty. You can call it a guest worker program, whatever. The difficult issues to deal with here, a homeland security department that is not enforcing security at the border, otherwise 3 million illegal aliens -- I can't even imagine how anyone with a straight face can respond that we have border security if 3 million people can cross it illegally, but in the United States of America in 2005, people can do that particularly if they're in charge of it. What in the world are we going to do? Why aren't the American people reacting to this? CUTLER: The funny thing is when I talk to my neighbors and folks who I know and they know where I've worked and they've seen me on your wonderful program and they've seen me go before Congress, they come up to me and say, what is wrong with our supposed leaders in Washington? And I tell them the same thing you're saying, call your congressman, call your senator, make as much noise as possible. Make the government accountable. Because what we're doing is asking for more problems, including terrorism, including the massive criminal problem. Right now roughly 30 percent of the inmate population in federal penitentiaries are aliens who shouldn't be here and they're victimizing our people...

DOBBS: Illegal aliens.

CUTLER: Or even aliens who are residents that have become deportable because they've committed murder or sold drugs or done some other heinous crime. So what are we doing to get a handle on it? Immigration fraud runs rampant, no one talks about it, but there's no one out there to conduct investigations to make certain...

DOBBS: (UNINTELLIGIBLE) supervisor in Los Angeles today talking about the fraud of the matricular consular cards and actually had a journalist follow up and say, well, the reason you're saying this is because you don't like Mexicans. I mean, that's the level of this thing and it's absurd.

CUTLER: This is because people don't know any other way of arguing against the reality, so it becomes a name-calling contest, but that's not the case.

DOBBS: Michael Cutler, good to have you with us. Maybe everyone should just look to the only state that is exercising leadership, and that's the state of Arizona.

CUTLER: Well, thank you for having me, Lou. I appreciate it.

DOBBS: Good to see you.

A reminder now to vote in our poll tonight. Do you believe President Bush's proposal to add 210 border patrol agents is sufficient to secure our national borders, yes or no. Cast your vote at loudobbs.com. We'll send the results along to those people who are so interested in reforming immigration laws and, of course, improves our national security along our borders.

Coming up here next, why my next guest says China is challenging our role as the worlds innovative super power. Stay with us.

(COMMERCIAL BREAK)

DOBBS: My next guest says the United States expects to lose $25 billion this year to Chinese counterfeiting and piracy. But he says the long-term effect on our economy is a much weightier matter. He's the author of a new book, "China, Inc.: How the Rise of the Next Super Power Challenges American and the World."

Joining me now, from Chicago, is author Ted Fishman. Ted, good to have you here.

TED FISHMAN, AUTHOR: Good to be here, Lou.

DOBBS: $25 billion just in counterfeiting -- why do we tolerate this?

FISHMAN: We tolerate it as one of the tariffs we pay for allowing free trade with the Chinese. We engage in commerce with the Chinese, which is completely overlooks their unwillingness to abide by international norms and rules in trade.

DOBBS: And the fact is, that corporate America knows, as you suggest, it's a write-off. Corporate America knows now fully what they're getting into. What most people don't realize is, is they look at those numbers, there a lot of CEOs right now just sweating bullets, because they don't know what they've gotten themselves in for, right?

FISHMAN: Yes. You know, sometimes, Lou, I think that they do know, but the lure of the Chinese market is so great to them. And the potential for them to grow inside of that market is so seductive to them, that American companies are willing to give away technology and are willing to transfer technology to the Chinese and to allow for rampant piracy within their economy.

DOBBS: You point out the impact of the deals, sometimes called offsets, all sorts of technology transfers, the knowledge base being transferred, in addition to outsourcing and a number of other issues, what is your best judgment as to the impact on the Chinese economic over the next five to 10 years and its relationship to the United States and the rest of the world?

Will it be preeminent?

FISHMAN: It will, and all of the statistics we've seen to date about outsourcing, loss of jobs, loss of technology, loss of whole industries, are really insignificant compared to what's coming. Because the Chinese are moving up the economic food chain, they're moving into the heart every the American economy, which is our high- tech, innovative, knowledge economy. And that will cause far more harm than we've seen to date.

DOBBS: Far more harm, most people want to say, the China -- the Chinese economy will not be a threat, a competitive economic threat for decades and decades. Yet you point out increase book a very interesting statistic. Is there any way in the world that the Chinese Government could, say, pull ahead of the United States any way soon?

FISHMAN: Oh, yes. If everyone in China had a per capital income of just the people in Botswana, China would have an economy four times the size of the United States. So, it's almost inevitable that they will have an economy larger than us. The real question is will we thrive as they thrive or will we get our standard of living sucked away as they grow?

DOBBS: What should the United States be doing right now to deal with a rising international competitive threat? FISHMAN: Well, the most important thing we need to do is to make sure that our knowledge economy is protected. Right now China makes things, Lou. They make the things that are fabricated in factories. We create -- the most vital parts of our economy create ideas which can be transferred around the world with a click of the mouse. We can't take their factories, but they can take our ideas, and we have to find away to protect those ideas.

DOBBS: In point of fact, and I take your point entirely, but they are also, literally in many cases, taking factories, factories lock stock and barrel from this country and moving them to China.

FISHMAN: Fair enough. Fair enough. In fact, in "China, Inc" I talk about the busy auction business made in the United States, where auctioneers just come along and sell whole factories to the Chinese. True enough.

DOBBS: Fascinating book, I recommend it. If you want to know the real numbers behind this story, "China Inc." Ted Fishman, Thanks.

Still ahead here, the results of "Tonight's Poll," a preview of what's ahead tomorrow. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Well, the results of "Tonight's Poll," this broadcast appears to be contributing at least to a building consensus on this issue. Ninety-eight percent of you do not believe President Bush's proposal to add 210 border patrol agents is sufficient to secure our national borders. We hope Washington is watching tonight.

Thank you for watching tonight. Please join us here tomorrow. I'll be talking with a leading senator who has plan to legalize millions of illegal aliens in this country. For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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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