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LOU DOBBS THIS WEEK

No Licenses for Illegals; More Campaign News; War on the Middle Class

Aired January 12, 2008 - 18:00   ET

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


LOU DOBBS, HOST: Tonight, presidential candidates crossing the nation, trying to win votes with political blather and superficial slogans. We'll examine whether style has triumphed over substance so far in this campaign.
And rising fury against the mortgage lenders behind the housing crisis, a crisis that is overwhelming what's left of our middle class. We'll have that report. All of that, much more, straight ahead here tonight.

ANNOUNCER: This is LOU DOBBS THIS WEEK. News, debate, and opinion. Here now, Lou Dobbs.

DOBBS: Good evening, everybody. Presidential candidates tonight are aggressively campaigning across the nation as the campaign intensifies. All the candidates are now promising change, whatever that means. None are telling voters in any detail what they will do to overcome the tremendous challenges that face this nation.

One of the challenges certainly is the conduct of the war in Iraq. And tens of thousands of our troops and Iraqis are now taking part in a major offensive against al Qaeda. The offensive includes some of the heaviest air strikes of the entire war. Barbara Starr has our report from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT (voice-over): These are the first pictures of punishing U.S. bombing runs on the southern outskirts of Baghdad near the town of Arab Jabur. U.S. war planes dropped 40,000 pounds of bombs in just ten minutes on insurgent targets.

Nearby, soldiers from the 3rd Infantry division were in a fierce fire fight. It's part of a massive military offensive to clear out what the U.S. hopes are some of the last al Qaeda strongholds. Thousands of U.S. troops are involved, many in Diyalah province.

It was exactly one year ago when President Bush announced the troop surge that sent 30,000 additional forces into Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The new strategy I outlined tonight will change America's course in Iraq.

STARR: The surge was supposed to improve security and buy time for the Iraqi government to get its act together. So why a year later are there still al Qaeda strongholds, especially deep in northern Iraq and south of Baghdad?

ROBERT GATES, DEFENSE SECRETARY: General Petraeus anticipated this in the sense of that they would move. And the key is to do in these provinces and where this offensive is underway what he has accomplished elsewhere. And that is to clear and then hold.

STARR: But it's been tough going. In Diyalah, six U.S. soldiers were killed and four wounded Wednesday when a booby trapped house exploded. More heavy casualties are likely, but Gates is hoping this offensive will turn a corner against al Qaeda.

GATES: Frankly, after these places, there's not much -- not much else -- not many places they can go.

STARR (on camera): Not even Gates is ready to declare light at the end of the tunnel. For long-term success, Iraq's government must achieve reconciliation on a national level before it may become peaceful enough for U.S. troops to come home.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

DOBBS: The war in Iraq is no longer a major issue for many of the presidential candidates. Instead, nearly all of the Democratic and Republican candidates are focusing on domestic issues, as are the voters according to the most recent polls. But none of the candidates are offering detailed public policy prescriptions on either domestic or foreign policy.

Joining me now, two members of the best political team anywhere in Washington, our senior political analyst Bill Schneider. And joining us from the campaign trail in Summerville, South Carolina, Dan Lothian.

Gentlemen, let me start by asking you straightforwardly as we are now being accused in many quarters of permitting style to overwhelm substance on the campaign trail. First, Dan, you're on the campaign trail. Your response?

DAN LOTHIAN, CNN CORRESPONDENT: Well, you will hear a lot of criticism from people who say why don't we pay more attention to what these candidates are saying to some of the issues rather than the horse race, or you know, rather than who has that personality.

But what you will also hear from the voters is that they are concerned about the issues. I was talking to a woman, first time voter, she'll be turning 20 soon. And I asked her if she'd been paying any attention to sort of this division rather between Obama and Clinton. She is an African-American woman. And I said are you caught up in that whole personality thing. And she said, listen, just because I'm black it doesn't mean I'm for Obama. Just because I'm a woman doesn't mean I'm for Clinton.

She says I'm really paying attention to the issues. And for her, she finds that Senator Edwards has the issues that she supports. So you know, there are those voters out there who really want to hear more about the issues, are paying closer attention to the issues, but there are those who are criticizing us for not paying enough attention to that as well.

DOBBS: That first time voter, you know, I think we should exalt, we should find her somewhere and hold her up as a role model for all of us in these elections.

LOTHIAN: That's right.

DOBBS: Your response, Bill?

BILL SCHNEIDER, CNN POLITICAL ANALYST: My response is that one of the difficulties voters are having is that this is a contest so far among Democrats and among Republicans in separate parties. And they don't have vastly different things to say. They're in basic agreement on all the issues.

So if you want to get into a debate over Hillary Clinton's health care plan versus Barack Obama's health care plan, yes, there are differences. But the differences are fairly small.

DOBBS: All right.

SCHNEIDER: They're both talking about pretty big health care plans to try to get health care expanded for all or almost all Americans.

DOBBS: And as you and I have discussed over this past week, the news organizations, not even focusing, for crying out loud, on the exit polls on the issue of illegal immigration on the Democratic side of this contest. I mean, this is crazy.

SCHNEIDER: I do have some evidence precisely on that point from our new national poll. We asked people to rate the five issues in importance. The number one issue to both Democrats and Republicans is now the economy, clearly in first place over the war in Iraq.

But immigration is interesting. As you see, it's slipping a little bit since December. But immigration is very different for Democrats and Republicans. Only 4, that's 4% of Democrats say immigration is a top issue for them. 20% of Republicans. It's the number two issue behind the economy for Republicans. So there's a big tiny difference on that.

DOBBS: Right. You know, I take the polls for what they are. I have to tell you, based on purely anecdotal evidence, and that's traveling around the country, reading the e-mails and the responses to our broadcast, Bill, I would be astounded if in the rank and file of the Democratic party that number really were that low. It just astonishes me that that would be, but it'll be fascinating to track it over to the course of the polling.

SCHNEIDER: Yes.

DOBBS: And good for you, Bill Schneider, for getting it into our polling. God bless you. SCHNEIDER: Thank you.

DOBBS: The issues that we're looking at there, Dan, the idea that it's the economy, stupid, again, as in 1992, here in 2008, this economy is starting to show real, real signs of strain. Neither political party, and its - their array of candidates are in great position on economic issues, are they?

LOTHIAN: They're not, but you're hearing them trying to address that now. Some of the issues that we heard about earlier on the campaign had been the war and some of these, you know, other issues that you were talking about, health care and so forth. Those are still important issues, although you don't hear that much about the war.

But what you are hearing more about is the economy. You hear talk of creating more jobs, of lifting people out of poverty. That is essentially trying to respond to the situation that's happening on the ground. You hear a lot of talk about I understand what you're going through with a difficulty and pain for your mortgage and the mortgage crisis. So you're right in saying that the economy, and the issue of the economy is becoming much more important and certainly will be in the coming weeks and months ahead.

Do you concur, Bill?

SCHNEIDER: Well, generally, I do. But what you're hearing is the same old answers from the same old politicians. If you mention the economy to Democrats, they're going to talk about jobs, jobs, jobs. Very important to people. That is what the economy means. But how are they going to create jobs in an era of global competition? A lot of people suspect it's the same answer, more government spending.

You talk to Republicans about the economy. They'll say cut taxes, it's the answer to everything.

DOBBS: Yes.

SCHNEIDER: You know, give the man a hammer and the world become a nail. They believe tax cuts will solve all the problems. I don't think voters really have much patience anymore with those old answers. They'd like to hear something new about turning the economy around.

DOBBS: You know, and I think, Bill, again, we're all victims as well as beneficiaries of our experience, but my experience in this broadcast over the years is -- leads me to a conclusion that there is no appreciable difference between Democrats and Republicans on the issue of these just really tired and hackneyed responses on the part of these two partisan parties.

As you suggest, a governmental program is the only solution to a social problem in the mind of the Democratic candidates. And faith- based free trade and market economics are the only appropriate response in the minds of the hackneyed Republicans.

I don't believe it's rank and file, that men and women of this country, working men and women who'd identified themselves as either Republican or Democrat and they're becoming fewer of them, not more, will buy into that anymore. Are you seeing that, Dan, on the trail?

LOTHIAN: Well, that is certainly correct. That is what we're seeing here. And one other thing I might add is that there's this whole issue of change versus experience. And as we've been talking so much about, there are a lot of people who are just not happy with what is going on in Washington. And that is why they want change. They may not be thinking so much about how that will happen, how, you know, what kind of plan that you have that will really lead to that change, but they have seen what people who have experience are doing. And according to them, it's not being done right in Washington.

So for them, the answer is simply change. And their candidates, you see them responding to it. It is what helped Obama in Iowa. We've seen the Clinton campaign shift from experience to change. Change, change, change. You keep hearing that. And normally, a lot of these candidates would be talking about the issue of experience. But people are responding to change.

DOBBS: You get the last word, Bill Schneider.

SCHNEIDER: Change is what it's all about. What kind of change? The voters will say, look, we want new people with new ideas. Let them decide what they want to do, but we definitely want new ideas in there.

DOBBS: It would be nice to hear a few real soon out there on the campaign trail. And from that trail, Dan Lothian in South Carolina, thank you very much. Bill Schneider from Washington, D.C., the seat of all our troubles or at least most of them. Thanks very much, Bill Schneider, Dan Lothian.

Up next, seething anger as the housing crisis is hammering working men and women in this country and their families. The mortgage lenders behind this debacle are under fire while they seek bailouts. We'll have a special report. And an astonishing outburst by the acting chief of the Consumer Products Safety Commission. Another example of the government's utter failure to protect American consumers from dangerous products imported.

And Mexico losing its war against drug cartels and endangering the United States. Why in the world isn't this country doing more both to help Mexico and ourselves? We'll have a special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: One of the lenders at the center of this country's crippling credit crisis is receiving a bailout from another financial institution. Bank of America announcing it will buy Countrywide Financial. That deal worth $4 billion. It comes as lenders face a barrage of criticism from investors, elected officials and, of course, home owners.

The city of Baltimore has filed a federal lawsuit that charges Wells Fargo Bank with creating the mortgage crisis in its communities. As Christine Romans now reports, there's rising concern that this crisis will only worsen.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): A growing middle class outcry against the lenders at the heart of the subprime mortgage crisis.

JOHN TAYLOR, NATL. COMMUNITY REINVESTMENT COAL.: What happened is the infectious greed and malfeasance of the industry, that's what really changed. They began to offer products that they knew at closing, that is the lender or the broker knew this person's not going to be able to afford this in a few years.

ROMANS: The city of Baltimore has sued Wells Fargo, claiming Wells Fargo targeted minority neighborhoods for bad loans with impossible terms. Baltimore claims Wells Fargo is responsible for millions of dollars in lost tax revenues, added police and fire costs, court administrative costs, and social programs needed to maintain stable and healthy neighborhoods.

Wells Fargo says race was never a factor. "We do not tolerate illegal discrimination against or unfair treatment of any consumer. Our loan pricing is based on credit risk. We are committed to serving all customers fairly -- our continued growth depends on it." In New York, Attorney General Andrew Cuomo is going after appraisers, who he says colluded with lenders to inflate appraisal values of homes, a widespread practice, he says.

Meanwhile, Countrywide Financial admits delinquencies and foreclosures in its portfolio loans soared last month. And this week was forced to issue a denial of bankruptcy rumors.

Yet the trouble for the lenders and for millions of homeowners may be just beginning. A study for the U.S. Conference of Mayors projects at least 1.4 million more foreclosures this year.

(END VIDEOTAPE)

ROMANS: A bailout of Countrywide Financial by Bank of America came on the very same day the city of Cleveland sued both companies for pushing subprime loans in its communities. The city hopes to recover hundreds of millions of dollars in losses. The city blames some 21 banks and mortgage lenders for pushing inappropriate loans, selling and repackaging those loans and creating this entire crisis, Lou.

DOBBS: There is simply no shortage of people responsible for this crisis in this country. But the institutions themselves, the idea that cities can be successful will prevail in these lawsuits. That can have a huge impact across the country, couldn't it?

ROMANS: Yes, absolutely. First Baltimore, now Cleveland. A lot of other cities and municipalities that are watching to see how these go. The city attorneys and the attorneys advising these towns say you got a pretty good case.

DOBBS: And I love the idea that this is -- that it's being called precisely what it is. This is white collar crime. And it's time for the government to deal with it, for all of us to deal with it. Christine, thanks. Christine Romans.

Well, another crisis facing this country, a flood of dangerous imports from communist China and other nations continues. 2007 was a year of recalls, especially of toys, especially of toys made in communist China. But the consumer watchdog charged with protecting all American consumers from dangerous products insists that toys now are safer than ever. Louise Schiavone reports on your government at work. Or not.

(BEGIN VIDEOTAPE)

LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): Lead paint in high profile toys like Thomas the Tank Engine, tiny magnets and kids art supplies that can kill if swallowed. The acting chief of the Consumer Products Safety Commission was surprised by the reporting last year.

NANCY NORD, CONSUMER PRODUCT SAFETY COMM.: Coverage reached near hysteria level.

SCHIAVONE: And told journalists in Washington her agency has a handle on this.

NORD: Toys are the most regulated product under our jurisdiction. And this year, toys were inspected, and tested more than any other year in the history of our agency. So toys are safer than they have ever been.

DON MAYS, CONSUMER REPORTS: We don't accept that. In fact, if we look at just last year, there are 25 million toys recalled because of one problem or another. Clearly, there are a lot of problems out there.

SCHIAVONE: Nord has been under fire for what some call her cozy relationship with lobbyists for the very industry she's supposed to be regulating. Taking trips at their expense, even though no one has said she did anything illegal.

NANCY COWELS, KIDS IN DANGER: We think that more -- the agency needs to be a strong watchdog for consumers, and not a PR agency for the manufacturers.

SCHIAVONE: But she says the public misunderstands the role of the Consumer Products Safety Commission. They just cannot police everything.

NORD: People ask me, with so few people, how you to inspect all those products coming in from overseas? Well, the answer, of course, is that we don't, we can't, and Congress never intended us to do this.

SCHIAVONE: She says the companies that sell these goods are responsible for their integrity. The toy industry association's chairman was at the toy fair in Hong Kong, but his office issued a statement that "draft guidelines for testing laboratory certification are well advanced and expected to be in force in time for the 2008 holiday season." (on camera): Chinese authorities say over the first ten months of last year, their toy exports to the U.S. rose more than 13%. The Commerce Department agrees there was a surge. Many in Congress want those goods examined at the port and turned away if they're harmful to Americans.

Louise Schiavone for CNN, Washington.

(END VIDEOTAPE)

DOBBS: Coming up next, a vicious drug war raging just across our border with Mexico and spilling over into this country. We'll have a full report.

And the amnesty agenda. An odd remark this week from Senator Hillary Clinton, an Obama endorsement and John Mccain's defense of his immigration position. We'll have all of that, underscoring how some candidates miscalculated about the mood and the views of voters.

Some of the best political minds in the country join us here next. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Startling evidence tonight that armed former Mexican troops are crossing our border with Mexico. And they're working for Mexican drug cartels. At the same time, the war between the Mexican military and those cartels is escalating just south of our border.

Casey Wian reports now on the vicious battles that rage along our border with Mexico.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Another wave of deadly shootouts involving Mexican federal troops and alleged drug cartel members just across the Texas-Mexico border. Wednesday in the town of Reynosa, two Mexican federal soldiers were killed, the latest victims of President Felipe Calderon's war on drug traffickers.

FRANCISCO LOPEZ, WITNESS (through translator): Shots were heard. They start over there by the corner and ended up here. And later, we heard bazookas or grenades or something.

WIAN: Tuesday in nearby Rio Bravo, Mexican troops killed three suspected drug cartel members and apprehended ten others.

FELIPE CALDERON, PRESIDENT, MEXICO (through translator): Our obligation as the authority of order within the government is to persevere in the fight against organized crime until we take complete control over public life in the country.

WIAN: Two of the captured suspects are residents of Detroit and another is from Texas. It's another reminder that Mexican drug cartels have spread far into the United States. Also this week, more evidence of possible links between those cartels and some Mexican troops and law enforcement. The conservative group Judicial Watch released documents it obtained from the Department of Homeland Security revealing 253 Mexican military and law enforcement incursions across the U.S. border from 1996 through 2006. Many of those incidents involved armed uniformed personnel assisting drug and alien smugglers.

CHRIS FARRELL, JUDICIAL WATCH: There never seems to be a really very strong sort of hey, cut it out. You know, this is -- you're crossing our border armed deliberately. It just seems like it's treated as sort of a diplomatic affair where, you know, perhaps through words of -- or notes of protest are exchanged but that's about it.

WIAN: Yet violence between drug smugglers and Mexican troops and police continues along our nation's southern border.

(on camera): In a statement, the Department of Homeland Security says irrespective of the circumstance, every incursion is taken seriously and appropriately resolved. At the local level, U.S. Customs and border protection leadership maintains open dialogue with Mexican government officials to resolve and implement measures to prevent accidental incursions.

Casey Wian, CNN, Los Angeles.

(END VIDEOTAPE)

DOBBS: Time now for some of your thoughts. Adrian in New York wrote in about the presidential candidates' favorite theme on the campaign trail this year. "Lou, unfortunately, the only 'change' that the American people are going to see after the 2008 election is the new name that comes after 'President.'"

Flossie in Indiana. "Change is just a word. We need ability, determination, and the power to do what is right."

And Dan in Tennessee. "Lou, for years, my wife and I lived in a divided house - she was a liberal Democrat and I was a conservative Republican. You've helped us realize that the problem lies not with either party but with both." I couldn't agree more. I assure you.

And Steve in California. "You said it yourself, Lou. Americans need choice. It is precisely because you don't have the patience to put up with the nonsense in Washington, D.C. that we choose you. Run, dammit."

Thanks for the thought, but send us your thoughts at loudobbs.com. We'll have more of your thoughts later in the broadcast. Each of you whose e-mail is read here receives a copy of my new book "Independents Day," the book that covered America, the Democratic party, the Republican party, and a lot of other son of a guns don't want you to read."

Coming up here next, will New York Mayor Michael Bloomberg become an independent presidential candidate? Some of the best political minds in the country will assess those possibilities and a great deal more next.

And a voter ID law before the Supreme Court could change the outcome of the presidential contest. What does that mean? We'll explain.

And Minnesota's governor helping to lead a fight against the harsh impact of illegal immigration. Governor Tim Pawlenty is among our guests. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: Part of New York Governor Eliot Spitzer's argument for giving away drivers licenses to illegal aliens before he withdrew his proposal was that other states were doing the same thing. Governor Spitzer is, of course, now, looking in a different direction. Three out of the eight states he cited that offered licenses to illegal aliens have stopped the practice.

Bill Tucker reports on states that are quickly retreating on the issue of those drivers license giveaways to illegal aliens.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT: The retreat is underway by states who grant driver's licenses to illegal aliens. There were eight states offering illegals a legal document to drive, but now there are five. Scratch the names of Oregon, Michigan and Hawaii from the list, Michigan's attorney general ruling that it would be inconsistent with federal law for the state of Michigan to effectively grant legal status to persons who under federal law are deemed to be unlawfully present.

In a ruling issued December 27th, the attorney general wrote "only a resident of Michigan may be issued a Michigan's driver's license. A person who is not a lawful resident of the United States cannot be a resident of this state for purposes of obtaining a driver's license." In his ruling, Attorney General Cox also cited security concerns.

MICHAEL COX, MICHIGAN ATTORNEY GENERAL: Drivers' license much more than a card that allows you to get an automobile. It allows you to close on a loan and a home, allows you to get most importantly in airports and public transportation.

TUCKER: The state of Oregon too is reversing its policy. And as of February 4th, it will no longer issue driver's licenses to illegal aliens. Hawaii insists that it does not give driver's licenses to illegal aliens, saying that it requires all applicants have valid Social Security numbers.

NEIL BERRO, COALITION FOR SECURE DRIVERS LICENSE: The tide is moving in this country towards stricter, higher standards. And you're going to see the Democratic nominee and the Republican nominee, they are going to understand from the electorate that the American people want this to happen.

TUCKER: In Maine, there have been efforts to reverse the state's policy, but the governor refuses despite the conviction by the U.S. Attorney there of individuals who transported illegal aliens to Maine specifically to get them driver's licenses.

(END VIDEOTAPE)

TUCKER: That refusal also stands in the face of a recent investigation of active Maine driver's licenses, which found that more than 5,700 driver's licenses have been issued to drivers with the Social Security number 999-99-999. And in addition to those, there are another 2500 drivers' licenses issued to people with no Social Security number. Lou, the logic of Michigan has clearly not reached Maine.

DOBBS: Well, knowing the people in Maine, I would have to think it's going to reach there pretty quickly. This is just about as dumb as it gets.

TUCKER: Well, there are efforts underway to repeal that policy, but it hasn't happened yet.

DOBBS: Well, the good people of Maine putting up with the kind of stupidity that have to be behind this practice. I mean, this sort of - this completely blows up the entire image of Maine as an independent thinking, right minded bunch of folks who just don't put up with nonsense. This is utter nonsense.

TUCKER: So far, the reaction from the leadership in Maine is well, this is the federal government's problem. They...

DOBBS: That's more nonsense.

TUCKER: Yes, exactly.

DOBBS: This is, again, I don't believe the people of Maine are putting up with this. I mean, what in the world are they doing up there? Are we going have to send reinforcements to our friends in Maine?

TUCKER: We may need to.

DOBBS: All right, Bill, thank you very much. And it's really important and I think wonderful to keep in mind that three states moving that quickly to change what had been a tide of stupidity that was starting to grip the country. You know there's hope for this country if we can just keep our eyes focused on the reality.

Minnesota is one of a rising number of states doing just that, fighting back against the impact of illegal immigration. Governor Tim Pawlenty has just issued executive orders trying to route out any state documents, including driver's licenses that have obtained through fraud. Wow, what a concept. Governor Pawlenty is explaining why he had to attack the problem without the help of Minnesota's state legislature.

(BEGIN VIDEOTAPE)

GOV. TIM PAWLENTY (R), MINNESOTA: Good to hang with you, sweet Lou.

DOBBS: I don't know -- this is Governor Pawlenty, right. It's good to have you here.

PAWLENTY: Yes, it is. Yes.

DOBBS: The reality is that you've taken action through executive order. Why so?

PAWLENTY: Well, my legislature refused to act after we made similar proposals a few years ago. And so we went back to the drawing boards and decided to do some of this through executive order and just did it unilaterally through executive action.

DOBBS: And the -- why not -- why take this route rather than through legislative means?

PAWLENTY: Well, the legislature refused to act. And as you know, we've got a crisis in the country. Our immigration situation is chaotic. It is undermining the rule of law and it's hurting our economy and in many respects and our criminal justice system. So we just couldn't stand by any longer, Lou. We had to take some action.

DOBBS: Now when the state legislature begins its session, you're going to call for more action to deal with the impact of illegal immigration. And I'd like to put this up for our viewers to see, amongst the things you're calling for to cut funding to sanctuary cities in your state. I understand there are three in your state. Strengthen human trafficking laws and to increase employer sanctions and strengthen penalties for identity theft. You call these common sense measures. Your state legislature, are they going to -- do you believe to the best of your knowledge and understanding, do you believe they're going to support you?

PAWLENTY: No. Their reaction to those proposals was that they're against it and they question my motives or call it political. But if you go down that list, I would suggest to you a majority of Minnesotans and a majority of Americans would say that's the least we can do with respect to combating illegal immigration.

My goodness, who's against cracking down on human trafficking and stiffer penalties for that? Who would be against cracking down on identify fraud and theft or as applied to illegal immigration and the like. It just goes to show you how inane the debate has become where people won't talk about the merits of the issues.

DOBBS: Right.

PAWLENTY: They just, you know, slap on labels.

DOBBS: And do you think you're going to have sufficient support to sustain the fight against the impact of illegal immigration in your state?

PAWLENTY: Yes. We can't go as far as we'd like without legislative help. But we'll go as far as we can through executive action. And we'll keep promoting this and eventually the people of Minnesota will, you know, demand action from the legislature, Lou. So we'll make some progress. And we have in the past, too. DOBBS: All right, governor. I have to say I haven't been taken aback too often, but being greeted with sweet Lou and hanging with you, took me there. I appreciate it.

PAWLENTY: Well, you're welcome.

(END VIDEOTAPE)

DOBBS: Up next, Senator Hillary Clinton says, get ready. She says no woman is illegal. Whatever in the heck that means. I'll be talking with three of the best political minds in the country about that curious remark and a great deal more that is curious about this presidential election and its campaign.

Now the Supreme Court could affect the election this year. We'll hear from advocates on both sides of the fight over voter identification and integrity of our democracy. This is getting really complicated in this country. We'll see if we can look at it with some understanding eye the course of the next segment. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: The Supreme Court this week heard oral arguments in a case that could have sweeping implications for our presidential election this year. At issue, an Indiana state law that requires Indiana voters to show voter identification before being allowed to vote.

Critics argue that the law would disenfranchise poor and minority voters. Proponents say the need to prevent voter fraud far outweighs any inconvenience to any group of voters.

Tom Fisher is the solicitor general of the state of Indiana. And he argued the merits of the new law before the Supreme Court. Ted Shaw is the director, counsel and president of the NAACP. The NAACP and the ACLU filing suit against the law. Shaw says the end to the law is anti-Democratic.

(BEGIN VIDEO CLIP)

TED SHAW, COUNSEL/NAACP LEGAL DEF. FUND: It's anti-Democratic because what it does is sends the most vulnerable people out of the political process. It takes away - well, it makes it more difficult rather for them to vote.

This is a solution in search of a problem. There is no evidence that Indiana could point to end person voter fraud. So this was adopted on strict party lines. And the effect of it is going to be minorities, the poorest, the elderly, people who basically are those -- similar to those who are left behind by the Katrina floodwaters are going to be left behind in this political process.

And this is the most sacred right, the right to vote. We ought to be moving toward making it easier for people to participate who are citizens in a political process, not fencing them out.

DOBBS: Tom, your response to that?

TOM FISHER, INDIANA SOLICITOR GENERAL: Well, the only study that's been done in the wake of this law has shown that there's been no dramatic or any downturn, any significant downturn at all with respect to voter participation with the administration of this law. And indeed, some groups have had turnout that's increased.

So we don't think there's any evidence of that. And indeed in this case, there's no injured voters unable to vote as a result of this law that are part of the case.

DOBBS: So let's -- I'm sorry, go ahead, Tim.

SHAW: Well, you know, there's -- I give you one example. There's an 85-year-old African-American woman by the name of Thelma Hunter, who lives in Indiana. And once this law was passed, she wanted to try to get her birth certificate from Tennessee. And Tennessee authorities said they couldn't find it, it wasn't on record. This is a woman who voted in every election and can't vote now. So this is real effect on real people.

DOBBS: Right.

FISHER: Lou, if I may, that's just not true that she can't vote, because the legislature created accommodations just for these kinds of situations. In Indiana if you're 65 or older, you can vote absentee automatically. And you don't need photo identification to vote in that state.

SHAW: Well, I'm not talking about absentee ballots. I'm talking about people who want to vote at the polls or want to go to the polls. That's what this is about.

X : That it would be an accommodation to this woman, you would have to agree. It may not be the perfect accommodation or the one you would prefer, but it is an accommodation.

SHAW: This a woman who wants to do what she's always done as an American, which is vote.

DOBBS: I understand. I take the point. But it would be an accommodation whether perfect or preferable, but nonetheless, it would be.

SHAW: Well, it may or may not be an accommodation that works for her.

DOBBS: So let's go to the other part of this issue. And that is Tom (INAUDIBLE) suggested is that this is a cure without a disease. This law is coming into place here against -- to protect against what extant grievance or breach of the law that you've experienced in the state of Indiana.

FISHER: Well, I think that since the 2000 elections in particular, society as a hole has become more sensitive to the need to modernize elections. We've seen around the country reported incidents of voter fraud. In Indiana, we've seen many instances of actual voter fraud, particularly in the absentee context. And when you have that kind of dynamic going on socially, and then you look and you see that there's an obvious gap in security measures with respect to voting at the polls, it's reasonable to take the step that the state has done here, which is to reassure voters that elections are secure, by requiring the most common form of identification in America, the one that's universally accepted.

DOBBS: Ted Shaw, your response?

SHAW: Well, I think it's telling that what we've just heard is that the Indiana legislature addressed n person voting fraud, which doesn't exist. They haven't found and they couldn't point to one example of that.

But what we just heard about was absentee ballot voting fraud, which was not part of the legislation. It's clear that this was passed with the -- again, on strict party lines, with the intention of having an effect in the political process. Some people are going to be fenced out.

DOBBS: Also, could I not ask you both, if I may, I would like to ask both of you gentlemen here, the reality is that we do want to secure our voting system. We want a electoral process that has great integrity. Most states do not have that. I think you would agree.

We have a very difficult time in this country regulating elections in any form. But we are a nation that is quickly changing in terms of the number of people who are creating great demands on volunteers. There are usually older citizens, who are volunteering their time. We have very little in the way of safeguards for voter integrity in this country.

How are -- is this the way we're going to resolve voter identification? Or are we -- without providing some sort of strength to our electoral local boards, our precinct wards and so forth? Tom, let me ask you to answer that question first.

FISHER: Well, I think in Indiana, we've taken an approach that addresses the issue of voter security on a number of fronts. Not only have we instituted voter identification at the polls, but we've also restricted who can cast an absentee ballot, who can handle an absentee ballot. We've updated technology with respect to voting machines. There is a pilot program for voting centers. So this is a multipart problem. And photo identification is one very important part of that.

DOBBS: Ted, you get the last word here.

SHAW: Well, you know, when you talk about the 2000 election and the concerns about 2004, the problem there was people's votes...

DOBBS: I moved on. I'm concerned about 2008.

SHAW: ...well, as are we. But the problem there was that people who had the right to vote, their votes weren't counted. This is a step that makes it more likely that some people who are American citizens will not be able to exercise this most sacred right.

I don't think that Indiana made a good policy choice. And it's going to have effect on the most vulnerable people, the poor, minorities, the elderly.

DOBBS: How concerned are you about that very issue? Tom Fisher?

FISHER: Well, I think the legislature went out of its way to make accommodations for groups that some might perceive to be vulnerable to this. That if you indigent, you can still vote without identification. If you have a religious objection, the same thing. If you are disabled, if you are elderly, you can vote absentee without identification. So the legislature was sensitive to these issues.

DOBBS: All right. I thank you, both, for being here. We look forward to obviously this very important case. Ted Shaw, thank you very much. Tom, thank you.

FISHER: Thank you.

UNIDENTIFIED MALE: Thank you.

(END VIDEOTAPE)

DOBBS: Coming up next, Republican presidential candidates facing off over the direction of this economy and our illegal immigration crisis. Also, Senator Barack Obama endorsed by a union that supports amnesty, and another union that supports amnesty. And a bizarre remark from Senator Clinton on female illegal aliens? Three top political analysts join me next. Stay with us. We'll get to the bottom of all this and more. Right back.

(COMMERCIAL BREAK)

DOBBS: Joining me now, three of the best political analysts in the country. Here in New York with me, New York "Daily News" columnist Errol Louis , Democratic strategist, Hank Sheinkopf in our Washington, D.C., bureau. Diana West, "Washington Times" columnist. Diana also author of "Death of the Grown-up." Good o have you all here.

And Diana West, "Washington Times: columnist, also author of "The Death of the Grown-up". Good to have you here. This has been a few days in which the national media has had to kind of reassess its enthusiasm and the approach to this campaign. What do you think?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: I'd argue that Iowa, frankly, the results, they may have been a response to the pundits and the media telling the public what to do. I would argue the same possibly in New Hampshire. People are going to do in this cycle what will they want to do because there's a new voter out there who doesn't need to pay attention to anything any of us in the punditry and the press have to say.

DOBBS: Who is that?

SHEINKOPF: Under 40, patriotic person, look at the data. He's patriotic, like he was born in the time of the Gulf War, he or she, first cold war. They're patriots. They feel strongly about this. They feel good about this country. They don't like the war in Iraq, but they like the military. And they don't like the way Washington is functioning.

DOBBS: I don't - it's hard for me. I don't know about you, but it's hard for me to put that down just to somebody under 40 in this new thinking.

ERROL LOUIS, NEW YORK DAILY NEWS: I don't know if I'd carve it up quite as finely as Hank, but there's certainly something going on out there that a lot of us didn't know about, don't really have a handle on, and can't really predict. I'm actually glad in a way that this happened early in the cycle, that everybody got egg on their face trying to sort of jump out ahead of the voters. And the voters kind of sent us all back and said no, we're going to figure this out. And you all can just report on it.

DIANA WEST, WASHINGTON TIMES: Well, I would say it should put the media back in the business of trying to cover the news rather than predict it. And I too am glad it happened early in the cycle. Maybe it will make the media a little bit more back to bread and butter issues, rather than high flights of emotionalism that I think probably turned New Hampshire voters off particularly in regards to the Obama candidacy. I think that was probably a big factor with that movement of voting.

DOBBS: Something of a backlash.

WEST: I think so.

DOBBS: You know, I have to say to you, and this panel knows me pretty well, I wasn't surprised here because I think there's something going on in this country that has - that's going to be really frustrating to partisans in both parties.

And that is that all of this nonsense about trying to create a Obama bandwagon, the national media, because that's precisely what they were doing, a reminder that the predominance of the media in this country, the national media is liberal. And trying to turn away from the Clintons because there's a real tension between the national media and the Clintons. All of that, I think, worked in the -- to the disfavor of Hillary Clinton, and to the advantage of Obama. I think that has been rectified.

WEST: But you know, I think what we're also seeing, though, we're seeing this -- this is still so far an election for celebrities. And that's actually been troubling me quite a lot because in the media we're focusing on tear tracks and bounce and so on. And we're not really dealing with issues in revealing the issues or the stances on any of the candidates. And you see that in our debates.

DOBBS: Errol, I truly believe. I think the American people are going to tell both parties to stick it. And any candidate who wants to assume that he or she has support based on some sort of entitlement from a membership in a particular party is going to be in real trouble this year. Whether Republican or Democrat.

LOUIS: I think the message is it's not going to be easy. There's not going to be any short cuts. You don't just get to sort of say the magic words and then reap all the benefits. Nor, frankly, looking at Clinton, do you get to sort of tick off a bunch of programs and get the - get waived through the gates either. It's not going to be easy this time.

DOBBS: Go ahead.

WEST: Well, that seems to be, though, exactly what she's doing. I mean, she does seem to be ticking off a list of programs. I mean, today or rather this week, we have been seeing her moving through various places now in Nevada. And California and also discussing bailing out the housing crisis or telegraphing her views on amnesty, for example. And I think that we are seeing her ticking off a list of issues. And so far, it's working for her.

(END VIDEO CLIP)

DOBBS: Well, let's come back to that in just a moment. We'll be with our panel in one moment. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

DOBBS: We're back with Errol Lewis, Hank Sheinkopf, Diana West. What - you know, about the time you think Senator Clinton's going to make some sense, she does something like what she did this week, announcing that no woman is illegal. What in the world was that?

WEST: It sounds to me off hand like she got her pandering points a little crossed. That, you know, there's one line of appeal that says no one is illegal. And there's this other instruction that she's got clearly that she's got to speak to women.

Exactly, exactly. The context was someone shouted out to her in her trip to Nevada that his wife was illegal. And that's when she responded with no woman is illegal. So this was very -- I think telegraphing both to the Hispanic vote and the female voters, perfect.

SHEINKOPF: I think she's tired. I think this campaign has taken a toll on everybody and she screwed up. Look, no candidate is perfect. And frankly, we're holding her to a standard and the pundocracy and in the press corps that is not fair. We expect her to be perfect. We look to pick at everything about her. We're not picking at everybody else. We're not picking them in the same way. We're just not.

DOBBS: You want to bet?

SHEINKOPF: No, I don't think so, Lou.

DOBBS: OK, let's try this. Let's try what would you say that I would comment about Senator McCain, senator -- Governor Huckabee, Barack Obama, Governor Richardson. My gosh, there's not -- as you say, not a single one of these candidates is perfect. But when you make a comment like that, it's just exactly as Errol said, she's crossing her pandering notes and lines and coming up, I think, looking really, really bad.

The criticism is not -- you've been very consistent about the issues and you frankly excited this populous center that's out there trying to figure out who we have to have as president, if anyone, how's that - by the turnout numbers.

But I think she has frankly been attacked. The attack on her on the tears business was to me overwhelming. And you were not part of that.

DOBBS: As I said at the time, I thought the tears were a wonderful genuine moment. And I frankly don't care if she was faking her authenticity. It worked with me. And just as other candidates, I'm sure, their attempts at authenticity are sometimes less than authentic.

But I actually think that something else came out of this. Remember the nonsense about her being a number of people were trying to make something out of her looking tired and being aged and the old hags sort of comments. I think this woman, and I disagree with her on host of issues and strongly so.

DOBBS: But I think this woman is bringing a great deal of character and class to a woman of her age. I think she is showing grace. And I think she's dismissing a lot of these - I'll say it - these jack asses in the national media, who want to judge a woman on a number of parents.

You know to hell with them. And I think the American people are saying the hell with them.

LOUIS: I mean, she's - I mean, when it comes to that, she practically. She doesn't just move well between the challenges that all powerful women have to appear commanding and caring at the same time. She basically invented in it to a great extent in modern politics.

She walks that path all the time. She a soldier. Covering her New York policies, you see it all the time.

I think the question, though, is once you get that silly stuff aside, is there still a critique there to be made, you know? And then...

DOBBS: On the issues, I believe there's a tremendous critique to be made.

WEST: Good point. Yes, Errol, I agree with that. And getting the silly stuff aside is what we really don't seem to be able to do. And getting back to Hank's point about criticizing him for not being perfect. I...

She makes statements to the media on a very staged, prominent walk though a Hispanic neighborhood. You've got to discuss what she talks about.

(END VIDEOTAPE) DOBBS: And with that, Errol Louis, thank you very much, (INAUDIBLE) thank you very much. And we thank you for joining u tomorrow as well. For all of us, thank you for watching. Good night from New York.

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