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PHOENIX -- The U.S. government may challenge Arizona's new immigration law, Attorney General Eric Holder said Tuesday as Arizona officials blamed the Feds for forcing the state into passing its own immigration enforcement mechanisms.

Attorney General Eric Holder told reporters on Tuesday that he fears the new law is subject to abuse. He said that the Justice Department and the Homeland Security Department are in the midst of conducting a review of the state law.

The attorney general said a number of options are under consideration including the possibility of a court challenge.

But it's the failure of the Obama administration to "secure our borders" that forced Arizona to pass the tough new law, Arizona Sen. John McCain said Tuesday.

Calling the situation in his state "the worst I've ever seen," McCain said drugs are pouring into the southwestern United States from Mexico because of ineffective border enforcement.

More On This... Civil Rights Groups Protest Arizona Immigration Law, File Suit Over Federal Program

Arizona Republican Gov. Jan Brewer signed a bill Friday to give state police the authority to question whether an individual is in the United States legally and would consider it a crime for people to be unlawfully in the state. She said she was forced to act because Washington has failed to stop the flow of illegal immigrants and drugs from Mexico.

Opponents of the law, who have staged protests in the state capital of Phoenix since last week, used refried beans to smear swastikas on the state Capitol and have demanded a boycott of the state, have said they want to take the case to court for a judge to decide whether the state can enforce federal laws.

"If you look or sound foreign, you are going to be subjected to never-ending requests for police to confirm your identity and to confirm your citizenship," said Alessandra Soler Meetze, executive director of the American Civil Liberties Union of Arizona, which is exploring legal action.

President Obama has also questioned the legal authority for Arizona to enforce federal law, arguing it would be a violation of civil rights for state law enforcement to question the legality of an individual's residency.

But McCain told CBS's "The Early Show" that he's talked to law enforcement officials and believes the new law can be implemented "without racial profiling," a chief concern of opponents.

He added that over a million pounds of marijuana were intercepted on the border at Tucson just in the last year.

Separately, House Majority Leader Steny Hoyer agreed Tuesday that the federal government hasn't secured the border with Mexico

"I think they’re right," said Hoyer. "The Feds haven't done their job."

Currently, many U.S. police departments do not ask about people's immigration status unless they have run afoul of the law in some other way. Many departments say stopping and questioning people will only discourage immigrants from cooperating to solve crimes.

Under the new Arizona law, immigrants unable to produce documents showing they are allowed to be in the U.S. could be arrested, jailed for up to six months and fined $2,500. That is a significant escalation of the typical federal punishment for being here illegally -- deportation.

People arrested by Arizona police would be turned over to federal immigration officers. Opponents said the federal government could thwart the law by refusing to accept them.

Supporters of the law said it is necessary to protect Arizonans. The state is home to an estimated 460,000 illegal immigrants and is the nation's busiest gateway for people slipping into the country. Brewer has ordered state officials to develop a training course for officers to learn what constitutes reasonable suspicion that someone is in the U.S. illegally.

The crux of opponents' arguments is that only the federal government has the authority to regulate immigration.

"If every state had its own laws, we wouldn't be one country; we'd be 50 different countries," said Thomas Saenz, president and general counsel of the Mexican American Legal Defense and Educational Fund.

Kevin Johnson, dean of the law school at the University of California-Davis and an immigration law professor, said such a lawsuit would have a very good chance of success. He said the state law gets into legal trouble by giving local law enforcement officers the authority to enforce immigration laws.

However, Gerald Neuman, a Harvard Law School professor, said Arizona could make a compelling legal argument that it has overlapping authority to protect its residents.

Kris Kobach, a University of Missouri-Kansas City law professor who helped write the Arizona legislation, said he anticipated legal challenges and carefully drafted the language. He said the state law is only prohibiting conduct already illegal under federal law.

Jon Garrido, who produces a Hispanic website and ran unsuccessfully last year for Phoenix City Council, told The Arizona Republic Monday he pulled organizing papers for a petition drive to repeal the law. A referendum would require the signature of 76,682 registered voters to get on the November ballot. If successful, the effort would block the law from taking effect until the vote.

San Francisco's city attorney has urged policymakers in the city to stop dealing with Arizona and Arizona businesses. Leaders in Mexico also demanded a boycott, as did civil rights leader Al Sharpton.

During a town hall meeting Monday in Tucson, Brewer dismissed the threat of a boycott, saying she doesn't believe the law is "going to have the kind of economic impact that some people think it might," the Arizona Daily Star reported.

The law has strong public support in Arizona, where passions have been running high since a rancher was killed close to the Mexican border last month, apparently by drug smugglers from across the border.

The Associated Press contributed to this report.