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LOU DOBBS TONIGHT

Flu Pandemic Imminent?; Interview With Senator Edward Kennedy; Interview With Senator Chuck Hagel

Aired December 3, 2003 - 18:00   ET

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

LOU DOBBS, CNN ANCHOR: Tonight: In Colorado, the flu has killed two more children. In that state, more than 6,000 people have fallen ill to the flu. Several other states have been affected by the outbreak. And, in Europe, health officials are warning about a worldwide flu pandemic. Bill Tucker will report.
The president's No Child Left Behind law, critics say it's underfunded, mired in red tape. We'll be joined tonight by a leader of the National Education Association and a top Education Department official in our "Face-off" on the issue. We'll also be joined by Senator Edward Kennedy.

Senator Chuck Hagel joins us. He says rising deficits, Medicare reform and uncontrolled spending all show the Republican Party has lost its way.

And "America's Bright Future": two remarkable young sisters who are blessed with an incredible, powerful talent for art.

And how is your confidence in our new electronic voting machines? Are they more reliable or more vulnerable to fraud? Lisa Sylvester will report.

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, December 3. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, the United States and the Iraqi Governing Council are considering a significant strategic change in the war against insurgents and terrorists. For months, U.S. officials said they would not recruit militiamen from religious and political parties. Now those same officials are talking about the creation of a new Iraqi military unit that would include members of those militias.

The United States seems determined to press ahead with its plans to dramatically increase the size of the Iraqi security forces and to not deploy any more U.S. troops. The Pentagon insists that U.S. commanders in Iraq have not requested additional troops.

Walt Rodgers reports from Baghdad -- Walt.

WALTER RODGERS, CNN SR. INTERNATIONAL CORRESPONDENT: Hello, Lou.

Well, the facts are here that the United States is doing a lot of experimenting on the ground, looking for something that works. It's clear on the surface that the campaign against the Iraqi guerrillas, the insurgents, is only marginally effective. Look at the continual death toll of the Americans here.

So the latest innovation would be an 800-man Iraqi paramilitary force. Now, this is above and beyond the police here. The Iraqi police are genuinely ineffective. Most of them don't even have guns. This force would be highly trained, highly mobile and it would have U.S. special forces at the head of each of the five battalions.

Of course, this is going to be difficult to pull off because of the ethnic complexity of Iraq. There was the -- there was one report that, indeed, that militias from all the religious and political factions here, Kurdish militias, Shiite Muslim militias, Sunni Muslim militias, would be included in the composition of this new paramilitary force. The U.S. military here in Baghdad is denying that on the surface of it.

And, again, that makes for a very interesting, perhaps even an explosive, combination. But what is most interesting, of course, is that you can't have a paramilitary force without balance. And that would include, if not the militias, certain designations of, these are the Shiite police, these are the Sunni police, these are the Kurdish police. So there has to be some sort of ethnic composition in there, call it militias, call it whatever you wish.

That appears to be the direction the U.S. is going now. This is only in the planning stages, however, and it is a work in progress -- Lou.

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

The president's dramatic visit to Iraq on Thanksgiving has given him a significant boost in the latest opinion poll. The National Annenberg Election Survey says the president's approval rating has risen from 56 percent to 61 percent after the visit.

Senior White House correspondent John King has the report -- John.

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, White House officials say that's not the reason the president went, that, as commander in chief, he thought it best to spend some Thanksgiving time with the troops.

But, certainly, they are encouraged here at the White House and at the Bush-Cheney reelection campaign if the American people are reacting favorably to the president's dramatic surprise visit to Baghdad on Thanksgiving. The administration also knows, though, that one visit to Baghdad will not answer voters' questions about the president's policy in postwar Iraq or the Democratic criticisms, the increasing Democratic criticisms, of the policy in postwar Iraq.

The administration, though, heartened. It says, overall, the president's approval number has bounced up in recent surveys, despite some lingering questions about the policy in postwar Iraq. Senator John Kerry today among the Democrats hammering the president and questioning his policy. The administration, Lou, believes this is good progress for the president of late.

They also believe, though, that most of the uptick in the president's approval number is because of the recent strong economic news, the growth in the third quarter, increasing jobs being added to the economy. They are hoping for more encouraging news in this week's unemployment report. And they believe the economy right now is the driving factor in the president's uptick in those approval polls -- Lou.

DOBBS: John, thank you very much -- John King, our senior White House correspondent.

In a federal appellate court in Richmond, Virginia, a case that could limit the government's ability to fight the war against radical Islamist terrorism. At issue is whether the terrorist suspect Zacarias Moussaoui, should be allowed to question al Qaeda witnesses that the United States is holding in custody overseas.

Our justice correspondent Kelli Arena has the report.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): Accused terrorist Zacarias Moussaoui has no right to call al Qaeda leaders as witnesses in the case against him, even if they have information that could help clear him.

That's what the government argued before a federal appeals court. Moussaoui believes these three men can help prove he had nothing to do with the September 11 attacks and wants their testimony for his trial. In an effort to stop future attacks, the three are still being questioned overseas.

A government lawyer argued, the al Qaeda leaders are outside the reach of U.S. courts because they are not American, not in the United States, and are in custody only as a result of military action. Paul Clement told the judges, "What the defendant seeks is a windfall from the government's war on terror."

BRADFORD BERENSON, FORMER FEDERAL PROSECUTOR: Hypothetically, at least, allowing access to these people could be very, very damaging to the national security interests of the United States and to the efforts of our military and intelligence services to get information that we need to dismantle terrorist networks and prevent attacks.

ARENA: But the defense argued, Moussaoui's right to a fair trial includes access to all information that could help his case. And he accused the government of sitting on the witnesses.

FRANK DUNHAM, ATTORNEY FOR MOUSSAOUI: The attorney general's filed affidavits that preclude us from ever seeing them. So the district court has to account and compensate for that loss.

ARENA: The way the judge overseeing the case compensated was to impose sanctions on the government, telling prosecutors they cannot show a jury the mounds of evidence related to the September 11 attacks or seek the death penalty.

(on camera): The government is protesting those sanctions. It's up to the appeals court to decide whether they will stand. But there's no telling when that decision will be made.

Kelli Arena, CNN, Richmond, Virginia.

(END VIDEOTAPE)

DOBBS: A federal court in Buffalo, New York, today sentenced the first of six Yemeni-Americans who attended an al Qaeda training camp and met with Osama bin Laden nearly three years ago.

Mukhtar al-Bakri was given a 10-year jail sentences. He pleaded guilty to providing material support to a terrorist organization and agreed to cooperate with prosecutors. All six men went to Afghanistan in the spring of 2001. They went there to receive weapons training in a camp near Kandahar. The other five men will be sentenced later this month.

Anti-terrorism police in Britain today charged a man with conspiring with convicted shoe bomber Richard Reid to carry out terrorist attacks. Police arrested the man at his home in Western England last week. He's also been charged with possessing explosives.

In January, a U.S. court sentenced Reid, a British citizen, to life in prison for trying to blow up an American Airlines flight from Paris to Miami with explosives hidden in his shoe.

Coming up next here: Senator Edward Kennedy talks to us about the No Child Left Behind Act, Medicare reform and controversial new legislation that would legalize some illegal aliens. Senator Kennedy is our guest.

And then: A deadly flu outbreak threatens the nation this winter. How prepared are we to fight off an even more deadly disease outbreak? Bill Tucker will have that report.

And Senator Chuck Hagel, one of the nine senator Republicans to reject the Medicare reform legislation, he is our guest. We'll be talking about why he says his party may be off its moorings.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Now, "Broken Borders."

DOBBS: With more than 1,000 illegal aliens crossing our border with Mexico each and every day, the federal government wants to construct an addition to a 40-mile fence that lies south of San Diego that has been successful in blocking illegal aliens from entering the country.

California environmentalists, however, are trying to block the 14-mile addition. They say it would cause soil erosion and endanger plants and rare birds and a nature preserve along the border. California commissioners are expected to vote on the project next year. Should they reject it, the White House still retains the option to overrule the commissioners.

The Western United States tonight is at the center of what appears to be a growing epidemic of the flu. The flu has now killed seven children in Colorado and New Mexico. It has infected thousands more nationwide. The early outbreak of the flu, less than a year after the spread of SARS, is raising serious questions about whether health officials in this country are prepared.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The Centers for Disease Control has been aggressive about warning the public over the dangers of the current flu season.

DR. JULIE GERBERDING, CENTERS FOR DISEASE CONTROL: We're very concerned that the flu season has had an earlier onset than we see in many years. And we are seeing some parts of the country that are having very high levels of widespread flu infection.

TUCKER: As of the week ending November 22, 3,337 had been officially reported, influenza being suffered on a widespread basis, the number showing a jump of 78 percent from the previous week.

But those numbers from the CDC are two weeks old. And more recent numbers from Colorado show a much bigger problem. The state reports 6,300 cases alone. And that raises the question of how well- prepared our public health systems are to deal with this outbreak and other possible outbreaks. A study by doctors at the University of Louisville suggests, we're not as well prepared as we could be.

DR. MARK ROTHSTEIN, UNIVERSITY OF LOUISVILLE: I think one of the things that we found most important in the countries we studied was coordination among all levels of governments and among all different government agencies that would be involved in an epidemic.

TUCKER: And that involves planning, knowing what course of action will be taken in the event of epidemics, such as designating hospitals that will be used for quarantined, if need be, which hasn't been done, and the educating of the public on the need for quarantines.

(END VIDEOTAPE)

TUCKER: The issue takes on added urgency as we head deeper into the flu season and health officials start becoming concerned about the reappearance of SARS. That's a disease that shares similar symptoms and can be easily confused with the flu.

And amazingly, despite my expectations, influenza is not a reportable disease to the CDC or any state health official. So we really only have an idea of how bad the cases really are. DOBBS: Going to the issue of better communication and coordination.

TUCKER: Exactly.

DOBBS: Bill Tucker, thank you very much.

Millions of Europeans have already fallen ill from the flu. In France, there are almost two million cases of the flu already. In Spain, there are more than 20 times the number of flu cases normally seen at this time of year. Health officials in Europe say there is a serious risk of a worldwide flu pandemic because of the large number of people who travel all around the world.

Tonight's quote is on the hepatitis A outbreak that took place in four Eastern states, a story that we've reported extensively here on the show. Three people died. More than 600 people fell ill. Today, the Food and Drug Administration announced, U.S. Customs officers will now help investigate food imports to prevent bioterrorist attack -- we quote -- "We are committed to using the bioterrorism law to safeguard our food supply to the fullest extent possible, without imposing any unnecessary costs or restrictions on food imports" -- FDA Commissioner Mark McClellan.

Coming up: "Face-Off." Is No Child Left Behind, is it living up to its promise? Two leading educational experts face off on the cost of this program.

And technology revolutionizing the voting process in this country. But is the technology safe or more vulnerable to fraud? Lisa Sylvester will report.

(COMMERCIAL BREAK)

DOBBS: President Bush signed the No Child Left Behind Act into law nearly two years ago. The law intended to make schools more accountable, expand local control and give parents more choices. But almost two years later, there is much debate about what has actually been accomplished.

And that brings us to the subject of tonight's "Face-Off." Joining me is the undersecretary of education, Eugene Hickok, who says progress is being made in narrowing achievement gaps. On the other side of the issue, Lily Eskelsen. She is secretary-treasurer of the National Education Association, who says the biggest problems with the No Child Left Behind Act are the absurd bureaucratic regulations that require the creation of perfect children, or at least perfect students, by the year 2014.

Thank you both for being here.

EUGENE HICKOK, UNDERSECRETARY OF EDUCATION: A pleasure. Thank you.

LILY ESKELSEN, SECRETARY-TREASURER, NATIONAL EDUCATION ASSN.: A pleasure. DOBBS: Secretary, let me begin with you. This law, we're hearing a number of complaints from educators that the program is not working. We're hearing that there's too little funding. We -- what is your reaction to that?

HICKOK: Well, it's not surprising that you'll hear people say it's not working, because it's a tough law. It requires a lot of hard work. It's got consequences. And it represents a fundamental change in the way we do business.

As far as funding is concerned, I think the American taxpayer is more than generous with regard to public education, upwards of $470 billion this year alone, a 60 percent increase at federal level since President Bush took office on just elementary and secondary education.

The issue isn't how much money. It's how well it's spent. And the issue is tying money to investments, which I think your audience understands, to making a difference.

DOBBS: And, Ms. Eskelsen, your view?

ESKELSEN: The Congress has actually been more generous with the president's No Child Left Behind bill than he's been.

He's actually proposing a cut to No Child Left Behind. What we'd like to see would be funding for those things in the elementary and secondary act that work, things like class-size reduction, technology, time to meet with parents and make sure they're involved in their kids' schools. There's no gimmicks to this.

But you'll probably be surprised to hear that, for teachers, the biggest problem with No Child Left Behind is not just the meager funding. It's these incredible federal mandates that, in 10 years, by the year 2014, all children will read, do math and science on grade level, even if they're disabled, even if they don't speak English, even if they live in poverty, that, somehow, schools will magically have these perfect children.

(CROSSTALK)

HICKOK: Can I respond to that last point?

DOBBS: Please.

HICKOK: The idea that we, as an American people, should be bothered by the concept that, 14 years from now, children should be able to read on grade level, my goodness. And to talk about meager funding, we're talking about close to $500 billion. Goodness knows how much it will be in 14 years.

So to argue that, somehow, this is an unreasonable goal for the American people to set is really quite striking, when you consider that this is, after all, the wealthiest nation on Earth.

DOBBS: Please. You don't have to raise your hand here.

(LAUGHTER)

ESKELSEN: I know. I teach sixth grade in Utah. So I just raised my hand.

But think about the real -- really, the concept that's here. It's not just whether or not kids can read and do math on grade level. We are talking about requiring -- federal law requiring children with serious disabilities, serious reading disabilities, that they will read on grade level, because Congress says so.

And even the part of the law that says, if less than 95 percent of kids in any category, special-ed, poor kids, non-English-speaking kids don't show up for the test, the entire school could be labeled as a failure. It's not that those kids aren't doing well. It's that two kids didn't show up for the test.

HICKOK: There you go again.

The fact is that we have, as a nation, for a very long time, not expected enough of our schools, of our students, of our teachers, of ourselves with regard to public education. And the fact is that we need to have teeth. And, by the way, it's not a-one-size-fits-all approach. Every state's accountability plan reflects the needs of that state.

So I think most people would agree that, while we want to be generous with the funding, while we want to be understanding with the rules and regulations, there needs to be an educational bottom line. And it's time that we off total success to all of our kids.

DOBBS: It sounds pretty good.

ESKELSEN: I'm going to bust.

(LAUGHTER)

DOBBS: You don't have to bust either. Just jump in there.

ESKELSEN: I'm a teacher. I have taught for 20 years. And, in fact, I've taught several years at a homeless shelter. I've taught kids where they're afraid that they don't know where their parents are. The kids come to us with such individual needs.

And to say that we have to ask more of our teachers, when we're doing so much with so little -- I come from Utah, where we have got the highest class sizes and we can stretch a dollar until you can see through it. And we're doing such a good job with what we've got. What we want are more involved parents. We want lower class sizes. We want things that work. We don't want these gimmicks that say, zero-defect kids by the year 2014 or you will be punished. That's what No Child Left Behind literally says.

DOBBS: Is that true, Mr. Secretary?

(CROSSTALK)

HICKOK: It doesn't say that.

But what it does say is, we can no longer say to children that, we think you're doing pretty well considering the background you come from, the poverty you live in, the lack of a family, etcetera, etcetera. In other words, rather than saying, some of our kids will succeed, and, others, because of conditions they have no reason to be held responsible for, won't be as successful -- that's the achievement gap. That's the soft bigotry of low expectations that we've got to stop.

DOBBS: Let me ask you both, you obviously, both of you, care a great deal, as we all do.

HICKOK: Of course.

DOBBS: And I think most of us in this country, about the education of our children. We treasure the public education system in the country. Why in the world do we not see more cooperation from the NEA, the Department of Education, working with state education departments at the local level to actually address issues? Because there isn't a person in this country of whom I'm aware who is so unsophisticated that he or she doesn't understand that you've got to have parental -- and opportunity for parental involvement first.

Secondly, you have got to have teachers who are trained and paid. And you've got to manage classroom size. And you can't ask our school systems to do the impossible. We have special education programs. We have mandates and funding that are overwhelming the school system. We have kids who are 30 points behind, because they're Hispanic and they are black -- still running 30 points back on teaching. These are self-evident problems.

Why can't intelligent people, like the two of you, the department you represent, Mr. Secretary, the huge organization you represent, come together, drop the politics and get to work for the kids together?

ESKELSEN: May I?

DOBBS: Absolutely. You don't...

(LAUGHTER)

ESKELSEN: May I?

What a wonderful, wonderful idea. And I will tell you, we are ready. We weren't included in building No Child Left Behind. And so we were kind of caught with just critiquing what we thought the main problems were.

(CROSSTALK)

DOBBS: Well, wait a minute. Wait a minute. If I may say, NEA has been here long before the Bush administration.

ESKELSEN: Sure. DOBBS: We've had Democrats and we've had Republican. What we've got are millions of kids in this country who can't read, can't write and do simple math.

HICKOK: And I must confess that it's curious to hear someone from the NEA say they're on board, when they're right now

(CROSSTALK)

DOBBS: Mr. Secretary, if I may, there you go again. I'm trying to talk you folks into talking to each other and working together.

HICKOK: And I do think, I do think, first of all, we do talk a lot more.

But the real story is, for far too many years, putting the NEA aside or the federal Department of Education aside, putting all the different organizations aside, the focus has been on the system. And the focus needs to be on the purpose the system exists, students and families and achievement. It shouldn't be about whether or not the system by itself is getting enough money. It is whether the system is serving the kids it's supposed to serve.

If we can keep that common focus, which should always be our focus in education, I think a lot of the barnacles of past politics can disappear pretty quickly.

(CROSSTALK)

DOBBS: Is that an invitation, Mr. Secretary?

HICKOK: Our door is always open.

ESKELSEN: Well, and let me say that there is no one, no one, more excited about the concept of being able to sit down and hammer out what kind of changes No Child Left Behind needs to really make it work in public schools. We want it to work. What a wonderful goal.

DOBBS: And you think it should work, right?

ESKELSEN: We know that...

DOBBS: You're committed to help making it work?

ESKELSEN: We know that you can bring people together to make this work. And we are absolutely committed to make it work.

DOBBS: Outstanding. You know what, Ms. Eskelsen? We thank you very much for being with us.

We thank you, Mr. Secretary.

HICKOK: You bet.

DOBBS: And I look forward to your -- it sounds like we got a promise here tonight. You're going to be working together hard, putting aside politics, and going for the kids. That's great.

ESKELSEN: I'm looking for the invitation. We're ready.

HICKOK: I think that's always been the ideal behind not just this administration, but American education generally. It's our highest aspiration.

DOBBS: Truly. Absolutely. And a noble one. And we thank you both for pursuing it.

HICKOK: You bet.

ESKELSEN: Thank you for carrying this subject.

DOBBS: Thank you.

Coming up next: Senator Edward Kennedy's position on Medicare and education. Tonight, Senator Kennedy will join us talk about those issues.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: Some bad news from Microsoft. Microsoft says hackers are winning the war against computer viruses. The computer giant says hackers have cost the global economy some $13 billion this year. With bugs like the Blaster worm and the so-called big -- the So Big e-mail virus.

The problems caused by hackers have sparked some concern about a shift to electronic voting methods as well across the country. That shift, of course, began after the voting debacle in Florida in year 2000. But several independent studies have now shown that the new voting devices are not only not foolproof, but perhaps more vulnerable. Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Rewind the clock. Remember those dangling and hanging chads in Florida in the 2000 presidential race? Since then, many counties and townships have switched to an electronic system eager to prevent future problems. Now, 30 states have one local government using electronic voting. But Johns Hopkins University professor says a hacker could cause more harm than someone tampering with paper ballots.

AVIEL RUBIN, JOHNS HOPKINS UNIVERSITY: If you wanted to stuff a ballot box, you would have to go around individually stuffing ballot boxes at every precinct, whereas when you introduce computers into the picture, an attack that's successful may be harder to launch but if it is successful, could scale to all of the voting machines.

SYLVESTER: A study released by the state of Ohio this week raises concerns ranging from a computer tallying votes more than once, a programmer gaining access to the system and altering the outcome, or even a hacker closing polls early. Hart InterCivic, one company that makes the machine says, there are areas of risk that need to be mitigated but there's no reason why those issues can't be addressed.

And supporters of the electronic machines say, there's no such thing as a perfect system.

RICHARD VARN, RJV CONSULTING: Electronic methods can meet or beat existing processes for voting security, assuming we follow rigorous processes in developing software, building the systems and deploying them.

SYLVESTER: But Congressman, Rush Holt, points out another problem with the electronic machines, it's impossible to verify results without a paper trail.

REP. RUSH HOLT, (D) NEW JERSEY: An electronic voting machine makes a recount meaningless. Whatever the machine said at 5 minutes after 8 when the polls closed it will say two weeks later when a judge orders a recount.

SYLVESTER: Holt say, what's important is not just that people cast their votes, but that they also have a vote of confidence in the election system.

(END VIDEOTAPE)

SYLVESTER: Congressman Holt has introduced a bill that has bipartisan support that would require all voting systems produce a paper record that maintains anonymity but that can be used in a manual recount -- Lou.

DOBBS: Thank you very much, Lisa Sylvester from Washington.

That brings us to tonight's poll. The question, "do you believe digital voting machines should be required to print a paper record of each vote?" Yes or no. Please cast your vote at cnn.com/lou. We'll have the results for you later.

President Bush signed the No Child Left Behind Act into law amid bipartisan support almost two years ago. The need to improve public education created an unlikely partnership in the eyes of many, between President Bush and Senator Edward Kennedy of Massachusetts with whom I spoke earlier.

(BEGIN VIDEOTAPE)

DOBBS: The No Child Left Behind, your signature education reform legislation, if I may, I'd like to show you and our viewers very quickly a videotape, if we could see that now, of you at the signing of the legislation, shaking hands with the president. It looks like, if you will, a lot of love there.

SEN. EDWARD KENNEDY (D), MASSACHUSETTS: Sure.

DOBBS: What's happened in the interim to create such displeasure on your part with the legislation? KENNEDY: Well, first of all, for all families in this country, they want strong schools. Strong schools are the basic instrument for opportunity for young people in our country. Strong schools are essential if we're to maintain our democracy. And thirdly, strong schools are essential if we're going to have a strong economy.

We had an agreement with the president to bring about strong schools all over this country. But the fact is that we've only gone partway on that kind of commitment. And as a result of it, there are more than seven-and-a-half million children that are being left behind.

DOBBS: Senator, this legislation funded a record level of money being spent now on education by the federal government. Do you see this as a broken promise by the president in the last year-and-a-half?

KENNEDY: Well, it's a failed commitment. Money isn't the answer to all of our problems.

But when you have reform and resources, particularly in trying to get well-qualified teachers in every classroom, smaller class sizes, after school programs, parental kind of involvement, those cost local school districts resources. They're going to have to invest in the local resources to be able to achieve it.

DOBBS: Senator, Medicare, obviously you invested in Medicare, or lobbying hard, bringing your fellow Democrats in the support of the legislation. And then, because of your disappointment with what happened in conference, turning against the program.

KENNEDY: Well, I am disappointed because what we did in 1965 when we passed Medicare is we addressed the issues of hospitalizations and physician fees. Today, prescription drugs are as necessary as hospitalization or physician's fees. And we passed a good bill earlier in the session that has 76 votes. Only 10 Democrats, 10 Republicans opposed it. That would have passed overwhelmingly in the House of Representatives.

But instead, effectively, as a result of an ideological viewpoint, they shifted -- our Republican friends shifted the thrust of this legislation from being a prescription drug program to undermining Medicare. That's wrong. Medicare works, and it needs to be modernized but not undermined.

DOBBS: Senator, turning quickly to one other piece of legislation, a proposal which you are sponsoring to give resident status to undocumented agricultural workers in this country.

KENNEDY: Well, first of all, we have seen the terrible abuses that have taken place with the farm worker program historically, the oposero (ph) program that had its roots, really, in the post-Second World War period.

DOBBS: Correct.

KENNEDY: And it was halted in the early 1960s. But nonetheless, we have probably two million undocumented workers that come in every year. We've got this program - this happens every year, whether we like it or not. We have approximately seven million that are living in the country at the present time, but two million are coming in every year.

The question is, an extraordinary loss, for example, at the border. I know you are very familiar with these issues...

DOBBS: Right.

KENNEDY: ... because I've seen you talk about them frequently on your program. But the fact is, we've had about close to 500 people that have been killed on the border over this last year.

This program is a very modest program, but it's based on the concept that we have some of these workers who are coming in -- we know they're coming in. If they are going to come on in, why don't we legitimatize their coming on in. And they can work for three or four years, four years, and then they can begin, if they're going to do that, work a certain number of hours.

DOBBS: Senator, let me ask you this, because neither your party nor the Republican Party seems willing or able to deal with the issue of a national immigration policy that is both rational, that is humane and that is effective.

Why are both parties avoiding dealing with this critically important issue?

KENNEDY: Well, it's basically -- you asked an excellent question. There's a great deal of emotion on any issue that involves immigration or involves issues on civil rights. It is a hot button item.

The fact is, we should have an immigration policy that is going to be humane, that No. 1 brings family unification, and No. 2 is going to provide individuals that can expand our economy. I think if you take that as the tenets of an immigration policy, and then build around that, I think you can work through many of the challenges that we're facing with immigration policy.

DOBBS: Senator Kennedy, we thank you very much...

KENNEDY: Thank you.

DOBBS: ... for being with us here.

KENNEDY: Nice to see you.

(END VIDEOTAPE)

DOBBS: Coming up next, we'll share some of your thoughts about our continuing series on "Exporting America," the outsourcing of American jobs. We'll tell you about yet another company that is shipping those American jobs overseas. Stay with us.

(COMMERCIAL BREAK)

DOBBS: A number of positive developments today in the market. The Nasdaq hit a milestone and some negative development as well. The dollar down to a record low against the Euro for a fourth straight day. Christine Romans is here now with the very latest -- Christine.

CHRISTINE ROMANS, CNN INTERNATIONAL CORRESPONDENT: Lou, the dollar is worth 20 percent less today on world marks than it just was a year ago.

And you know, it's kind of a dull subject, but it's getting more and more important in the markets here because a weak dollar is seen as the single biggest threat to the U.S. recovery, as the economy rises, the dollar keeps falling. What's wrong? U.S. interest rates are at a 45-year low and that has foreign investors looking for investment growth elsewhere. The U.S. current account deficit is soaring at 5 percent of GDP, world markets are awash with the dollars we're paying for foreign goods -- Lou.

DOBBS: Well, some major development today. The SEC saying they're going to fix the mutual fund industry.

ROMANS: Bill Donaldson coming out with three proposals. No 1., 4:00 pm is close the trading and 4:00 pm is the deadline. They are shutting the window -- many market timers use to make a quick buck at our expense. Also, Donaldson, wants a chief compliance officer who works for the mutual fund managers who reports to the fund boards. And he wants market timing policies fully disclosed. So there is no question about what is allowed and what is not allowed.

DOBBS: And obviously he wants an independent chairman for those boards, wants fully independent directors on the boards. No, okay. Christine Romans, it's a beginning, as they say.

ROMANS: Yes, three steps.

DOBBS: Now, let's take a look at some of your thoughts. From Logansport, Indiana tonight, "President Bush should not do away with the steel tariffs. Our domestic steel industry is just getting back on its feet and now he wants to pull the rug out from underneath our collective feet." That from Michael Ayers.

From Valparaiso, Indiana -- how about that. "How in the world can people say that the loss of manufacturing jobs can be blamed on the price of American steel, when the real reason we are losing those jobs is the simple fact that the American workers just can't make it on 63 cents a day. And Wal-Mart wants the lowest price everyday.

"Gee, can you remember when Wal-Mart used to brag that everything at Wal-Mart was made in America. Now we're lucky if the workers there are Americans." Steve Skvara.

And on big media and Howard Dean's position that big media should be broken up, from San Antonio, Texas, "I am not a big Howard Dean supporter, but after seeing your program last night where Governor Dean vowed to take on the big media monopolies I'm now quickly becoming a Dean supporter."

And from South Salem, New York, "media concentration is like McDonalds and food. Are we losing our regional voices for a homogenized consumer bite?" From Gregory Gufstafon.

And from El Cerrito, California, "thank you for airing Howard Dean's view of big media. While this may not be a sexy issue, it is a critically important one. I'm glad 94 percent of those responding agree, myself included." David Bennett.

And on "America's Bright Future," from Catonsville, Maryland, "delighted to see your story on Ryan Patterson and his disability research. It is refreshing to see a brilliant individual who wants to make the world a better place and isn't in it for the money. Hats off to Ryan and the University of Colorado for looking beyond the tree and seeing the forest." Professor Bradley Kaldahl.

And from Pennsylvania, "Deal Lou, I've a regular comfortable schedule for my intake of news for many years, 6:00 to 6:30, I'd watch my local news, 6:30-7:00 my national network news, then you came along. Now I'm watching CNN from 6:00 to 7:00 totally screwing up my long time tradition. And now I have to surf the net to get my local news. Damn you, I hope you're happy." Lou King. Indeed, we are. And great first name, Mr. King.

We love hearing from you. E-mail us at loudobbs@CNN.

"Exporting America" tonight, one of the leading consulting firms to corporate America is exporting more jobs to India. Accenture, the technology consulting firm that based in Bermuda says it could more than double its staff in India in the next year to 10,000. Accenture has already tripled its Indian workforce over the past two years.

Our special reports this year, "Exporting America," have focused on outsourcing of jobs overseas. And as we continue in this broadcast, our reporting on this very important subject, we want to ask you for your help.

The government does not maintain any record of jobs outsourced overseas, nor do state governments, nor any single organization. That's why, tonight, we're asking you, our viewers to let us know right here whenever you find your employer is outsourcing jobs, or if you learn of another company doing so.

What we are doing is creating our own record of American companies that have chosen cheap foreign labor instead of preserving U.S. jobs. And we're, of course, going to share all of that information with you. And a lot of other people, perhaps, in Washington, D.C., for example.

Please e-mail us at loudobbs@CNN.com with that information whenever you have it. Thank you.

Coming up next here, Senator Chuck Hagel of Nebraska says the $400 billion Medicare bill is one example of how the Republican party has lost its way. Stay with us. (COMMERCIAL BREAK)

DOBBS: My guest tonight says the Republican party has come loose from its moorings. The $400 billion Medicare reform legislation, just the latest betrayal of traditional Republican principles, on top of rising budget deficits and uncontrolled spending.

We're joined now by Senator Chuck Hagel. He joins us Washington, D.C. Senator, good to have you with us.

SEN. CHUCK HAGEL, (R) NEBRASKA: Thanks, Lou.

DOBBS: I think a lot of people were surprised when you wrote that the party had come loose from its moorings, in particular in terms of fiscal policy. How deeply are you concerned about it?

HAGEL: I was deeply concerned about this as any one thing that I'm dealing with as a United States Senator. Lou, the fact is, as you just noted with this Medicare bill, it's not just $400 billion over the 9 years ahead of us, but we're adding on to almost every one's projections here about a $7 trillion unfunded liability on top of a $13.5 trillion Medicare unfunded liability.

Now, when you look at what's happened the last three years, last three years, federal spending up 21 percent. Deficits the last two years about $560 billion, we're headed to half a trillion dollar in deficits for FY 2004, at the same time taking on more military obligations, peacekeeping obligations, foreign entanglements since we had since World War II, no budget discipline.

We used to be the party of fiscal responsibility, balanced budgets, limited government. And somehow that all doesn't count anymore. And the trillions of dollars in these liabilities and future commitments that we're piling on top of our children cannot be sustained without something breaking, Lou.

DOBBS: Well, something breaking indeed. One thing we have broken is the budget, as you point out, $500 billion budget deficit, we've got a half trillion dollar current account deficit. The fact is, though, there is a war against terror, which has to be funded. There is the expansion of entitlements, in this case Medicare that we just talked about.

What -- I would love to hear from you what you think the difference is right now between the Republican view of the world in its politics and the Democrats, because it seems to me for the life of me, the two parties have switched viewpoints. It's the most peculiar period I can recall.

HAGEL: Well, as I said in that op-ed that you quoted from, Lou, I voted against the Medicare bill, most likely not for the same reasons that Ted Kennedy did.

Ted is at least honest about it. He wants more federal spending. He wants the government to control Medicare. I don't. So I part company with the Democrats as to why I objected to it. But your question, what's the difference? Right now there's very little difference. We're using the budget issue and spending as a kind of a political gotcha game and defining it by the lowest common denominator of American politics. What gets you through the next election? How much do you have to pay to buy off all these different groups to get you through the election in 2004? That bill comes due one of these days very soon.

And let me just give you another frame of reference on this Medicare bill.

DOBBS: Sure.

HAGEL: The lead actuary of the Health, Education and Welfare Department here in Washington, in 1965, when Medicare came into existence -- and we need Medicare, and by the way we need a prescription drug plan -- but he estimated in 1965 that the total cost of Medicare by 1990 would be $9 billion. Do you know what the real cost was in 1990? $66 billion. So these numbers are staggering, what we're piling on to future generations.

DOBBS: I think, Senator, amongst our audience that you probably won't find a lot of people surprised at that kind of let's say extended overrun on government projections.

Let's turn to another issue, and this is something I asked Senator Kennedy earlier in the broadcast, and that is why, with all of the issues that we have confronting us right now, population growth, demand on resources, all of these critically important issues, why is it neither the Republicans nor the Democrats can take seriously the issue of immigration and create a national immigration policy that is effective, that is rational, that is humane? And why it seems it's taken the position of what used to be the third rail in politics, Social Security and Medicare, that's now moved to immigration?

HAGEL: Two main reasons, in my opinion. One, September 11, 2001. That changed all the dynamics of our government. Security became the focus, as it should have been, no question about it. But that cannot be at the expense of all the other needs of our nation. Immigration, economic growth and all the dynamics that are part of that universe must be addressed as well.

The second main problem that we have is a lack of courage on Capitol Hill and a lack of leadership from the administration. Both parties are not courageous in dealing with this. The administration has let it go over the last two years. And so we just kind of wink and nod and act like it's not there.

Now, my state of Nebraska, for example, sees an awful lot of illegal immigrants in that state, working in that state. People know the illegal immigrants are in that state, but we must get back to what exactly you just said, and have the courage to buck the special interests in this country to come up with the same humane, rational immigration policy. It's in the interests of our country, our economy and our security.

DOBBS: Senator Hagel, we'll have you back to talk more about this very important issue.

HAGEL: Thank you.

DOBBS: And we thank you for being here tonight. Good to see you.

HAGEL: Thanks, Lou.

DOBBS: Senator Chuck Hagel.

Coming up next -- "America's Bright Future." Tonight, we introduce you to two sisters who are blessed with incredible artistic talent. We'll have their story coming right up.

(COMMERCIAL BREAK)

DOBBS: In our poll result tonight, 97 percent of you voted to say digital voting machines should be required to print a paper record of each vote. Only 3 percent said no.

Tonight, we introduce you to two young artists whose incredible talent have already won them the admiration of art collectors the world over. But what makes these young ladies even more remarkable is they are sisters and so young. Meet Nina and Angie Quinard.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): These young ladies are talented well beyond their years.

BEN VALENTY, INTERNATIONAL ART PUBLISHERS: What's particularly incredible about both Nina and Angie is their ability to modulate shapes and forms, their spacious relationships, combined with a very explosive and vibrant palette. And it's very, very difficult and it's very, very rare to see that, and to see all those elements in any one artist, let alone sisters.

DOBBS: Nina Quinard is 12 years old. Her sister, Angie, is 10. In the garage of their Orange County, California townhouse they create unique works inspired by life and the great masters.

ANGIE QUINARD, ARTIST: My style is cubism. I do cubism, and I put a lot of colors in it to make everybody feel happy when they see my paintings. And I just, like, it's just painting. It's just, like, it's just a lot of figures and everything, so it's cubistic. And so I try to follow the success of Picasso.

NINA QUINARD, ARTIST: I really like Cezanne, even though abstract is my favorite kind of painting. He puts so much passion into his artwork that it just influenced my life.

DOBBS: And where did their great talent come from?

GRACE QUINARD, MOTHER: They never took lessons. They just did it on their own. They decided they wanted to do it. They got some supplies, and then they just started painting. I really don't know. I mean, I don't know how this happened, you know.

DOBBS: Although they work together, each maintains a distinct style. Nina's work is passionate, using strong colors. Angie's, more sensitive.

N. QUINARD: I think we influence each other's, because our different minds, we have very different minds, even though our paintings are somewhat alike. We can pick up what each other's thinks, feelings they have. Any kind of passion, we can just pick it up like a heartbeat. It's just wonderful.

DOBBS: And while art collectors clamor for her work, Nina's motivation remains straightforward.

N. QUINARD: I love to paint. And it's just something I want to keep on -- I just want to -- I want to help people with my paintings and share it to the world.

DOBBS: The sisters paint for up to five hours a day, but their life is balanced. They both maintain A averages in school, as well as play with friends and continue their hobbies, including violin lessons and writing poetry.

(END VIDEOTAPE)

DOBBS: And that's our show for tonight. Thank you for being with us. Please join us tomorrow evening. 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

Kennedy; Interview With Senator Chuck Hagel>


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