Lou Dobbs Tonight

SHOW: LOU DOBBS TONIGHT

HEADLINE: LOU DOBBS TONIGHT; CNNfn

GUESTS: David Dreier, Rick Davis, Adam Smith

BYLINE: Lou Dobbs, Casey Wian, Eric Philips, Mary Snow, Peter Viles, Dana Bash, Jeffrey Toobin, Christine Romans, David Grange

BREAK IN TRANSCRIPT

REP. ADAM SMITH (D), WASHINGTON: Good to be here, Lou. I promise not to be as tough on you as my colleague.

DOBBS: No, I want you to be tough.

SMITH: I'm kidding.

DOBBS: It's called America because we have the opportunity to express ourselves and sometimes passionately and I respect that. Let me ask you, the trade adjustment authority that you seek, has been denied to service workers and specifically software workers, because of the determination that software is not a quote unquote "product." Do you think that you can change this? It's been defeated before.

SMITH: Absolutely I think we can. I think there's a growing awareness, due in no small part to some of the programs that you've run, that service sector jobs are also vulnerable to this sort of competition and people who lose those jobs need the benefits that come with trade adjustment assistance every little bit as much. It's become a huge issue in this country with a lot of attention. So I'm confident that we can do that and I'm going to push really hard in Congress to get the change through.

DOBBS: The fact that we need trade adjustment authority. The fact that we are losing jobs as a result of trade, it boggles my mind, Congressman, to hear people, frankly, like Congressman Dreier who is a very smart, accomplished legislator and very knowledgeable, say things like we are going to shape international trade when we are watching American wealth being sent out the door every day in our search to buy, as he put it, low cost products. Those low cost products are amounting to something like half a trillion dollars in deficit every year. When are we going to see some rationalization of trade and its impact on working men and women in this country?

SMITH: And that's my concern, really, about the Bush administration's overall approach. They seem fairly cavalier about it, like there's not really a problem, it's going to work itself out. I mean, I agree with many of the points that Congressman Dreier made. I mean trade is important. Raising tariffs has a negative effect, but there are also negative impacts. We need to be smart about how we change our policies to address those negative impacts and improve the situation and not just assume they are going to take care of themselves. The administration saying that outsourcing is just fine, it doesn't create any problems, we'll be OK, is not a smart approach.

I mean, I don't think you should go shutting off the borders but let's make some changes to our policy so we can help those people who need the help. And one big point that I think we ought to do. If we are going to bring China into the WTO, as you mentioned, I voted for that, we ought to make sure that they live up to the responsibilities of being there. Right now, they are enjoying the rights but we're not enforcing the rules against them. I certainly would not have supported WTO if China-China and the WTO if they had said we're not going to enforce the rules against them. We need to aggressively enforce the rules. There's things we need to do to improve this situation.

DOBBS: At the same time you're seeking, in the contradictions and the complexities in this debate and dialogue are immense on trade and its impact here, but at the same time you're talking about trade adjustment authority, you are also one of the leading proponents of expanding the work visa program, the H-1B, H-1A, the L-1, and the other work visas.

SMITH: Actually that's not true. I'm not a proponent of expanding the L-1 visas. I think the L-1 visas are a major problem. H-1B's have many requirements attached to them. They're smaller for one thing. There's a fixed number of H-1B's. There's an unlimited of L-1s and there's no requirements attached to them. So I'm very concerned about the L-1 visa.

I think the H-1B visa program has been fairly positive. I am concerned about some of the enforcement on H-1B to make sure that the rules that we have put in place, the legislation, is actually enforced. But it's the L-1 I think are the big problems.

DOBBS: To put a cap on this, just so we're not rationalizing anything, you are still a free trader. Is it-just out of curiosity for our audience, as we discuss the jobs that are being lost, the huge trade deficit and we hear time and time from so-called free traders.

SMITH: I reject that label, by the way, but I'll try to answer your question.

DOBBS: That's what I'm asking you, if you are a free trader, because at some point we've got to, it seems to me, if I may be so simpleminded, reach some sort of balance in trade in order to preserve the wealth of this country. Would you agree with that?

SMITH: Absolutely. And I think throwing out the term like free trade is not very definitive. Let me tell you for example.

DOBBS: Congressman, I appreciate it.

I just wanted to get to that point. We're way out of time on this. I appreciate you being here. Good luck.

SMITH: Thanks for the opportunity.