Lou Dobbs Show Transcript -- January 6, 2004


President Bush Proposes Changes in Immigration Policy

Aired January 6, 2004 - 18:00 ET


LOU DOBBS, CNN ANCHOR: Tonight: new concerns that one of America's closest allies in the war on radical Islamist terror may be exporting nuclear weapons technology to rogue states. Senior White House correspondent John King reports. In what appears to be a significant political gamble, President Bush may be fighting members of his own party when he announces sweeping changes in U.S. immigration policy. Lisa Sylvester reports.

In "Exporting America" tonight, we go to a city in the Midwest facing now a huge rise in unemployment, as the community's biggest employer ships hundreds of jobs to Mexico. Peter Viles with a special report.


DOBBS: Well, strata of society may not change appreciable soon but if President Bush has his way and it appears that he is going to advance tomorrow, a major change in immigration policy, how significant a political risk is the president taking?

Let's turn to you, Ron.

BROWNSTEIN: I think it is a risk. Both ends of the equation that he's dealing with are controversial at this point. The general assumption has been the only way to do either some kind of earned legalization for illegal immigrants who are here now or a guest worker program that business wants is to do them both together or do a coalition that will bring together Republicans and Democrats, business and labor. The problem is each end of the that equation is very controversial right now. At a time when we have a net loss of job under President Bush a lot of people are going to ask why do we need a guest worker program to bring in more foreign workers. At a time when we have all the security concerns there are going to be a lot of people especially conservatives, asking why do we want to legalize people who enter the country illegally. So, he's going to have to thread the needle. But I'm told from the White House it is going to be an ambitious proposal and there may be some unhappy conservatives tomorrow.

DOBBS: Unhappy conservatives and that middle class we're talking about who are struggling to find representation. Economically, this is pressuring wages at the lower end of the income scale in this country. The middle class facing another squeeze.

Is there a possibility in your judgment, Karen, that this could become more than simply an issue of between conservatives and liberals but rather go straight to the heart of the middle class?

TUMULTY: Well, of course, what the big demographics of it, the Bush administration is looking at here, Hispanics which are, you know, very much a part of the growing population, not just in the southwest but in a lot of Midwestern cities throughout the south. These are voters that the White House thinks they really need to make inroads with if they are going to win. And there is just no other issue where the rubber really hits the road with Hispanics than this one. So...

DOBBS: Is that really true. Because what we have heard here, is we have been reporting on this issue, Karen, is the idea of making a connection between quote "Hispanics and Latinos" in this country and illegal immigrants or illegal aliens doesn't hold up. Hispanic and Latino legal immigrants are as offended by illegal immigration as any other part of our society.

TUMULTY: Well, all you have to do is look at what happened in California with prop 187 and you see how much of a visceral reaction this issue, however, does bring out with Hispanic voters.

BROWNSTEIN: There is, but I think, Lou, there is some ambivalence even in the Hispanic community because of the economic competition that is created. As I say, one of the things that's going to be difficult for President Bush here is that what is going to take to attract labor, Democrats and organized Latino groups is a very generous program of moving people here illegal toward legal status. But if he goes in that direction obviously there are going to be a lot of conservative and maybe even many mid Americans -- middle class Americans who don't like it. So it's one of these things where it simply may not be possible to square the circle and get this done. We'll see tomorrow exactly where he comes out at his opening bid.

DOBBS: And Roger, the final question, John Kerry, he is calling companies exporting jobs overseas to cheap foreign labor markets Benedict Arnold companies.

Is this issue starting to take on some traction?

SIMON: Well, he certainly wants it to. The solution he has for the outsourcing of American jobs, especially in telecommunications though, is not a very strong one. He wants a law that says when a company switches your phone I inquiry to a foreign country you're notified of it. Well, I don't think most people are going to care. It doesn't stop people that are going to do it. If have you a computer question and are told your call is being switched to New Delhi, you only care if your computer question is being answered.

DOBBS: Roger Simon, Karen Tumulty, Ron Brownstein we thank you always. Good to talk with you.

TUMULTY: Thank you, Lou.

DOBBS: Senate Majority Leader Bill Frist is in Mexico. He's meeting with members of the legislature there and Mexican law enforcement officials. Frist and Mexican officials talked about, of course, immigration, trade, the drug war and the war on terror. The Senate Republican leader will meet with President Vincente Fox tomorrow in advance of the president's trip to Mexico next week and as we reported earlier, tomorrow is also the day President Bush will unveil his immigration proposals. Mr. Bush meets with President Fox at the summit of the Americans which will be held in Monterey, Mexico next week.

That brings us to the topic of "Tonight's Poll." Ahead of that immigration initiative tomorrow to come from the White House. The question should Mexico reform its own political and economic policies as a condition of any liberalized U.S. immigration policy, yes or no? Cast your vote as cnn.com/lou. We'll the results later in the show.

Coming up next, a controversial proposal. Our next guess says it amounts to amnesty for illegal aliens. Michael Cutler is a former special agent for the Immigration and Naturalization Service. He joins us. Please stay with us.


DOBBS: President Bush is about to present his plan to fix immigration laws in this country. But my guest says, we still haven't learned the lessons of the last immigration reform, so called.

Michael Cutler is former senior special agent for Immigration and Naturalization Service. And he joins us. 1986 immigration reform, about three and a half million illegal aliens...


DOBBS: ... were granted amnesty.


DOBBS: Now we have an estimated somewhere around 10 to 12 million in this country.

CUTLER: That's right.

DOBBS: How is that working out?

CUTLER: I think we're creating another nightmare for ourselves. Somebody wants to find insanity is doing the same thing and same way and expecting a different outcome. Certainly that situation now from where I see it.

DOBBS: Our distinguished panel of political journal is addressed the political motivations or at least some of them involved. The idea of matching so-called willing workers with willing employers.

We know there are plenty of willing employers in this country who will hire low wage illegal aliens irrespected of their status.

What does that expression mean to you?

CUTLER: It's hard to comprehend it. Because the policy of immigration enforcement was based on the idea of employer sanctions. The magnet that draws the alien across the border was the prospect of finding employment. So, now we seem to be sending the very confused message.

Well, if you have a job, come on over and that's what's been drawing them in the first place. So I don't understand how this is going to discourage a human tidal wave if this becomes the way we do business. DOBBS: What will be the impact, do you think, on the spirit, if you will, of those who protect our borders. The border patrol, immigration control, customs, what in the world -- would they just throw their hands up?

CUTLER: I've been talking to some of the folks and they are ready to jump out the window. Nobody could believe this is happening. You know, you would think we would learn from our mistakes and especially at a time when we have great concern over who we're letting into the country and other issues that revolve around this whole immigration problem.

To send this very mixed message that on the one hand we don't want you to run the border, but on the other hand, if you do, we'll let you work here and we'll do everything we can to make it convenient for you. How does that discourage people from coming here?

DOBBS: The other part of this is that the administration seems, if I can use the expression, hellbent on providing amnesty. Providing a matching willing workers and employers which is, to me, just simply a code for we're going to let business, whether they be agribusiness or corporations or small business, hire whom they want at whatever wage they basically want. And saying they want to protect their social benefits of illegal aliens while the middle class is getting hammered in this country.

CUTLER: The thing that's amazing to me is when I worked on narcotics investigations, that was part of the drug task force for a number of years, we would seize the assets of people that gained these assets by breaking the law.

Now we were dealing with drug dealers, but we would take their houses, their bank books, their jewelry, their airplanes because these were ill gotten goods. So now we're talking about protecting money that's earned by people who got the money by breaking the law. It just seems to fly in the face of the way we do business as law enforcement officers.

DOBBS: The consequences of crossing a border illegally in this country is almost nothing. In other countries in Europe, for example, it is a very serious matter, as you well know. But the idea, again, that we can't come up with an intelligent and honest response to border security, to me, is absolutely baffling.

Because we're effectively, it seems to me, saying citizenship -- American citizenship -- doesn't mean much. Cross our borders illegally, do whatever is necessary, for the Yankee dollar we'll forget and forgive.

CUTLER: It seems that way. It seems that we are willing to sell citizenship, in effect, by doing this. We have cheapened what it means.

DOBBS: What would make sense, in your judgment?

CUTLER: We need to have meaningful strategy for interior enforcement. We keep talking about the border but half the illegal aliens don't run the border. They come through ports of entry. The terrorists came through ports of entry.

There's a fraud problem where people are filing applications for citizenship, for residency, and according to the general accounting office, the level of fraud is astronomical because there's nobody out there to do investigations, to determine that there's any kind of legitimacy to the applications that are being filed.

So you need to look at it from an enforcement tripod perspective. The inspectors have to enforce the laws at ports of entry, the border patrol agents between ports of entry, and you need enough special agents to go out there and enforce the laws from within the interior and then you would have a possibility of success. But you know, a tripod on two legs falls over.

DOBBS: You work on these issues all the time and you have a sense of what is happening in Washington.


DOBBS: If the president's proposals are as dramatic as we are hearing they may well be, is it your judgment that Congress is prepared to accept them and put them into law?

CUTLER: I think that there's a lot of people on both sides of the aisle that have some real concerns where this is going to go. This one is a rough call. I don't know.

DOBBS: Are you astounded that more people aren't just picking up the phones, calling their congressmen or senators and saying what in the world are you people thinking about?

CUTLER: This is supposed to be a government by the people and 70 percent of Americans when polled said they want tighter immigration enforcement yet neither side of the aisle wants to deliver it.

I think the public does need to be heard. They need to -- in that movie network where the guy got up and said I'm angry as hell and I won't take it anymore. The public needs to make their elected representatives do what they are supposed to do and that is represent them.

DOBBS: That would be an interesting approach. Michael Cutler, thank you very much for being here.

CUTLER: Thank you for having me again. Good to see you.

DOBBS: Coming up next, the broken promises of free trade. I'll be joined by Nobel Prize winning economist Josef. He says the very peace and prosperity of the western hemisphere are now at risk. He joins us next. Please stay with us.


DOBBS: The NASDAQ is now at its highest level in two years. The dollar is at another record low against the Euro. Christine Romans is here with the market and more -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL NEWS CORRESPONDENT: And that falling dollar has been a boom for the metals market. Blue gold at the highest since 1988. Platinum at a 24-month high and silver, copper and other industrial metals booming as the U.S. recovery moves overseas.

Corporate corruption also moving overseas. The accounting hold for Parmalat, that's the Italian dairy company. It could be on par with WorldCom. Banks and creditors nervous to say the least. The SEC is investigating and the lawsuits are already flying and prosecutors want to know, what role, if any, U.S. banks played in this fraud.

And an alleged bribery ring between IBM executives and South Korean officials in a case involving state contracts for service of computers. IBM Korea, Lou, says it does not condone such behavior and has fired some staff involved in that case.

Meanwhile in New York, jury selection began today in the Martha Stewart insider trading case. Her trial begins January 12 and opens a busy season of executives on trial.

Former WorldCom and Adelphi executives head to court next month. CreditSuisse FirstBoston's Frank Quattrone will be retried in March. Enron's former CFO faces the music next year. Tyco's former general counsel will be tried in March and the trial with old chief Dennis Kozlowski is expected to wrap up later this month.

A witness testified that Kozlowski used $5 million of Tyco money to buy a very big diamond ring for Kozlowski's wife.

DOBBS: So he used all of the company's five million to buy that one ring?

ROMANS: Well I'm not sure, but I'm telling you something, it's been interesting twist and turns. That should wrap up later are this month.

DOBBS: Three people in jail, it's over two years since Enron. Big investigation, prosecution, you have a lot of interesting things. Christine Romans, thanks.

Taking a look now at the news in brief tonight. A woman's winter coat triggered a terror scare on a Delta flight from Paris to Cincinnati. The woman was taken off the plane before it left France because of suspicious wires sticking out of her coat.

The government and aviation security sources say U.S. fighter jets escorted the flight part of the way to Cincinnati. U.S. officials determined the woman was not a threat at all. The wires were part of a heater built into the jacket. Now that's some jacket.

DNA tests have confirmed with a high degree of certainty that the first case of mad cow disease in this country originated in Canada. Agricultural officials say the infected cow in Washington state came from a dairy farm in Alberta. And a winter storm has hit the pacific northwest with record cold temperature. Falling snow, treacherous driving conditions. Parts of Oregon and Washington have been brought to a standstill tonight. The storm is being blamed for one death in Seattle.

And NASA today released the clearest image yet of Mars taken by the Spirit rover. The stunning image shows (UNINTELLIGIBLE) rocks dotting the Martian landscape. NASA says the red, orange, pink colors in the picture appear as they would to the naked eye. Spirit is expected to send back more color pictures of Mars over the coming days before it begins roving around the Gusev crater where it landed flawlessly, perfectly three days ago.

Well, turning now from the scientific wonders of Mars to trade tension in this hemisphere. My guest tonight says free trade agreements that this is country is pursuing in Central and South America could, in fact, be doing more harm than good. I'm joined by a Nobel laureate, professor of economics at Columbia University, Joseph Stiglitz, and a former chairman of the Council Economic Advisers under President Clinton, chief economist for the World Bank, always a busy man. And today, in your op-ed piece in "The New York Times," you suggest that NAFTA has hurt Mexico more than helped it. Why?

JOSEPH STIGLITZ, FORMER CHIEF ECONOMIST, WORLD BANK: Well, it didn't live up to its promise. A lot of people thought that it was going to be the magic bullet that would lead Mexico to prosperity. In fact, the gap between the United States and Mexico has actually grown in the decade. Real wages in Mexico have actually fallen, and the growth in Mexico in the last decade is much poorer than it was in the decades after, say, 1948.

DOBBS: Yet we have a huge trade deficit with Mexico. They have been the beneficiary in the trade balance with this country. Why?

STIGLITZ: Well, one of the concerns about these trade agreements is that they focus only on two countries. The trading regime that we have is a global trading regime. You can't look at the balance between any two countries. If you look at really the relationship between Mexico and the United States, what you see is that Mexico is being hurt by our huge subsidies for agriculture.

DOBBS: Well, let's be honest. Mexico is being hurt, because it doesn't have the developed infrastructure, it does not have the investment that is necessary to drive a modern country. It is not organized for transparency and terrific market conditions. That NAFTA can't solve or anything else.

STIGLITZ: Exactly. So the point exactly the point I was making. It's not a magic bullet. Mexico can't compete...

DOBBS: Yet it was sold on the basis that this is going to drive jobs in the United States. It's going to create wealth in Mexico. When did we figure it all out?

STIGLITZ: Well, a lot of us knew that it was not going to be the magic bullet, and that it was being oversold. We were worried. On the other hand, there was a debate on the other side that was underselling it. They said that jobs -- the sucking sound of jobs that we were going to lose, Ross Perot talked about that. There wasn't -- remember, after NAFTA was signed, unemployment in the United States fell. It fell to 3.8 percent.

DOBBS: You don't really think that was because...

STIGLITZ: No, no. No, no. The point I'm making is that when you have the economy managed well, it can create jobs even though we're reshifting our economy, losing some low quality jobs and gaining high quality jobs.

DOBBS: Well, you have been a proponent of free trade, and a vigorous one. Wouldn't you have...

STIGLITZ: But fair trade.

DOBBS: Fair trade. You have been a vigorous advocate, also, of concern for illegal immigration into this country. You want humane treatment. Most of us do. The fact is, we're looking at a situation that we have not considered before. We are seeing labor being transported all over the world, along with capital and technology. And we've got people saying, well, you can't be protectionist, you would simply disrupt the world economy. They are looking at it as if we have to have free trade, monolithically, blindly in one direction. What do you think is going to happen?

STIGLITZ: Well, I think one of the things that those of us who were advocates -- are advocates of free trade was that we need assistance for people who are going to be losing jobs. There's no way of hiding that.

But the other thing we have to do at a global level is make sure that we have fair trade agreements, and the problem is United States has been advocating unfair trade agreements.

DOBBS: When you say unfair, I get the feeling you are talking about it's unfair to the countries we are dealing with, rather than the United States.

STIGLITZ: That's absolutely true.


DOBBS: And I'm sitting here arguing with a Nobel laureate economist, professor. And I have to say to you, we're watching hundreds of thousands of high valued jobs being transferred, along with capital and production facilities, overseas. No one ever anticipated that situation, did they?

STIGLITZ: We did. We anticipated...

DOBBS: You forgot to tell me.

STIGLITZ: Well, what we anticipated is that at the same time we would also be creating new jobs, and we did when the economy was well managed. We did create new jobs in the '90s.

DOBBS: Wait a minute. Well managed economies? Wait a minute. You're going too far for me now.

STIGLITZ: What we were talking about is we had macro policies.

DOBBS: You mean like under the Clinton administration?

STIGLITZ: Exactly.

DOBBS: Exactly. I wondered where we were going with that.

STIGLITZ: That's where we're going.

DOBBS: Isn't that the president who signed NAFTA, though?

STIGLITZ: That's right. That's right. But so the point I'm making is that right now we're confusing two separate issues. We have unemployment, because the president, President Bush, decided to push a tax cut for upper income Americans rather than the kind of stimulus that the country needed and would have gotten us out of the economic downturn far quicker than it did. We've lost three million jobs in the last three years. We should have been creating...

DOBBS: And $1.5 trillion in stimulus isn't enough to drive it, you think?

STIGLITZ: We're finally getting it up. But...

DOBBS: Joseph Stiglitz, I am going to ask you to please come back. Can we ask you to come back soon?


DOBBS: In the next few days?


DOBBS: Because we really -- our audience is terribly interested, we're all interested in the future of this economy and the pressures that are on our hardworking middle class.

STIGLITZ: I understand that. I understand that impact.

DOBBS: So if you will, please come back soon. It's great to see you.

STIGLITZ: Nice to be here.

DOBBS: Professor Joseph Stiglitz.

A reminder now to vote on our poll. The question tonight, should Mexico reform its political and economic policies as a condition of any liberalized U.S. immigration policy? Give us your thoughts, as to yes or no. Cast your vote at cnn.com/lou. We will have the results in just a few moments. And next, a lotto controversy draws to a dramatic conclusion. We'll have that story and much more to come. But first, "Exporting America." Each night here, we build on the list of American countries that our staff has confirmed to be exporting jobs to cheap overseas labor markets. Tonight's addiction to that list include department store chain Marshall Fields, Storage Technology Corporation, Sykes Enterprises, a direct marketing firm, Target, Tecumseh, a machine manufacturer, and VA Software. Those are the additions tonight.

One company our staff confirmed last month, EarthLink, today announced a plan to restructure its call center operations; 1,300 jobs will be cut at the Internet service provider in this country. EarthLink, of course, will outsource most of those jobs to companies based in, well, some places here, but India and the Philippines. We will, of course, update the list each evening. Please continue to send us the names of those companies you don't see on our list. If you can see this moving by so quickly. We're going to try to slow that down. Please, our e-mail address, loudobbs@cnn.com. We'll be right back. Please stay with us.


DOBBS: Results of our poll. Eighty-four percent of you say Mexico should reform its political and economic policies as a condition of any liberalized U.S. immigration policy. Sixteen percent said it should not.

Finally tonight, after days of controversy, there is a winner in that $162 million Mega Millions lotto jackpot. Rebecca Jemison of South Euclid, Ohio came forward today to claim her prize as the sole winner. This just days after a Cleveland woman filed a police report claiming to have lost the winning ticket. Jemison was quick to respond to skeptics.


REBECCA JEMISON, MEGA MILLIONS WINNER: Wow. First of all, I want to clear up a few things that have came out in the press. One of the them is that -- for one, I've been playing these numbers for approximately about two years. One thing I wanted to make clear when I hear people say, luck, luck, luck. Luck had nothing to do with this. This is truly a blessing, truly a blessing.


DOBBS: A blessing indeed. Jemison opted, by the way, for the lump sum. After taxes, that single payout amounts to just about $67 million.

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