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LOU DOBBS TONIGHT

Ricin Found on Capitol Hill; Who Will Run Against Bush?

Aired February 3, 2004 - 18:00   ET

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

(BEGIN VIDEOTAPE)
LOU DOBBS, CNN ANCHOR (voice-over): Tonight: terrorism on Capitol Hill, the poison ricin sent to the Senate majority leader, most of the U.S. Senate forced to close.

SEN. BILL FRIST (R-TN), MAJORITY LEADER: The assumption is, it is the intent to do harm.

DOBBS: Who will run against President Bush? Democrats in seven states casting their votes to decide their party's nominee.

In "Broken Borders" tonight, Mexican children commuting across the border every day to receive a free education in this country.

RAMON YANEZ, SCHOOL BUS DRIVER: According to the paperwork we've got, they are all American citizens and they all live on this side.

DOBBS: Janet Jackson and Justin Timberlake, they remind us all why it's called the boob tube. And some of the Super Bowl commercials rival Janet and Justin for taste and class.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, February 3. Here now, Lou Dobbs.

DOBBS: Good evening.

Tonight, the discovery of the deadly poison ricin in the Senate majority leader's office has forced the closure of most of the U.S. Senate and disrupted lawmakers and staff on Capitol Hill. Emergency workers quarantined and decontaminated staff members. Doctors are telling Senate employees to be alert for any unusual symptoms for the next two to three days. But, at this point, no one has fallen ill.

Homeland security correspondent Jeanne Meserve reports -- Jeanne.

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Lou, you just stressed the important point. At this point, no one has exhibited symptoms of exposure to ricin, a deadly derivative of the castor bean. But a criminal investigation is under way to determine how the ricin got into a Senate office building, who might have put it there and why.

The white powder was discovered yesterday afternoon near a mail- opening machine in the Dirksen Building offices of Senator Bill Frist. (BEGIN VIDEO CLIP)

FRIST: The powder was observed in an area where letters had been opened. And that's the extent of the observation to date. The criminal investigation is under way. And whether it came out of one letter, several letters or any letters has not yet been determined. We will know that. It has not been associated with a particular envelope as of yet.

(END VIDEO CLIP)

MESERVE: Authorities are trying to determine if the mail in the room where ricin was discovered went through irradiation and other security procedures.

To prevent mail delay, some members of Congress are known to bypass the security designed to protect them by having district mail sent to staffers' homes and then carried into the office. Though the Capitol Building was open for essential business, all Senate office buildings were shut and their reopening will take days, at least.

(BEGIN VIDEO CLIP)

CHIEF TERRY GAINER, CAPITOL HILL POLICE: Certainly, the Homeland Security and the Department of Defense have offered us all the assets we need to smartly and scientifically go through those buildings. So the buildings will be done in an order so that we clear one floor, then one building, and then turn that back open for use. So it will be an ongoing process.

(END VIDEO CLIP)

MESERVE: Now, law enforcement sources say a letter addressed to the White House containing ricin was intercepted by federal authorities in November. There is no known connection to the Colin Powell ricin incident, but the investigation has just begun -- Lou.

DOBBS: Jeanne, thank you very much.

In Connecticut, post office workers there found a suspicious white powder on a letter in the Wallingford postal center. That letter was addressed to the Republican National Committee. No one was injured. The facility did not close. The mail center was also linked to a death of a Connecticut woman from anthrax poisoning in November of 2001.

Those anthrax attacks in 2001 killed five people in all; 17 others fell ill. So far, not a single person has been arrested in the case. Letters containing anthrax were sent to leading politicians on Capitol Hill and the offices of news organizations. The targets included Democratic Senators Tom Daschle and Patrick Leahy. The FBI says the case is one of the most complex in its 95-year history.

Agents are trying to recreate the strain of anthrax used in those attacks, so that it can be traced to a particular laboratory. Authorities named a former government scientist, Steven Hatfill, as a -- quote, unquote -- "person of interest in the case." But Hatfill has insisted he is innocent. And he has not been charged with any crime.

While domestic agencies are investigating the act of terrorism against the Senate, the U.S. Army in Iraq continues to battle insurgents. They killed an American soldier today South of Baghdad.

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

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, as much as U.S. commanders like to highlight the progress being made in Iraq, there's no way to deny that the almost daily casualty count is taking a toll.

Today, another American soldier was killed and another wounded south of Baghdad, when a roadside bomb exploded during an operation aimed at clearing the road of so-called improvised explosive devices. Today, a grim-faced military spokesman, Brigadier General Mark Kimmitt, told reporters in Baghdad that there was -- quote -- "a long way to go" before the insurgency is defeated and the deaths stop.

(BEGIN VIDEO CLIP)

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: One never wants to have the significant responsibility of having to walk up to a family and tell them that their son or their daughter has died in combat. And so I don't want to make an assessment until that number is zero. And then I'll tell you the assessment is good.

(END VIDEO CLIP)

MCINTYRE: The latest death brings the total death toll in Iraq since the start of the war to 525, with 2,594 troops wounded in action.

In Afghanistan, by the way, the death toll is now 107. When we first report these deaths, we often know very little about the service members who have been killed. For instance, we don't know, for instance, the name of the soldier who died today. But, in a few days, the Pentagon will issue a release with some sketchy details. I have a release here that says 37-year-old Staff Sergeant Roger Turner of Parkersburg, West Virginia, died on February 1.

He was in his sleeping quarters when it came under mortar attack. But it is not until some news organization takes time to find out do we find out the rest of the story. And, if I may, here's one such small story that was in today's "New York Daily News," if I can just read a tiny bit of it, Lou.

It says: "Private 1st Class Luis Moreno wasn't born in this country and didn't die in this country, yet an American hero, he was. Moreno was born in the Dominican Republic, immigrated to the United States in 1991, graduated from Tapp (ph) High School in the Bronx. He dreamed about being a Bronx police officer, but that dream was cut short by a bullet when he was struck down by standing guard in Baghdad. He was 19 years old.

Just a reminder, Lou, that behind every statistic is a story.

DOBBS: Yes, 525 dead Americans in uniform in Iraq represents far more than statistics, Jamie. Thank you.

The star witness in the government's case against Martha Stewart today took the stand. Former Merrill Lynch broker assistant Doug Faneuil testified that he illegally tipped off Martha Stewart that ImClone founder Sam Waksal was selling shares of his company's stock.

Mary Snow is at the federal courthouse in Lower Manhattan with the story -- Mary.

MARY SNOW, CNN CORRESPONDENT: Lou, after having his testimony delayed last week, Doug Faneuil testified for about an hour and a half today, appearing calm, recalling the events surrounding December 27, 2001, the day Martha Stewart sold her shares of ImClone.

Faneuil has been cooperating with investigators. He's pled guilty to a misdemeanor, telling the court why, saying -- quote -- "I told one client about what another client was doing in their account and then lied about covering it up." He testified about the flurry of phone calls that day, December 27, and the activity. Phone calls from Sam Waksal's accountant, Sam Waksal, the former CEO of ImClone, and also calls from Waksal's daughter, two of them, all wanting to sell their ImClone shares.

He then recalled a conversation that he had with his then boss, Peter Bacanovic, Martha Stewart's stockbroker. He quoted Peter Bacanovic as saying -- quote -- "Oh, my God. Get Martha on the phone." In a later conversation, after leaving a message on Martha Stewart's phone, saying that, you have to tell Martha what is going on, he said, can I tell her about Sam? He said -- quote -- "Of course, you must. You've got to. That's the whole point."

Tomorrow, it is suspected he will tell about the conversation he had with Martha Stewart -- Lou.

DOBBS: Mary, thank you very much.

Still to come, Democrats in seven states deciding who they want to challenge President Bush. Our panel of top political journalists join us to tell us which, in their opinion, Democratic candidates are likely to win tonight's primaries and caucuses.

And in "Broken Borders," the strange case of illegal aliens, a sex slavery ring and an employee of the Department of Homeland Security.

And Janet Jackson and Justin Timberlake are not the only ones accused of bad taste in their Super Bowl performances. So are some of the Super Bowl advertisers -- that coming right up.

(COMMERCIAL BREAK) DOBBS: Tonight, we should learn a lot more about who will likely be running against President Bush, Democrats in seven states voting to decide their party's nominee, 269 delegates at stake in those seven contests. Senator John Kerry is leading or tied for the lead in all of the preelection polls.

(BEGIN VIDEOTAPE)

DOBBS (voice-over): Senator John Edwards is fighting to be the first Democrat besides Senator Kerry to win a caucus or primary. South Carolina is his best opportunity. Edwards himself calls it a must-win. The North Carolina senator has spent six of the past seven days campaigning in South Carolina; 45 delegates are at stake. He says his popularity in the South will help in November.

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANDIDATE: I think this South Carolina primary is a head-to-head contest on who can compete in the South, who can win rural voters and who can do well with African- American voters.

DOBBS: Like Edwards, former General Wesley Clark is focusing on one state, Oklahoma. But polls show him still trailing Senator Kerry in the contest, where 40 delegates are at stake. Senator Kerry is expected to easily win the remaining five primary and caucus contests.

The biggest prizes are Missouri, 74 delegates, Arizona, 55.

CROWD: Kerry! Kerry!

DOBBS: Kerry has already moved to the next battleground, Washington state, for Saturday's primary. He joins former front- runner Howard Dean, who is campaigning in Washington, after giving up all hope that he will win any of today's contests.

(END VIDEOTAPE)

DOBBS: As for the other candidates, Senator Joseph Lieberman is running well in Delaware. And Al Sharpton is expected to make a strong showing in South Carolina. However, Democratic strategists say that if Lieberman and Clark fail to impress today, there is little reason for them to continue their campaigns. A strong showing, of course, would leave the nomination wide open.

The polling stations in South Carolina close at 7:00 p.m. Eastern tonight. That's in just about 47 minutes. To remind everyone exactly just how much time is left, we here at CNN are inserting a countdown clock on the lower left of your television green. There it is, 46 minutes and eight seconds.

Joining me now for the countdown and to give us their insight into today's contests, our panel of top political journalists, Ron Brownstein, national political correspondent for "The Los Angeles Times," joining us tonight from Washington, Karen Tumulty, national political correspondent for "TIME" magazine. She is in Columbia, South Carolina. Roger Simon, political editor "U.S. News & World Report," joining us tonight from Washington as well. Thank you all for being here.

Karen, because you are closest to the action in one of those states, do you think there will be any surprises tonight?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, at this point, as you said, there are still almost 45 minutes left before the polls close.

But, from their body language, you can tell that the Edwards people are expecting a pretty good night here in South Carolina. And the word is that Oklahoma is somewhat closer than we thought it was going to be. So I think the one story to watch tonight is Wesley Clark, who spent more than any other candidate advertising in six of these seven states and may in fact be completely out of the money tonight.

DOBBS: That's surprising to me at least. I didn't realize he had spent that much money. Outspent the other candidates in six of these states, is that what you said, Karen?

TUMULTY: He did indeed. And he certainly spent a lot more than the other candidates here in South Carolina. So, this was going to be his first big test of how well he does nationally. And they are hoping for a win somewhere to keep Wesley Clark's candidacy going.

DOBBS: Roger, is it your sense that Clark can do well tonight?

ROGER SIMON, POLITICAL EDITOR, "U.S. NEWS & WORLD REPORT": I think he might pull off one state. But I think he's going to have trouble doing better than that.

Clark has proven to be a somewhat erratic campaigner. He's spent an awful lot of time explaining what he just said the day before, the day after. That never helps a campaign. His sort of refusal to not call George Bush a deserter, when George Bush, whatever his sins, has clearly never been a deserter, also did not help. And he's really now a candidate searching for a niche, searching for a message, when Kerry and Edwards seem to have already established their niches.

DOBBS: And, in contrast, Ron, Senator Kerry was quick to disavow the deserter language that was used by one of his prominent supporters, I believe Michael Moore.

RON BROWNSTEIN, CNN POLITICAL ANALYST: Yes, that was actually one of Wesley Clark supporters.

You're right, Lou. Kerry did disassociate himself from that. He has had a very effective few weeks. He has run a very single strategy here, one that campaign strategists are going to looking at for years, and in direct counterpoint to Wesley Clark or Howard Dean, in particular, who spent heavily in states that vote after New Hampshire, Kerry threw all of his efforts into Iowa and New Hampshire, eventually only into Iowa, hoping to generate momentum that would carry him through this very compressed calender. And it has turned out very well for him. The momentum from Iowa carried him right through New Hampshire. And now he's in a much stronger position than anyone in this group of states, as you mentioned, states where he was at 2, 5, 8, 10 percent only a few weeks ago. So it has been really a very effective few weeks for them and one that has put the other candidates really right up against the edge of the ropes.

DOBBS: And we've also noticed one thing. A month ago, everyone was talking about Howard Dean. He graced the covers of both "TIME" magazine, "Newsweek." No one was talking about anyone but Howard Dean, really. Now it's all Kerry.

Is there likely to be another twist and turn in this, Karen?

TUMULTY: Well, I think one thing that we've all been humbled by, those of us in the political reporting business, is that we should quit trying to predict this election cycle, that we should quit mistaking our rearview mirror for our windshield.

I think there could be a few more surprises. But, at this point, the strategy that everyone else has, which is trying to stop John Kerry in one state or another, it looks like, other people have tried it in the past and it's never worked before.

DOBBS: In Oklahoma, in South Carolina, where, early, it looks like Edwards has done fairly well -- we won't know, obviously, for some time, but he's run a little -- he's run a little stronger in Oklahoma than I think some people expected. What does Edwards have to do to ignite it? Is it enough to win in South Carolina, which is his home state, his state of birth, and next door neighbor to North Carolina, obviously?

BROWNSTEIN: Well, I think, look, that keeps him alive, but it probably does not provide enough momentum to really change the dynamic. And he would be in a lot stronger position if he was able to win Oklahoma as well.

And I think he may wonder, despite a very good campaign in South Carolina he's run in the last few days, whether he should have spent a little more time in Oklahoma. He is beginning to carve out a niche, though, Lou. He is moving toward a tougher position on trade than John Kerry, criticizing NAFTA, emphasizing economic issues. He's doing well, I think, with people who are concerned about the economy and jobs.

Kerry's strength are electability and experience. You could imagine a niche for Edwards in a one-on-one race. The question, as Karen said, is whether so much momentum has built up behind John Kerry that John Edwards couldn't really effectively try to stop that at this point.

DOBBS: Roger, how important is it that Kerry has shown up so well, beating Bush in the CNN/"USA Today" poll, Gallup poll, yesterday? How does that play for the overall primary process? That should, it seems to me at least, be a tremendous piece of momentum. SIMON: It helps. It helps, but nothing helps as much as winning states. That's what this contest is about. That's what Kerry has done.

His strategy was the correct one. It was the same one as Dean strategy's, win early and roll to an eventual victory. Dean couldn't pull it off. John Kerry has pulled it off so far.

DOBBS: Ron Brownstein, Roger Simon, Karen Tumulty, we thank you very much. I know, in about -- I'll look at our little countdown clock there -- 40 minutes, 17 seconds...

(LAUGHTER)

DOBBS: You will focus mightily on those results. Thanks a lot.

That brings us to the subject of tonight's poll. The question: Do you believe any Democratic presidential candidate that has not won a primary or caucus after today should withdraw from the race, yes or no? Please cast your vote at CNN.com/Lou. We'll have the results for you later in the broadcast.

Tonight's thought is, of course, on campaigns and campaign promises. "Everything a politician promises at election time has to be paid for either by higher taxation or by borrowing" -- those the words from a pretty good politician, one Margaret Thatcher.

Our complete election coverage here on CNN begins at the end of this broadcast tonight at 7:00 p.m. Eastern, 4:00 p.m. Pacific. Wolf Blitzer will anchor our coverage. Larry King will be along at 9:00 Eastern. Please stay with us for the results from all seven states as they come in, as well as the speeches, of course, and our expert analysis.

Still ahead, in "Broken Borders" tonight, Mexican children crossing the border every day to receive a free education in this country. We'll have a special report for you. And "Exporting America." Thousands of union members protest in Washington to keep American jobs in this country.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Of all of the issues facing the United States, little is more complex than our immigration laws and policies. In "Broken Borders" tonight, dozens of children from Mexico cross the border into one small Arizona town every day.

There, they receive a free U.S. taxpayer-financed education. Officials in Lukeville, Arizona, are aware of the problem, yet, they are doing absolutely nothing to stop it. In fact, one local businessman is actually going out of his way to encourage it.

Casey Wian reports from Lukeville, Arizona.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Just before dawn, the remote border crossing at Lukeville, Arizona, comes alive, with parents bringing children from Mexico into the United States to attend public school.

UNIDENTIFIED MALE: As far as how they are getting across, you can see. They are driving across.

WIAN: They have all provided documents to school district officials claiming they are U.S. residents; 97 students catch the bus here, but Lukeville's population is only 65.

(on camera): It's pretty obvious that they are not living here in the United States. What are your thoughts on that, as someone who comes down here and picks up 97 of them every day, I guess?

YANEZ: According to the paperwork we've got, they are all American citizens and they all live on this side.

WIAN (voice-over): But only a handful of the students actually live here. Most get around residency requirements by setting up guardianships with U.S. relatives or renting space at a local R.V. park and claiming that as their home address.

SCOTT LITTLE, PIMA COUNTY SCHOOL DISTRICT: I think the problem actually Probably exists from Brownsville, Texas, to San Diego. What you have is, you have a more visible example of the concerns in Lukeville.

WIAN: Al Gay owns Lukeville's Gringo Pass R.V. park. He charges Mexicans with border crossing students $100 a month, less than half of what he charges tourists for space.

AL GAY, OWNER, GRINGO PASS: Those kids need the education. And that will create the goodwill between Mexico and the United States, I hope.

WIAN: Students are bused an hour north to school in the town of Ajo.

ROBERT DOOLEY, AJO SCHOOL SUPERINTENDENT: Once they get on the Pima County bus, we're obligated, legally and morally, in my opinion, to accept them as student here. My job is not to enforce immigration laws.

WIAN (on camera): The number of students bused here from Lukeville has nearly doubled since 1995. They now make up nearly 18 percent of the Ajo school district's student population.

(voice-over): County officials say most, if not all of the border crossing students are natural-born U.S. citizens. They also say they don't have the resources to verify residency claims and are powerless to stop Mexican residents from obtaining a free U.S. education.

Casey Wian, CNN, Lukeville, Arizona.

(END VIDEOTAPE)

DOBBS: Coming up next here, Congressman Bob Menendez says, the president's plan to give illegal aliens temporary legal status simply doesn't go far enough. And he is my guest.

And another shocking report on our "Broken Borders" tonight. A homeland security official is now under arrest in an investigation into a sex-slave ring exporting illegal aliens. We'll have that report and "Exporting America" tonight. Thousands of Americans today marched to Capitol Hill, there to protest the shipment of American jobs to overseas cheap labor markets.

And the president's new budget promises to cut the deficit in half within five years, but critics say it will cost even more. I'll be talking with the powerful chairman of the House Ways and Means Committee, Congressman Bill Thomas.

All of that, a great deal more still ahead -- please stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush last month proposed temporary legal status for millions of illegal aliens in this country.

My guest tonight says the president's proposals don't go far enough.

Congressman Bob Menendez of New Jersey says immigration reform must include a path to permanent legal status and citizenship. He says the president's plan is just election-year politics. Congressman Menendez is the chairman of the House Democratic Caucus, a member of the House Hispanic Caucus, also the most Hispanic in congressional history, and joins us tonight from Capitol Hill.

Congressman, good to have you with us.

REP. ROBERT MENENDEZ (D), NEW JERSEY: Good to be with you.

DOBBS: Why, in your judgment, doesn't the president's plan go far enough? He has been, effectively, criticized from all quarters for offering amnesty. And this plan, in the judgment of most critics, is effective amnesty.

MENENDEZ: Well, the reality is, is that the president -- it clearly is an election-year proposal. It's not going to go very far. And, ultimately, it doesn't really get to the root of the issue.

The root of the issue is, how do you have an immigration policy that observes our traditional elements of family reunification, number one.

Number two, that does clearly protect the borders in a way that makes sense. That doesn't have U.S. citizens and U.S. permanent legal residents waiting inordinate amount of time to reclaim their family here in the United States. That's part of why we have people who come in undocumented fashion. So the president's proposal does nothing to incentive the people he is supposedly go after, those who are already here in an undocumented fashion, to come out of the darkness into the light because at the end of the day, he provides no clear pathway to an opportunity to change their status in this country. And that's not going to bring those people out. We're not going to help for national security purposes a knowledge of who is here. And he's not going to stop the flow of undocumented immigration into this country by such a policy. So it's not holistic. It doesn't cover all the elements of an immigration policy you need. It doesn't solve the immediate issue of those who are here.

DOBBS: Those who are here, some 8 to 12 million, what would you have U.S. Immigration policy do as far as their futures are concerned?

MENENDEZ: Well, for those that are here I don't believe in an amnesty, and neither does the Democratic caucus. What we do believe is an opportunity for earned legalization which means that if you are here and you have worked and you have worked and paid your taxes and if you have not been a public charge, which under the last welfare reform bill and the last immigration bill is virtually impossible to do.

But if you have not been a public charge, if you have no criminal record either here in the United States or in your native country, then have you an opportunity, not a guarantee, but an opportunity to find a pathway towards legalization. And it is in part a recognition of our own complicatiness in this process in so far as we have an enormous need for labor that has gone unfulfilled in the United States. Our principals, say first and foremost we want to ensure any American worker isn't displaced. And we stand for any American worker who wants to do the work that we find so many immigrants performing.

DOBBS: As you know, Congressman, that's an important consideration, also, a controversial one because in a study at Harvard recently showing that the effect of excessive immigration level, which is the case over the past decade in this country, is costing workers an estimated 190 to 200 billion in depressed wages. Secondly, the issue comes up as to whether or not the combination between organized labor, supporting open borders, and corporate American -- corporate interests supporting open borders is simply exploiting illegal aliens.

How do you deal with that element of this?

MENENDEZ: Well, first of all, if you look at the national association -- the National Academy of Sciences '97 study they say overall the Gross Domestic Product immigrants have contributed anywhere between 1 and $10 billion to the governments and to the nation's benefit. The real issue, however, is to have an immigration policy that fulfills the expectation the have always had as a country which is family reunification. We hear a lot about family values. So you don't have to wait, for example, if you are a U.S. citizen and have a sibling in the Philippines 20 years to bring your sibling here. That create pressures. Also to be sure if you have a guest workers program, that it is based upon U.S. domestic needs that clearly cannot be fulfilled but that provides an opportunity for that person's work to be honored and recognized at the same time. Those are some elements of what we need to do.

DOBBS: Guest worker is, as you know, Congressman a very serious buzzword, particularly in Europe. Trying to their dismay, by the French and the Germans, this now starts to approximate the president's proposal. Congressman Menendez, I hope you will come back and we can continue our discussion on this. The president kicked off a very important and tortured national dialogue that we all hope will lead to a rational, effective, humane solution. We thank you for being here.

MENENDEZ: Thank you.

DOBBS: Tonight, a bizarre twist in a federal investigation into allegation that a sex slavery ring preyed on illegal aliens in New York. Federal prosecutors have charged a employee of the Department Homeland Security about trying to deport a woman who complained about being held against her will.

Peter Viles, has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): It looks like a neighborhood bar in Queens, but federal prosecutors say two women who worked there were held as sex slave, illegal immigrants of South Korea living in fear of the smugglers that brought them to America.

ANDREW HRUSKA, CHIEF ASSISTANT U.S. ATTY., EASTERN DIST. OF N.Y.: These women were subjected intense physical and psychological terror. They were taken thousands of miles away from their family, communities, lied to, subjected to threats and coercion to perform sex.

VILES: Two Korean women effectively held hostage in the bar and in this nearby apartment building. Neighbors suspected something was wrong.

PETE DONNELLY, NEIGHBOR: I used to see three or four of these girls being delivered back here. In a van or in a limousine and it just seemed strange they were all young. And they were out here at that time of the morning coming home, and my first thought what kind of work were they doing.

VILES: Then it got worse before after one of the women went to police to complain, this man knocked on her door. Said he was an inspector for the U.S. Customs Department, displayed a badge, told her she was being deported immediately. He really was an inspector, Nisim Yushuvayev, but prosecutors say he was acting illegally at the request of the smugglers. He's been charged with obstruction, but immigration experts say he did serious damage.

PETER KWONG, HUNTER COLLEGE: That's exactly the kind of thing that these enslaved try to tell the people. Don't ever go to police. I don't want to police because police will not help you. Your illegal to begin with. If you go forward they are going to deport you. VILES: All three in this alleged ring, the bar owners and the inspector, face up to life in prison if convicted.

(END VIDEOTAPE)

VILES: Now the bar owners are charged with aggravated sexual abuse and a charge you rarely here in this country, peonage that is the legal term for keeping someone in slavery while they are paying off a debt -- Lou.

DOBBS: Pete, thank you very much.

That's a -- talk about complicated stories and apparently a problem in more than one city in this country. Thank you.

Coming up next here, "Exporting America." American workers, they are on Capitol Hill taking a stand against the export of American jobs to cheap overseas labor markets. In one goal of the president's new budget, to dramatically cut the federal deficit over the next five years. We'll find out how he's going to do that and what the House leadership thinks. We'll be talking with the House Ways and Means Committee chairman, Congressman Bill Thomas.

Please stay with us.

(COMMERCIAL BREAK)

DOBBS: President Bush unveiled his $2.4 trillion budget proposal for 2005 projecting a sharp reduction in the federal budget deficit over the next five years. The president's plan also calls for the tax cuts to be made permanent. That would cost more than a trillion dollars over the next decade as well. Congressman Bill Thomas is the chairman of the powerful House Ways and Means Committee and he joins us tonight from Capitol Hill.

Good to have you with us, Mr. Chairman.

REP. BILL THOMAS (R-CA), CHAIRMAN, WAYS AND MEANS COMMITTEE: Nice to be with you, Lou.

DOBBS: $2.4 trillion, these are big numbers. We have a record national debt, a record budget deficit.

Can this be sustained?

THOMAS: Can what be sustained?

DOBBS: Well, this level of spending. This president is spending at a rate that is remarkable, by any historical standard. I think you know that, Mr. Chairman.

THOMAS: We're looking at an annual gross domestic product of more than $11 trillion. So what you have to do is what anybody has to do, you have to prioritize, you have to pick and choose what is most important today and leave until tomorrow what can be left until tomorrow. We have seen a remarkable recovery in the last 12 months, stock market up 30 percent. We were concerned about the 30-year treasury note, because a number of pension programs were inverted. Even General Motors is now positive in terms of its income flow, based upon what happened in the market.

I'm not being Polyannish and saying that we can grow our way out of the problem. Definitely.

DOBBS: Thank you.

THOMAS: We have to put ourselves on a prioritized basis for spending. Now, that's going to cause a lot of pain among those people who want to spend. But we have to cut back on spending. But there are some things that are investments and not just spending. And that's like making some of these tax cuts permanent.

DOBBS: You know, it's one of the things that I, frankly, I like best about you, Mr. Chairman, is that you're not a Polyanna and you will tell it straight. And when you talk about what we can't afford, cutbacks right now, as proposed by the president. Environmental protection, Department of Agriculture, commerce, the National Institutes of Health, the Centers for Disease Control, how can we afford not, as you put it, and I think you're -- and I must say, Mr. Chairman, I agree with you 100 percent, how can we not afford to be investing there?

THOMAS: We are investing. We're just investing less. The idea that somehow, because we have such low inflation, that we have to continue to look at increases in budgets that are double digit or at least near double digit doesn't make any sense. I said we can review periodically, but this year and the next year, we have to go slow.

We are still in the middle of a war on terror. We will have to invest, we don't know how much yet, sometime later in the year. But to try to say that everything needs to go up, and nothing should be reviewed and perhaps eliminated, is simply unacceptable to me and it's clearly unacceptable to the president. There are some programs, not the ones you mentioned, that don't deserve to continue being funded at the levels they are being funded. We have to say no.

DOBBS: The ones I mentioned are actually cuts and not slower growth or incremental, as you put it.

THOMAS: And those reductions aren't absolutely devastating. It means they don't get to add the third or the fifth or the sixth person in a research program. They are going to have to make do with the four that currently are on there.

DOBBS: Let me ask you, Mr. Chairman, how confident are you, given this economy that we're seeing right now, it's not creating jobs, there's no job creation here. We have seen growth decline from -- better than 8 percent in the third quarter to 4 percent in the fourth. We have a different kind of recovery going on here. How confident are you that we're going to be able to sustain these deficits and actually turn them around?

THOMAS: Well, we had a different kind of a recession. And just because...

DOBBS: Correct. I agree with you.

THOMAS: ... we aren't matching the growth numbers with Asian tigers doesn't mean that productivity hasn't gone up. At some point, if we continue to show that we are making the right decisions, and we've seen that confidence and investment percentage level go up, people are going to say, I feel confident enough to hire an extra person, to hire two extra people. That's when the jobs start coming in.

Our job is to make sure that we support the president as best we're able with a very close majority in the Senate to deliver slowing down of spending. Believe me, you know as well as I do, Lou, at the end of the day all we can do is slow down spending. We will not reverse it. And sometimes that's not all bad.

DOBBS: Congressman Bill Thomas, we thank you very much, as always. Good to talk with you, the chairman of the House Ways and Means Committee.

Coming up next here, "Exporting America." The massive shipment of American jobs overseas is causing the country's largest labor organization to fight back. They did today, and we'll have the report.

And indecency in America. We'll be talking about Janet Jackson's overexposure in prime-time television with two leading social and media critics. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: As we have been reporting on this broadcast for months and months, some would say years and years, this economy is simply losing millions of manufacturing jobs to what are best styled as cheap overseas labor markets. Tonight, the nation's largest labor union fighting back. Thousands of AFL-CIO members took the fight to the nation's capital. They're demanding action. Louise Schiavone reports from Washington.

(BEGIN VIDEOTAPE)

LOUIS SCHIAVONE, CNN CORRESPONDENT (voice-over): With the ricin scare putting every Senate office and the Capitol building itself off limits, except to emergency personnel, an army of union workers descended on the House side of the Capitol to a warm welcome from top Democrats.

SEN. TOM DASCHLE (D-SD), MINORITY LEADER: I'm tired of watching the U.S. Treasury turn into a buffet line for every anti-worker special interest with a checkbook.

SCHIAVONE: By the AFL-CIO's count, 2.6 million manufacturing jobs have evaporated over the past couple of years. While the recession and productivity gains conspire to shrink factory jobs, so did the corporate quest for cheap products and workers overseas. A trend facilitated, labor argues, by free trade agreements.

RICHARD TRUMKA, AFL-CIO: And the blind loyalty to free trade is now being challenged in the mainstream media. Let me show you an amazing clip from "THE LOU DOBBS SHOW." He has made trade a nightly crusade on his program.

DOBBS: Here in New York City today, corporate executives are paying $500 apiece for advice on how to export American jobs to cheap overseas labor markets.

SCHIAVONE: U.S. businesses on the ropes. Textiles, auto and machine parts, tool and dye makers. High tech jobs of all kinds. And plastics.

(END VIDEOTAPE)

SCHIAVONE: Both Democrats and Republicans are eager to offer job retraining programs and tax incentives to keep and grow jobs at home. But not as universal as labor's call for a higher minimum wage, extended jobless benefits and improved health care benefits to carry workers until those other measures yield results -- Lou.

DOBBS: And the other results most -- equally as important is start seeing those jobs being created by this economy. Louise, thank you very much. Louise Schiavone, reporting from Washington.

Coming up next here, we'll be talking about Janet Jackson's halftime wardrobe malfunction. We'll be joined by Genevieve Wood, she is vice president for communication, Family Research Council. Robert Thompson, director, Center for the Study of Popular Television, Syracuse University.

But first, an update on the number of companies that we've confirmed to be exporting America. These are U.S. companies either sending American jobs overseas or choosing to employ cheap foreign labor instead of American workers. Tonight's additions include -- Amazon.com, BearingPoint, Cadence Design Systems, Supra Telecom. We want you to know that the complete list of those companies, that ever- growing list is on our Web site. For the complete list, you can go to cnn.com/lou, and there the list will be, which we have each evening, of course. We'll be right back. Please stay with us.

(COMMERCIAL BREAK)

DOBBS: Results of our poll. 43 percent of you, 43 percent say any Democratic presidential candidate that has not won a primary or caucus after today should withdraw from the race. 57 percent do not. We have just about 7 minutes left before our coverage here on CNN begins of the primaries tonight.

Janet Jackson's halftime show during the Super Bowl set a new standard for taste and class or absent there off during primetime broadcast television. Critics say some of the television commercials were equally objectionable. CBS is taking no chances with this Sunday' Grammy Awards using a tape delay system for the first time to delete any inappropriate video or audio. I'm joined now by Professor Bob Thompson. He's director of the Center for the Study of Popular Television at Syracuse University and Genevieve Wood, vice president at the Family Research Council. Thank you both for being here.

Just how, in your best judgment, Bob, just how seriously should we take the FCC's complaints against CBS and by extension, the NFL. It has no regulatory authority, of course, over the NFL but particularly with CBS.

PROF. ROBERT THOMPSON, DIRECTOR, CENTER FOR STUDY OF POPULAR TELEVISION: I suppose what is interesting is how shocked everybody seems to be. The NFL and now the FCC talking about how the Super Bowl is this family time when everybody is gathered around together.

I had never realized what a Norman Rockwell-esque moment the Super Bowl was before. This has been a pretty raunchy broadcast for a long time. They have been using, for example, sex and twins to sell beer on the Super Bowl. It's interesting how now we somehow are seeing the Super Bowl as having been invaded. It's being talked about as though it were the Macy's Thanksgiving Day parade, not the Super Bowl.

DOBBS: Frankly, we had three generations of my family sitting around watching the Super Bowl and I will tell you honestly, Genevieve, many of my family were as offended by the commercials as they were by the Janet Jackson incident.

GENEVIEVE WOOD, FAMILY RESEARCH COUNCIL: Well, Lou, I think you're absolutely right. I don't think we should let any of the guys that were sponsoring commercials off the hook because many of them were filled with sexual innuendo just as much as the halftime show was. But the fact is while I will agree with you, this certainly is nothing new in the sense that football commercials and like have been getting raunchier over the past two years.

When it comes to the Super Bowl, all CBS has talked about is how many men between 18 and 35 watching the show. What they don't talk is one in five children under the age of 11 in this country were in a living room somewhere watching the Super Bowl with their families. There are a lot more kids watching this. Yesterday it was on in the west coast in 6:00 in the evening. This was not at night after 10:00. This is on when a lot of families were watching. The fact is CBS is responsible for it at halftime and all the commercials they previewed and let air as well.

DOBBS: I think, professor, you make an interesting point. That the NFL is hardly this pristine organization. A number of cheerleaders for a number of NFL teams come quickly to mind for not particularly setting the most pristine standards. But why is there so little urge here to take responsibility for this halftime show? MTV says it wasn't responsible. Viacom says it wasn't responsible. CBS says it wasn't responsible. The NFL says it wasn't responsible. For crying out loud, this is broadcast television. Isn't it CBS's show?

THOMPSON: It absolutely is. I mean, they are responsible for what they put over the airwaves and the stations that carry the CBS signal so they are responsible. I think what they are trying to claim is that they didn't know it happened. I can believe that. There would have been no motive to do this. Let's face it, Janet Jackson upstaged the Super Bowl. She upstaged the commercials. For Heaven's sake, she upstaged Iraq and the primaries to a great extent on Monday.

So the responsibility issue clearly ends up ultimately in the hands of the people that broadcast it which is why I think we will immediately go to five second -- ten second delays and you can bet the trigger fingers are going to be very, very careful on those things. They are going to be pushing the button for anything now.

DOBBS: That's an interesting idea, Genevieve. And, professor, let me ask you this, as well. If we had a five second delay in these network control rooms, do you think they would use that five second delay on the dance you just watched a few seconds ago? Do you think they would use it on any of the commercials which frankly several of them looked to me like they had been produced by some sort of frustrated frat boy.

THOMPSON: They sure wouldn't use it on the commercials at 2.3 million per -- you can be sure of that.

WOOD: I was going to say, I think it's a little bit curious to say that CBS didn't know about all this. I mean, for crying out loud, has anybody watched MTV lately or seen anything else they have been putting on in event years? It shouldn't have been overly surprising what they did put on. And look, CBS and MTV are owned by the same parent company, Viacom, who ultimately is responsible for this whole thing.

I think they did know what was probably likely to come. I think they are trying to promote the Grammys which will be coming up where you're going Justin Timberlake. And if CBS is really sorry they ought to tell Justin Timberlake, you know what, you are not going to be on our show this year because of what you pulled in the Super Bowl but I doubt CBS is that upset about what happened yesterday.

DOBBS: Bob, you've got 15 seconds to tell us how this will alter the path of modern media.

THOMPSON: Ultimately, the ten second delay is probably going to be its biggest legacy but it's going to start a big conversation.

DOBBS: Thank you very much. We thank you both for being here. And that's our show for tonight. We thank you for being with us.

Tomorrow, Senator Chuck Hagel joins us to talk about his bipartisan immigration reform plan. Governor Jennifer Granholm joins us from Michigan. She'll be here to tell us what she's doing, trying to keep American jobs in this country.

For all of us here, thanks for being with us. Good night from New York. CNN's primary coverage begins right now.

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