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Lou Dobbs Tonight

John Ashcroft Steps Aside From White House Investigation; FDA Bans Ephedra

Aired December 30, 2003 - 18:00   ET

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

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


JOHN KING, CNN ANCHOR: Tonight: Attorney General John Ashcroft steps aside from an investigation into CIA leaks. Justice Department correspondent Kelli Arena will report. Democratic Senator Charles Schumer will be our guest.
For the first time ever, the government bans a dietary supplement. The Food and Drug Administration says the weight loss aid ephedra is too dangerous. Peter Viles will report on the potential impact to the almost $20-billion-a-year industry.

As the new year approaches, cities around the world on high alert for a terrorist attack. We'll have the latest on what they are doing to boost security.

In Baghdad, Iraq's new civil defense force launches its biggest raid yet in search of loyalists to Saddam Hussein. Karl Penhaul went along and will have a report.

And in "Grange on Point" tonight, why the training of Iraqi forces is critical to the plans for rotating U.S. troops.

And America's bright future. Christopher Paolini spent his teenage years creating a fantasy world in a book that is now a best- seller. Casey Wian will have his story.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, December 30. Sitting in for Lou Dobbs, who is on vacation, John King.

KING: Good evening.

Tonight: The United States' top law enforcement official is stepping aside from a politically charged investigation into who leaked the name of an undercover CIA operative. Attorney General John Ashcroft made the decision almost three months after his Justice Department opened the probe. Now the Justice Department says a special prosecutor will take over the case.

CNN justice correspondent Kelli Arena reports from Washington -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: John, justice officials say that the decision was made out of an abundance of caution and appointed Patrick Fitzgerald, the U.S. attorney out of Chicago, as special prosecutor. (BEGIN VIDEO CLIP)

JAMES COMEY, U.S. DEPUTY ATTORNEY GENERAL: We thought it prudent to have the matter handled by someone who is not in regular contact with the agencies and entities affected by this investigation.

(END VIDEO CLIP)

ARENA: But Justice isn't saying any more than that, citing secrecy rules. Critics praise the decision, alleging that Ashcroft is just too close to the Bush administration to conduct an impartial probe.

Now, for some background, John, investigators are trying to find out who leaked the name of a former undercover CIA operative, Valerie Plame. Now, Plame is married to former Ambassador Joe Wilson, who was harshly critical of the U.S. before going to war with Iraq, alleging the administration was exaggerating claims of Iraq's nuclear capabilities.

Wilson charged, the Bush administration leaked his wife's name out of revenge. Now, as for where the investigation stands, sources say that a fourth prosecutor was just recently added to the investigation team and that a grand jury may soon be called to take testimony. That follows dozens of interviews with administration staff, as well as employees of both the CIA and the State Departments -- back to you, John.

KING: And, Kelli, a new prosecutor added to the team, plans, but no grand jury in place yet. Prognosis, several more months of investigating?

ARENA: Not exactly sure. As you know, John, it's been pretty much impossible to get any information on this investigation.

KING: Yes.

ARENA: That was -- it was a recent discussion that I had with some officials who did say that a plan was in the works to impanel a grand jury. They weren't exactly sure when that would happen. But judging by this move today, obviously, this investigation moving forward and getting some definition that it didn't have before.

KING: Difficult, to say the least. Thank you, Kelli Arena in Washington tonight. Thank you again.

And before the special prosecutor took over the case, President Bush said, he had full confidence in Attorney General Ashcroft's ability to conduct an impartial investigation.

Joining me now from Crawford, Texas, with White House reaction to today's developments is our White House correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, John, President Bush was notified at his Crawford ranch about noon from his staffers. We are told that the Justice Department made this decision independently, that they did not consult the president. Two messages coming out of the White House from a spokesman today, essentially saying that the president does have confidence the Justice Department will do a fair investigation, at the same time, the president saying that he will not tolerate leaks, that he wants this resolved as quickly as possible.

Now, as you know,, there are about 40 White House officials who have been interviewed by the FBI, including the president's top political adviser, Karl Rove, as well as the White House spokesman, Scott McClellan. So far, no traction yet from the FBI in terms of what they have found. One Republican strategist who I talked to said they believe it's a good thing for the White House that it's a special counsel, as opposed to an independent counsel.

It allows this process to continue on. And the last thing the Bush administration wants is this type of investigation going well into the election season -- John.

KING: Suzanne Malveaux in Crawford, Texas, where the president is through the New Year's holiday -- thank you, Suzanne.

Ambassador Joe Wilson tonight told CNN he is pleased with Attorney General Ashcroft's decision. He said -- quote -- "The fact that attorney general recused himself indicates that administration wants to avoid the potential perception of a conflict of interests. And that's a good thing."

Democrats for months have demanded that Attorney General Ashcroft reduce himself from any role in this investigation.

Senator Chuck Schumer, Democrat of New York, was among the earliest and most vocal voices in that debate. And he joins us now here in the studio.

Senator, I'm struck by one thing Attorney General Ashcroft's deputy said in announcing this decision for the attorney general to step aside. He said it was made -- quote -- "based on the totality of the circumstances and the facts and evidence developed at this stage of the investigation."

Does that tell you that they came upon something that left the attorney general no choice?

SEN. CHARLES SCHUMER (D), NEW YORK: Well, clearly, it seemed to me from the outset -- and I've been calling for the attorney general to recuse himself and for the special counsel for months -- that there was a potential conflict, because, even if the names that were mentioned all have to deal with the attorney general every day.

So, could they have stumbled on something new that magnifies this? Possibly. But a guy like Comey, who I think has a lot of integrity, the deputy attorney general, I think that he would have seen the conflict from the outset. And had he been there, this might have happened a lot sooner, which would have been better. They would have avoided some of the mistakes they made early on.

KING: So is this the end of the political debate over this? Some Democrats say, it's not good enough. You still have a Republican appointee looking at a Republican administration. Why not go outside to an independent counsel, an independent special prosecutor, not someone who

(CROSSTALK)

SCHUMER: Yes, this is 95 percent of what I've asked for.

When we asked for the special counsel, there were two main issues, No. 1, that that person be allowed to pursue any direction that they wanted to, that they could call into the grand jury or to be interviewed by FBI agents anyone they decided. That's been done, at least if you believe what Comey says. And I believe him.

The second was -- and this was a very important part of the special counsel statute -- that, if they were blocked, they'd come to Congress and tell us. Comey agreed to that at his nomination hearing when I asked him to do so at the Judiciary Committee's meeting. So the one thing you don't have is someone on the outside completely. That is true.

But Fitzgerald has tremendous integrity. He's like a Comey. They both believe -- I truly believe this, and I'm not on their side politically, obviously -- but that they believe the integrity of the department and the integrity of their careers is way at the top of their list. So I think we have to give it the benefit of the doubt. Am I going to keep watching it carefully? I was the first one to call for this on the day it happened.

KING: This prosecutor

(CROSSTALK)

KING: ... brought a 22-count indictment against a former Republican governor.

SCHUMER: Exactly.

KING: That has to lead you to believe

(CROSSTALK)

SCHUMER: They are, both of them, Comey and Fitzgerald, are known. In fact, Fitzgerald was my choice for U.S. attorney in New York. And when Illinois grabbed him, Comey came in. So they are -- it's strong.

And I think we have to give them the benefit of the doubt at a time when Washington is as partisan as it is. This was a good move, by any stroke. And I spoke to Ambassador Wilson, who I've talked to at length about this. We both agree that we should give it the benefit of the doubt. That doesn't mean we're not going to watch it carefully. And one thing that does trouble me up to this point, they haven't empowered a grand jury. Most prosecutors would have said they should have done it a long time ago. But now let's see, with Fitzgerald, a seasoned prosecutor who cares about integrity.

KING: Quickly, you say you to Ambassador Wilson. He is active supporting one of the Democratic candidates for president. He has made appearances criticizing this administration, saying they are on a witch-hunt to get him and get his wife. Is it incumbent on him now, as part of the benefit of the doubt, turn down the volume, let this play out?

SCHUMER: He's entitled to his political views. He served his country as ambassador under a Republican president.

What was done to his wife was a dastardly deed. And the initial comments were outrageous. Oh, well, we've had leaks every day. No, we have never had the leaking the name of an agent for very well possibly a vindictive purpose, because they didn't like what the husband was doing. It jeopardized the lives of many. The CIA is still furious.

I called for this from the beginning. But until the CIA made it clear how furious they were, the Justice Department wasn't moving. So we see continual steps of progress. Does it mean it's a done deal, that we're certain that we're going to get real justice here? No. But does it make it much more likely than you would have thought yesterday? You bet.

KING: On that point, we'll end today, but we will carry this over into a highly charged election year.

Senator Charles Schumer of New York, thank you very much, sir.

SCHUMER: Thank you.

KING: Turning to another big story out of Washington tonight, a landmark decision from the Food and Drug Administration that could impact millions of Americans. The FDA said it will ban the popular weight loss supplement ephedra.

The government says the health risks of taking those pills are just too high.

(BEGIN VIDEOTAPE)

KING (voice-over): Ephedra is used by millions of Americans trying to lose weight because it raises the metabolism. But the government warns, it is also linked to heart attacks and strokes. The ban takes effect in 60 days. But officials are warning consumers to stop using ephedra products immediately.

TOMMY THOMPSON, HEALTH AND HUMAN SERVICES SECRETARY: Today's actions tells consumers that the time to stop using these products is now.

KING: Ephedra manufacturers were put on notice as well.

MARK MCCLELLAN, COMMISSIONER, FOOD & DRUG ADMINISTRATION: Any responsible manufacturer and retailer should stop selling these products as soon as possible. Everyone involved in marketing ephedra should be on notice that, as soon as the rule becomes effective, we intend to shut you down.

KING: A Rand Corporation study released in February found 16,000 reports of adverse reactions to ephedra, including two deaths, four heart attacks, nine strokes, one seizure and five psychiatric cases.

Steve Bechler, a 23-year-old pitcher for the Baltimore Orioles, died of heatstroke during spring training this year. Medical examiners linked his death to use of an ephedra supplement. Metabolife, which recently removed ephedra from its product line, said in a written statement today, "Ephedra dietary supplements can reasonably be expected to be safe when used under their intended conditions of use."

The American Medical Association praised the government's decision, calling dietary supplements containing ephedra a serious health threat.

(END VIDEOTAPE)

KING: The U.S. government has never before blocked the sale of over-the-counter dietary supplements. Unlike with prescription drugs, supplements do not have to be proven safe before going on the market.

But authorities can pull them from the shelves if they are proven to be unsafe. Now, the government's move to ban ephedra shines a spotlight on the huge and largely unregulated industry of dietary supplements. The many pills, powders and herbal remedies taken by millions of Americans is an $18-billion-a-year business.

Peter Viles has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Open any muscle magazine, you'll find the ads, designer whey protein for stronger, faster muscle-building power, ephedra free Hydroxycut, supports weight loss, reduces appetite, and Oxydrene that speeds the loss of excess body fat.

Get yours now before it's too late, all of this perfectly legal, the cutting edge of an $18 billion-a-year industry supported by three of the biggest trends in America, the fitness craze, looking for an edge in the gym, the obesity crisis, we want weight loss from a bill, and the aging of the baby boomers. They are popping vitamins and herbal pills to ward off everything from arthritis to prostate cancer.

The common thread here, almost no government regulation, no required safety tests. And nobody knows for sure which of these supplements work and which don't. TODD SCHLIFSTEIN, NYU MEDICAL UNIT: A lot of the research that is out there is on 20 healthy subjects by the company who were 20 years old and took it for two weeks and they were fine. Well, of course they were. We need more scientific-based research and not research by the companies themselves that produce these supplements.

VILES: The American Medical Association applauded the Bush administration's ban on ephedra, but wants more.

DR. RONALD M. DAVIS, AMERICAN MEDICAL ASSOCIATION: We would encourage Congress to go one step further and amend the 1994 legislation on dietary supplements, so that manufacturers have to prove that these products are safe and effective before they can market these products.

VILES: On Wall Street, those who follow the industry expect more government activity, but not a sweeping move to regulate the industry.

SCOTT VAN WINKLE, ANALYST, ADAMS, HARKNESS & HILL: I do think you'll see more proactive moves by the FDA to remove products that they feel concerned about or to at least establish guidelines, either for doses limitations or how the products are marketed.

(END VIDEOTAPE)

VILES: Now, sales of products containing ephedra have already dropped sharply, from roughly 1.4 billion a couple of years ago to an estimated $500 billion this year. And this is all before the ban has even gone into place, John.

KING: And Pete, ephedra today, is there another supplement or drug on the radar screen?

VILES: Not a specific supplement. But the AMA is worried about diet in general that speed the metabolism, because, often, people take them in combination with other pills that speed the metabolism, caffeine or whatever. In combination, these two things can be dangerous. The burden of proof, though, on the government to go out and say, this is unsafe. Otherwise, they're all on the market.

KING: We'll continue to watch this, the FDA getting more aggressive.

And that brings us to tonight's poll question: Do you want the federal government to be more aggressive in regulating dietary supplements, yes or no? Cast your vote at CNN.com/Lou. We'll bring you the results a bit later in the show.

The Department of Agriculture announced additional steps today designed to stem the fear of mad cow disease. Secretary Ann Veneman announced the bailing of all ailing, or so-called downer cattle from the human food chain.

(BEGIN VIDEO CLIP)

ANN VENEMAN, SECRETARY OF AGRICULTURE: We are declaring those high-risk tissues primarily contained in the head and spinal column in cattle 30 months or older to be unfit for human consumption. And we are prohibiting their presence in human food.

(END VIDEO CLIP)

KING: The USDA will also ban spinal and intestinal tissue from older cattle. And slaughterhouse techniques will be changed to prevent accidental contamination of meat with cow nerve tissue.

Coming up, on high alert, unprecedented security measures across the country tonight as cities and towns brace for New Year's Eve.

Then, links to terror. Two Americans suspected of terrorist activity in the Philippines are to be deported back home. Judith Torres will report from Manila.

And "Grange On Point." The U.S. military prepares to begin the most sweeping troop movements since World War II. General David Grange will join us.

(COMMERCIAL BREAK)

KING: Security across the country is at an unprecedented level tonight, according to Homeland Security Secretary Tom Ridge. The national terror alert system remains at an increased level of high, or orange, and it will remain there at least through New Year's Day.

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY: Right now, we think that the level of threat is appropriately at orange. And we have ramped up in an unprecedented way levels of security around the country. And I think you're going to see it remain there through the balance of the week.

(END VIDEO CLIP)

KING: Secretary Ridge also highlighted the specific threat to commercial airliners. Airspace over most major cities will be closed or significantly restricted on New Year's Eve.

New York City's Times Square is the traditional hub of New Year's celebrations. Thousands of police will be on hand, in addition to bomb squads and radiation detectors. But New York's Mayor Michael Bloomberg today had some reassurance for the hundreds of thousands of visitors expected in Times Square tomorrow night.

(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: I want to urge everyone to leave the worrying to the professionals. That's what these security levels are for. They're for professionals. The rest of us, let's go to Times Square. It's going to be a fantastic night, a great beginning to a wonderful 2004.

There will be close to one billion people estimated to be watching this around the world on television. So, if you want to wave to one billion people, here's your chance to do so.

(END VIDEO CLIP)

KING: Heightened fears of a terror attack over the holiday have also raised security levels across Europe. U.S. government officials tell CNN that British authorities have received intelligence on general threats to British airliners. In response, some British carriers have placed armed air marshals aboard some flights. The United States announced a plan yesterday to place some air marshals on some international flights to and from the United States.

In Germany, authorities sealed off a military hospital in Hamburg after they received a tip that radical Islamist terrorists were planning a car bomb attack. A German prosecutor said the suspects were connected to the radical Islamist group Ansar al-Islam, a group American officials believe has ties to al Qaeda.

In the Philippines tonight, two American citizens are being held on immigration charges, but authorities suspect they may also have links to al Qaeda. Two brothers, James and Michael Ray Stubbs, are scheduled to be deported to the United States.

Judith Torres reports from Manila.

(BEGIN VIDEOTAPE)

JUDITH TORRES, CNN CORRESPONDENT (voice-over): The two suspects, identified as James Stubbs Jr., also known as Jamil Daud Mujahid, and his brother, Michael Ray Stubbs, had, according to the Philippine government, been seen meeting with known leaders of terrorist cells in the country with links to al Qaeda.

UNIDENTIFIED MALE: Yes, I am American.

TORRES: Jamil Mujahid says he is a Muslim convert and a former policeman in California and had been living in the Philippines since February of this year.

Philippine officials say he is married to a Filipina. Intelligence reports allege that, in May 2003, Mujahid started meeting with leaders of nongovernment organizations founded by Osama bin Laden's brother-in-law, Mohammed Jamal Khalifa. Philippine immigration officials say, those organizations are being used to channel funds from bin Laden sympathizers to al Qaeda terrorist cells in the Philippines.

Mujahid, who was initially identified as a Jordanian, denies any ties to terrorism.

UNIDENTIFIED MALE: I'm not Jordanian. I am an American.

UNIDENTIFIED FEMALE: Nobody says that they are Jordanians. We are saying they are American citizens. And they are in violation of immigration laws of the Philippines.

TORRES: Mujahid's brother, Michael Ray Stubbs, on the other hand, is a recently retired technician of the Lawrence Livermore National Laboratory, tapped by Homeland Security for research regarding countering biological and chemical terrorism.

Judith Torres, CNN, Manila.

(END VIDEOTAPE)

KING: Coming up: "Exporting America." Desperate times and millions of lost jobs forcing American manufacturers to make difficult and unlikely alliances. Bill Tucker will report.

And the Democratic contenders for the presidential nomination come out swinging against the current front-runner, as the race for the White House grows even more contentious. Pollster John Zogby at Zogby International and Ron Faucheux of "Campaigns & Elections" magazine will join us.

(COMMERCIAL BREAK)

KING: Few industry in this country have lost as many jobs as the manufacturing sector. According to the federal government, nearly three million manufacturing jobs have been eliminated over the past five years.

As we have been reporting here on this broadcast, many of those jobs have been exported to cheaper overseas labor markets, a situation that has forced manufacturers to dramatically change the way they do business.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): This is Mike Retzer of Strohwig Tool & Die. He's co-founder of a grassroot group of manufacturers, Save American Manufacturing Now. The group held its first meeting in Wisconsin this past June, expecting 200 people would attend; 1,000 showed up.

MIKE RETZER, SAMNOW: We're talking about the downsizing and exporting of America's economy. We're going to be left as a Third World nation without our ability to manufacture and even our ability to service.

TUCKER: SAMNow has members in 16 states. There's also Mad in USA, which is a manufacturing group based in Connecticut. It represents companies that employ 500,000 workers.

And there are grassroot groups like the American Manufacturing Trade Action Coalition, which is trying to bring together all of the various groups under one lobbying umbrella to focus their political power.

ALAN TONELSON, EDUCATION FOUNDATION: Traditional metal bending, metal cutting industries that remain the heart of the American economy still in many respects banding together and essentially marching into the offices of their local senators and congressmen and saying, we're getting killed and you had better do something about it.

TUCKER: Labor unions are also a part of the growing coalition.

Upset with the loss of jobs, jobs that typically pay 40,000 a year and include benefits, unions like the AFL-CIO see the survival of manufacturing as vital to everyone's interests.

RICHARD TRUMKA, AFL-CIO: American manufacturing is in a crisis. There's three unemployed people for every job opening that comes about right now. And 98 percent of the jobs that are being created are low- wage service-end jobs that only pay four-fifths of what a manufacturing job pays.

TUCKER: One group you won't find in the coalitions, the National Association of Manufacturers. Save American Manufacturing and Mad say the National Association of Manufacturers is more interested in serving large manufacturers, who they say are more interested in buying from overseas than building in America.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

KING: Coming up, the ongoing hunt for weapons of mass destruction in Iraq and the politics that surround it, how the issue will play out in the election year just ahead. We'll have that story coming up.

But first, "Exporting America." Each night, we are updating the list of companies our staff has confirmed to be exporting American jobs to cheaper overseas labor markets. Today's additions to the list are HSN, formerly called the Home Shopping Network, Pearson Digital Learning, Rainbow Technologies, and Sprint PCS. We will continue to update this list every night. Please send us the names of companies you know, to be exporting American jobs to cheap overseas labor markets. The e-mail address again, LouDobbs@CNN.com.

We'll be right back.

(COMMERCIAL BREAK)

KING: While the capture of Saddam Hussein has quieted some critics of the war, many others, including some of the war's supporters, are feeling misled by the fact that no weapons of mass destruction have been found in Iraq.

(BEGIN VIDEOTAPE)

KING (voice-over): The State of the Union a year ago, before the war, the president unequivocal on the issue of Saddam Hussein and weapons of mass destruction.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He pursued chemical, biological and nuclear weapons, even while inspectors were in his country. Nothing to date has restrained him from his pursuit of these weapons. KING: But, as 2003 comes to a close, months of searching, yet no major weapons discovered and an evolution in how the administration deals with the weapons debate.

It began with Vice President Cheney in a key speech back in July, saying that, even if no weapons are found, that the decision to go to war was based on the best judgment of the CIA.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Quote: "We judge that Iraq has continued its weapons of mass destruction program, in defiance of U.N. resolutions and restrictions."

KING: At this year-end news conference, Mr. Bush cited fresh proof of Iraq's ability to make chemical and biological weapons.

BUSH: He has weapons programs that would have put him in material breach.

KING: But gone was any claim that Iraq had stockpiles of such weapons at the ready. Critics see a president who deliberately exaggerated the intelligence.

(BEGIN VIDEO CLIP, AD)

NARRATOR: So we went to war. Now there's evidence we were misled. And almost every day, Americans are dying in Iraq. We need the truth, not a cover-up.

(END VIDEO CLIP)

KING: The Bush team scoffs at the misleader label.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I think it's the very small outliers out there who never supported the war in the first place, don't support some of the needed steps we've taken to try to protect America. And they are a small voice out there.

KING: Some Democrats suggest over time a failure to find weapons of mass destruction will erode the president's credibility.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATES: They told us they knew where the weapons of mass destruction were, there was no evidence for that.

KING: Yet, entering the election year, finding weapons does not appear to be a political must. In a year-end CNN poll, 61 percent of Americans approve of the decision to go to war. The White House believes most voters will accept the argument that in a post 9/11 world, just the possibility Saddam Hussein had weapons of mass destruction justified knocking him from power.

(END VIDEOTAPE)

KING: The race for the Democratic presidential nomination is becoming more nasty. Connecticut Senator Joe Liberian, said front runner Howard Dean, will, quote, "melt in a minute," unquote if he becomes the party's nominee and is subjected to Republican attacks. Massachusetts Senator John Kerry joined with Lieberman in denouncing a closed door energy task force Dean convened as governor. Early this week, Dean questioned party chairman Terry McAuliffe' leadership for failing to stop attacks on his candidacy. Generally Wesley Clark is countering Al Gore's endorsement of Dean with a TV ad featuring an even bigger gun.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What if we could have a president who in his lifetime has seen ordinary people do extraordinary things? Because he believed in them who was decorated for valor and service to our country.

(END VIDEO CLIP)

KING: Joining us, pollster John Zogby of Zogby International and Ron Faucheux political scientist with George Washington University.

Gentlemen, thank you both.

John Zogby, let me start with you first. The ad we saw, Wesley Clark, Bill Clinton putting a medal around his neck, that likely to have an impact on the Democratic primary?

JOHN ZOGBY, ZOGBY INTERNATIONAL: Not really, not in the immediate. Public opinion really has congealed among Democrats. They strongly opposed the war and Howard Dean, you know, captivated that anger and is holding on to it. So, right now, I mean, Clark is not in Iowa. He's really a blip in New Hampshire. And he becomes a player February 3rd, it remains to be seen if he'll be alive and around on February 3rd.

KING: Ron Faucheux, help me through this. Governor Dean complaining to the Terry McAuliffe, the chairman, help me, stop the other Democrats from, in his view, beating up on him.

Inside baseball or does that have any meaning on how this campaign plays out?

RON FAUCHEUX, GEORGE WASHINGTON UNIVERSITY: Well, no, it is inside baseball. And it's Howard Dean, of course, beginning to start acting like a front-runner where he's trying to get the point across to Democrats around the country that, hey, I'm going to be your nominee anyway, let's stop the bloodshed and get this thing straight. Of course, he's saying this in his interest. And the other candidates are saying, wait a minute, voters haven't even voted yet. Let's at least have some primaries and caucuses and see whether the Democrats around the country are actually going to be for you for the nomination.

KING: John Zogby, help me stay on this point. So far every time dean gets attacked it appears to actually strengthen his support. But might Democrats step back on the issue of electability and saying if you're complaining of Gephardt hitting you, and John Kerry hitting, what's going to happen when George Bush and his $200 million starts hitting you?

ZOGBY: To be sure what those Democrats are doing is giving a lot of ammunition to Karl Rove and the Republicans. Democratic party is split now between Dean supporters who really dislike President Bush and non-Dean supporters at least not yet anyway, who dislike President Bush but want to be sure that they have a winner. What Gephardt, what Kerry, what Lieberman, Clark, what they have to do is really forget about cutting into Dean's support and try to pick up the other 50 percent of the Democrats where they have an opportunity to make some gains. Howard Dean is comfortable in the support that he has with approximately a third of the Democrats so far. That's pretty good with nine candidates in the race.

KING: Pretty good, Ron Faucheux with nine candidates in the race. Three weeks from now, Iowa caucuses will kick this off and begin what we'll politely call the blur of the early primaries. What is your sense a week from now or three weeks from now when we get to Iowa and one week after that when we get to New Hampshire, how many candidate candidates will be left standing?

FAUCHEUX: Dean is a classic protest candidate in the sense that he's appealing to voter alienation and voter anger. He's anti-Bush, anti-war, and he's anti-Washington politicians who compromise fundamental principles. There's 40 percent, 50 percent of the Democratic electorate that are looking for somebody like this and they were looking for a protest vehicle. And I agree with John, he's going to keep that vote. But the big question is when voters after the first of the year look at this field again, when they look at candidates again, when they start digesting all of these attacks against Dean, whether or not he has ability to grow beyond that 40, 35 percent-40 percent base he's now polling in a lot of places and that remains to be seen. The big thing is this, you can't beat a front- runner with a field of candidates. You can only beat a front-runner with a single candidate. One of these candidates will have to emerge and have to take on Dean. You can't just say, well, Gephardt can do it here or Clark can do it there or Edwards can do it here and Kerry can do it there. One candidate's going to have to take him on.

KING: Well, John Zogby, you know the numbers as well as anyone. As you look at not only the horse race numbers but how other candidate as appeal to the Democratic constituency, if Howard Dean is the hare, do you see a tortoise?

ZOGBY: The only tortoise I'm looking at is Dick Gephardt because he has the opportunity at least to win in Iowa. If Dean wins in Iowa and, say, a John Edwards looks good. Dean wins in New Hampshire and General Clark looks good, looking good is not going to be enough by the time you get into February 3rd if Dean wins both of the states.

KING: I want to turn your attention to the president and his political standing going into the new year. If you look at his approval rating, economic numbers, if you look even at the support for the war in Iraq this president, in pretty good shape, hard to argue with that heading into the year.

Ron Faucheux, tonight the big story, CIA leak investigation, they handed over to a new Republican prosecutor but one who is not afraid at least in his past to go after big Republicans, big-named Republicans if necessary. That investigation hanging over into the new year, the 9/11 Commission hanging over into the new year.

Are those two big question marks for this president?

FAUCHEUX: Sure, they are. Anything like that can always potentially blow up and become a big political problem for any incumbent president. But most voters are skeptical of investigations. And they're very skeptical of the politics that are played around investigations. And that is one of the things we as a result of the Clinton scandals in the late 1990s. So, voters will wait and see before they make any hard, negative judgment against the president on any of those things.

KING: John Zogby, if Karl Rove called you and he said, OK, what is it, what should I be worried about most, your answer would be?

ZOGBY: Oh, the economy and Iraq, to be sure. 12 years ago, there was plenty of talk about a recovery by the spring of 1992, most economist told us we were in a recovery. But voters voted the economy, stupid. And as far as Iraq is concerned that has congealed opposition opinion. We are very much a red state versus blue state nation whoever the Democratic nominee is, he or she comes in with 45 percent or 48 percent of the vote, you're looking at a hotly competitive race no matter where President Bush's numbers are right now for those reasons.

KING: Gentlemen, let me close with this quickly.

We're in the season of new year's prediction. I'll start with John Zogby and then to you Ron Faucheux.

Who will be the Democratic nominee?

ZOGBY: I think it's pretty hard to see anyone but Howard Dean right now.

KING: Agree, Ron?

FAUCHEUX: I would agree. I would bet on Dean right now.

KING: We will keep the tape. If a hare suddenly catches the tortoise, we'll bring it back, in good nature.

Thank you both, Ron Faucheux in Washington, John Zogby in New York.

Thank you both, gentleman.

Vote in tonight's poll on the FDA's decision to ban Ephedra.

Do you want the federal government to be more aggressive in regulating diet supplements, yes or no?

Cast your vote at cnn.com/lou. We'll have results a little later in the show?

Tonight's thought is on drugs and how they contribute to society's ills. No drug, not even alcohol causes the fundamental ills of society. If we are looking at the sources of our troubles, we shouldn't test people for drugs we should test them for stupidity, ignorance, greed and love of power. That is from P.J. O'Rourke.

Coming up, "Grange on Point": a massive undertaking for the United States military as it prepares to rotate 10s of thousands of troops out of Iraq. General David Grange will join us.

And "America's Bright Future": tonight a teenage author who has accomplished something most adult writers will never achieve.

Casey Wian will have his inspiring story.

(COMMERCIAL BREAK)

KING: On "Broken Borders" from Shoals, Alabama. "I'm for a better system of allowing a much smaller number of foreigners into our country legally with proper paperwork first and not allowed to simply flow in. It's an outrage the way our government does things so upside down."

From Plymouth, Michigan. "We're about to allow illegal aliens certain rights to work in this country. Why are they allowed to bypass the law? Why is it that Americans are now treated as minority workers. It appears that being American is now the lowest thing on the social totem pole as other national groups appear to have more rights and more jobs than we do." That from Christina.

And from Globe, Arizona, "If we want to eliminate illegal aliens, then we need to go after the people who hire them. Picking up the illegals and returning them to the border is not the answer. Putting the industries and people who hire them in jail is. Once the word gets out that there is no work in America, then the illegals will have no reason to come here." That from Jorge Noriega.

And from Quitman, Texas, "It's funny. All those jobs people keep saying we need illegal aliens for, working in restaurants, mowing lawns, babysitting, et cetera, those are all jobs teenagers used to do when I was growing up. Now our teenagers can't find work." That from Gerry Glazener.

We love hearing from you. E-mail us at loudobbs@CNN.com.

And turning now to the markets. The Dow pulled back a bit today following a big run-up over the past few weeks. The blue chips ended down 25 points. The Nasdaq, however, managed to move slightly high, staying above the 2,000 mark. And the S&P 500 ended just about unchanged. Mary Snow is here now with more on the markets and the latest economic news -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, John, stocks have been gaining on the notion that there will be strong economic growth. But today, three reports disappointed investors. Consumer confidence, Chicago area manufacturing and existing homes all showed a dip. The dip in consumer confidence, though, gained the most attention because it raises concerns about the pace of the job recovery.

The conference board today reported that the increase in number of people saying jobs are hard to get, and economists say consumers are anxious because of worries about job being outsourced overseas along with the fact that those who do have jobs are more productive. Still, looking into the future the conference board found that consumers are still feeling pretty upbeat.

Finally, looking into the new year, history shows us that election years are generally up years for the market. And when an incumbent has been re-elected, the Dow on average, has gained nearly 16 percent -- John?

KING: Keep watching that as we get to the year ahead. Mary Snow, thank you very much.

And coming up, America's bright future. Tonight, meet a 19- year-old whose novel is No. 2 on the "New York Times" children's best- seller list. Casey Wian will have his story coming up.

(COMMERCIAL BREAK)

KING: A unit from Iraq's newly-formed civil defense corps recently took on one of Baghdad's toughest neighborhoods. The force is a cross between an army and a police department and the more successful they are, the faster they can take over the streets of the Iraqi capital allowing more American troops to come home. Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT, (voice-over): Hatching the final plan. A big night ahead for the ICDC, Iraq's new civil defense corps. Their biggest raid yet, the first that U.S. trainers from this Florida national guard unit have allowed them to lead. The order comes through. The target...

UNIDENTIFIED MALE: Mother and father-in-law of Saddam Hussein.

PENHAUL: He and another man are suspected of bankrolling anti- coalition guerrillas.

UNIDENTIFIED MALE: Outstanding. They're ready. They're pumped. They're pumped. They're ready to go.

PENHAUL: Some of the Iraqi troopers masked up, afraid of former regime diehards taking reprisals for the crackdown.

UNIDENTIFIED MALE: I do that because -- just for security.

PENHAUL: This company was recruited from the district it's now patrolling, trained for four months. Some, former Iraqi soldiers, others butchers and bakers answering a coalition ad.

UNIDENTIFIED MALE: I'm the chairman of the council. I have the...

PENHAUL: A frosty reception as they go into the home of a local council leader. But this Iraqi soldier breaks the ice. None of the cultural language barriers that dog coalition troops.

Spirits are running high after last night's mission. In a few moments, it will be time for promotions. That's the next step in building up a self-defense corps. It will be another step closer toward U.S. troops handing back control of the streets to Iraqi security forces.

COL. PETE MANSOOR, 1ST ARMORED DIVISION: I think it is a direct equation. The more and more we can turn security in Iraq over to Iraqis, the fewer coalition forces we need to do that.

PENHAUL: And the further U.S. soldiers are from Baghdad streets, the closer they may be to going home. Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

KING: Now grange on point, the biggest rotation of military personnel since World War II is planned for U.S. troops in Iraq in February and April. Nearly a quarter of a million troops will be in transit. Joining us with some insights on the magnitude of this undertaking, General David Grange.

General, let us begin just with that. How can they pull this off without undermining security of the troops on the ground as you take some out and put some in.

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: It's extensive planning involved and rehearsals. There's war games and exercises that have taken place and are still ongoing on how to do this thing as neat as possible.

You're moving thousands of troops from all services across the world, at the same time moving another group back. At the same time, maintaining security requirements in Iraq to include nation building tasks that are put on the military.

So a lot of effort, a lot of leaders going early, learning what they call right seat rides, learning the ropes from the old-timers there, the new units get into country, there's an overlap period, so there's a surge in numbers at one period of time and then they transition out. And you have to do that knowing quite well that the enemy may take advantage of the situation.

KING: We talked repeatedly, General, about how stretched thin the force is already. As you have that overlap time, troops going in, getting in, getting settled before those that are leaving actually pull out, does that leave a hole somewhere?

Does it love an opening elsewhere in the world, a vulnerability? GRANGE: There are a lot of threats around the world and there's always vulnerabilities. It's always risk assessment, what you would do if something broke out somewhere else in the world during this transition of forces with a good half of the army as well as good portions of the other services. And so prudent measures are taken using other elements of power, other elements of military force to cover down on potential crisis points during this transition.

KING: I remember years ago during the first gulf war one of the questions facing the U.S. Military, did you have the transport capacity and capability to move troops quickly?

Has that been dealt with?

GRANGE: It has been dealt with. Improvements have been made since 1990-'91 for the desert war movement of deployment and redeployment of troops. This is probably the only nation in the world has such a capability to project itself with so much power across the world. But that's the type of military the United States must have, a homeland defense piece but also a war fighting piece that projects itself anywhere in the world and a very short amount of time with a capable force that can defeat any enemy through a spectrum of conflict. And it took a while build this up and it's going to continue to take a lot of resources to keep it that way.

KING: As we watch this switch, the hand over early next year in a couple of installments one of the questions the American people have, never mind rotating troops, when are the troops going to start to come home permanently?

Karl Penhall's piece looked at one of the forces the United States is helping to train, a paramilitary force, if you will, to police and conduct raids and operations.

Your sense of how that process is going so far?

GRANGE: I think it's going well. It's not a quick very process. You have to give it time. You're transitioning in this case a national guard-type military from one that was ruled by fear which had no pride, low morale, incompetent leaders and poor equipment and transition it into something that has pride, that has a respect of the people that they're responsible to defend with good leadership and high morale. And that takes time to train to those type of standards very similar to the United States, Great Britain-type military and then put it on the street. The faster that can happen, the faster U.S. troops can come home.

But it cannot be rushed and standards cannot be lowered.

KING: I want to close with an issue that will carry over into the next year, how to treat the military tribunals of all of the people being head in Guantanamo Bay, Cuba. The Pentagon today named a retired two-star John Altenburg Jr. to be essentially the judge, the military person who oversees that process.

Any insights on that, sir? GRANGE: He's a well-respected general officer. He was the legal counsel for the United States Army when I -- right before I retired. He has a great reputation. He has the competence to do this. And I think it's good they selected someone that is retired that's independent, but also knows the military justice and he'll run it, I'm sure, very similar to how they did it after World War II.

KING: Difficult job for that retired general ahead.

And we thank you, David -- General David Grange, sir. Happy new year to you.

GRANGE: Thank you.

KING: Coming up -- "America's Bright Future."

Tonight meet a 19-year-old who already is a best selling author. Casey Wian will have his story coming up.

(COMMERCIAL BREAK)

KING: The results of tonight's poll question. Sixty percent of you want the federal government to be more aggressive in regulating dietary supplements, 40 percent of you do not.

In "American's Bright Future" tonight, a young man who graduated high school at age 15 and went on to publish a "New York Times" best seller. Now 19, Christopher Paolini is busy with book tours, movie deals and work on his next novel.

Casey Wian has his story from Paradise Valley, Montana.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: You need a book signed?

CASEY WIAN, CNN CORRESPONDENT (voice-over): Christopher Paolini's debut novel, the fantasy thriller, "Eragon" is number two on the "New York Times" children's best-seller list. Most bright 19- year-olds are in college, but Paolini is a publishing phenomenon.

CHRISTOPHER PAOLINI, AUTHOR, "ERAGON": I did not expect the book to be published and I didn't expect it to debut on the "New York Time's" best-seller list. Everything that's happened with the book has just been extraordinary and completely unexpected.

WIAN: You might say the same about his upbringing. Christopher and his younger sister Angela were home schooled by their parents in this house in Montana's Paradise Island.

PAOLINI: If I had not been home schooled I would not have "Eragon" give me the time to explore my own interests and time to day dream. I didn't have every minute scheduled with activities.

WIAN: Christopher earned a high school diploma at 15 and then began three years of "Eragon."

TALIITA PAOLINI, MOTHER: The first time we realized Christopher had something special was when he had us read his manuscript which we had not seen.

KENNETH PAOLINI, FATHER: We made a decision as a family to put every resource that we had available into the publishing, the designing, the printing, the publishing and the marketing and promotion of Christopher's book.

WIAN: Christopher, a talented artist drew "Eragon's" the cover with help from his sister who inspired one of the book's characters.

ANGELA PAOLINI, SISTER: His success is in part the success of our entire family.

WIAN: The parents decide to self-publish and the family traveled to schools and bookstores selling copies by the minivan full.

K. PAOLINI: We recouped the investment the first month.

WIAN: Mainstream publishers noticed and the Paolini last year signed a mid six figure deal with Knopf, which trimmed and repackaged "Eragon" as a hard cover.

PAOLINI: I hope people are going to enjoy "Eragon." It's a great story with duels and dragons and battles and villains and romance and all the good stuff a story needs.

WIAN: "Eragon's" just a start. Part two of Paolini's fantasy trilogy is in the works and Fox bought the movie rights. College will have to wait.

Casey Wian, CNN, Montana.

(END VIDEOTAPE)

KING: That's our show. Thanks for being with us.

Tomorrow, in "America's Bright Future" the story of two remarkable brothers who teamed up to advance science.

And Martin Groove of the "Hollywood Reporter" gives his picks for the best and worst movies of the year.

We'll talk politics with Ron Brownstein of the "L.A. Times" and Karen Tumulty of "Time" magazine.

And Harvard Business School professor Brian Hall tells why in his view executives compensation is still outrageous high.

For all of here good night from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





FDA Bans Ephedra>


Aired December 30, 2003 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Tonight: Attorney General John Ashcroft steps aside from an investigation into CIA leaks. Justice Department correspondent Kelli Arena will report. Democratic Senator Charles Schumer will be our guest.
For the first time ever, the government bans a dietary supplement. The Food and Drug Administration says the weight loss aid ephedra is too dangerous. Peter Viles will report on the potential impact to the almost $20-billion-a-year industry.

As the new year approaches, cities around the world on high alert for a terrorist attack. We'll have the latest on what they are doing to boost security.

In Baghdad, Iraq's new civil defense force launches its biggest raid yet in search of loyalists to Saddam Hussein. Karl Penhaul went along and will have a report.

And in "Grange on Point" tonight, why the training of Iraqi forces is critical to the plans for rotating U.S. troops.

And America's bright future. Christopher Paolini spent his teenage years creating a fantasy world in a book that is now a best- seller. Casey Wian will have his story.

ANNOUNCER: This is LOU DOBBS TONIGHT for Tuesday, December 30. Sitting in for Lou Dobbs, who is on vacation, John King.

KING: Good evening.

Tonight: The United States' top law enforcement official is stepping aside from a politically charged investigation into who leaked the name of an undercover CIA operative. Attorney General John Ashcroft made the decision almost three months after his Justice Department opened the probe. Now the Justice Department says a special prosecutor will take over the case.

CNN justice correspondent Kelli Arena reports from Washington -- Kelli.

KELLI ARENA, CNN JUSTICE CORRESPONDENT: John, justice officials say that the decision was made out of an abundance of caution and appointed Patrick Fitzgerald, the U.S. attorney out of Chicago, as special prosecutor. (BEGIN VIDEO CLIP)

JAMES COMEY, U.S. DEPUTY ATTORNEY GENERAL: We thought it prudent to have the matter handled by someone who is not in regular contact with the agencies and entities affected by this investigation.

(END VIDEO CLIP)

ARENA: But Justice isn't saying any more than that, citing secrecy rules. Critics praise the decision, alleging that Ashcroft is just too close to the Bush administration to conduct an impartial probe.

Now, for some background, John, investigators are trying to find out who leaked the name of a former undercover CIA operative, Valerie Plame. Now, Plame is married to former Ambassador Joe Wilson, who was harshly critical of the U.S. before going to war with Iraq, alleging the administration was exaggerating claims of Iraq's nuclear capabilities.

Wilson charged, the Bush administration leaked his wife's name out of revenge. Now, as for where the investigation stands, sources say that a fourth prosecutor was just recently added to the investigation team and that a grand jury may soon be called to take testimony. That follows dozens of interviews with administration staff, as well as employees of both the CIA and the State Departments -- back to you, John.

KING: And, Kelli, a new prosecutor added to the team, plans, but no grand jury in place yet. Prognosis, several more months of investigating?

ARENA: Not exactly sure. As you know, John, it's been pretty much impossible to get any information on this investigation.

KING: Yes.

ARENA: That was -- it was a recent discussion that I had with some officials who did say that a plan was in the works to impanel a grand jury. They weren't exactly sure when that would happen. But judging by this move today, obviously, this investigation moving forward and getting some definition that it didn't have before.

KING: Difficult, to say the least. Thank you, Kelli Arena in Washington tonight. Thank you again.

And before the special prosecutor took over the case, President Bush said, he had full confidence in Attorney General Ashcroft's ability to conduct an impartial investigation.

Joining me now from Crawford, Texas, with White House reaction to today's developments is our White House correspondent Suzanne Malveaux -- Suzanne.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, John, President Bush was notified at his Crawford ranch about noon from his staffers. We are told that the Justice Department made this decision independently, that they did not consult the president. Two messages coming out of the White House from a spokesman today, essentially saying that the president does have confidence the Justice Department will do a fair investigation, at the same time, the president saying that he will not tolerate leaks, that he wants this resolved as quickly as possible.

Now, as you know,, there are about 40 White House officials who have been interviewed by the FBI, including the president's top political adviser, Karl Rove, as well as the White House spokesman, Scott McClellan. So far, no traction yet from the FBI in terms of what they have found. One Republican strategist who I talked to said they believe it's a good thing for the White House that it's a special counsel, as opposed to an independent counsel.

It allows this process to continue on. And the last thing the Bush administration wants is this type of investigation going well into the election season -- John.

KING: Suzanne Malveaux in Crawford, Texas, where the president is through the New Year's holiday -- thank you, Suzanne.

Ambassador Joe Wilson tonight told CNN he is pleased with Attorney General Ashcroft's decision. He said -- quote -- "The fact that attorney general recused himself indicates that administration wants to avoid the potential perception of a conflict of interests. And that's a good thing."

Democrats for months have demanded that Attorney General Ashcroft reduce himself from any role in this investigation.

Senator Chuck Schumer, Democrat of New York, was among the earliest and most vocal voices in that debate. And he joins us now here in the studio.

Senator, I'm struck by one thing Attorney General Ashcroft's deputy said in announcing this decision for the attorney general to step aside. He said it was made -- quote -- "based on the totality of the circumstances and the facts and evidence developed at this stage of the investigation."

Does that tell you that they came upon something that left the attorney general no choice?

SEN. CHARLES SCHUMER (D), NEW YORK: Well, clearly, it seemed to me from the outset -- and I've been calling for the attorney general to recuse himself and for the special counsel for months -- that there was a potential conflict, because, even if the names that were mentioned all have to deal with the attorney general every day.

So, could they have stumbled on something new that magnifies this? Possibly. But a guy like Comey, who I think has a lot of integrity, the deputy attorney general, I think that he would have seen the conflict from the outset. And had he been there, this might have happened a lot sooner, which would have been better. They would have avoided some of the mistakes they made early on.

KING: So is this the end of the political debate over this? Some Democrats say, it's not good enough. You still have a Republican appointee looking at a Republican administration. Why not go outside to an independent counsel, an independent special prosecutor, not someone who

(CROSSTALK)

SCHUMER: Yes, this is 95 percent of what I've asked for.

When we asked for the special counsel, there were two main issues, No. 1, that that person be allowed to pursue any direction that they wanted to, that they could call into the grand jury or to be interviewed by FBI agents anyone they decided. That's been done, at least if you believe what Comey says. And I believe him.

The second was -- and this was a very important part of the special counsel statute -- that, if they were blocked, they'd come to Congress and tell us. Comey agreed to that at his nomination hearing when I asked him to do so at the Judiciary Committee's meeting. So the one thing you don't have is someone on the outside completely. That is true.

But Fitzgerald has tremendous integrity. He's like a Comey. They both believe -- I truly believe this, and I'm not on their side politically, obviously -- but that they believe the integrity of the department and the integrity of their careers is way at the top of their list. So I think we have to give it the benefit of the doubt. Am I going to keep watching it carefully? I was the first one to call for this on the day it happened.

KING: This prosecutor

(CROSSTALK)

KING: ... brought a 22-count indictment against a former Republican governor.

SCHUMER: Exactly.

KING: That has to lead you to believe

(CROSSTALK)

SCHUMER: They are, both of them, Comey and Fitzgerald, are known. In fact, Fitzgerald was my choice for U.S. attorney in New York. And when Illinois grabbed him, Comey came in. So they are -- it's strong.

And I think we have to give them the benefit of the doubt at a time when Washington is as partisan as it is. This was a good move, by any stroke. And I spoke to Ambassador Wilson, who I've talked to at length about this. We both agree that we should give it the benefit of the doubt. That doesn't mean we're not going to watch it carefully. And one thing that does trouble me up to this point, they haven't empowered a grand jury. Most prosecutors would have said they should have done it a long time ago. But now let's see, with Fitzgerald, a seasoned prosecutor who cares about integrity.

KING: Quickly, you say you to Ambassador Wilson. He is active supporting one of the Democratic candidates for president. He has made appearances criticizing this administration, saying they are on a witch-hunt to get him and get his wife. Is it incumbent on him now, as part of the benefit of the doubt, turn down the volume, let this play out?

SCHUMER: He's entitled to his political views. He served his country as ambassador under a Republican president.

What was done to his wife was a dastardly deed. And the initial comments were outrageous. Oh, well, we've had leaks every day. No, we have never had the leaking the name of an agent for very well possibly a vindictive purpose, because they didn't like what the husband was doing. It jeopardized the lives of many. The CIA is still furious.

I called for this from the beginning. But until the CIA made it clear how furious they were, the Justice Department wasn't moving. So we see continual steps of progress. Does it mean it's a done deal, that we're certain that we're going to get real justice here? No. But does it make it much more likely than you would have thought yesterday? You bet.

KING: On that point, we'll end today, but we will carry this over into a highly charged election year.

Senator Charles Schumer of New York, thank you very much, sir.

SCHUMER: Thank you.

KING: Turning to another big story out of Washington tonight, a landmark decision from the Food and Drug Administration that could impact millions of Americans. The FDA said it will ban the popular weight loss supplement ephedra.

The government says the health risks of taking those pills are just too high.

(BEGIN VIDEOTAPE)

KING (voice-over): Ephedra is used by millions of Americans trying to lose weight because it raises the metabolism. But the government warns, it is also linked to heart attacks and strokes. The ban takes effect in 60 days. But officials are warning consumers to stop using ephedra products immediately.

TOMMY THOMPSON, HEALTH AND HUMAN SERVICES SECRETARY: Today's actions tells consumers that the time to stop using these products is now.

KING: Ephedra manufacturers were put on notice as well.

MARK MCCLELLAN, COMMISSIONER, FOOD & DRUG ADMINISTRATION: Any responsible manufacturer and retailer should stop selling these products as soon as possible. Everyone involved in marketing ephedra should be on notice that, as soon as the rule becomes effective, we intend to shut you down.

KING: A Rand Corporation study released in February found 16,000 reports of adverse reactions to ephedra, including two deaths, four heart attacks, nine strokes, one seizure and five psychiatric cases.

Steve Bechler, a 23-year-old pitcher for the Baltimore Orioles, died of heatstroke during spring training this year. Medical examiners linked his death to use of an ephedra supplement. Metabolife, which recently removed ephedra from its product line, said in a written statement today, "Ephedra dietary supplements can reasonably be expected to be safe when used under their intended conditions of use."

The American Medical Association praised the government's decision, calling dietary supplements containing ephedra a serious health threat.

(END VIDEOTAPE)

KING: The U.S. government has never before blocked the sale of over-the-counter dietary supplements. Unlike with prescription drugs, supplements do not have to be proven safe before going on the market.

But authorities can pull them from the shelves if they are proven to be unsafe. Now, the government's move to ban ephedra shines a spotlight on the huge and largely unregulated industry of dietary supplements. The many pills, powders and herbal remedies taken by millions of Americans is an $18-billion-a-year business.

Peter Viles has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Open any muscle magazine, you'll find the ads, designer whey protein for stronger, faster muscle-building power, ephedra free Hydroxycut, supports weight loss, reduces appetite, and Oxydrene that speeds the loss of excess body fat.

Get yours now before it's too late, all of this perfectly legal, the cutting edge of an $18 billion-a-year industry supported by three of the biggest trends in America, the fitness craze, looking for an edge in the gym, the obesity crisis, we want weight loss from a bill, and the aging of the baby boomers. They are popping vitamins and herbal pills to ward off everything from arthritis to prostate cancer.

The common thread here, almost no government regulation, no required safety tests. And nobody knows for sure which of these supplements work and which don't. TODD SCHLIFSTEIN, NYU MEDICAL UNIT: A lot of the research that is out there is on 20 healthy subjects by the company who were 20 years old and took it for two weeks and they were fine. Well, of course they were. We need more scientific-based research and not research by the companies themselves that produce these supplements.

VILES: The American Medical Association applauded the Bush administration's ban on ephedra, but wants more.

DR. RONALD M. DAVIS, AMERICAN MEDICAL ASSOCIATION: We would encourage Congress to go one step further and amend the 1994 legislation on dietary supplements, so that manufacturers have to prove that these products are safe and effective before they can market these products.

VILES: On Wall Street, those who follow the industry expect more government activity, but not a sweeping move to regulate the industry.

SCOTT VAN WINKLE, ANALYST, ADAMS, HARKNESS & HILL: I do think you'll see more proactive moves by the FDA to remove products that they feel concerned about or to at least establish guidelines, either for doses limitations or how the products are marketed.

(END VIDEOTAPE)

VILES: Now, sales of products containing ephedra have already dropped sharply, from roughly 1.4 billion a couple of years ago to an estimated $500 billion this year. And this is all before the ban has even gone into place, John.

KING: And Pete, ephedra today, is there another supplement or drug on the radar screen?

VILES: Not a specific supplement. But the AMA is worried about diet in general that speed the metabolism, because, often, people take them in combination with other pills that speed the metabolism, caffeine or whatever. In combination, these two things can be dangerous. The burden of proof, though, on the government to go out and say, this is unsafe. Otherwise, they're all on the market.

KING: We'll continue to watch this, the FDA getting more aggressive.

And that brings us to tonight's poll question: Do you want the federal government to be more aggressive in regulating dietary supplements, yes or no? Cast your vote at CNN.com/Lou. We'll bring you the results a bit later in the show.

The Department of Agriculture announced additional steps today designed to stem the fear of mad cow disease. Secretary Ann Veneman announced the bailing of all ailing, or so-called downer cattle from the human food chain.

(BEGIN VIDEO CLIP)

ANN VENEMAN, SECRETARY OF AGRICULTURE: We are declaring those high-risk tissues primarily contained in the head and spinal column in cattle 30 months or older to be unfit for human consumption. And we are prohibiting their presence in human food.

(END VIDEO CLIP)

KING: The USDA will also ban spinal and intestinal tissue from older cattle. And slaughterhouse techniques will be changed to prevent accidental contamination of meat with cow nerve tissue.

Coming up, on high alert, unprecedented security measures across the country tonight as cities and towns brace for New Year's Eve.

Then, links to terror. Two Americans suspected of terrorist activity in the Philippines are to be deported back home. Judith Torres will report from Manila.

And "Grange On Point." The U.S. military prepares to begin the most sweeping troop movements since World War II. General David Grange will join us.

(COMMERCIAL BREAK)

KING: Security across the country is at an unprecedented level tonight, according to Homeland Security Secretary Tom Ridge. The national terror alert system remains at an increased level of high, or orange, and it will remain there at least through New Year's Day.

(BEGIN VIDEO CLIP)

TOM RIDGE, HOMELAND SECURITY SECRETARY: Right now, we think that the level of threat is appropriately at orange. And we have ramped up in an unprecedented way levels of security around the country. And I think you're going to see it remain there through the balance of the week.

(END VIDEO CLIP)

KING: Secretary Ridge also highlighted the specific threat to commercial airliners. Airspace over most major cities will be closed or significantly restricted on New Year's Eve.

New York City's Times Square is the traditional hub of New Year's celebrations. Thousands of police will be on hand, in addition to bomb squads and radiation detectors. But New York's Mayor Michael Bloomberg today had some reassurance for the hundreds of thousands of visitors expected in Times Square tomorrow night.

(BEGIN VIDEO CLIP)

MICHAEL BLOOMBERG (R), MAYOR OF NEW YORK: I want to urge everyone to leave the worrying to the professionals. That's what these security levels are for. They're for professionals. The rest of us, let's go to Times Square. It's going to be a fantastic night, a great beginning to a wonderful 2004.

There will be close to one billion people estimated to be watching this around the world on television. So, if you want to wave to one billion people, here's your chance to do so.

(END VIDEO CLIP)

KING: Heightened fears of a terror attack over the holiday have also raised security levels across Europe. U.S. government officials tell CNN that British authorities have received intelligence on general threats to British airliners. In response, some British carriers have placed armed air marshals aboard some flights. The United States announced a plan yesterday to place some air marshals on some international flights to and from the United States.

In Germany, authorities sealed off a military hospital in Hamburg after they received a tip that radical Islamist terrorists were planning a car bomb attack. A German prosecutor said the suspects were connected to the radical Islamist group Ansar al-Islam, a group American officials believe has ties to al Qaeda.

In the Philippines tonight, two American citizens are being held on immigration charges, but authorities suspect they may also have links to al Qaeda. Two brothers, James and Michael Ray Stubbs, are scheduled to be deported to the United States.

Judith Torres reports from Manila.

(BEGIN VIDEOTAPE)

JUDITH TORRES, CNN CORRESPONDENT (voice-over): The two suspects, identified as James Stubbs Jr., also known as Jamil Daud Mujahid, and his brother, Michael Ray Stubbs, had, according to the Philippine government, been seen meeting with known leaders of terrorist cells in the country with links to al Qaeda.

UNIDENTIFIED MALE: Yes, I am American.

TORRES: Jamil Mujahid says he is a Muslim convert and a former policeman in California and had been living in the Philippines since February of this year.

Philippine officials say he is married to a Filipina. Intelligence reports allege that, in May 2003, Mujahid started meeting with leaders of nongovernment organizations founded by Osama bin Laden's brother-in-law, Mohammed Jamal Khalifa. Philippine immigration officials say, those organizations are being used to channel funds from bin Laden sympathizers to al Qaeda terrorist cells in the Philippines.

Mujahid, who was initially identified as a Jordanian, denies any ties to terrorism.

UNIDENTIFIED MALE: I'm not Jordanian. I am an American.

UNIDENTIFIED FEMALE: Nobody says that they are Jordanians. We are saying they are American citizens. And they are in violation of immigration laws of the Philippines.

TORRES: Mujahid's brother, Michael Ray Stubbs, on the other hand, is a recently retired technician of the Lawrence Livermore National Laboratory, tapped by Homeland Security for research regarding countering biological and chemical terrorism.

Judith Torres, CNN, Manila.

(END VIDEOTAPE)

KING: Coming up: "Exporting America." Desperate times and millions of lost jobs forcing American manufacturers to make difficult and unlikely alliances. Bill Tucker will report.

And the Democratic contenders for the presidential nomination come out swinging against the current front-runner, as the race for the White House grows even more contentious. Pollster John Zogby at Zogby International and Ron Faucheux of "Campaigns & Elections" magazine will join us.

(COMMERCIAL BREAK)

KING: Few industry in this country have lost as many jobs as the manufacturing sector. According to the federal government, nearly three million manufacturing jobs have been eliminated over the past five years.

As we have been reporting here on this broadcast, many of those jobs have been exported to cheaper overseas labor markets, a situation that has forced manufacturers to dramatically change the way they do business.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): This is Mike Retzer of Strohwig Tool & Die. He's co-founder of a grassroot group of manufacturers, Save American Manufacturing Now. The group held its first meeting in Wisconsin this past June, expecting 200 people would attend; 1,000 showed up.

MIKE RETZER, SAMNOW: We're talking about the downsizing and exporting of America's economy. We're going to be left as a Third World nation without our ability to manufacture and even our ability to service.

TUCKER: SAMNow has members in 16 states. There's also Mad in USA, which is a manufacturing group based in Connecticut. It represents companies that employ 500,000 workers.

And there are grassroot groups like the American Manufacturing Trade Action Coalition, which is trying to bring together all of the various groups under one lobbying umbrella to focus their political power.

ALAN TONELSON, EDUCATION FOUNDATION: Traditional metal bending, metal cutting industries that remain the heart of the American economy still in many respects banding together and essentially marching into the offices of their local senators and congressmen and saying, we're getting killed and you had better do something about it.

TUCKER: Labor unions are also a part of the growing coalition.

Upset with the loss of jobs, jobs that typically pay 40,000 a year and include benefits, unions like the AFL-CIO see the survival of manufacturing as vital to everyone's interests.

RICHARD TRUMKA, AFL-CIO: American manufacturing is in a crisis. There's three unemployed people for every job opening that comes about right now. And 98 percent of the jobs that are being created are low- wage service-end jobs that only pay four-fifths of what a manufacturing job pays.

TUCKER: One group you won't find in the coalitions, the National Association of Manufacturers. Save American Manufacturing and Mad say the National Association of Manufacturers is more interested in serving large manufacturers, who they say are more interested in buying from overseas than building in America.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

KING: Coming up, the ongoing hunt for weapons of mass destruction in Iraq and the politics that surround it, how the issue will play out in the election year just ahead. We'll have that story coming up.

But first, "Exporting America." Each night, we are updating the list of companies our staff has confirmed to be exporting American jobs to cheaper overseas labor markets. Today's additions to the list are HSN, formerly called the Home Shopping Network, Pearson Digital Learning, Rainbow Technologies, and Sprint PCS. We will continue to update this list every night. Please send us the names of companies you know, to be exporting American jobs to cheap overseas labor markets. The e-mail address again, LouDobbs@CNN.com.

We'll be right back.

(COMMERCIAL BREAK)

KING: While the capture of Saddam Hussein has quieted some critics of the war, many others, including some of the war's supporters, are feeling misled by the fact that no weapons of mass destruction have been found in Iraq.

(BEGIN VIDEOTAPE)

KING (voice-over): The State of the Union a year ago, before the war, the president unequivocal on the issue of Saddam Hussein and weapons of mass destruction.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: He pursued chemical, biological and nuclear weapons, even while inspectors were in his country. Nothing to date has restrained him from his pursuit of these weapons. KING: But, as 2003 comes to a close, months of searching, yet no major weapons discovered and an evolution in how the administration deals with the weapons debate.

It began with Vice President Cheney in a key speech back in July, saying that, even if no weapons are found, that the decision to go to war was based on the best judgment of the CIA.

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: Quote: "We judge that Iraq has continued its weapons of mass destruction program, in defiance of U.N. resolutions and restrictions."

KING: At this year-end news conference, Mr. Bush cited fresh proof of Iraq's ability to make chemical and biological weapons.

BUSH: He has weapons programs that would have put him in material breach.

KING: But gone was any claim that Iraq had stockpiles of such weapons at the ready. Critics see a president who deliberately exaggerated the intelligence.

(BEGIN VIDEO CLIP, AD)

NARRATOR: So we went to war. Now there's evidence we were misled. And almost every day, Americans are dying in Iraq. We need the truth, not a cover-up.

(END VIDEO CLIP)

KING: The Bush team scoffs at the misleader label.

DAN BARTLETT, WHITE HOUSE COMMUNICATIONS DIRECTOR: Well, I think it's the very small outliers out there who never supported the war in the first place, don't support some of the needed steps we've taken to try to protect America. And they are a small voice out there.

KING: Some Democrats suggest over time a failure to find weapons of mass destruction will erode the president's credibility.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATES: They told us they knew where the weapons of mass destruction were, there was no evidence for that.

KING: Yet, entering the election year, finding weapons does not appear to be a political must. In a year-end CNN poll, 61 percent of Americans approve of the decision to go to war. The White House believes most voters will accept the argument that in a post 9/11 world, just the possibility Saddam Hussein had weapons of mass destruction justified knocking him from power.

(END VIDEOTAPE)

KING: The race for the Democratic presidential nomination is becoming more nasty. Connecticut Senator Joe Liberian, said front runner Howard Dean, will, quote, "melt in a minute," unquote if he becomes the party's nominee and is subjected to Republican attacks. Massachusetts Senator John Kerry joined with Lieberman in denouncing a closed door energy task force Dean convened as governor. Early this week, Dean questioned party chairman Terry McAuliffe' leadership for failing to stop attacks on his candidacy. Generally Wesley Clark is countering Al Gore's endorsement of Dean with a TV ad featuring an even bigger gun.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What if we could have a president who in his lifetime has seen ordinary people do extraordinary things? Because he believed in them who was decorated for valor and service to our country.

(END VIDEO CLIP)

KING: Joining us, pollster John Zogby of Zogby International and Ron Faucheux political scientist with George Washington University.

Gentlemen, thank you both.

John Zogby, let me start with you first. The ad we saw, Wesley Clark, Bill Clinton putting a medal around his neck, that likely to have an impact on the Democratic primary?

JOHN ZOGBY, ZOGBY INTERNATIONAL: Not really, not in the immediate. Public opinion really has congealed among Democrats. They strongly opposed the war and Howard Dean, you know, captivated that anger and is holding on to it. So, right now, I mean, Clark is not in Iowa. He's really a blip in New Hampshire. And he becomes a player February 3rd, it remains to be seen if he'll be alive and around on February 3rd.

KING: Ron Faucheux, help me through this. Governor Dean complaining to the Terry McAuliffe, the chairman, help me, stop the other Democrats from, in his view, beating up on him.

Inside baseball or does that have any meaning on how this campaign plays out?

RON FAUCHEUX, GEORGE WASHINGTON UNIVERSITY: Well, no, it is inside baseball. And it's Howard Dean, of course, beginning to start acting like a front-runner where he's trying to get the point across to Democrats around the country that, hey, I'm going to be your nominee anyway, let's stop the bloodshed and get this thing straight. Of course, he's saying this in his interest. And the other candidates are saying, wait a minute, voters haven't even voted yet. Let's at least have some primaries and caucuses and see whether the Democrats around the country are actually going to be for you for the nomination.

KING: John Zogby, help me stay on this point. So far every time dean gets attacked it appears to actually strengthen his support. But might Democrats step back on the issue of electability and saying if you're complaining of Gephardt hitting you, and John Kerry hitting, what's going to happen when George Bush and his $200 million starts hitting you?

ZOGBY: To be sure what those Democrats are doing is giving a lot of ammunition to Karl Rove and the Republicans. Democratic party is split now between Dean supporters who really dislike President Bush and non-Dean supporters at least not yet anyway, who dislike President Bush but want to be sure that they have a winner. What Gephardt, what Kerry, what Lieberman, Clark, what they have to do is really forget about cutting into Dean's support and try to pick up the other 50 percent of the Democrats where they have an opportunity to make some gains. Howard Dean is comfortable in the support that he has with approximately a third of the Democrats so far. That's pretty good with nine candidates in the race.

KING: Pretty good, Ron Faucheux with nine candidates in the race. Three weeks from now, Iowa caucuses will kick this off and begin what we'll politely call the blur of the early primaries. What is your sense a week from now or three weeks from now when we get to Iowa and one week after that when we get to New Hampshire, how many candidate candidates will be left standing?

FAUCHEUX: Dean is a classic protest candidate in the sense that he's appealing to voter alienation and voter anger. He's anti-Bush, anti-war, and he's anti-Washington politicians who compromise fundamental principles. There's 40 percent, 50 percent of the Democratic electorate that are looking for somebody like this and they were looking for a protest vehicle. And I agree with John, he's going to keep that vote. But the big question is when voters after the first of the year look at this field again, when they look at candidates again, when they start digesting all of these attacks against Dean, whether or not he has ability to grow beyond that 40, 35 percent-40 percent base he's now polling in a lot of places and that remains to be seen. The big thing is this, you can't beat a front- runner with a field of candidates. You can only beat a front-runner with a single candidate. One of these candidates will have to emerge and have to take on Dean. You can't just say, well, Gephardt can do it here or Clark can do it there or Edwards can do it here and Kerry can do it there. One candidate's going to have to take him on.

KING: Well, John Zogby, you know the numbers as well as anyone. As you look at not only the horse race numbers but how other candidate as appeal to the Democratic constituency, if Howard Dean is the hare, do you see a tortoise?

ZOGBY: The only tortoise I'm looking at is Dick Gephardt because he has the opportunity at least to win in Iowa. If Dean wins in Iowa and, say, a John Edwards looks good. Dean wins in New Hampshire and General Clark looks good, looking good is not going to be enough by the time you get into February 3rd if Dean wins both of the states.

KING: I want to turn your attention to the president and his political standing going into the new year. If you look at his approval rating, economic numbers, if you look even at the support for the war in Iraq this president, in pretty good shape, hard to argue with that heading into the year.

Ron Faucheux, tonight the big story, CIA leak investigation, they handed over to a new Republican prosecutor but one who is not afraid at least in his past to go after big Republicans, big-named Republicans if necessary. That investigation hanging over into the new year, the 9/11 Commission hanging over into the new year.

Are those two big question marks for this president?

FAUCHEUX: Sure, they are. Anything like that can always potentially blow up and become a big political problem for any incumbent president. But most voters are skeptical of investigations. And they're very skeptical of the politics that are played around investigations. And that is one of the things we as a result of the Clinton scandals in the late 1990s. So, voters will wait and see before they make any hard, negative judgment against the president on any of those things.

KING: John Zogby, if Karl Rove called you and he said, OK, what is it, what should I be worried about most, your answer would be?

ZOGBY: Oh, the economy and Iraq, to be sure. 12 years ago, there was plenty of talk about a recovery by the spring of 1992, most economist told us we were in a recovery. But voters voted the economy, stupid. And as far as Iraq is concerned that has congealed opposition opinion. We are very much a red state versus blue state nation whoever the Democratic nominee is, he or she comes in with 45 percent or 48 percent of the vote, you're looking at a hotly competitive race no matter where President Bush's numbers are right now for those reasons.

KING: Gentlemen, let me close with this quickly.

We're in the season of new year's prediction. I'll start with John Zogby and then to you Ron Faucheux.

Who will be the Democratic nominee?

ZOGBY: I think it's pretty hard to see anyone but Howard Dean right now.

KING: Agree, Ron?

FAUCHEUX: I would agree. I would bet on Dean right now.

KING: We will keep the tape. If a hare suddenly catches the tortoise, we'll bring it back, in good nature.

Thank you both, Ron Faucheux in Washington, John Zogby in New York.

Thank you both, gentleman.

Vote in tonight's poll on the FDA's decision to ban Ephedra.

Do you want the federal government to be more aggressive in regulating diet supplements, yes or no?

Cast your vote at cnn.com/lou. We'll have results a little later in the show?

Tonight's thought is on drugs and how they contribute to society's ills. No drug, not even alcohol causes the fundamental ills of society. If we are looking at the sources of our troubles, we shouldn't test people for drugs we should test them for stupidity, ignorance, greed and love of power. That is from P.J. O'Rourke.

Coming up, "Grange on Point": a massive undertaking for the United States military as it prepares to rotate 10s of thousands of troops out of Iraq. General David Grange will join us.

And "America's Bright Future": tonight a teenage author who has accomplished something most adult writers will never achieve.

Casey Wian will have his inspiring story.

(COMMERCIAL BREAK)

KING: On "Broken Borders" from Shoals, Alabama. "I'm for a better system of allowing a much smaller number of foreigners into our country legally with proper paperwork first and not allowed to simply flow in. It's an outrage the way our government does things so upside down."

From Plymouth, Michigan. "We're about to allow illegal aliens certain rights to work in this country. Why are they allowed to bypass the law? Why is it that Americans are now treated as minority workers. It appears that being American is now the lowest thing on the social totem pole as other national groups appear to have more rights and more jobs than we do." That from Christina.

And from Globe, Arizona, "If we want to eliminate illegal aliens, then we need to go after the people who hire them. Picking up the illegals and returning them to the border is not the answer. Putting the industries and people who hire them in jail is. Once the word gets out that there is no work in America, then the illegals will have no reason to come here." That from Jorge Noriega.

And from Quitman, Texas, "It's funny. All those jobs people keep saying we need illegal aliens for, working in restaurants, mowing lawns, babysitting, et cetera, those are all jobs teenagers used to do when I was growing up. Now our teenagers can't find work." That from Gerry Glazener.

We love hearing from you. E-mail us at loudobbs@CNN.com.

And turning now to the markets. The Dow pulled back a bit today following a big run-up over the past few weeks. The blue chips ended down 25 points. The Nasdaq, however, managed to move slightly high, staying above the 2,000 mark. And the S&P 500 ended just about unchanged. Mary Snow is here now with more on the markets and the latest economic news -- Mary.

MARY SNOW, CNN CORRESPONDENT: Well, John, stocks have been gaining on the notion that there will be strong economic growth. But today, three reports disappointed investors. Consumer confidence, Chicago area manufacturing and existing homes all showed a dip. The dip in consumer confidence, though, gained the most attention because it raises concerns about the pace of the job recovery.

The conference board today reported that the increase in number of people saying jobs are hard to get, and economists say consumers are anxious because of worries about job being outsourced overseas along with the fact that those who do have jobs are more productive. Still, looking into the future the conference board found that consumers are still feeling pretty upbeat.

Finally, looking into the new year, history shows us that election years are generally up years for the market. And when an incumbent has been re-elected, the Dow on average, has gained nearly 16 percent -- John?

KING: Keep watching that as we get to the year ahead. Mary Snow, thank you very much.

And coming up, America's bright future. Tonight, meet a 19- year-old whose novel is No. 2 on the "New York Times" children's best- seller list. Casey Wian will have his story coming up.

(COMMERCIAL BREAK)

KING: A unit from Iraq's newly-formed civil defense corps recently took on one of Baghdad's toughest neighborhoods. The force is a cross between an army and a police department and the more successful they are, the faster they can take over the streets of the Iraqi capital allowing more American troops to come home. Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT, (voice-over): Hatching the final plan. A big night ahead for the ICDC, Iraq's new civil defense corps. Their biggest raid yet, the first that U.S. trainers from this Florida national guard unit have allowed them to lead. The order comes through. The target...

UNIDENTIFIED MALE: Mother and father-in-law of Saddam Hussein.

PENHAUL: He and another man are suspected of bankrolling anti- coalition guerrillas.

UNIDENTIFIED MALE: Outstanding. They're ready. They're pumped. They're pumped. They're ready to go.

PENHAUL: Some of the Iraqi troopers masked up, afraid of former regime diehards taking reprisals for the crackdown.

UNIDENTIFIED MALE: I do that because -- just for security.

PENHAUL: This company was recruited from the district it's now patrolling, trained for four months. Some, former Iraqi soldiers, others butchers and bakers answering a coalition ad.

UNIDENTIFIED MALE: I'm the chairman of the council. I have the...

PENHAUL: A frosty reception as they go into the home of a local council leader. But this Iraqi soldier breaks the ice. None of the cultural language barriers that dog coalition troops.

Spirits are running high after last night's mission. In a few moments, it will be time for promotions. That's the next step in building up a self-defense corps. It will be another step closer toward U.S. troops handing back control of the streets to Iraqi security forces.

COL. PETE MANSOOR, 1ST ARMORED DIVISION: I think it is a direct equation. The more and more we can turn security in Iraq over to Iraqis, the fewer coalition forces we need to do that.

PENHAUL: And the further U.S. soldiers are from Baghdad streets, the closer they may be to going home. Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

KING: Now grange on point, the biggest rotation of military personnel since World War II is planned for U.S. troops in Iraq in February and April. Nearly a quarter of a million troops will be in transit. Joining us with some insights on the magnitude of this undertaking, General David Grange.

General, let us begin just with that. How can they pull this off without undermining security of the troops on the ground as you take some out and put some in.

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: It's extensive planning involved and rehearsals. There's war games and exercises that have taken place and are still ongoing on how to do this thing as neat as possible.

You're moving thousands of troops from all services across the world, at the same time moving another group back. At the same time, maintaining security requirements in Iraq to include nation building tasks that are put on the military.

So a lot of effort, a lot of leaders going early, learning what they call right seat rides, learning the ropes from the old-timers there, the new units get into country, there's an overlap period, so there's a surge in numbers at one period of time and then they transition out. And you have to do that knowing quite well that the enemy may take advantage of the situation.

KING: We talked repeatedly, General, about how stretched thin the force is already. As you have that overlap time, troops going in, getting in, getting settled before those that are leaving actually pull out, does that leave a hole somewhere?

Does it love an opening elsewhere in the world, a vulnerability? GRANGE: There are a lot of threats around the world and there's always vulnerabilities. It's always risk assessment, what you would do if something broke out somewhere else in the world during this transition of forces with a good half of the army as well as good portions of the other services. And so prudent measures are taken using other elements of power, other elements of military force to cover down on potential crisis points during this transition.

KING: I remember years ago during the first gulf war one of the questions facing the U.S. Military, did you have the transport capacity and capability to move troops quickly?

Has that been dealt with?

GRANGE: It has been dealt with. Improvements have been made since 1990-'91 for the desert war movement of deployment and redeployment of troops. This is probably the only nation in the world has such a capability to project itself with so much power across the world. But that's the type of military the United States must have, a homeland defense piece but also a war fighting piece that projects itself anywhere in the world and a very short amount of time with a capable force that can defeat any enemy through a spectrum of conflict. And it took a while build this up and it's going to continue to take a lot of resources to keep it that way.

KING: As we watch this switch, the hand over early next year in a couple of installments one of the questions the American people have, never mind rotating troops, when are the troops going to start to come home permanently?

Karl Penhall's piece looked at one of the forces the United States is helping to train, a paramilitary force, if you will, to police and conduct raids and operations.

Your sense of how that process is going so far?

GRANGE: I think it's going well. It's not a quick very process. You have to give it time. You're transitioning in this case a national guard-type military from one that was ruled by fear which had no pride, low morale, incompetent leaders and poor equipment and transition it into something that has pride, that has a respect of the people that they're responsible to defend with good leadership and high morale. And that takes time to train to those type of standards very similar to the United States, Great Britain-type military and then put it on the street. The faster that can happen, the faster U.S. troops can come home.

But it cannot be rushed and standards cannot be lowered.

KING: I want to close with an issue that will carry over into the next year, how to treat the military tribunals of all of the people being head in Guantanamo Bay, Cuba. The Pentagon today named a retired two-star John Altenburg Jr. to be essentially the judge, the military person who oversees that process.

Any insights on that, sir? GRANGE: He's a well-respected general officer. He was the legal counsel for the United States Army when I -- right before I retired. He has a great reputation. He has the competence to do this. And I think it's good they selected someone that is retired that's independent, but also knows the military justice and he'll run it, I'm sure, very similar to how they did it after World War II.

KING: Difficult job for that retired general ahead.

And we thank you, David -- General David Grange, sir. Happy new year to you.

GRANGE: Thank you.

KING: Coming up -- "America's Bright Future."

Tonight meet a 19-year-old who already is a best selling author. Casey Wian will have his story coming up.

(COMMERCIAL BREAK)

KING: The results of tonight's poll question. Sixty percent of you want the federal government to be more aggressive in regulating dietary supplements, 40 percent of you do not.

In "American's Bright Future" tonight, a young man who graduated high school at age 15 and went on to publish a "New York Times" best seller. Now 19, Christopher Paolini is busy with book tours, movie deals and work on his next novel.

Casey Wian has his story from Paradise Valley, Montana.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: You need a book signed?

CASEY WIAN, CNN CORRESPONDENT (voice-over): Christopher Paolini's debut novel, the fantasy thriller, "Eragon" is number two on the "New York Times" children's best-seller list. Most bright 19- year-olds are in college, but Paolini is a publishing phenomenon.

CHRISTOPHER PAOLINI, AUTHOR, "ERAGON": I did not expect the book to be published and I didn't expect it to debut on the "New York Time's" best-seller list. Everything that's happened with the book has just been extraordinary and completely unexpected.

WIAN: You might say the same about his upbringing. Christopher and his younger sister Angela were home schooled by their parents in this house in Montana's Paradise Island.

PAOLINI: If I had not been home schooled I would not have "Eragon" give me the time to explore my own interests and time to day dream. I didn't have every minute scheduled with activities.

WIAN: Christopher earned a high school diploma at 15 and then began three years of "Eragon."

TALIITA PAOLINI, MOTHER: The first time we realized Christopher had something special was when he had us read his manuscript which we had not seen.

KENNETH PAOLINI, FATHER: We made a decision as a family to put every resource that we had available into the publishing, the designing, the printing, the publishing and the marketing and promotion of Christopher's book.

WIAN: Christopher, a talented artist drew "Eragon's" the cover with help from his sister who inspired one of the book's characters.

ANGELA PAOLINI, SISTER: His success is in part the success of our entire family.

WIAN: The parents decide to self-publish and the family traveled to schools and bookstores selling copies by the minivan full.

K. PAOLINI: We recouped the investment the first month.

WIAN: Mainstream publishers noticed and the Paolini last year signed a mid six figure deal with Knopf, which trimmed and repackaged "Eragon" as a hard cover.

PAOLINI: I hope people are going to enjoy "Eragon." It's a great story with duels and dragons and battles and villains and romance and all the good stuff a story needs.

WIAN: "Eragon's" just a start. Part two of Paolini's fantasy trilogy is in the works and Fox bought the movie rights. College will have to wait.

Casey Wian, CNN, Montana.

(END VIDEOTAPE)

KING: That's our show. Thanks for being with us.

Tomorrow, in "America's Bright Future" the story of two remarkable brothers who teamed up to advance science.

And Martin Groove of the "Hollywood Reporter" gives his picks for the best and worst movies of the year.

We'll talk politics with Ron Brownstein of the "L.A. Times" and Karen Tumulty of "Time" magazine.

And Harvard Business School professor Brian Hall tells why in his view executives compensation is still outrageous high.

For all of here good night from New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com





FDA Bans Ephedra>