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Lou Dobbs Tonight

Bush Begins Building Second Term Economic Team; Administration Pressures Congress to Pass Intelligence Reform

Aired November 29, 2004 - 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.


(BEGIN VIDEOTAPE)
KITTY PILGRIM, HOST (voice-over): Tonight, President Bush makes the first move in what's expected to be an aggressive second term economic agenda. Kellogg's CEO Carlos Gutierrez is his commerce secretary nominee.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll reform our outdated tax code to eliminate needless paperwork and encourage savings, investment and growth.

PILGRIM: We'll have a live report from the White House, and three of the country's top journalists will join us.

Kofi's crisis. The United Nations secretary-general speaks about new revelations about his son and the oil-for-food scandal.

KOFI ANNAN, SECRETARY-GENERAL, UNITED NATIONS: Naturally, I was very disappointed and surprised.

PILGRIM: We'll have a special report.

New violence in Iraq with the elections now just two months away. The United States answers calls from some Iraqis to delay the elections. Senator Ben Nelson, who just returned from Iraq, and foreign policy expert Ian Bremmer will join us.

And one nation overmedicated. Why critics of the drug industry say its first priority say it has nothing to do with curing Americans who are ill. We'll begin our special report.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, November 29. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

Tonight President Bush has named the first member of what's expected to be an all-new economic team. The nominee for commerce secretary, Carlos Gutierrez, is expected to play a key role in advancing the president's goals of reforming Social Security and the nation's tax code.

Senior White House correspondent John King has the report. (BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): A new commerce secretary is step one in a second-term makeover of the Bush economic team.

BUSH: Carlos Gutierrez is one of America's most respected business leaders. He is a great American success story.

KING: The Cuban-born Gutierrez rose from selling Kellogg cereal out of a truck in Mexico to being the company CEO. And now if confirmed by the Senate, will help sell an ambitious Bush domestic agenda.

BUSH: We'll reform our outdated tax code to eliminate needless paperwork and encourage savings, investment and growth.

KING: Tax overhaul is just one controversial item on Mr. Bush's second-term wish list. Social Security is another, including letting younger workers divert some payroll taxes to private investment accounts. Not to mention Mr. Bush's promise to slash the record federal budget deficit by half over the next four years.

Critics see bad ideas and bad math.

GENE SPERLING, FORMER CLINTON ECONOMIC ADVISER: They seem to almost have a campaign to convince people that large deficits don't matter. I don't think anyone could have ever believed a Republican administration would be taking that position 10 years ago.

KING: The president and vice president will take the lead in making the case to Congress and the American people. But the lineup of deputies will have a new look.

Gutierrez will replace Bush friend Don Evans at commerce. Budget director Josh Bolton stays on, but the chief White House economic adviser's job is open, and there likely will be other changes.

Council of Economic Advisers Chairman Greg Mankiw is said to be moving on, and several administration sources predict Treasury Secretary John Snow likely will stay only a few months into the new term.

Bush allies say a quick start is critical.

STEPHEN MOORE, CLUB FOR GROWTH: He's got to get most of these initiatives passed in his first two years. Because once he's done with his first two years, you know what? People are starting to look toward who's going to be the next president, and then the president becomes a lame duck.

(END VIDEOTAPE)

KING: Now, Gutierrez is the first Bush pick for a second-term cabinet opening -- opening that does not come from the president's inner circle. But officials say his boardroom success and his rags to riches story make him a good fit for a job that mostly involves selling the president's policies across the country and around the world while officials at the White House, Kitty, navigate the legislative battles in Washington.

PILGRIM: All right. Thanks very much, John King.

Well, the White House tonight is also speaking out about the stalled intelligence reform bill. Critics have said President Bush isn't doing enough to pressure Congress to pass the bill before it's too late.

Congressional correspondent Joe Johns has the report.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: The administration is trying to put an end to criticism the president is only lukewarm on passing intelligence reform. The White House says President Bush will send a letter to Capitol Hill later this week, urging congress to get the bill finished.

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: The president is firmly committed to getting this legislation passed and done as quickly as possible.

JOHNS: White House spokesman Scott McClellan made clear Monday the president disagrees with Republican Congressman Duncan Hunter, who opposes intelligence reform on the grounds it could confuse the chain of command for military intelligence.

MCCLELLAN: The president would never sign legislation that would harm our troops or hurt our troops in any way. And the president believes that this is an important legislation that will further strengthen our intelligence operations.

JOHNS: With time running out, former members of the 9/11 Commission are also ratcheting up the public relations push to get a bill passed.

THOMAS KEAN, CHAIR, 9/11 COMMISSION: And if it doesn't pass now, it could be six months or longer, and that's six more or longer without the American people having the protections which we think they must have and which they want, 80 percent of them want. That's a danger we shouldn't risk.

JOHNS: This week, former members of the 9/11 Commission will meet with reporters while representatives Chris Shays and Carolyn Maloney, who started a 9/11 Commission caucus, will hold an event with 9/11 families.

Some families are also holding vigils this week in New York, Boston, and Los Angeles. The hope is that added pressure and more public information about the bill will make it harder for some House members to continue opposing it.

(on camera) The intelligence reform bill is expected to come up at a retreat of House Republicans in Virginia this week. White House officials are expected to be there. And people who want changes to the legislation are also expected to make their voices heard, including September 11 families who want tougher immigration language.

Joe Johns, CNN, Capitol Hill.

(END VIDEOTAPE)

PILGRIM: A new videotape from al Qaeda vows to continue the fight against the United States.

Osama bin Laden's top deputy, Ayman al Zawahiri, appears on the tape, which aired today on the Al Jazeera network. On it, he says the terrorist group will continue its fight against the United States unless Washington changes its policy toward Muslims. Zawahiri also said the result of the U.S. presidential election does not matter to al Qaeda.

New violence tonight in Iraq. Just two months before the country is scheduled to hold its first election, the Pentagon tonight insists the new insurgent attacks will not delay the voting, now set for January 30.

Senior Pentagon correspondent Jamie McIntyre has the report.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT: With U.S., Iraqi and British troops hunting down insurgents in operations like this one along the Euphrates River, the United States insists Iraqi elections will be held January 30 as scheduled.

COLIN POWELL, SECRETARY OF STATE: There's no reason they shouldn't. We're working hard on it. The U.N. has increased its presence. There are thousands of Iraqis who are working on registration and getting ready for the elections.

MCINTYRE: But in parts of Sunni-dominated Iraq, including an area dubbed the Triangle of Death, no one has yet been registered, two months before the elections.

And insurgents continue to wage a campaign of organized crime- style intimidation, with tactics one journalist called more like "The Sopranos" than "Black Hawk Down." It's a description Pentagon officials do not dispute.

In Ramadi, a suicide bomber plowed into a crowd of police waiting outside the police station to be paid, killing a dozen people and wounding at least ten others.

In Mosul, 40 dead bodies have been found in the past week. Most had been bound and shot execution style. And there are even sporadic attacks in Falluja, three weeks after an offensive that routed insurgents. Large stockpiles of weapons are still turning up.

Pentagon officials say across Iraq, attacks in recent days have dropped, from more than 100 a day to an average of to only 50 or 60. But while violence may be down, the fear is up.

JOHN HENDREN, "L.A. TIMES": In Ramadi, where I just was, I was told by military commanders there that the national guard is basically ineffective, because they're under so much threat to their families, in a very tightly-knit tribal area. So they're going to have to import National Guard troops -- Iraqi National Guard troops from elsewhere.

MCINTYRE: With two months to go, the Pentagon lists 114,000 Iraqi security forces that, on paper, are trained and on hand. At least 10,000 shy of what police will be necessary to provide security for the elections.

(END VIDEOTAPE)

MCINTYRE: Meanwhile, the Pentagon has decided to extend the stay of some 6,500 U.S. soldiers in order to provide more security. But no decision has been made yet whether to send fresh troops in early -- Kitty.

PILGRIM: All right. Thanks very much, Jamie McIntyre.

Senator Ben Nelson, who is a member of the armed services committee, has just returned from a Thanksgiving visit from the Middle East, including Iraq, Afghanistan and Pakistan. Later, I will talk with him about what Iraqi leaders are saying about whether the elections will take place as scheduled. Senator Ben Nelson is my guest, ahead.

New developments tonight in the United Nations oil-for-food program scandal. U.N. Secretary-General Kofi Annan today responded to shocking revelations that his son was on the payroll of a major contractor in the program until earlier this year.

Richard Roth has the report.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN CORRESPONDENT (voice-over): The oil-for-food controversy has now turned into a family affair at the highest levels. United Nations Secretary-General Kofi Annan says he was unaware that his son got paid by a Swiss company at the heart of the oil-for-food story for years longer than previously acknowledged.

Is Annan angry with his son, Kojo, for not telling him?

ANNAN: Naturally, I was very disappointed and surprised.

ROTH: Annan's son was hired as a consultant by the company Cotecna which won the contract to inspect humanitarian goods going into Iraq under the oil-for-food program.

But the company says Kojo Annan was assigned to West Africa, and there was no connection with oil for food. Kofi Annan says he did not expect the relationship to continue. ANNAN: I have warm family relations with my son, but he is in a different field. He is an independent businessman. He's a grown man, and I don't get involved with his activities, and he doesn't get involved in mine.

ROTH: But the failure by the company or the U.N. twice to state the length of the Annan family ties to the company right up until corruption stories broke big this year adds more fuel to a number of American opinion makers who are calling for Kofi Annan to resign. The U.N. chief declined to answer those calls, but knows it could look bad.

ANNAN: I understand the perception problem for the U.N. or the perception of conflict of interest (UNINTELLIGIBLE). I understand that.

ROTH: The U.S., a proponent of the original oil-for-food program, is concerned about this Annan disclosure.

JOHN DANFORTH, U.S. AMBASSADOR TO THE U.N.: This deserves very careful attention, a very close investigation, and let all the facts come out.

ANNAN: The U.N. says it checked in 1998 after a press report and was told Kojo Annan was not linked to the company which won the bid to inspect oil for food. Now it's all in the hands of the U.N.-approved investigation run by former Fed chairman Paul Volcker.

(END VIDEOTAPE)

ROTH: Both representatives for Kojo Annan and the Cotecna company say they are fully cooperating with the Volcker panel. However, it will be several months until we learn exactly what Volcker concludes.

Back to you, Kitty.

PILGRIM: Richard, have any officials gone as far as to call for Kofi Annan to resign?

ROTH: No country, including the U.S., is joining on that bandwagon to resign -- for Annan to resign. Basically, it's been editorial page writers and certain publications, ranging from William Safire in today's "New York Times" to certain people in "The Wall Street Journal" and guests, such as the Heritage Foundation, who have been on this program. But if there is any proof found of any bribe- taking by senior U.N. officials, things could get a little bit murkier here.

PILGRIM: All right. Thanks very much.

Richard Roth.

Well, that does bring us to the subject of tonight's poll. Do you believe Kofi Annan should step down as U.N. secretary general? Yes or no. Cast your vote at cnn.com/lou. We will bring you the results later in the show.

Still ahead, the election standoff that has divided a country. Will the Ukraine break apart, and what does it mean for our interests in the region? International political expert Ian Bremmer is my guest.

And a new report talks about the problems that come from a boom in immigration all over the world, immigration that's both legal and illegal. We'll have that story.

(COMMERCIAL BREAK)

PILGRIM: The United Nations today released a report showing that immigration is on the rise in countries all around the world. Now that report outlines some of the major problems that arise when tens of millions of people leave their own country for another.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): The United Nations says migration is one of the biggest challenges now facing world governments. The number of people living in countries other than where they were born has more than doubled since 1960, to 175 million worldwide. The U.N.'s report on migration also says illegal immigrant smuggling has grown into a $10-billion-a-year global business.

JOSEPH CHAMIE, DIRECTOR, U.S. POPULATION DIVISION: We've had lots of migrants coming in undocumented. Many of them are being exploited, many of them are working for substandard wages and living conditions. Others have had difficulties with integration. So we're trying to move to a situation with better management, better cooperation globally.

WIAN: The U.N. says one of every 12 people in developed nations is an immigrant, and they send about $79 billion a year back to their Third-World countries of origin.

The report lists problems, including a brain drain that hurts poorer nations when their most educated citizens flee, and benefits, such an increased supply of labor for European nations that otherwise would experience population declines.

DEMETRIOS PAPADEMETRIOU, PRESIDENT, MIGRATION POLICY INSTITUTE: The United Nations, after many years' absence, is finally entering the fray. It's a mine field in terms of the politics of the issue, and it really did not effect the majority, perhaps the vast majority of countries around the world, until the last decade or so.

WIAN: But much of the report reads as if it was written by U.S. open border advocates. It applauds guest worker programs and expanded voting rights for noncitizen immigrants. It urges governments of developed nations to stress the economic value of immigrants to their citizens to lessen anti-immigrant prejudice. Yet it also urges lower transaction fees for immigrants seeking to send money home. (END VIDEOTAPE)

VILES: Now the U.N. is in no hurry to adopt resolutions on immigration. It's waiting for another report due out next year and then a General Assembly dialogue not until 2006 -- Kitty.

PILGRIM: All right. Thanks very much.

Casey Wian.

And one of the most influential organizations in the immigration debate is heavily backed by corporate America. It's called MALDEF, or the Mexican-American Legal Defense and Education Fund. It's a group that fights for the rights of illegal aliens in this country and has some very powerful backers.

Peter Viles reports from Los Angeles.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Redondo Beach, California. At issue: whether day laborers, including illegal aliens, have the right to solicit work on the sidewalk. Local law says no, the police say no, but a powerful legal group says yes.

THOMAS SAENZ, MADELF: From the beginning of our country's history, the sidewalk has been an area left aside for everyone to express themselves freely. That's what the First Amendment protects. And it protects everyone's right, whether it's a corporation or a politician, a religious proselytizer or a day laborer.

VILES: That's the voice of MALDEF, the Mexican-American Legal Defense and Education Fund, the same group that sued Abercrombie & Fitch for discrimination and won a $50 million settlement, the same group that defeated California's Prop 187, which would have prevented illegal aliens from receiving government benefits, the same group expected to try to block Arizona's Prop 200.

Time and again, MALDEF goes to bat not just for Mexican- Americans, but often for illegal aliens.

KRIS KOBACH, IMMIGRATION LAW EXPERT: MALDEF started out as a mainstream civil rights organization, intending to enforce the civil rights of citizens. But now their objective seems to be to redefine citizenship so that there are no meaningful legal distinctions between citizens and aliens.

VILES: MALDEF says the current immigration system is broken, calls the Bush proposals "a step in the right direction," but would go much further. It wants earned legalization for illegal aliens, driver's licenses for illegals and opposes deportations without a judicial hearing.

Who pays for this agenda? You'd be surprised. Its donors include Anheuser-Busch, Coca-Cola, Time Warner, which owns CNN, Tyson Foods and McDonald's. WILLIAM HAWKINS, U.S.M.I.C.: They want to improve their image or have a positive image in the Hispanic community, and MALDEF has positioned itself as the mainstream civil rights group in the Hispanic community. But I think they also want to support their agenda.

VILES: An agenda that will likely challenge the will of the voters in Arizona.

(on camera): MALDEF declined to speak to us on camera about its agenda, but did say that its highest legal priorities right now are voting rights and access to education.

Peter Viles, CNN, Los Angeles.

(END VIDEOTAPE)

PILGRIM: Still ahead tonight, President Bush travels to Canada to try to repair a damaged relationship. Tens of thousands of protesters could be on hand for the president's arrival.

And just two months to go before scheduled elections in Iraq. Will they go ahead as planned? Well, Senator Ben Nelson, a member of the Armed Services Committee, has just returned from Iraq, and he is my guest.

(COMMERCIAL BREAK)

PILGRIM: President Bush will travel to Canada tomorrow for his first official visit. It will be the first state visit to Canada by an American president in nearly a decade, and not all Canadians will be happy to see President Bush arrive.

Judy Woodruff has the report.

(BEGIN VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR (voice-over): Some members of parliament and other Canadians are not shy about showing their less than friendly feelings toward President Bush.

This lawmaker recently was seen on Canadian television stomping on a Bush action figure. It was meant to be a spoof, but it wasn't the first time she had publicly dissed the president.

UNIDENTIFIED FEMALE: We are not joining the coalition of the idiots.

WOODRUFF: That helps explain why President Bush will not address the Canadian parliament during his trip, as most major foreign leaders do. Catcalls from sometimes raucous members would have been a real possibility, as President Reagan found out in 1987.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: We see such a campaign on our own shores. Threatening -- is there an echo in here? WOODRUFF: It may be more difficult for Mr. Bush to avoid the thousands of anti-war protesters expected to converge in Canada during his visit. Like the Europeans, many Canadians oppose the U.S.-led war in Iraq and are turned off by what they perceive to be the Bush administration's go-it-alone foreign policy.

Two-thirds of Canadians say their opinion of the United States has gotten worse over the past four years. No wonder Mr. Bush is expected to deliver a we're-all-in-this-together message to Canadians, particularly on the war on terror.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm looking forward to bringing the greetings of my great country to your great country.

WOODRUFF: Canadian Prime Minister Paul Martin is expected to walk a fine line during his talks with the president. He hopes to make progress on trade disputes without appearing too chummy with someone so unpopular with so many Canadians.

PAUL MARTIN, CANADIAN PRIME MINISTER: We have a lot of issues to discuss in terms of North America and also in terms of the world.

WOODRUFF: Judy Woodruff, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: Coming up, an election standoff threatens to divide the Ukraine permanently. Will it also damage our relationship with Russia? Ian Bremmer, president of Eurasia Group joins me.

And has the United States become an overmedicated nation? Tonight, a special report on the health-care crisis gripping this country.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: In a moment, I'll be joined by Senator Ben Nelson of the Armed Services Committee who has just returned from Iraq, and we will discuss concerns over the upcoming election there.

But, first, a look at some of the top stories tonight.

Military officials say seven soldiers were killed today when their Black Hawk helicopter crashed in central Texas. Officials say the helicopter clipped a TV tower guide wire while flying in heavy fog. The helicopter was en route from Fort Hood to the Red River Depot, a maintenance facility.

The 14-year-old son of NBC Sports head Dick Ebersol is presumed dead after a fiery plane crash in Colorado. Dick Ebersol and his 21- year-old son survived the crash, which happened soon after takeoff Sunday morning. Their conditions were not disclosed. The pilot and co-pilot were killed. A third crewmember survived.

At least two million locusts have invaded one of Spain's Canary Islands. Officials there have begun fumigating the giant swarm that flew over 60 miles of ocean after devastating North Africa this summer. Officials say the damage in the Canary Islands was not as bad as expected because the insects were exhausted when they finally touched down.

Well, my next guest just returned from the Persian Gulf. He spent his Thanksgiving holiday visiting our troops in Iraq, and he also met with Iraqi leaders about the election scheduled for January.

I spoke earlier with Senator Ben Nelson of the Armed Services Committee. I asked him if he thought Iraqi elections could proceed as scheduled on January 30.

(BEGIN VIDEOTAPE)

SEN. BEN NELSON (D), ARMED SERVICES COMMITTEE: Well, the Iraqis are on the horns of a dilemma. If they don't make the deadline, if they don't have the election -- the constitutional election on the 30th of January, then the insurgents are going to claim victory or be encouraged to move forward.

If they do go ahead and have it as Prime Minister Allawi says they're going to -- and I think he's probably going to win out on this, then the Sunnis are going to say that it wasn't a fair election. That they -- as a minority, they're even a smaller minority because they can't turn out due to the violence.

But I think Prime Minister Allawi's point is -- it's a point that has some merit. And that is that there is never going to be a time to have a perfect election and that there will always be some violence associated with it and it's better to move forward than to give the insurgents any cause for celebration.

PILGRIM: Now some of the Sunni leaders are asking for a delay, saying that they're worried about the violence, and yet if they don't participate, how much more would we see disenfranchised groups escalating violence?

NELSON: Well, I think that's the point. Will violence beget violence with others, because they'll feel like they're left out? I would hope that the prime minister and the Sunni leaders who are getting together and going to continue to get together for the next two months, will try to find some accommodation where that is not the case, where they are able to participate to some degree, maybe to a great degree in the election.

One of the most important things in getting an election that will work in Iraq is pretty much what happened in Afghanistan. And that is sufficient security support to make it as risk-free as you can make it for people who want to show up and vote.

PILGRIM: Do you see that as the primary U.S. role, after all, we have to let Prime Minister Allawi drive this, don't we? NELSON: Well, quite honestly, we passed over sovereignty to the Iraqi government. It is a primary role for the American military. But it's not the sole role of the military because we're going to be working hand in glove with the newly stood-up Iraqi police force and the security forces. So we're going to work with them to get it done.

You know, there has also been a suggestion that we need more troops. And I think that you're going to see more troops coming in. I think in the next few days you're going to see a request for more troops on the ground -- American troops on the ground who can work with the Iraqis to provide the level of security that's going to be required.

PILGRIM: Senator Nelson, I need to switch countries on you quickly and we're almost out of time, but in Pakistan there was the announcement that they will discontinue military operations on the border with Afghanistan exactly where Osama bin Laden was expected to be still hiding. How do you take that announcement.

NELSON: Well, I'm very worried about that. It was my understanding in getting briefings in Pakistan this week that that was -- that the actual presence in that region would continue. And so it's a bit surprising to hear that they're going to withdraw or reduce their presence because I think it's so important that they continue to pursue bin Laden.

If they pursue him, I think eventually they will get him. If they pull back, then I think they create a safe environment, a safe zone for him. And that's about the last that either they or we need.

PILGRIM: All right. Thank you very much for joining us this evening. Nebraska Senator Ben Nelson.

NELSON: Thank you, Kitty.

PILGRIM: Tonight, an escalating election crisis in the Ukraine. Now, the supreme -- the country's supreme court today began reviewing claims of election fraud from the opposition party. The opposition is calling for the court to annual the recent victory of the prime minister and order a new vote for December 12th.

Now, for more on the standoff, I'm joined now by Ian Bremmer, president of Eurasia Group. And thanks for being with us.

IAN BREMMER, PRESIDENT, EURASIA GROUP: Good to see you.

PILGRIM: Senator Richard Lugar says this is perhaps the greatest story in the world now right now.

Why is the Ukraine story so important?

BREMMER: All of the European states have said that this election was a farce, so has the United States. Russia had said no, they actually think that Yanukovich was the properly elected president. So have all of the members of the CIS Commonwealth (UNINTELLIGIBLE) with Russia. Ukraine isn't situated on a fault line. Ukraine is a fault line. And I think, the real question we have is ask is, is where does Europe end and where does this other fuzzy space, that we may have a good relationship with, we may not, but it's not Europe.

Where does that start? That's what we're talking about.

PILGRIM: Seventh day of the protests. Where do we go from here? Is violence likely? Is it likely to be resolved? Where do stand in the whole with negotiating, which has been intense in the recent days?

BREMMER: It has been. It's violence is more likely than it was on Friday, it's less likely than it was yesterday. Both of the key parties here, both of the two Viktors, Viktor Yanukovich, the former prime minister, Viktor Yushchenko, opposition, both of them have been playing harder ball than one would have thought prudent. Tomorrow, Yushchenko has said they're going to call on parliament for a vote of no confidence of the prime minister. At the same time, Yanukovich has been in southeast Ukraine where the Russians, and Russian speaking Ukrainian's are located, they've said they're looking for succession, leaving Ukraine, if the election is overturned. What's interesting, here, that there's a third faction. That third faction is President Kuchma. President Kuchma has backed away from Yanukovich.

PILGRIM: That's the outgoing president, right?

BREMMER: The existing president, maybe he's outgoing, maybe not. If things go really badly, he could conceivably declare a state of emergency. And he could say, you know what, we need to have new elections. We don't know how long they'll take. I'm still the president for the time. He doesn't want to run for a third time, but that doesn't mean he can't stay president nor a little while. That is an option.

PILGRIM: Let's go to Iran. And we have a new agreement with Britain, France and Germany. We hope it will stick. Mohammed ElBaradei, the head of the IAEA, said the ball is in Iran's court. Let's that hope they cooperate. Where do we stand now on Iran?

Maybe joining the world community and quelling their nuclear ambitions?

BREMMER: Well, the agreement is softer than the one they originally signed. It is not legally binding. And the United States said just today they reserved the right, unilaterally, to bring this issue to the United Nations Security Council, if they see fit. Now, why would the United States do that if they know that the Europeans have a deal and the Chinese have said no sanctions? And the reason, of course, that the United States are very unhappy with this deal. They know it's not binding, they know the Iranians are continuing to develop, they don't believe the Iranians need nuclear energy for civilian use. And also Iran sits next to Israel, and Israel has made it clear they find the status quo unacceptable. They would not accept an Iranian nuclear weapons program, even if undeclared, like Israel's own. And so, that means the prospects either covert or overt military action for 2005 are looming larger than before this the deal was coming.

PILGRIM: If this goes to Security Council...

BREMMER: No chance of comprehensive sanctions. No, the Europeans don't want it. They just signed a deal. The Chinese don't want it. They have real energy interests on the ground. Oil prices are 40 what today? No, this is the second largest oil producer right now. Nobody is looking to give these guys a hard time. And by the way the Iranians, who are making so much money on their oil revenues have no interest in backing down because they're much more stable, lots of cash to spend internally.

PILGRIM: All right. Let's go to Iraq. The prospect of keeping elections on track. Where do we stand here today?

BREMMER: Well, Allawi, the prime minister, has said he wants to keep elections on January 30th. President Bush has said he expects to have elections January 30th. They've been spending an awful lot of manpower, dozens of Americans have lost their lives, hundreds of Iraqis, because they have a window they want to have maximized security January 30th. The U.S. has also spent a lot of money over 2004, trying to make sure Iraq will be stable. Here's a question you have to ask yourself.

If they were to hold off six more months, is the U.S. Likely to spend as much money as they've spent over the last year on a day-to- day basis?

Are they prepared to continue to lose those casualties?

In other words, is it really likely that the situation, security on the ground in, say, July 30th will be as good or better than it is January 30th?

The answer is a resounding no. And that's why President Bush -- the situation doesn't look good right now. But the messy truth is that it's probably going to look better in six months.

PILGRIM: So it's better to push ahead.

BREMMER: It's better to push ahead.

PILGRIM: Quick one on Pakistan and Pakistan is ending the operation in Waziristan, which where bin Laden was thought to have been, they said they're pulling their military back. They're not going to continue to pressuring that area.

What does that mean for the United States?

BREMMER: The U.s. Doesn't like it, but we have to recognize is while Pakistan has provided more and better intel, solid intel on proliferation activities because of the Aq-Kahn situation, all this information of the Pakistanis providing nuclear technology to countries all over the world, that puts them in better stead with the U.S. and U.S. intelligence. Hard to press the Pakistanis too hard right now.

PILGRIM: All right. Thank you very much, Dr. Ian Bremmer, Eurasia Group.

A reminder now to vote in "Tonight's Poll." Do you believe that Kofi Annan Should step down as U.N. secretary-general, yes or no? Cast your vote at cnn.com/lou, and we'll bring you the results a little bit later in the show.

Now, apparently lying is hard work. And that's according to a new study showing people use more of their brain to lie than to tell the truth. Researchers in Philadelphia tonight say brain scans of people lying look very different from those of people telling the truth. The study looked closely as realtime pictures of the brain activity of volunteers, and some of them were asked to lie, some were asked to tell the truth. Researchers say this new discovery could provide new technology for lie-detecting.

Still ahead, why the controversial issue of medical marijuana has again made its way to the U.S. Supreme Court.

And we begin our series of special reports "Overmedicated Nation," why profits dictate what drugs are available to you. We'll have a full report.

(COMMERCIAL BREAK)

PILGRIM: The Supreme Court today took up the issue of medical marijuana. The high court will decide whether 11 states can allow the use of marijuana for medical purposes, or if those state laws are at odds with a federal ban on marijuana. Bob Franken has the report.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): For Angel Raich, it's not about the sweeping issues her case places before the justices. For her, it's her brain tumor and what she says is her need for help from marijuana.

ANGEL RAICH, MEDICAL MARIJUANA USER: I need to use cannabis every two hours. If I don't medicate every two hours, I become debilitated.

FRANKEN: Her home state of California is one of 11 that permit private use of marijuana for medical purposes. But federal law prohibits virtually any use. So the Supreme Court was again hearing arguments over the constitutional power of the federal government to override state laws. Was the medical individual use of home-grown marijuana interstate commerce? Yes, said Paul Clement the administration's acting solicitor general because the garden-patch weed would affect overall production. Randy Barnett who argued the other side called any connection hypothetical since it's privately grown, not bought or sold. Many argued there's little evidence that marijuana has medical value.

UNIDENTIFIED FEMALE: It's a handful of people who want to see not just marijuana, but all drugs legalized. FRANKEN: Inside, the justices peppered both sides. Ginsburg: nobody is buying anything. Nobody is selling anything. But Justice Breyer argued a preference for medicine by regulation as opposed to medicine by referendum.

(END VIDEOTAPE)

(on camera): The referendum in these cases will now involve the nine justices, including, we're told, Chief Justice Rehnquist, who was, once again, not present. He is busy fighting his own medical affliction -- Kitty.

PILGRIM: Thanks very much, Bob Franken.

Now, this week we begin a new series of special reports we're calling "Overmedicated Nation." Tonight, concerns that drug companies in this country are more focused on making a profit than they are on making a difference for Americans who need health care. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Americans love their drugs and the promises of drugs.

UNIDENTIFIED MALE: So if you're thinking about Viagra...

TUCKER: We're taking more prescription drugs than ever before.

UNIDENTIFIED MALE: You may feel sad, hopeless.

TUCKER: We've moved way beyond what were once politely known as mommy's little helpers, a.k.a. tranquilizers in the mid sixties, to drugs that promise to make everything better. But try and get a flu shot, and it's a different story.

DR. JERRY AVORN, AUTHOR, "POWERFUL MEDICINES": It turns out it's far more lucrative for a company to be making drugs for impotence or for heartburn or allergies than it is for them to make flu vaccine. By letting the marketplace work its wonders, we have had companies leaving the vaccine business going into the erectile dysfunction business, and we are left with only two companies making flu shot.

TUCKER: In the minds of many, that is exactly what's gone wrong with medicine. Science has taken a back seat to profits. During the decade from 1993 to 2003, the price of drugs rose at an average rate of 7.4 percent a year. That's more than double the rate of inflation. And because of those increases, a survey by the Kaiser Family Foundation found that nearly 40 percent of uninsured Americans do not fill a prescription because they cannot afford it. What do we get in return? Well, consider this statistic. The United States spends more per person than any other industrialized nation on health care, yet it has the shortest life expectancy.

DR. JOHN ABRAMSON, AUTHOR, "OVERDOSED AMERICA": The purpose of medical care in the United States is now to generate profits, largely to generate profits for the corporations that provide the knowledge and the guidelines that determine how medicine is practiced. It is not to take care of the American people most effectively and efficiently.

TUCKER: There's also the issue of conflict of interest. For example, eight out of the nine members on the National Institute of Health's panel setting prescription guidelines for cholesterol drugs had financial ties to the pharmaceutical industry.

(END VIDEOTAPE)

(on camera): Fundamentally, it comes down to this question. Investors want drug companies to grow their bottom lines. Doctors and patients are wondering why the marketplace is dominating the science -- Kitty.

PILGRIM: Thanks very much, Bill Tucker.

Still ahead, a new economic team for President Bush, a stalled intelligence bill? Medical marijuana? We will discuss all the latest with our panel of leading political journalists when we continue.

(COMMERCIAL BREAK)

PILGRIM: Joining me now, three of the nation's top political journalists. We have Marcus Mabry of "Newsweek," Karen Tumulty of "TIME" magazine, and CNN senior political analyst Bill Schneider. Thank you all for joining us tonight. Let's start with Carlos Gutierrez replacing Don Evans. We'll start with you, Bill. What do you make of this, and what does this say for the challenges ahead?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, of course, one of the first things is it's a strong statement about President Bush's support for Hispanics, which may have been an all-time high for a Republican presidential candidate. There's some dispute about the figures, but there's no question he did very well and Hispanics, clearly going to play a major role in his administration. I should point out the commerce secretary is a job that usually does not play a key role in policymaking. Historically the commerce secretary is sort of the politico in chief. It's the office that succeeds the old postmaster general, which was a patronage operation. These days what does a commerce secretary do? Well, it's a position where you promote business, you do favors for business, you find markets for business, and you raise a lot of money from business. And he, of course, is a major American CEO.

PILGRIM: Karen, the economic agenda for the second term? Any hints?

KAREN TUMULTY, "TIME" MAGAZINE: Well, this commerce secretary appointment comes on the very day that we are hearing reports of a major house-cleaning of the entire Bush economic team. Treasury Secretary John Snow has made it known he would like to stay, but most people think that he won't, that because the administration has developed a very full platter of economic issues that they want to push really hard in this second term, starting with Social Security reform and moving on to tax reform, the feeling is that they do need some stronger players in those jobs, not only people who can better articulate their policies but people who will have a little more clout on Capitol Hill.

PILGRIM: Marcus, these are hot-button issues. Social Security reform alone could take a lot of debate?

MARCUS MABRY, NEWSWEEK: Absolutely, Kitty. It's amazing, because this is going to be I think one of the most aggressive second- term presidencies we've ever seen, and I think the reforms in Social Security and potentially in the tax code, which I think will be even more far-reaching and more controversial. Everyone realizes we have to do something to save Social Security. People don't feel the same way about the tax code. The president needs a lot more people who actually have some political clout and some popularity, both on Main Street, on Capitol Hill, and finally on Wall Street.

PILGRIM: Let's talk about the intelligence bill, because there's the perception that this is somewhat stalled. Will we get some motion on this? Will President Bush use some political capital to push this through, or is this basically stalled? Let's start with you, Bill.

SCHNEIDER: Well, it is stalled right now, and there's a big question right there on the table, and that is, will President Bush do everything necessary to get this bill out of Congress? He's a newly elected president. He has a popular majority. He says he has political capital. He's going to spend it.

Will he spend it on this, the 9/11 Commission report, one of the most central features of the last four years, the issue on which he staked his presidency? It stalled because the House Republican leadership says it doesn't want to give the president a bill that can't get support, isn't assured of support, from a majority not at the House, but of Republicans. Well, if the president accedes to that point of view, he's really saying, I'm only going to govern on the basis of things that my party wants, not things that the country wants or need. That's a very serious statement.

PILGRIM: We'll go this way. Go ahead, Karen.

TUMULTY: That's right, Kitty. The fact is that if the president truly wants this bill to pass, it is going to take, perhaps, one public statement, and that is for him to call upon Denny Hastert to put this bill on the floor right now. Because if it were on the floor right now, it would pass, primarily, perhaps, with Democratic votes, but it would pass.

So the real question right now, as the president moves forward, is what is more important to him, getting things done, or party unity?

MABRY: In this week's magazine, we actually talk to Sensenbrenner, the head of the Judiciary Committee, and he actually says that he talked to the president, and the president was very laid back. The president at no point, you know, twisted his arm. At the same time, he said he also talked to Vice President Dick Cheney. Dick Cheney didn't even bring up the subject of the intel bill. Sensenbrenner had to bring it up himself. The administration really I think is ambivalent about this, and it shows.

PILGRIM: If the moment isn't seized now, it may pass, correct?

MABRY: Absolutely. And I think, you know, you saw Tom Kean this weekend really up the ante. He said that we have to pass it now, rather than after the next 9/11. And that really, I think, you'll see the 9/11 commissioners really turning up the pressure on the administration.

PILGRIM: OK. Let's go to Ukraine. And I hate to switch from domestic to foreign politics, but Ukraine has really been dominating the headlines. Where do we stand here tonight? Bill, let's take it from the inside the Beltway perspective. How much buzz is this generating, and how much of a problem is this?

SCHNEIDER: Well, people are just amazed by what's going on over there. It's a combination of the old Cold War confrontation between Russia and the West in the Ukraine, with Russia siding with one candidate, the U.S. and European Union siding with the other candidate, a little bit of Tiananmen Square, some of the activities we saw in Eastern Europe when they overthrew the Rumanian dictator, and Solidarity under Walesa. It's a whole lot of issues. It's very dramatic. And believe me, these protesters have media savvy.

Of course, what the United States is hoping for here in Washington is that the government of Ukraine will eventually concede that there has to be a new election, and presumably in that new election, the challenger, Yushchenko, has a good chance of winning, and that will be a victory for the West and really a setback for Putin and the Russians. And it will indicate how far the collapse of the Soviet Union, how much it's meant even in countries close by, like Ukraine.

PILGRIM: Well, we've seen Secretary of State Colin Powell say that he spoke to the Russian foreign minister and also the president of the Ukraine. There is a certain amount of inserting of U.S. viewpoint into this equation. Is there the perception, Karen, that it's at a crisis, or is this being managed well?

TUMULTY: Well, it actually is looking more and more like the forces are aligning for there to be new elections, and to be -- new elections within a week or two.

PILGRIM: All right. Marcus, any thoughts on Ukraine?

MABRY: I think Karen's absolutely right. I think this is not in the interest of either Washington or Moscow to have this issue carry on. The fact is, it is a contentious issue for both countries, but this is not nearly the most important issue facing these two nations, in a very important relationship for George Bush and his second term agenda internationally.

I think they both want this off the table. I think Karen's right. I think we'll actually see some peaceful resolution in a very short term.

PILGRIM: All right. Thanks very much, Bill Schneider, Karen Tumulty and Marcus Mabry, thank you.

Well, tonight's thought is on America, and here it is. "Now that the election is over, may not all, having a common interest reunite in a common effort to save our common country."

Still ahead, the results of tonight's poll and a preview of what's ahead tomorrow.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll: 54 percent of you believe Kofi Annan should step down as U.N. secretary-general; 46 percent do not.

Well, thank you for being with us tonight. Please join us tomorrow when Lou Dobbs returns. We continue our series of special reports, "Overmedicated Nation." Tomorrow, how drug ads are dominating the airwaves.

Plus, Congressman Christopher Shays on the stalled intelligence bill. He says every day we fail to pass intelligence reform, we put our nation at unnecessary risk. And Joseph Nye, professor of government at Harvard University. He says this country needs more foreign students because they are a critical part of the U.S. economy.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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


Aired November 29, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, HOST (voice-over): Tonight, President Bush makes the first move in what's expected to be an aggressive second term economic agenda. Kellogg's CEO Carlos Gutierrez is his commerce secretary nominee.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll reform our outdated tax code to eliminate needless paperwork and encourage savings, investment and growth.

PILGRIM: We'll have a live report from the White House, and three of the country's top journalists will join us.

Kofi's crisis. The United Nations secretary-general speaks about new revelations about his son and the oil-for-food scandal.

KOFI ANNAN, SECRETARY-GENERAL, UNITED NATIONS: Naturally, I was very disappointed and surprised.

PILGRIM: We'll have a special report.

New violence in Iraq with the elections now just two months away. The United States answers calls from some Iraqis to delay the elections. Senator Ben Nelson, who just returned from Iraq, and foreign policy expert Ian Bremmer will join us.

And one nation overmedicated. Why critics of the drug industry say its first priority say it has nothing to do with curing Americans who are ill. We'll begin our special report.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Monday, November 29. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

Tonight President Bush has named the first member of what's expected to be an all-new economic team. The nominee for commerce secretary, Carlos Gutierrez, is expected to play a key role in advancing the president's goals of reforming Social Security and the nation's tax code.

Senior White House correspondent John King has the report. (BEGIN VIDEOTAPE)

JOHN KING, CNN CORRESPONDENT (voice-over): A new commerce secretary is step one in a second-term makeover of the Bush economic team.

BUSH: Carlos Gutierrez is one of America's most respected business leaders. He is a great American success story.

KING: The Cuban-born Gutierrez rose from selling Kellogg cereal out of a truck in Mexico to being the company CEO. And now if confirmed by the Senate, will help sell an ambitious Bush domestic agenda.

BUSH: We'll reform our outdated tax code to eliminate needless paperwork and encourage savings, investment and growth.

KING: Tax overhaul is just one controversial item on Mr. Bush's second-term wish list. Social Security is another, including letting younger workers divert some payroll taxes to private investment accounts. Not to mention Mr. Bush's promise to slash the record federal budget deficit by half over the next four years.

Critics see bad ideas and bad math.

GENE SPERLING, FORMER CLINTON ECONOMIC ADVISER: They seem to almost have a campaign to convince people that large deficits don't matter. I don't think anyone could have ever believed a Republican administration would be taking that position 10 years ago.

KING: The president and vice president will take the lead in making the case to Congress and the American people. But the lineup of deputies will have a new look.

Gutierrez will replace Bush friend Don Evans at commerce. Budget director Josh Bolton stays on, but the chief White House economic adviser's job is open, and there likely will be other changes.

Council of Economic Advisers Chairman Greg Mankiw is said to be moving on, and several administration sources predict Treasury Secretary John Snow likely will stay only a few months into the new term.

Bush allies say a quick start is critical.

STEPHEN MOORE, CLUB FOR GROWTH: He's got to get most of these initiatives passed in his first two years. Because once he's done with his first two years, you know what? People are starting to look toward who's going to be the next president, and then the president becomes a lame duck.

(END VIDEOTAPE)

KING: Now, Gutierrez is the first Bush pick for a second-term cabinet opening -- opening that does not come from the president's inner circle. But officials say his boardroom success and his rags to riches story make him a good fit for a job that mostly involves selling the president's policies across the country and around the world while officials at the White House, Kitty, navigate the legislative battles in Washington.

PILGRIM: All right. Thanks very much, John King.

Well, the White House tonight is also speaking out about the stalled intelligence reform bill. Critics have said President Bush isn't doing enough to pressure Congress to pass the bill before it's too late.

Congressional correspondent Joe Johns has the report.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: The administration is trying to put an end to criticism the president is only lukewarm on passing intelligence reform. The White House says President Bush will send a letter to Capitol Hill later this week, urging congress to get the bill finished.

SCOTT MCCLELLAN, WHITE HOUSE SPOKESMAN: The president is firmly committed to getting this legislation passed and done as quickly as possible.

JOHNS: White House spokesman Scott McClellan made clear Monday the president disagrees with Republican Congressman Duncan Hunter, who opposes intelligence reform on the grounds it could confuse the chain of command for military intelligence.

MCCLELLAN: The president would never sign legislation that would harm our troops or hurt our troops in any way. And the president believes that this is an important legislation that will further strengthen our intelligence operations.

JOHNS: With time running out, former members of the 9/11 Commission are also ratcheting up the public relations push to get a bill passed.

THOMAS KEAN, CHAIR, 9/11 COMMISSION: And if it doesn't pass now, it could be six months or longer, and that's six more or longer without the American people having the protections which we think they must have and which they want, 80 percent of them want. That's a danger we shouldn't risk.

JOHNS: This week, former members of the 9/11 Commission will meet with reporters while representatives Chris Shays and Carolyn Maloney, who started a 9/11 Commission caucus, will hold an event with 9/11 families.

Some families are also holding vigils this week in New York, Boston, and Los Angeles. The hope is that added pressure and more public information about the bill will make it harder for some House members to continue opposing it.

(on camera) The intelligence reform bill is expected to come up at a retreat of House Republicans in Virginia this week. White House officials are expected to be there. And people who want changes to the legislation are also expected to make their voices heard, including September 11 families who want tougher immigration language.

Joe Johns, CNN, Capitol Hill.

(END VIDEOTAPE)

PILGRIM: A new videotape from al Qaeda vows to continue the fight against the United States.

Osama bin Laden's top deputy, Ayman al Zawahiri, appears on the tape, which aired today on the Al Jazeera network. On it, he says the terrorist group will continue its fight against the United States unless Washington changes its policy toward Muslims. Zawahiri also said the result of the U.S. presidential election does not matter to al Qaeda.

New violence tonight in Iraq. Just two months before the country is scheduled to hold its first election, the Pentagon tonight insists the new insurgent attacks will not delay the voting, now set for January 30.

Senior Pentagon correspondent Jamie McIntyre has the report.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT: With U.S., Iraqi and British troops hunting down insurgents in operations like this one along the Euphrates River, the United States insists Iraqi elections will be held January 30 as scheduled.

COLIN POWELL, SECRETARY OF STATE: There's no reason they shouldn't. We're working hard on it. The U.N. has increased its presence. There are thousands of Iraqis who are working on registration and getting ready for the elections.

MCINTYRE: But in parts of Sunni-dominated Iraq, including an area dubbed the Triangle of Death, no one has yet been registered, two months before the elections.

And insurgents continue to wage a campaign of organized crime- style intimidation, with tactics one journalist called more like "The Sopranos" than "Black Hawk Down." It's a description Pentagon officials do not dispute.

In Ramadi, a suicide bomber plowed into a crowd of police waiting outside the police station to be paid, killing a dozen people and wounding at least ten others.

In Mosul, 40 dead bodies have been found in the past week. Most had been bound and shot execution style. And there are even sporadic attacks in Falluja, three weeks after an offensive that routed insurgents. Large stockpiles of weapons are still turning up.

Pentagon officials say across Iraq, attacks in recent days have dropped, from more than 100 a day to an average of to only 50 or 60. But while violence may be down, the fear is up.

JOHN HENDREN, "L.A. TIMES": In Ramadi, where I just was, I was told by military commanders there that the national guard is basically ineffective, because they're under so much threat to their families, in a very tightly-knit tribal area. So they're going to have to import National Guard troops -- Iraqi National Guard troops from elsewhere.

MCINTYRE: With two months to go, the Pentagon lists 114,000 Iraqi security forces that, on paper, are trained and on hand. At least 10,000 shy of what police will be necessary to provide security for the elections.

(END VIDEOTAPE)

MCINTYRE: Meanwhile, the Pentagon has decided to extend the stay of some 6,500 U.S. soldiers in order to provide more security. But no decision has been made yet whether to send fresh troops in early -- Kitty.

PILGRIM: All right. Thanks very much, Jamie McIntyre.

Senator Ben Nelson, who is a member of the armed services committee, has just returned from a Thanksgiving visit from the Middle East, including Iraq, Afghanistan and Pakistan. Later, I will talk with him about what Iraqi leaders are saying about whether the elections will take place as scheduled. Senator Ben Nelson is my guest, ahead.

New developments tonight in the United Nations oil-for-food program scandal. U.N. Secretary-General Kofi Annan today responded to shocking revelations that his son was on the payroll of a major contractor in the program until earlier this year.

Richard Roth has the report.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN CORRESPONDENT (voice-over): The oil-for-food controversy has now turned into a family affair at the highest levels. United Nations Secretary-General Kofi Annan says he was unaware that his son got paid by a Swiss company at the heart of the oil-for-food story for years longer than previously acknowledged.

Is Annan angry with his son, Kojo, for not telling him?

ANNAN: Naturally, I was very disappointed and surprised.

ROTH: Annan's son was hired as a consultant by the company Cotecna which won the contract to inspect humanitarian goods going into Iraq under the oil-for-food program.

But the company says Kojo Annan was assigned to West Africa, and there was no connection with oil for food. Kofi Annan says he did not expect the relationship to continue. ANNAN: I have warm family relations with my son, but he is in a different field. He is an independent businessman. He's a grown man, and I don't get involved with his activities, and he doesn't get involved in mine.

ROTH: But the failure by the company or the U.N. twice to state the length of the Annan family ties to the company right up until corruption stories broke big this year adds more fuel to a number of American opinion makers who are calling for Kofi Annan to resign. The U.N. chief declined to answer those calls, but knows it could look bad.

ANNAN: I understand the perception problem for the U.N. or the perception of conflict of interest (UNINTELLIGIBLE). I understand that.

ROTH: The U.S., a proponent of the original oil-for-food program, is concerned about this Annan disclosure.

JOHN DANFORTH, U.S. AMBASSADOR TO THE U.N.: This deserves very careful attention, a very close investigation, and let all the facts come out.

ANNAN: The U.N. says it checked in 1998 after a press report and was told Kojo Annan was not linked to the company which won the bid to inspect oil for food. Now it's all in the hands of the U.N.-approved investigation run by former Fed chairman Paul Volcker.

(END VIDEOTAPE)

ROTH: Both representatives for Kojo Annan and the Cotecna company say they are fully cooperating with the Volcker panel. However, it will be several months until we learn exactly what Volcker concludes.

Back to you, Kitty.

PILGRIM: Richard, have any officials gone as far as to call for Kofi Annan to resign?

ROTH: No country, including the U.S., is joining on that bandwagon to resign -- for Annan to resign. Basically, it's been editorial page writers and certain publications, ranging from William Safire in today's "New York Times" to certain people in "The Wall Street Journal" and guests, such as the Heritage Foundation, who have been on this program. But if there is any proof found of any bribe- taking by senior U.N. officials, things could get a little bit murkier here.

PILGRIM: All right. Thanks very much.

Richard Roth.

Well, that does bring us to the subject of tonight's poll. Do you believe Kofi Annan should step down as U.N. secretary general? Yes or no. Cast your vote at cnn.com/lou. We will bring you the results later in the show.

Still ahead, the election standoff that has divided a country. Will the Ukraine break apart, and what does it mean for our interests in the region? International political expert Ian Bremmer is my guest.

And a new report talks about the problems that come from a boom in immigration all over the world, immigration that's both legal and illegal. We'll have that story.

(COMMERCIAL BREAK)

PILGRIM: The United Nations today released a report showing that immigration is on the rise in countries all around the world. Now that report outlines some of the major problems that arise when tens of millions of people leave their own country for another.

Casey Wian reports from Los Angeles.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): The United Nations says migration is one of the biggest challenges now facing world governments. The number of people living in countries other than where they were born has more than doubled since 1960, to 175 million worldwide. The U.N.'s report on migration also says illegal immigrant smuggling has grown into a $10-billion-a-year global business.

JOSEPH CHAMIE, DIRECTOR, U.S. POPULATION DIVISION: We've had lots of migrants coming in undocumented. Many of them are being exploited, many of them are working for substandard wages and living conditions. Others have had difficulties with integration. So we're trying to move to a situation with better management, better cooperation globally.

WIAN: The U.N. says one of every 12 people in developed nations is an immigrant, and they send about $79 billion a year back to their Third-World countries of origin.

The report lists problems, including a brain drain that hurts poorer nations when their most educated citizens flee, and benefits, such an increased supply of labor for European nations that otherwise would experience population declines.

DEMETRIOS PAPADEMETRIOU, PRESIDENT, MIGRATION POLICY INSTITUTE: The United Nations, after many years' absence, is finally entering the fray. It's a mine field in terms of the politics of the issue, and it really did not effect the majority, perhaps the vast majority of countries around the world, until the last decade or so.

WIAN: But much of the report reads as if it was written by U.S. open border advocates. It applauds guest worker programs and expanded voting rights for noncitizen immigrants. It urges governments of developed nations to stress the economic value of immigrants to their citizens to lessen anti-immigrant prejudice. Yet it also urges lower transaction fees for immigrants seeking to send money home. (END VIDEOTAPE)

VILES: Now the U.N. is in no hurry to adopt resolutions on immigration. It's waiting for another report due out next year and then a General Assembly dialogue not until 2006 -- Kitty.

PILGRIM: All right. Thanks very much.

Casey Wian.

And one of the most influential organizations in the immigration debate is heavily backed by corporate America. It's called MALDEF, or the Mexican-American Legal Defense and Education Fund. It's a group that fights for the rights of illegal aliens in this country and has some very powerful backers.

Peter Viles reports from Los Angeles.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Redondo Beach, California. At issue: whether day laborers, including illegal aliens, have the right to solicit work on the sidewalk. Local law says no, the police say no, but a powerful legal group says yes.

THOMAS SAENZ, MADELF: From the beginning of our country's history, the sidewalk has been an area left aside for everyone to express themselves freely. That's what the First Amendment protects. And it protects everyone's right, whether it's a corporation or a politician, a religious proselytizer or a day laborer.

VILES: That's the voice of MALDEF, the Mexican-American Legal Defense and Education Fund, the same group that sued Abercrombie & Fitch for discrimination and won a $50 million settlement, the same group that defeated California's Prop 187, which would have prevented illegal aliens from receiving government benefits, the same group expected to try to block Arizona's Prop 200.

Time and again, MALDEF goes to bat not just for Mexican- Americans, but often for illegal aliens.

KRIS KOBACH, IMMIGRATION LAW EXPERT: MALDEF started out as a mainstream civil rights organization, intending to enforce the civil rights of citizens. But now their objective seems to be to redefine citizenship so that there are no meaningful legal distinctions between citizens and aliens.

VILES: MALDEF says the current immigration system is broken, calls the Bush proposals "a step in the right direction," but would go much further. It wants earned legalization for illegal aliens, driver's licenses for illegals and opposes deportations without a judicial hearing.

Who pays for this agenda? You'd be surprised. Its donors include Anheuser-Busch, Coca-Cola, Time Warner, which owns CNN, Tyson Foods and McDonald's. WILLIAM HAWKINS, U.S.M.I.C.: They want to improve their image or have a positive image in the Hispanic community, and MALDEF has positioned itself as the mainstream civil rights group in the Hispanic community. But I think they also want to support their agenda.

VILES: An agenda that will likely challenge the will of the voters in Arizona.

(on camera): MALDEF declined to speak to us on camera about its agenda, but did say that its highest legal priorities right now are voting rights and access to education.

Peter Viles, CNN, Los Angeles.

(END VIDEOTAPE)

PILGRIM: Still ahead tonight, President Bush travels to Canada to try to repair a damaged relationship. Tens of thousands of protesters could be on hand for the president's arrival.

And just two months to go before scheduled elections in Iraq. Will they go ahead as planned? Well, Senator Ben Nelson, a member of the Armed Services Committee, has just returned from Iraq, and he is my guest.

(COMMERCIAL BREAK)

PILGRIM: President Bush will travel to Canada tomorrow for his first official visit. It will be the first state visit to Canada by an American president in nearly a decade, and not all Canadians will be happy to see President Bush arrive.

Judy Woodruff has the report.

(BEGIN VIDEOTAPE)

JUDY WOODRUFF, CNN ANCHOR (voice-over): Some members of parliament and other Canadians are not shy about showing their less than friendly feelings toward President Bush.

This lawmaker recently was seen on Canadian television stomping on a Bush action figure. It was meant to be a spoof, but it wasn't the first time she had publicly dissed the president.

UNIDENTIFIED FEMALE: We are not joining the coalition of the idiots.

WOODRUFF: That helps explain why President Bush will not address the Canadian parliament during his trip, as most major foreign leaders do. Catcalls from sometimes raucous members would have been a real possibility, as President Reagan found out in 1987.

RONALD REAGAN, FORMER PRESIDENT OF THE UNITED STATES: We see such a campaign on our own shores. Threatening -- is there an echo in here? WOODRUFF: It may be more difficult for Mr. Bush to avoid the thousands of anti-war protesters expected to converge in Canada during his visit. Like the Europeans, many Canadians oppose the U.S.-led war in Iraq and are turned off by what they perceive to be the Bush administration's go-it-alone foreign policy.

Two-thirds of Canadians say their opinion of the United States has gotten worse over the past four years. No wonder Mr. Bush is expected to deliver a we're-all-in-this-together message to Canadians, particularly on the war on terror.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I'm looking forward to bringing the greetings of my great country to your great country.

WOODRUFF: Canadian Prime Minister Paul Martin is expected to walk a fine line during his talks with the president. He hopes to make progress on trade disputes without appearing too chummy with someone so unpopular with so many Canadians.

PAUL MARTIN, CANADIAN PRIME MINISTER: We have a lot of issues to discuss in terms of North America and also in terms of the world.

WOODRUFF: Judy Woodruff, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: Coming up, an election standoff threatens to divide the Ukraine permanently. Will it also damage our relationship with Russia? Ian Bremmer, president of Eurasia Group joins me.

And has the United States become an overmedicated nation? Tonight, a special report on the health-care crisis gripping this country.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: In a moment, I'll be joined by Senator Ben Nelson of the Armed Services Committee who has just returned from Iraq, and we will discuss concerns over the upcoming election there.

But, first, a look at some of the top stories tonight.

Military officials say seven soldiers were killed today when their Black Hawk helicopter crashed in central Texas. Officials say the helicopter clipped a TV tower guide wire while flying in heavy fog. The helicopter was en route from Fort Hood to the Red River Depot, a maintenance facility.

The 14-year-old son of NBC Sports head Dick Ebersol is presumed dead after a fiery plane crash in Colorado. Dick Ebersol and his 21- year-old son survived the crash, which happened soon after takeoff Sunday morning. Their conditions were not disclosed. The pilot and co-pilot were killed. A third crewmember survived.

At least two million locusts have invaded one of Spain's Canary Islands. Officials there have begun fumigating the giant swarm that flew over 60 miles of ocean after devastating North Africa this summer. Officials say the damage in the Canary Islands was not as bad as expected because the insects were exhausted when they finally touched down.

Well, my next guest just returned from the Persian Gulf. He spent his Thanksgiving holiday visiting our troops in Iraq, and he also met with Iraqi leaders about the election scheduled for January.

I spoke earlier with Senator Ben Nelson of the Armed Services Committee. I asked him if he thought Iraqi elections could proceed as scheduled on January 30.

(BEGIN VIDEOTAPE)

SEN. BEN NELSON (D), ARMED SERVICES COMMITTEE: Well, the Iraqis are on the horns of a dilemma. If they don't make the deadline, if they don't have the election -- the constitutional election on the 30th of January, then the insurgents are going to claim victory or be encouraged to move forward.

If they do go ahead and have it as Prime Minister Allawi says they're going to -- and I think he's probably going to win out on this, then the Sunnis are going to say that it wasn't a fair election. That they -- as a minority, they're even a smaller minority because they can't turn out due to the violence.

But I think Prime Minister Allawi's point is -- it's a point that has some merit. And that is that there is never going to be a time to have a perfect election and that there will always be some violence associated with it and it's better to move forward than to give the insurgents any cause for celebration.

PILGRIM: Now some of the Sunni leaders are asking for a delay, saying that they're worried about the violence, and yet if they don't participate, how much more would we see disenfranchised groups escalating violence?

NELSON: Well, I think that's the point. Will violence beget violence with others, because they'll feel like they're left out? I would hope that the prime minister and the Sunni leaders who are getting together and going to continue to get together for the next two months, will try to find some accommodation where that is not the case, where they are able to participate to some degree, maybe to a great degree in the election.

One of the most important things in getting an election that will work in Iraq is pretty much what happened in Afghanistan. And that is sufficient security support to make it as risk-free as you can make it for people who want to show up and vote.

PILGRIM: Do you see that as the primary U.S. role, after all, we have to let Prime Minister Allawi drive this, don't we? NELSON: Well, quite honestly, we passed over sovereignty to the Iraqi government. It is a primary role for the American military. But it's not the sole role of the military because we're going to be working hand in glove with the newly stood-up Iraqi police force and the security forces. So we're going to work with them to get it done.

You know, there has also been a suggestion that we need more troops. And I think that you're going to see more troops coming in. I think in the next few days you're going to see a request for more troops on the ground -- American troops on the ground who can work with the Iraqis to provide the level of security that's going to be required.

PILGRIM: Senator Nelson, I need to switch countries on you quickly and we're almost out of time, but in Pakistan there was the announcement that they will discontinue military operations on the border with Afghanistan exactly where Osama bin Laden was expected to be still hiding. How do you take that announcement.

NELSON: Well, I'm very worried about that. It was my understanding in getting briefings in Pakistan this week that that was -- that the actual presence in that region would continue. And so it's a bit surprising to hear that they're going to withdraw or reduce their presence because I think it's so important that they continue to pursue bin Laden.

If they pursue him, I think eventually they will get him. If they pull back, then I think they create a safe environment, a safe zone for him. And that's about the last that either they or we need.

PILGRIM: All right. Thank you very much for joining us this evening. Nebraska Senator Ben Nelson.

NELSON: Thank you, Kitty.

PILGRIM: Tonight, an escalating election crisis in the Ukraine. Now, the supreme -- the country's supreme court today began reviewing claims of election fraud from the opposition party. The opposition is calling for the court to annual the recent victory of the prime minister and order a new vote for December 12th.

Now, for more on the standoff, I'm joined now by Ian Bremmer, president of Eurasia Group. And thanks for being with us.

IAN BREMMER, PRESIDENT, EURASIA GROUP: Good to see you.

PILGRIM: Senator Richard Lugar says this is perhaps the greatest story in the world now right now.

Why is the Ukraine story so important?

BREMMER: All of the European states have said that this election was a farce, so has the United States. Russia had said no, they actually think that Yanukovich was the properly elected president. So have all of the members of the CIS Commonwealth (UNINTELLIGIBLE) with Russia. Ukraine isn't situated on a fault line. Ukraine is a fault line. And I think, the real question we have is ask is, is where does Europe end and where does this other fuzzy space, that we may have a good relationship with, we may not, but it's not Europe.

Where does that start? That's what we're talking about.

PILGRIM: Seventh day of the protests. Where do we go from here? Is violence likely? Is it likely to be resolved? Where do stand in the whole with negotiating, which has been intense in the recent days?

BREMMER: It has been. It's violence is more likely than it was on Friday, it's less likely than it was yesterday. Both of the key parties here, both of the two Viktors, Viktor Yanukovich, the former prime minister, Viktor Yushchenko, opposition, both of them have been playing harder ball than one would have thought prudent. Tomorrow, Yushchenko has said they're going to call on parliament for a vote of no confidence of the prime minister. At the same time, Yanukovich has been in southeast Ukraine where the Russians, and Russian speaking Ukrainian's are located, they've said they're looking for succession, leaving Ukraine, if the election is overturned. What's interesting, here, that there's a third faction. That third faction is President Kuchma. President Kuchma has backed away from Yanukovich.

PILGRIM: That's the outgoing president, right?

BREMMER: The existing president, maybe he's outgoing, maybe not. If things go really badly, he could conceivably declare a state of emergency. And he could say, you know what, we need to have new elections. We don't know how long they'll take. I'm still the president for the time. He doesn't want to run for a third time, but that doesn't mean he can't stay president nor a little while. That is an option.

PILGRIM: Let's go to Iran. And we have a new agreement with Britain, France and Germany. We hope it will stick. Mohammed ElBaradei, the head of the IAEA, said the ball is in Iran's court. Let's that hope they cooperate. Where do we stand now on Iran?

Maybe joining the world community and quelling their nuclear ambitions?

BREMMER: Well, the agreement is softer than the one they originally signed. It is not legally binding. And the United States said just today they reserved the right, unilaterally, to bring this issue to the United Nations Security Council, if they see fit. Now, why would the United States do that if they know that the Europeans have a deal and the Chinese have said no sanctions? And the reason, of course, that the United States are very unhappy with this deal. They know it's not binding, they know the Iranians are continuing to develop, they don't believe the Iranians need nuclear energy for civilian use. And also Iran sits next to Israel, and Israel has made it clear they find the status quo unacceptable. They would not accept an Iranian nuclear weapons program, even if undeclared, like Israel's own. And so, that means the prospects either covert or overt military action for 2005 are looming larger than before this the deal was coming.

PILGRIM: If this goes to Security Council...

BREMMER: No chance of comprehensive sanctions. No, the Europeans don't want it. They just signed a deal. The Chinese don't want it. They have real energy interests on the ground. Oil prices are 40 what today? No, this is the second largest oil producer right now. Nobody is looking to give these guys a hard time. And by the way the Iranians, who are making so much money on their oil revenues have no interest in backing down because they're much more stable, lots of cash to spend internally.

PILGRIM: All right. Let's go to Iraq. The prospect of keeping elections on track. Where do we stand here today?

BREMMER: Well, Allawi, the prime minister, has said he wants to keep elections on January 30th. President Bush has said he expects to have elections January 30th. They've been spending an awful lot of manpower, dozens of Americans have lost their lives, hundreds of Iraqis, because they have a window they want to have maximized security January 30th. The U.S. has also spent a lot of money over 2004, trying to make sure Iraq will be stable. Here's a question you have to ask yourself.

If they were to hold off six more months, is the U.S. Likely to spend as much money as they've spent over the last year on a day-to- day basis?

Are they prepared to continue to lose those casualties?

In other words, is it really likely that the situation, security on the ground in, say, July 30th will be as good or better than it is January 30th?

The answer is a resounding no. And that's why President Bush -- the situation doesn't look good right now. But the messy truth is that it's probably going to look better in six months.

PILGRIM: So it's better to push ahead.

BREMMER: It's better to push ahead.

PILGRIM: Quick one on Pakistan and Pakistan is ending the operation in Waziristan, which where bin Laden was thought to have been, they said they're pulling their military back. They're not going to continue to pressuring that area.

What does that mean for the United States?

BREMMER: The U.s. Doesn't like it, but we have to recognize is while Pakistan has provided more and better intel, solid intel on proliferation activities because of the Aq-Kahn situation, all this information of the Pakistanis providing nuclear technology to countries all over the world, that puts them in better stead with the U.S. and U.S. intelligence. Hard to press the Pakistanis too hard right now.

PILGRIM: All right. Thank you very much, Dr. Ian Bremmer, Eurasia Group.

A reminder now to vote in "Tonight's Poll." Do you believe that Kofi Annan Should step down as U.N. secretary-general, yes or no? Cast your vote at cnn.com/lou, and we'll bring you the results a little bit later in the show.

Now, apparently lying is hard work. And that's according to a new study showing people use more of their brain to lie than to tell the truth. Researchers in Philadelphia tonight say brain scans of people lying look very different from those of people telling the truth. The study looked closely as realtime pictures of the brain activity of volunteers, and some of them were asked to lie, some were asked to tell the truth. Researchers say this new discovery could provide new technology for lie-detecting.

Still ahead, why the controversial issue of medical marijuana has again made its way to the U.S. Supreme Court.

And we begin our series of special reports "Overmedicated Nation," why profits dictate what drugs are available to you. We'll have a full report.

(COMMERCIAL BREAK)

PILGRIM: The Supreme Court today took up the issue of medical marijuana. The high court will decide whether 11 states can allow the use of marijuana for medical purposes, or if those state laws are at odds with a federal ban on marijuana. Bob Franken has the report.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): For Angel Raich, it's not about the sweeping issues her case places before the justices. For her, it's her brain tumor and what she says is her need for help from marijuana.

ANGEL RAICH, MEDICAL MARIJUANA USER: I need to use cannabis every two hours. If I don't medicate every two hours, I become debilitated.

FRANKEN: Her home state of California is one of 11 that permit private use of marijuana for medical purposes. But federal law prohibits virtually any use. So the Supreme Court was again hearing arguments over the constitutional power of the federal government to override state laws. Was the medical individual use of home-grown marijuana interstate commerce? Yes, said Paul Clement the administration's acting solicitor general because the garden-patch weed would affect overall production. Randy Barnett who argued the other side called any connection hypothetical since it's privately grown, not bought or sold. Many argued there's little evidence that marijuana has medical value.

UNIDENTIFIED FEMALE: It's a handful of people who want to see not just marijuana, but all drugs legalized. FRANKEN: Inside, the justices peppered both sides. Ginsburg: nobody is buying anything. Nobody is selling anything. But Justice Breyer argued a preference for medicine by regulation as opposed to medicine by referendum.

(END VIDEOTAPE)

(on camera): The referendum in these cases will now involve the nine justices, including, we're told, Chief Justice Rehnquist, who was, once again, not present. He is busy fighting his own medical affliction -- Kitty.

PILGRIM: Thanks very much, Bob Franken.

Now, this week we begin a new series of special reports we're calling "Overmedicated Nation." Tonight, concerns that drug companies in this country are more focused on making a profit than they are on making a difference for Americans who need health care. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Americans love their drugs and the promises of drugs.

UNIDENTIFIED MALE: So if you're thinking about Viagra...

TUCKER: We're taking more prescription drugs than ever before.

UNIDENTIFIED MALE: You may feel sad, hopeless.

TUCKER: We've moved way beyond what were once politely known as mommy's little helpers, a.k.a. tranquilizers in the mid sixties, to drugs that promise to make everything better. But try and get a flu shot, and it's a different story.

DR. JERRY AVORN, AUTHOR, "POWERFUL MEDICINES": It turns out it's far more lucrative for a company to be making drugs for impotence or for heartburn or allergies than it is for them to make flu vaccine. By letting the marketplace work its wonders, we have had companies leaving the vaccine business going into the erectile dysfunction business, and we are left with only two companies making flu shot.

TUCKER: In the minds of many, that is exactly what's gone wrong with medicine. Science has taken a back seat to profits. During the decade from 1993 to 2003, the price of drugs rose at an average rate of 7.4 percent a year. That's more than double the rate of inflation. And because of those increases, a survey by the Kaiser Family Foundation found that nearly 40 percent of uninsured Americans do not fill a prescription because they cannot afford it. What do we get in return? Well, consider this statistic. The United States spends more per person than any other industrialized nation on health care, yet it has the shortest life expectancy.

DR. JOHN ABRAMSON, AUTHOR, "OVERDOSED AMERICA": The purpose of medical care in the United States is now to generate profits, largely to generate profits for the corporations that provide the knowledge and the guidelines that determine how medicine is practiced. It is not to take care of the American people most effectively and efficiently.

TUCKER: There's also the issue of conflict of interest. For example, eight out of the nine members on the National Institute of Health's panel setting prescription guidelines for cholesterol drugs had financial ties to the pharmaceutical industry.

(END VIDEOTAPE)

(on camera): Fundamentally, it comes down to this question. Investors want drug companies to grow their bottom lines. Doctors and patients are wondering why the marketplace is dominating the science -- Kitty.

PILGRIM: Thanks very much, Bill Tucker.

Still ahead, a new economic team for President Bush, a stalled intelligence bill? Medical marijuana? We will discuss all the latest with our panel of leading political journalists when we continue.

(COMMERCIAL BREAK)

PILGRIM: Joining me now, three of the nation's top political journalists. We have Marcus Mabry of "Newsweek," Karen Tumulty of "TIME" magazine, and CNN senior political analyst Bill Schneider. Thank you all for joining us tonight. Let's start with Carlos Gutierrez replacing Don Evans. We'll start with you, Bill. What do you make of this, and what does this say for the challenges ahead?

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, of course, one of the first things is it's a strong statement about President Bush's support for Hispanics, which may have been an all-time high for a Republican presidential candidate. There's some dispute about the figures, but there's no question he did very well and Hispanics, clearly going to play a major role in his administration. I should point out the commerce secretary is a job that usually does not play a key role in policymaking. Historically the commerce secretary is sort of the politico in chief. It's the office that succeeds the old postmaster general, which was a patronage operation. These days what does a commerce secretary do? Well, it's a position where you promote business, you do favors for business, you find markets for business, and you raise a lot of money from business. And he, of course, is a major American CEO.

PILGRIM: Karen, the economic agenda for the second term? Any hints?

KAREN TUMULTY, "TIME" MAGAZINE: Well, this commerce secretary appointment comes on the very day that we are hearing reports of a major house-cleaning of the entire Bush economic team. Treasury Secretary John Snow has made it known he would like to stay, but most people think that he won't, that because the administration has developed a very full platter of economic issues that they want to push really hard in this second term, starting with Social Security reform and moving on to tax reform, the feeling is that they do need some stronger players in those jobs, not only people who can better articulate their policies but people who will have a little more clout on Capitol Hill.

PILGRIM: Marcus, these are hot-button issues. Social Security reform alone could take a lot of debate?

MARCUS MABRY, NEWSWEEK: Absolutely, Kitty. It's amazing, because this is going to be I think one of the most aggressive second- term presidencies we've ever seen, and I think the reforms in Social Security and potentially in the tax code, which I think will be even more far-reaching and more controversial. Everyone realizes we have to do something to save Social Security. People don't feel the same way about the tax code. The president needs a lot more people who actually have some political clout and some popularity, both on Main Street, on Capitol Hill, and finally on Wall Street.

PILGRIM: Let's talk about the intelligence bill, because there's the perception that this is somewhat stalled. Will we get some motion on this? Will President Bush use some political capital to push this through, or is this basically stalled? Let's start with you, Bill.

SCHNEIDER: Well, it is stalled right now, and there's a big question right there on the table, and that is, will President Bush do everything necessary to get this bill out of Congress? He's a newly elected president. He has a popular majority. He says he has political capital. He's going to spend it.

Will he spend it on this, the 9/11 Commission report, one of the most central features of the last four years, the issue on which he staked his presidency? It stalled because the House Republican leadership says it doesn't want to give the president a bill that can't get support, isn't assured of support, from a majority not at the House, but of Republicans. Well, if the president accedes to that point of view, he's really saying, I'm only going to govern on the basis of things that my party wants, not things that the country wants or need. That's a very serious statement.

PILGRIM: We'll go this way. Go ahead, Karen.

TUMULTY: That's right, Kitty. The fact is that if the president truly wants this bill to pass, it is going to take, perhaps, one public statement, and that is for him to call upon Denny Hastert to put this bill on the floor right now. Because if it were on the floor right now, it would pass, primarily, perhaps, with Democratic votes, but it would pass.

So the real question right now, as the president moves forward, is what is more important to him, getting things done, or party unity?

MABRY: In this week's magazine, we actually talk to Sensenbrenner, the head of the Judiciary Committee, and he actually says that he talked to the president, and the president was very laid back. The president at no point, you know, twisted his arm. At the same time, he said he also talked to Vice President Dick Cheney. Dick Cheney didn't even bring up the subject of the intel bill. Sensenbrenner had to bring it up himself. The administration really I think is ambivalent about this, and it shows.

PILGRIM: If the moment isn't seized now, it may pass, correct?

MABRY: Absolutely. And I think, you know, you saw Tom Kean this weekend really up the ante. He said that we have to pass it now, rather than after the next 9/11. And that really, I think, you'll see the 9/11 commissioners really turning up the pressure on the administration.

PILGRIM: OK. Let's go to Ukraine. And I hate to switch from domestic to foreign politics, but Ukraine has really been dominating the headlines. Where do we stand here tonight? Bill, let's take it from the inside the Beltway perspective. How much buzz is this generating, and how much of a problem is this?

SCHNEIDER: Well, people are just amazed by what's going on over there. It's a combination of the old Cold War confrontation between Russia and the West in the Ukraine, with Russia siding with one candidate, the U.S. and European Union siding with the other candidate, a little bit of Tiananmen Square, some of the activities we saw in Eastern Europe when they overthrew the Rumanian dictator, and Solidarity under Walesa. It's a whole lot of issues. It's very dramatic. And believe me, these protesters have media savvy.

Of course, what the United States is hoping for here in Washington is that the government of Ukraine will eventually concede that there has to be a new election, and presumably in that new election, the challenger, Yushchenko, has a good chance of winning, and that will be a victory for the West and really a setback for Putin and the Russians. And it will indicate how far the collapse of the Soviet Union, how much it's meant even in countries close by, like Ukraine.

PILGRIM: Well, we've seen Secretary of State Colin Powell say that he spoke to the Russian foreign minister and also the president of the Ukraine. There is a certain amount of inserting of U.S. viewpoint into this equation. Is there the perception, Karen, that it's at a crisis, or is this being managed well?

TUMULTY: Well, it actually is looking more and more like the forces are aligning for there to be new elections, and to be -- new elections within a week or two.

PILGRIM: All right. Marcus, any thoughts on Ukraine?

MABRY: I think Karen's absolutely right. I think this is not in the interest of either Washington or Moscow to have this issue carry on. The fact is, it is a contentious issue for both countries, but this is not nearly the most important issue facing these two nations, in a very important relationship for George Bush and his second term agenda internationally.

I think they both want this off the table. I think Karen's right. I think we'll actually see some peaceful resolution in a very short term.

PILGRIM: All right. Thanks very much, Bill Schneider, Karen Tumulty and Marcus Mabry, thank you.

Well, tonight's thought is on America, and here it is. "Now that the election is over, may not all, having a common interest reunite in a common effort to save our common country."

Still ahead, the results of tonight's poll and a preview of what's ahead tomorrow.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll: 54 percent of you believe Kofi Annan should step down as U.N. secretary-general; 46 percent do not.

Well, thank you for being with us tonight. Please join us tomorrow when Lou Dobbs returns. We continue our series of special reports, "Overmedicated Nation." Tomorrow, how drug ads are dominating the airwaves.

Plus, Congressman Christopher Shays on the stalled intelligence bill. He says every day we fail to pass intelligence reform, we put our nation at unnecessary risk. And Joseph Nye, professor of government at Harvard University. He says this country needs more foreign students because they are a critical part of the U.S. economy.

For all of us here, good night from New York. "ANDERSON COOPER 360" is next.

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