Rose bushes, even the Knockout types, are susceptible to many types of stem cankers (caused by a fungus). This appears to be the issue on your plants. We recommend that you prune out the affected canes after the first flush of blooms. Typically roses should be pruned every year in late winter before the plants start developing new leaves. Prune out the oldest canes and any stems that have the spots or black lesions (cankers). Thin out the bushes by cutting out one-third of the oldest and diseased canes every year. This helps improve air circulation and reduces the amount of inoculum (spores) that start the disease cycle. Pruning also helps to stimulate new growth and will help rejuvenate the plant. Be sure to put the diseased branches in the trash; do not compost them. It is also good practice to sanitize your pruners (e.g., with an alcohol wipe) after you finish cutting out the diseased canes. This will help to prevent the spread of the disease.

CKC

You stated to prune out the affected canes. Every single cane is affected, going all the way down to the ground.  If I drastically cut the entire bush back is there any chance new canes will develop and the bush will survive?  Thank you

This looks like cankers on the stems.  Prune out all dead and oldest canes to the ground. Prune the affected canes back to about several inches above the ground. You can fertilizer with a slow release fertilizer or spread some compost around the base of the plants.  Roses are pretty hardy and they should rebound and send up some new canes.
mh