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Interview With Richard Perle; Fallujah Negotiations at Critical Juncture

Aired April 19, 2004 - 18:00   ET


LOU DOBBS, CNN ANCHOR (voice-over): Tonight, negotiations to end the siege of Fallujah at a critical juncture. U.S. Marines say they could retake control the city in fairly short order.

BRIG. GEN. MARK KIMMITT, U.S. DEPUTY CHIEF OF OPERATIONS: Do we fear the terrorists? Hell no.

DOBBS: Tonight, Richard Perle, former chairman of the Defense Policy Board, is my guest. He'll testify before the Senate Foreign Relations Committee tomorrow.

As the war in Iraq continues, President Bush widens his lead in the polls over Senator Kerry. I'll be joined by three of the country's top political journalists.

More violence in the Middle East tonight after the Israeli assassination of the new leader of Hamas. Former U.S. peace envoy George Mitchell will be our guest.

And an American business success story undermined by the exporting of America.

LIZA ZANERI, PRESIDENT, BASE ONE TECHNOLOGIES: We can't compete with the offshore companies. We can't compete price-wise.

DOBBS: And, tonight, Congressman David Dreier will be here to justify his support for the export of American jobs to cheap overseas labor markets.


ANNOUNCER: This is LOU DOBBS TONIGHT Monday, for April 19. Here now for an hour of news, debate and opinion, Lou Dobbs.

DOBBS: Good evening.

One hundred American soldiers have now been killed in Iraq since the beginning of this month; 12 of them died over the weekend. Tonight, U.S. efforts to end the siege of Fallujah by peaceful means have reached a critical juncture. Fallujah's civic leaders today joined American officials in calling upon insurgents to turn in their weapons and to disarm. Military commanders said U.S. Marines could retake Fallujah in what they call fairly short order if those insurgent do not disarm. (BEGIN VIDEOTAPE)

DOBBS (voice-over): Sporadic gunfire today around Fallujah.

KIMMITT: Clearly, the Marines are observing the unilateral suspension of offensive operations. I wish we could say the same for the enemy. Over the past 48 hours, there have been 16 documented indirect fire attacks coming from the enemy and 18 direct fire attacks.

DOBBS: The first step in the new cease-fire deal, insurgents will surrender their weapons.

DAN SENOR, COALITION PROVISIONAL AUTHORITY: The parties agreed to call on citizens and groups to immediately turn in all illegal weapons, illegal weapons defined as mortars, RPGs, machine gun, sniper rifles, I.D.-making materials, grenades and surface-to-air missiles.

In return, negotiators promise access to hospitals, a later curfew and more humanitarian assistance for the residents of Fallujah. Near the Syrian border, U.S. forces engaged in heavy fighting again. A Marine patrol under attack by insurgents with machine guns and rocket-propelled grenade. Five Marines and 30 insurgents were killed over the weekend. Convoys are still being attacked by insurgents around Baghdad and within the city itself.

Mortar fire damaged the Swedish Embassy compound. And U.S. forces still around the holy city of Najaf where radical Shiite cleric Muqtada al-Sadr remains.


DOBBS: Spain, one of the biggest troop contributors to the coalition in Iraq, says it will withdraw all of its soldiers as soon as possible. That means likely six to eight weeks. Spain's decision is raising concerns that other coalition countries may also pull out their troops.

Kitty Pilgrim reports.


KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Coalition military spokesman Brigadier General Mark Kimmitt said Monday, Spain's withdrawal won't change the balance of force on the ground.

KIMMITT: There will not be a security vacuum in that area at any time. We know that the departure of the Spanish and any other forces that will be departing at the same time will be orderly.

PILGRIM: Spain is the sixth largest coalition partner, contributing 1,400 of the nearly 150,000 coalition troops in Iraq. Spain's decision to withdraw was not a surprise, but it came early. Spain's new prime minister, Zapatero, had campaigned on a pledge to withdraw Spanish troops from Iraq if the U.N. didn't have control by June 30. He made the withdrawal announcement, however, just one day after being sworn into office. The U.S. State Department Monday expressed surprise at the -- quote -- "abruptness" and said other countries face their own decisions on whether to stay or go.

RICHARD BOUCHER, STATE DEPARTMENT SPOKESMAN: Individual nations will be making, are making, will make their own decisions about when to deploy, how long to stay and what kind of commitments they can make and what kind of commitments they can meet.

PILGRIM: Monday, the State Department repeatedly said the 34- member coalition is intact. The British, South Koreans, Japanese, Italians and Portuguese have all restated their commitments to staying in recent days. So far, only Honduras has given indications it is considering withdrawing its 370 troops.

In Iraq Monday, radical insurgent leader Muqtada al-Sadr told his militia not to attack Spanish troops from now on. Spanish troops are deployed near Najaf, where al-Sadr's militia has been attacking coalition forces for the last two weeks.


PILGRIM: Now, the loss of Spain is more politically symbolic than militarily significant. No one is predicting a mass exodus of coalition partners, but the question remains however how many will keep their troops there past their initial commitment -- Lou.

DOBBS: Well, since 90 percent of the troops in the coalition in Iraq are American, obviously the troop contribution is not significant. What makes Spain significant?

PILGRIM: What is significant is they were the most vocal and public ally in the lead-up to the war. And so, symbolically, this is quite a loss.

DOBBS: Kitty, thank you very much -- Kitty Pilgrim.

President Bush today talked with the new Spanish prime minister. Mr. Bush expressed his displeasure about the withdrawal of Spanish troops from Iraq. President Bush said Spain should avoid actions that give false comfort to terrorists or the enemies of freedom in Iraq.

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

JOHN KING, CNN SR. WHITE HOUSE CORRESPONDENT: And, Lou, of course, the president knew this decision, this withdrawal was coming because the new prime minister campaigned so aggressively on that pledge.

As you noted, though, and as Kitty noted, what hurts the White House is the abruptness, the prime minister within a day of taking office saying those troops will be pulled out of Iraq as soon as possible. The president voicing regret at that. The White House press secretary saying it even might encourage more terrorist attacks. The president went out of the White House earlier today, said the terrorists are trying to -- quote -- "They want us to panic. That's their intent." So the White House believes Spain's quick decision could send the wrong signal and encourage more terrorist attacks against coalition allies. Mr. Bush doing a bit of diplomacy of his own today as well in the Oval Office, announcing that the current U.S. ambassador to the United Nations, John Negroponte, will be his new point man in Baghdad, the U.S. ambassador to Iraq, effective June 30, when there's a transfer of power.

You see Mr. Negroponte here to the president's right in the Oval Office. Also on hand, Lou, for this announcement was the secretary of state, Colin Powell. He's in the news again because of the allegations in this new book by Bob Woodward. One of the allegations is that the Saudi ambassador to the United States actually received a detailed briefing here in the West Wing of the White House on the final war plan even before Secretary Powell was aware of details of that plan.

Secretary Powell in an interview with the Associated Press tonight says he was in the loop all along and that is simply not true.


COLIN POWELL, SECRETARY OF STATE: We all sat together regularly and discussed the plan, commented on the plan and reviewed the plan. With respect to my support for what the president did, it is complete.


KING: Now, the White House also disputing an account that somehow the Saudis have promised to drive up oil production and drive down gas prices here in the United States just before the November election. The White House also disputing the suggestion that it did anything wrong in taking $700 million that was in the big congressional appropriation for the war in Afghanistan and using that $700 million to plan for the war in Iraq.

The White House says it has the discretion to use that money that way. So they're taking issue, Lou, with of a few of the nuggets in the new book by Bob Woodward. But what is most striking is that, here at the White House, they say read the book. They believe it shows -- it paints the picture of a president who asks the right questions, the tough questions, before going to war and then decided that he was right in launching that war -- Lou.

DOBBS: So, John, the reports of a dispute, a simmering dispute, if you will, between Colin Powell and Vice President Cheney are simply erroneous?

KING: Well, they're not simply erroneous that these two men have disagreed in the past and they've struggled and fought over the nuance certainly over whether diplomacy should be given more time in the run- up to war in Iraq.

But in the book it says they're barely on speaking terms. People here at the White House who have been in meetings with them say that's not true, that there perhaps might be some tension from time to time, but the two get along, at least professionally, if not cordially. And Secretary Powell himself describing the relationship tonight as -- quote -- "excellent" -- Lou.

DOBBS: And the power and the influence of Defense Secretary Rumsfeld remains as described in the book all but absolute?

KING: All but absolute, it is described in the book. Again, there's no question that in the postwar period some Pentagon powers have been shifted to here at the White House.

There's a great deal of theater always, Lou, in any of these decisions about when to go to war, how to go to war. There's a little bit of fear. But Secretary Rumsfeld certainly has great influence, absolutely. I don't know if I would use that term.

KING: Well, that's all right. We appreciate the terms you do use, John. John King, our senior White House correspondent.

Well, as John King just reported, Bob Woodward's new book charges that the White House made a new deal with Saudi Arabia to help lower oil prices in time before for the presidential election. Both the White House and Saudi Arabia deny it. Senator John Kerry today spoke out about that allegation at a campaign stop in Florida.


SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If, as Bob Woodward reports, it is true that gas supplies and prices in America are tied to the American election, then -- tied to a secret White House deal, that is outrageous and unacceptable to the American people.


DOBBS: Senator Kerry also said, if elected, he would work to decrease U.S. dependence upon foreign oil.

Still ahead here, the United States says the Iraqis aren't ready to take over their security. I'll be joined by former Defense Policy Board Chairman Richard Perle on the issue of the June 30 handover. He will testify before Congress tomorrow on that issue.

Radical Islamists threaten revenge against Israel after the assassination of a second Hamas leader in a month. Former U.S. peace envoy George Mitchell is our guest here.

In "Exporting America" tonight, one of this country's most successful technology companies is fighting for survival against the outsourcing of American jobs to cheap overseas labor markets. We'll have a special report. Congressman David Dreier will join us as well.

Please stay with us.


DOBBS: New violence tonight in the Middle East. Two Palestinian rockets exploded in a Jewish settlement in Gaza. Four people were wounded in the attacks. Those attacks came a day after the funeral of Hamas leader Abdel-Aziz Rantisi. He was killed in an Israeli missile attack Saturday.

My guest tonight led a commission three years ago that explored the chances for peace between Israelis and Palestinians. I am joined now by former Senator George Mitchell.

Good to have you with us.


DOBBS: The president's endorsement of the Sharon proposal, the effective withdrawal, unilateral withdrawal by Israel from Gaza, but the retention of six major blocks of settlements in the West Bank, good idea, bad idea?

MITCHELL: If it is or becomes part of a comprehensive plan to move the process forward, the road map or some other formulation to bring this to a settlement, which I think is possible, then I think it will be a good idea.

And everyone knows, of course, that the withdrawal from Gaza was going to occur at some point. The question is whether it's occurring now serves as a trigger. If it's simply a one-time response to an initiative by the prime minister of Israel, then it likely will not produce any long-term benefits and it will produce a short-term, of course, negative result.

DOBBS: You said you hold out some hope. At the same time the Palestinians themselves have said that this ends the road map. It is absolutely rejected on all counts and shows the prejudice and the bias of the United States government vis-a-vis Israel.

Under those circumstances, that sounds like something more than negotiating, at least to me. What does it sound like to you?

MITCHELL: Well, of course, negative statements about various proposals have been made repeatedly for several years by both sides, so you can't take it as the final word. You have to accept it as a position that represents their view now.

But they recognize that their circumstance will require further action and it can only be led by the United States.

DOBBS: At this juncture, with this proposal -- and we just received word here at CNN that King Abdullah has canceled his visit with the president this week because of developments in the region, as the king's office put it, but the king of Jordan canceling that trip, obviously, in reaction to the U.S. position taken here.

Without Abdullah's support and alliance, it makes the situation all the more difficult, does it not? MITCHELL: It certainly does in the short term. Most Arabs will see this as further evidence of what they already believe, that the United States is totally biased in favor of Israel.

At the same time, they all recognize that the only way there can be a resolution is if the U.S. gets involved. And keep this in mind, Lou. What the Israelis want is security. They've got a state. They want security for their people. What the Palestinians want is the state that they do not have.

I believe that neither can attain its objective by denying to the other side its objective.

DOBBS: We've had a 50-year demonstration of that very truism.

What in the world is it going to take for these two -- these two peoples to focus on that fact and to adjust the reality to something that approaches a civilized, secure future?

MITCHELL: I'm seeing in the Middle East -- I was just there for a week in January -- the same thing I saw in Northern Ireland after 30 years of war. And that was exhaustion by the public on both sides with the conflict. Simply put, people are sick of war and they recognize that the policies now being pursued will not help them to attain their objective, an end to the war, security for Israel, a state for the Palestinians. That can only be achieved under American leadership through an agreement.

And I think it is possible. I don't think it will happen this year because of the American election. But I think it is going to be possible thereafter.

DOBBS: Senator George Mitchell, we thank you for being with us, as always.

MITCHELL: Thank you, Lou, for having me.

DOBBS: Tonight's thought is on peace and what is required for peace to be both established and successful: "For peace is not mere absence of war, but it is a virtue that springs from force of character" -- that from philosopher Baruch Spinoza.

Still ahead here, a stunning statement from a top U.S. official in Iraq on the ability of Iraq's security forces to defend the country. We'll have a live report for you from the Pentagon.

And tonight, our special report, "Exporting America." One American technology company is managing to remain competitive without shipping jobs to cheap overseas labor markets. We'll have that success story and a great deal more still ahead here.

Please stay with us.


DOBBS: Paul Bremer today said Iraqi forces aren't ready to deal with the threat from insurgents without coalition support. Bremer's comments reflect concerns about the loyalty of the Iraqi army and police units during the recent fighting against insurgents and terrorists.

Senior Pentagon correspondent Jamie McIntyre reports tonight -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Lou, it is no secret That U.S. commanders were disappointed in the performance of some units of the Iraqi army and other defense forces even as they applaud how some of the forces have been working side by side with U.S. troops.

But the fact that some of the Iraqi police and some of the Iraqi military have failed to stand up to opponents of the United States, combined with the fact that an entire unit, the Iraqi army's 2nd Battalion, did not show up for a battle as requested, has just underscored what U.S. officials have been saying in recent weeks, that the Iraqi military will not be ready to take over security for the country when there's a transfer of sovereignty on June 30.

The latest statement coming today from the U.S. civil administrator, Paul Bremer.


PAUL BREMER, U.S. ADMINISTRATOR IN IRAQ: It is clear that the Iraqi forces will not be able on their own to deal with these threats by June 30 when an Iraqi government assumes sovereignty. So after June 30, Iraq and troops from many countries, including the United States, will be partners in providing security that Iraqis need.


MCINTYRE: So what will happen after the transfer of sovereignty? Well, the U.S. military says not much. U.S. commanders say if you wake up on July 1 and take a look around, Iraq is going to look much the same as it did the day before, with U.S. forces providing most of the security.

Meanwhile, of course, the Pentagon is scrambling to make adjustments now that Spain has announced it is going to pull its troops out of Iraq in the next several weeks -- Lou.

DOBBS: And, Jamie, as you say, Iraq may look much the same. Let's hope not. Let's hope it looks much improved on July .

But the fact is, none of us is likely surprised that the Iraqis are not ready to take over their own security . But this does raise the question as to whom U.S. forces in Iraq will be reporting if sovereignty is turned over to an interim government. What does that mean?

MCINTYRE: Well, U.S. commanders have been clear on that. And that is that the U.S. military will stay under U.S. control and the U.S. will maintain authority over all of the forces in Iraq. And they say that that will be essentially by invitation of the new Iraqi government. But it also shows that the transfer of sovereignty, while important, is also somewhat symbolic.

DOBBS: As some people say, suggesting some rather fancy structures.

Jamie, as John King reported just moments ago, there are questions tonight about whether $700 million was diverted from the war in Afghanistan to fund preparations for war in Iraq and the questions that raises about the legality and propriety. What is the Pentagon saying about that tonight?

MCINTYRE: Well, the Pentagon was scrambling around to respond to this allegation that was in Bob Woodward's new book. And, at the end of day, they basically came back and told us that after reviewing what happened, what they believe is General Tommy Franks asked for $750 million of things that he would need if he were to go to war with Iraq and that that request was parsed and separated into $178 million that were not specific to Iraq war planning.

Those were granted under terms of the supplemental appropriation. The rest of it had to wait until their was authorization from Congress. But they say they followed the letter of the law.

DOBBS: Was Congress informed?

MCINTYRE: Well, they didn't need to be informed of the $178 million, because that was under the terms of the supplemental.

DOBBS: Right.

MCINTYRE: They were informed of a military constructions project back in October. And they say they consulted with Congress all along.

DOBBS: OK. Jamie, thank you very much -- Jamie McIntyre, our senior Pentagon correspondent.

Turning now to the subject of tonight's poll, the question, which of the following countries is the most reliable ally of the United States -- three to choose from tonight, because they're in the news -- Spain, Saudi Arabia or Pakistan? Cast your vote at We'll have the results for you, of course, later in the broadcast.

The Senate Foreign Relations Committee tomorrow takes up three days of hearings about Iraq and the handover of sovereignty. Still ahead tonight, I'll be talking with former Assistant Secretary of Defense Richard Perle. He'll join us ahead of his testimony before the committee.

Also ahead, building an American business and keeping jobs in this country. We'll have a special report on one company that has managed to do both. Also, Congressman David Dreier will be here to tell why he says shipping American jobs to cheap foreign labor markets is good for our economy. And encouraging news for President Bush in the latest polls in the race for the White House. And we'll be joined by our panel of the nation's leading political journalists.

All of that and a great deal more still ahead here. Please stay with us.


DOBBS: "Exporting America" the subject of numerous reports on this broadcast for more than a year. Tonight, the information technology sector has been hit particularly hard by competition from companies using that cheap foreign labor.

We have a success story, however, for you tonight to share. Base One Technologies has found a way to stay competitive and to keep jobs in this country. Imagine that.

Bill Tucker has the story.


BILL TUCKER, CNN CORRESPONDENT (voice-over): The debate over the exporting of American jobs is changing.

MICHAEL PORTER, FOUNDER, ICIC: The outsourcing of I.T. jobs is getting more common. The numbers of jobs that are affected is actually relatively small, even compared to all I.T. jobs. So we're talking about a few percent, as opposed to 10 percent or 20 percent or 30 percent.

TUCKER: That's the academics' view from Harvard Business School.

Here's a reality check from a small business owner.

ZANERI: Many of my competitors have gone out of business. We can't compete with the offshore companies. We can't compete price- wise. And the only thing that has kept us in business is because we were savvy enough and quick enough to take our engineering expertise and move away from corporate America, because corporate America really turned their back on us, in essence. And we moved towards the federal government.

TUCKER: Base One Technologies builds high-end sophisticated networks. The network it constructed for the Federal Reserve banking system, for example, handles one billion transactions a day. It's also built networks for J.P. Morgan, Chase, Merrill Lynch, and the Federal Aviation Administration; 45 engineers now work for the company, but 125 once did. Work from corporate America is drying up, as businesses squeeze their bottom lines and take their work offshore, increasing the unemployment rolls.

ZANERI: Today, when I see corporate America and I see who is pulling the stings, it's the bean counters. It's the money people. So we don't have a prayer in hell.

TUCKER: Raising the question, is the bottom line the only line?

THOMAS MALONE, AUTHOR, "THE FUTURE OF BUSINESS": I think that there's a widespread misconception that the only purpose of business should be to maximize economic returns to shareholders. There's no law of nature or economics that says that has to be true.

TUCKER: But it seems that few businesses value the quality of work or their employees as richly as they value their bottom line.

(on camera): And when the bottom line is the only object, the money goes offshore, along with the jobs, idling American engineers, leaving universities to wonder why are there fewer students studying engineering. Bill Tucker, CNN, New York.


DOBBS: My next guest says (UNINTELLIGIBLE), global outsourcing will not make a difference when it comes to creating jobs for Americans. He says the United States is insourcing as many jobs, in fact, as it's exporting. Republican Congressman David Dreier, California joins tonight from Washington D.C. Congressman, good to have you here.

Outsourcing, insourcing. You know, when we talk about outsourcing here, we talk about shipping, corporate America shipping American jobs to cheap, foreign labor markets for the express purpose of bringing back to this market goods or services and the only basis for it simply lower wages. What's the corollary with insourcing?

REP. DAVID DREIER (R), CALIFORNIA: You know, Lou, I will tell you that the term outsourcing has really become a meaningless buzz word. It's a dirty word. It's a political football and I don't really believe that it correctly describes what it is that we're dealing with here. The issue is global investment. We need to focus...

DOBBS: Congressman, I've got love that. I've got to be honest with you. I love that. That was almost (UNINTELLIGIBLE) -- because you remember in the...

DREIER: I take that as a compliment.

DOBBS: I mean it as compliment because you remember, it was the Clinton administration, when they talked about raising spending on the federal budget, in various junctures, did talk about spending, they changed the word to investment. So I love that.

DREIER: Let me just say -- this is what it is, though. The fact of the matter is, unlike that, because increase in taxes was not investment, increase in spending was not investment as we saw it but I will tell you this has to do with global investments.

Since you mentioned Bill Clinton, Lou, I'm reminded of something that I said to you in one of our exchanges a few weeks ago when I quoted a very prominent Clinton cabinet member who said to me that he was a prominent Democrat and a supportive Democrat, but he really believed that any time U.S. business does not focus on the most competitive efficient, productive way to deal with their question of the bottom line, they are doomed.

And so this really is the issue of productivity. How do you get to be most productive and in this trip that I just took where you were mentioned as we were discussing at the break there in the speech that I gave in New Delhi, I didn't even mention the word "outsourcing." It was unintentional. I didn't know it until the guy got up after I'd spoken. I didn't even mention the word "outsourcing."

I talked about innovation, I talked about creativity, I talked about the ingenuity. I talked about the productivity of the U.S. worker and when I went to a call center in Kathmandu, Nepal, one of the things that I found is that somebody said to me it's important for us to have a strong vibrant growing U.S. economy and because of the presence of this call center they were able to provide loans to small businesses here in the United States and to potential homebuyers at a lower rate, because of this.

And so it's finding the most competitive way and the most productive way to deal with these issues and it's being done and it's been for decades. And many people have predicted -- I'm approaching a quarter of a century of service here in the Congress. During that whole period of time, Lou, from Walter Mondale to Michael Dukakis we've heard Democrats join in this chorus of saying economic ruin is on the horizon. The fact of the matter is they've been wrong and they're wrong now and you're wrong, too, Lou.

DOBBS: Well, you know, but unlike them, perhaps I should say I would love to be wrong, Congressman, and I don't know whether you would join me in this, but could both of us agree to hold out hope that we might be wrong...

DREIER: Well, of course. I'm looking at history...

DOBBS: Let's talk about history. You mentioned Dukakis, you mentioned Mondale. Let's talk about a guy by the name of Reagan. Because when you quote insourcing, as a number of people have, they talk about Honda, Toyota, BMW, right, and they talk about free trade and it's wonderful, right? I mean, you loved Ronald Reagan, you like free trade.

DREIER: ...Congress when he was elected.

DOBBS: Would you look into the camera and tell our audience why those plants from Honda, from Toyota, and BMW are in this country, and why they're employing American workers?

DREIER: They're in this country because of the fact that we didn't follow the policy in the 1980s that many people had pushed and that is the auto industry trying to pursue this industrial planning and in the seventies...

DOBBS: In the eighties?

DREIER: In the eighties. People said we needed to pursue the industrial planning model...

DOBBS: Congressman...

DREIER: ...that Japan has. And you know what, we've seen tremendous numbers of people hired.

DOBBS: Let's you and I just have a quiet moment here together and let's remember the reason they're here. The reason is that that great Republican, that great conservative Ronald Reagan putting quotas...

DREIER: No, that's not why they're here.

DOBBS: Please, let me finish and then you can go ahead. He put in quotas. The U.S. Congress put in quotas, and the U.S trade representative put in quotas against those imports and forced the building of those plants so they can have access to the world's largest consumer market.

DREIER: You know, that's not why they're here.

DOBBS: Oh, it's not?


DOBBS: Wait a minute, then why do you think they're here?

DREIER: I believe they're here because they found that the U.S. worker is the most productive...


DOBBS: Then why in the world is corporate America outsourcing their jobs every day here?

DREIER: Because comparative advantage says you do what you do best. Making telephone calls, Lou, is something that is done more cost effectively in India. I will tell you many of those auto manufacturers...


DOBBS: Wait a minute. I wrote these words down. These are the words you used, Congressman. Ingenuity, productivity, competitiveness and innovation and now you're talking about cost effectiveness. You're talking about exporting the middle class jobs in this country to a cheap foreign labor market on the pure basis, not because they're more innovative or productive or competitive but because they're cheaper. You're putting American workers in a competition against the lowest wages in the world. Do you really believe that's fair?

DREIER: Yes. That is all part of it. That's all part of the equation. Let me ask this question. Have we, in fact, seen this devastation. When you were on break we saw the report of 308,000 new jobs created in the last month. If you take that numbers that we've seen, three-quarters of a million created in the last few months, we will see the number increased up to 2 million this year and it's because of the fact we're competitive, but remember, many of these autoworkers in the United States are manufacturing automobiles for export from this country, too. That's something else, you've got to recall.

DOBBS: Congressman Dreier, I always love talking with you because it's always interesting to see which turn you will take, but if I may, let me ask you to come back as soon as we continue to look at this assault on the middle class that I call outsourcing and you call investment.

DREIER: Global investment.

DOBBS: Congressman David Dreier, thank you, sir.

DREIER: Thanks, Lou.

DOBBS: Still ahead we'll be talking with one of the architects of U.S. policy in Iraq, former chairman of the Defense Policy Board, Richard Perl. And a new book by Bob Woodward claims President Bush made a secret oil deal with Saudi Arabia, the White House and Saudi Arabia denied it. We'll be talking about that and a great deal more with our panel of top national political journalists. Stay with us.


DOBBS: My next guest tonight says he's opposed to any delay in the transfer of power from the coalition to the Iraqis. That handover scheduled for June 30th, as you know, and that's what he'll be telling the Senate Foreign Relations Committee tomorrow. Richard Perle is the former chairman of the Defense Policy board, assistant secretary of defense and he joins us tonight from Washington.

Richard, why is there this -- we just heard from Paul Bremer today that the Iraqis won't be to provide security. That really a handoff of sovereignty if they can't provide for their own security.

RICHARD PERLE, FORMER ASSISTANT SECRETARY OF DEFENSE: They won't be able to do everything on day one, but once there is a sovereign Iraqi power and we are there to help them at their invitation we cease to be an occupying power and I believe that that is the essential next step in bringing about a stable and decent Iraq.

DOBBS: Not to quibble, but if 125, 130,000 American troops in Iraq providing security and not under the control or influence or direction of an interim government established by the United Nations and comprised of Iraqis, aren't we still an occupying force?

PERLE: Well, we will be there with the approval of the Iraqis under terms and conditions that we will be discussing with them. That's a very different situation from what prevails today where we are under international law and clearly under practice -- an occupying power, responsible only to ourselves, really.

DOBBS: Richard, I would ask you this you were one of the architects, if you will, one of the so-called neo-conservative architects of the war against Saddam Hussein. You were amongst those who criticized the United Nations at all. Is there any unseemly turn here in that you look to the United Nations providing the interim government to facilitate a U.S. withdrawal and if not withdrawal at least wall papering as an occupying power.

PERLE: I think we've looked to the U.N. to play a very limited role. We've asked Mr. Brahimi to help work out the politics of the transition to an Iraqi sovereign government. I hope we're not going to see the U.N. rolling into Iraq with large numbers of bureaucrats. That isn't what Iraqis need. They need a little bit of political help, but not too much because they have to take responsibility for themselves and when they do I believe they will surprise a lot of people at their ability to manage their own affairs.

DOBBS: The surprises so far have not been pleasant in Iraq as you well know. You were on amongst those who thought things would go much more favorably in a post-Saddam Iraq. You are thinking in terms of pleasant surprises once again with a handover.

The handover to whom is still a relevant question, Shia, Sunni, Kurds?

PERLE: Well, it's very important that the handover is to a representative group of Iraqis in whom the Iraqi people have some confidence. If we don't do that, if we continue as an occupying power, push the Iraqis to the side, allow the governing counsel to comment from time to time, but give them no real authority, I think that will lead to a steady decline in support for our involvement there, even though there's gratitude for our having liberated them.

DOBBS: That gratitude not always so obvious amongst whether it be the Shia or the Sunni or each the Kurds for that matter. But there is also the claim by many that our policy to Democracies Iraq even those who supported the Bush policy in terms of Democratization has been overly influenced by the neo-conservative cabal, if you will, to put a negative term on it that you, Wolfowitz at all, at beginning of the war that you were two overly influenced by the desire for an Israeli policy that would lead to positive result in the Palestinian- Israeli conflict.

How do you respond to those critics?

PERLE: It's simply not the case. In fact, prior to the war, the Israeli position that was Iran was really the problem and not Iraq. I believed and most of the others I know that took this position believed, that as long as Saddam Hussen was there, with his history of weapons of mass destruction, which he had possessed, and his ties to terrorists, we were in a menaced position, because we didn't know when or if or how or under what circumstances he might choose to put the most dreadful weapons in the hands of people who want to kill us. And we learned in by waiting too long in Afghanistan, by not going after bin Laden before he attacked that that was a very dangerous thing to do. So we did the right thing to limit the threat of this country. If we can also encourage democracy in Iraq, that's a very positive addition, but removing Saddam was vital to our security. And Democratization, the enunciated policy of the Bush administration, one would think that you would consider that critical for the future of not only Iraq, but the region itself.

PERLE: I think we will get there. I think the overwhelming majority of Iraqis want to see decent governance. They want to be represented by people who have their interests at heart, and not by a tyrant who is out for himself. And it is very interesting that despite the appeals of extremists like Sadr, there has been no general uprising. He has very few followers, handful of followers, in fact.

Richard Perle, good have you here.

PERLE: It's always a pleasure.

DOBBS: Coming up next, we'll hear some of "Your Thoughts" about "Exporting America" and other issues.

We'll have the latest polls for you on President Bush and Senator Kerry. And we'll be joined by three of the nation's top political journalists. Stay with us.


DOBBS: Well on Wall Street, stocks opened the week not doing much. The Dow down 14 points, the Nasdaq up 24, the S&P up A point, but a new record tonight, bad news for consumers, gas line prices at a record.

Christine Romans with the story -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: The shock continues the fourth week now of record high gas price. The government says Americans, Lou, are paying $1.81 on average. Twenty-nine cents higher from last year and where companies can't raise prices they're absorbing higher costs by pinching salaries. Raising prices on all kinds of different goods, everything from paper products, kitchen appliances, plastics and food.

Now, that sticker shock not a problem for well paid American CEOs, but the heat is on the board members who are excessive pay enablers. The AFL-CIO urges shareholders to vote against these 10 company directors that it blames for enabling pay excess. The union targeting what it calls, Lou, derelict directors, telling them these monster pay packages must stop.

Cendant apparently got this message. The company will now link CEO Henry Silverman's pay with performance. He's not just guaranteed a job through 2012 anymore, Lou, and his golden parachute has been deflated. But don't feel bad. He made $64 million last year.

DOBBS: Now, how much -- how much will his pay be cut?

ROMANS: No, his pay will not be cut, his bonus will be tied to performance.

DOBBS: Performance. Whatever that means.

OK, I think we can still say, good for Henry.

All right, Christine Romans, thanks.

ROMANS: Thank you.

DOBBS: Now for some of your thoughts tonight on "Exporting America." John Ryan of Tucson, Arizona. "We have the best Congress money can buy. It is no surprise we're exporting America. It is a red, white and blue light special.

Klaus Hechenroder of Ontario, Canada. "Outsourcing is not a mutual beneficial trade practice. It's outright labor arbitrage."

Doug Marsden, Bloomfield, New Jersey. "Outsourcing, like everything else involving economic theory, is somehow related to the principles of supply and demand. Take a thousand jobs out of the job supply and the demand for unemployment benefits goes up."

We love hearing from you. Send us your thoughts at

When we continue, polls, politics, Bob Woodward's new book, just a few of the topics ahead. Three of the nation's top political journalists join me next.


DOBBS: The results now of our poll; 59 percent of you say Spain is the most reliable ally of the United States; 15 percent, Saudi Arabia; 26 percent, Pakistan.

The latest poll on the presidential election shows President Bush with a widening lead over Senator Kerry. The CNN/"USA Today" Gallup poll found 51 percent of those surveyed said they would vote for the president. Forty-six percent say the senator.

Joining me now, Ron Brownstein, the national political correspondent for "The Los Angeles Times." Karen Tumulty, national political correspondent, "Time" magazine. Roger Simon, political editor, "U.S. News and World Report," all from Washington tonight.

Roger, let me begin with you. Bob Woodward, why in the world, given all that is in that book, would the Bush administration agree to talking to Bob Woodward?

ROGER SIMON, U.S. NEWS AND WORLD REPORT: One wonders. One is always amazed after Woodward comes out with one of these books that anyone would talk to him. I guess the fear is that if you don't talk to Bob Woodward, you will come across even worse, and you hope in giving him an interview is that he will take care of your political enemies for you, and he'll take care of you in a good way, although it often doesn't seem to work out that way.

DOBBS: There are denials today, obviously, Karen, from the White House, the allegation that Colin Powell was not provided full information about the war in Iraq, that in fact the Saudis were told about that war before him. How damaging, how important?

KAREN TUMULTY, TIME MAGAZINE: Well, I think that those allegations, which are certainly giving Washington a lot to talk about, are sort of a continuation of the sort of longest-running psychodrama of the Bush administration, which is, you know, where does Colin Powell fit into this picture?

I actually think that the two allegations that could be the most damaging in the long run are, first, the suggestion that just 10 months after 9/11, the administration was diverting $700 million from the fight against al Qaeda in Afghanistan and shipping it into preparing for a war in Iraq that the country didn't even know about, and, of course, this suggestion that somehow Prince Bandar assured the president that Saudi Arabia was going to open up the spigot to lower oil prices in time for the election.

Now the administration on this second one is denying it, but if in fact that happens, any time between now and the election it is going to look mighty suspicious.

DOBBS: Ron, these poll numbers look very good for the president, despite a host of books -- there are at least two of them, the Clarke book, the Woodward book. The assault from the Democratic contender, Senator Kerry. The Bush administration's got to be feeling pretty good right now.

RON BROWNSTEIN, "LOS ANGELES TIMES": Well, Lou, I think it's actually kind of mixed. The polling itself is mixed. First of all, I want to say -- I want to tip my cap to Bob Woodward. Anybody who has covered this administration knows how difficult it is to penetrate their inner workings, and to have this level of -- high level officials talking about what they did and why is really extraordinary.

But on the polling, look, the president's approval rating remains right around 50 percent, and Lou, that is a number to keep an eye on. In a race with an incumbent president who is -- who has sort of an equivocal verdict from the public about, they're very volatile. They go up and down. The people don't know a lot about the challenger. The challenger hasn't been in the news, and the mood may shift back and forth.

But what really is important I think in the end is a verdict on the incumbent, and for that reason, Bush is looking a little better than he was a couple of weeks ago, but he's still in a position where it is a sort of danger zone for him.

DOBBS: Well, last week, we were able to talk here about how well or not so well the president did in his press conference. We now have that opportunity to discuss Senator Kerry on "Meet the Press." Is "Meet the Press" a forum that is losing its -- well, its attractiveness for candidates? How do you think Senator Kerry did, Roger?

SIMON: I think he had mixed results. I think "Meet the Press" continues to be one of those rites of passage that candidates have to -- candidates and incumbent presidents have to appear on if they want to be elected or reelected.

I thought Kerry did fine when he was attacking George Bush. He's got that down. I think he did less than fine when he was defending his own record. I thought that the clip that Tim Russert showed of Kerry in 1971 talking about how he had committed, sort of, atrocities in Vietnam led to a very poor response by Kerry. He joked about, you know, how he had dark hair back then. And it was also a missed opportunity, as Karen said on the...

DOBBS: I'm sorry to interrupt you, Roger, we got about 15 seconds. Karen.

TUMULTY: Well, I just think he's got to come up with a better explanation on that $87 billion vote that -- the amendment that he voted against.

BROWNSTEIN: Lou, the appearance may have been most valuable as a reminder for the people that John Kerry is running for president, because it's been awful hard to tell that the last few weeks.

DOBBS: OK. Ron, Karen, Roger, thank you very much for being here.

That's our show for tonight, and we thank you for being with us. Please join us tomorrow. The Senate Foreign Relations Committee begins its hearings on Iraq. Senator Chuck Hagel will be part of those hearings, and he will be here as our guest. Please join us.

For all of us here, good night from New York.


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