Return to Transcripts main page

Lou Dobbs Tonight

Small and Medium-sized Business Now Exporting American Jobs Overseas; Interview with Astrophysicist Charles Liu

Aired December 22, 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, the Pentagon blames a suicide bomber for the Mosul massacre. Eighteen Americans were killed.

RICHARD MYERS, CHAIRMAN, JOINT CHIEFS OF STAFF: At this point, it looks like it was an improvised explosive device worn by an attacker.

PILGRIM: The rising threat to American jobs from overseas outsourcing. A new report says many more companies are likely to export jobs to cheap overseas labor markets.

Winter wallop! A massive snowstorm stretching from New Mexico to Ohio, causing dozens of accidents.

UNIDENTIFIED MALE: If you don't have to get out today, just simply stay home. You're going to be much, much safer inside your home.

PILGRIM: And in "Face Off," is it "merry Christmas" or "happy holidays"? The battle over political correctness at Christmas escalates. We'll have a vigorous debate.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, December 22. Here now for an hour of news, debate, and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

The Pentagon tonight says a suicide bomber likely caused the huge explosion at a U.S. Base in Mosul. Twenty-two people were killed in yesterday's attack, 18 of them Americans.

And tonight, there are troubling new questions about security at U.S. bases in Iraq.

Kathleen Koch reports from the Pentagon.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Not a rocket, not a mortar but a bomb, says the Pentagon, was carried right into the midst of the Camp Marez mess hall Tuesday just as soldiers were sitting down to eat.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: We had a suicide bomber apparently strapped something to his body, apparently a him, and go into a dining hall. We know how difficult this is, to prevent suicide -- people bent on suicide and stopping them.

KOCH: An Iraqi militant group had claimed responsibility, saying it was a suicide attack carried out by a single individual. The coalition says among the dead is one unidentified non-U.S. person. The Pentagon says it does not know whether or not that person was the bomber.

It's believed key evidence came from small circular holes found in metal kitchen equipment in the mess hall. Signs of ball bearings used as shrapnel to increase the deadliness of the bomb.

Secretary Rumsfeld, under fire recently for perceived insensitivity to troops and their families, tried to wipe the slate clean.

DONALD RUMSFELD, DEFENSE SECRETARY: I am truly saddened by the thought that anyone could have the impression that I or others here are doing anything other than working urgently to see that the lives of the fighting men and women are protected and are cared for and in every way humanly possible. And I hope and pray that every family member of those who have died so bravely knows how deeply I feel their loss.

KOCH: A multinational force spokesman says Iraqis working at U.S. bases do have to show I.D. to gain entry but are not always bodily searched.

(END VIDEOTAPE)

KOCH: Nor are they always accompanied when they enter those U.S. facilities. Those are the types of things that could change because of yesterday's attack.

But what won't change is large numbers of U.S. troops gathering three times a day for meals. As General Richard Myers said today, quote, "It's not a viable strategy to ask everybody to separate."

Back to you.

PILGRIM: All right. Thanks very much, Kathleen Koch.

More than 40 troops and civilians wounded in the Mosul attack arrived in Germany today for medical treatment. The casualties were flown from Iraq to Ramstein Air Base in a U.S. Air Force plane, and they were then transferred to a military hospital in Landstuhl.

Matthew Chance reports.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT: In the biting cold of southern Germany, we've been witnessing the painstaking transfer of between 40 and 50 of the injured from this devastating Mosul attack from the aircraft behind me onto ambulances and onward to the massive U.S. Army medical facility at Landstuhl here in southern Germany.

Many of the injured were taken off in stretchers. In fact, only 15 of them, we're told, were actually able to walk unassisted. The rest were carried off by stretchers.

Eight of the injured said to be in extremely critical condition, which means their injuries are so serious that they may, indeed, be life threatening if they don't get the specialist medical attention the medical teams at the Landstuhl hospital are able to give them.

It's been a bit of a struggle from the point of view of the Landstuhl hospital, because this was a particularly slow period in what's been a very sort of busy few months from Iraq. It's obviously the holiday period. There were no battles under way in Iraq. There were no offensives being planned. And so these influx of casualties were somewhat unexpected.

As a result, they had to call back many of their staff that they'd allowed to go on holiday leave back from their families to make sure the right medical teams, the right doctors, the right nurses, the right support staff were there to give these soldiers the kind of medical attention that they will need to make a full recovery.

They will be getting that intensive care now. It may take only a few days for some of them to be back on their feet and able to be flown back to the United States, but for others, particularly those in critical condition, it may take a good deal longer than that before they can return home.

Matthew Chance, CNN, Ramstein Air Base, southern Germany.

(END VIDEOTAPE)

PILGRIM: American troops and armored vehicles today launched a huge security operation in Mosul. The troops blocked roads and searched city neighborhoods for terrorists and insurgents.

Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT: U.S. military commanders on the ground in Mosul said they'd been working on the theory that a suicide bomber caused Tuesday's explosion at Camp Marez.

They say that among the telltale signs found by FBI experts were a series of perfectly symmetrical round perforations in some of the stainless steel kitchen equipment in the dining hall. That was indicative that ball bearings, a favorite used by home made bombers, had been include in the explosive device.

The group Ansar al-Sunnah, an insurgent group based largely in northern Iraq, has claimed responsibility for this bombing in a web site. It's impossible at this stage to authenticate that claim.

Of course, this won't be the first time that insurgent bombers have penetrated heavily fortified U.S. compounds. Back in October, October the 14th, a suicide bomber or two suicide bombers took backpacks laden with explosives into the Green Zone in Baghdad. That's the center of the U.S. administration and Iraqi government here.

Those bombs exploded, killing at least 10 people, including four Americans.

From now on, we understand that U.S. military commanders will be investigating how this suicide bomber entered the camp in Mosul and whether possibly he was a trusted contractor or possibly even a member of the Iraqi security forces based there.

Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: The escalating violence in Iraq has forced a leading U.S. contractor to withdraw from a major Iraqi transportation project.

Contract International is the first American contractor to pull out of Iraq. This year, 182 contractors have been killed in Iraq and more than 1,600 others have been wounded.

Well, as the nation mourned the loss of our soldier in Mosul, there was an emotional ceremony at the Vietnam Memorial Wall in Washington. Veterans and active duty military troops read out personal greetings to our servicemen and women. It was part of the annual holiday tree at the wall ceremony.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I would like to say happy holidays to all the servicemen and women serving overseas in Iraq and Afghanistan.

UNIDENTIFIED MALE: Your courage and dedication to the freedom of our country will always be remembered by our family.

UNIDENTIFIED FEMALE: God bless you and keep you throughout eternity and hope all our guys come home and our women. Thank you.

UNIDENTIFIED MALE: I want to send my thoughts and prayers to my comrades over there now, and all the soldiers, especially the ones in Mosul yesterday.

UNIDENTIFIED FEMALE: May the joy and the spirit of holiday season heal the hearts of the families and friends of the soldiers who gave the ultimate sacrifice.

UNIDENTIFIED MALE: All of you war heroes are truly honorable men and women with dignity. I salute you and support you to the fullest. Happy holidays, merry Christmas and thanks for the service and devotion to this great country. UNIDENTIFIED MALE: With our son in the hospital, we didn't want to go anywhere but be by his side. But the one place I did want to come to is the Vietnam Memorial.

He was hit on Thanksgiving day, just north of Sadr City by IED. He lost both his legs and his right thumb. We found out Thanksgiving. We said this is the best Thanksgiving we had, and this is the best Christmas.

It's really, you know, your child is born, it's like our child was born twice to us. We're getting him back another time, and it's just a blessing.

(END VIDEOTAPE)

PILGRIM: A moving ceremony there to the men and women who are serving our country now, and those who have served our country in the past.

Well, still to come, the rising overseas threat to American jobs. We'll tell you which U.S. professions are likely to suffer the most in the next wave of overseas outsourcing.

And whatever happened to Christmas goodwill? The debate over Christmas and the holiday season turns nasty, and that's our "Face Off" tonight.

(COMMERCIAL BREAK)

PILGRIM: A shocking new report tonight about the escalating threat to American jobs from overseas outsourcing, and the study says small-and medium-sized businesses are now joining large corporations in exporting American jobs to cheap overseas labor markets.

Now Christine Romans is here with our report -- Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Kitty, by the end of next year, 80 percent of the biggest 2000 companies in the world will have moved jobs to cheaper overseas labor markets.

The researchers in this new report say a more accepting political environment will encourage many small- and medium-sized companies to send jobs abroad as well, and companies will find new industries to outsource, including retail, health care and manufacturing.

The report concludes that sending American jobs overseas is a corporate must-have, but not without risks. The researchers concede that 40 percent of outsourcing deals don't save any money or the quality of the work is just too poor.

Now India will remain the center of the outsourcing boom. China and the Philippines will rapidly mature as new cheap labor markets, with Poland, the Czech Republic and Hungary following close behind.

The consultants say many more jobs move overseas next year and the year after. Mike Gilday (ph) at the AFL-CIO -- he think so, too, but, unlike the consultants, he's not happy about it.

He says more Americans are going to lose their jobs in the global chase for cheap labor, that American companies are pulling out of this economy hundreds of thousands of dollars in wages, benefits and taxes, and that, Kitty, will eventually have some dangerous consequences.

PILGRIM: Some of the smaller companies are anxious to get on the wave, but they may learn a hard lesson.

ROMANS: A hard lesson. Forty percent of those deals, according to this I.T. consulting firm -- they don't really pan out. There are simply too many risks.

PILGRIM: Very interesting. Thanks very much.

Christine Romans.

Overseas outsourcing is not the only threat to the jobs of American workers. The United States has also become dependent on cheap foreign imports from China and other countries. Now with the Christmas shopping season in full swing, Wal-Mart alone says it will import $18 billion worth of Chinese goods this year.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): As partnerships go, it's a friendly one. American business loves to invest in China, loves the cheap labor and loves to buy Chinese products. Wal-Mart alone buys $50 million worth of Chinese products every day.

But the partnership is so one-sided it's beginning to look like a takeover. First clothing and toys, but now it's high-tech. From DVDs to microchips, China is taking over more and more manufacturing for the U.S. economy.

ALAN TOMELSON, U.S. BUSINESS AND INDUSTRY COUNCIL: Well, the risk is that China will control more and more of our country's future. Now we can assume that China will remain as it's been in the recent past, relatively friendly, or we could recognize that China's future, both in terms of economics and politics and also geopolitics, could be as unstable and unpredictable as China's past was.

VILES: The U.S. trade deficit with China is running at half a billion dollars a day. The booming Chinese economy is creating new consumer brands almost overnight, like Apex, maker of that famous $29 DVD player, and its new competitor, Norcent, which makes a $38 DVD player, which is why the three scariest words in U.S. industry today, according to "BusinessWeek" are "the China price," a pressure felt as far away as South Korea.

WILL DOBSON, FOREIGN POLICY MAGAZINE: The South Korean Ministry of Commerce warned recently that they believe that South Korea is going to lose its competitive edge to China in key industries where they're currently the leader, particularly cell phones and flat-screen televisions.

VILES: The latest concern is that China will enter the already glutted global market for auto production. Honda and Nissan now plan to export cars from China.

(voice-over): There is no mystery to China's economic success. It has a huge supply of cheap labor, a pro-growth government and, most important right now, it has a very friendly relationship with its biggest customer, the United States.

Peter Viles, CNN, Los Angeles.

(END VIDEOTAPE)

PILGRIM: A town called Luck has proved lucky for lottery winners in Spain. Tickets sold in the town won the biggest prize in Spain's Christmas lottery, which is otherwise known as El Gordo or the fat one.

Now the winning ticket this year pays $522 million, and people from around Spain flock every year to buy tickets in the town of Sort, which means luck in Catalan.

Now, for those that can't make it to Spain but want to try their own luck in a lucky town, there are two towns named Luck in this country. One is in Wisconsin, and the other one is in North Carolina.

Still ahead here tonight, an extraordinary gift from one American to another. How some women in Arizona are paying tribute to American troops wounded overseas. Our special report is next.

And then, the growing debate on whether Christmas has become too politically correct. We'll talk with two officials with very different ideas with about how we should celebrate Christmas.

That and a great deal more still ahead here tonight.

(COMMERCIAL BREAK)

PILGRIM: Now our special report on the many Americans spreading holiday joy to our troops stationed around the world. Tonight, a group of women in Arizona giving a special kind of comfort and joy to troops who are wounded overseas.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): At sunset in the desert outside Prescott, Arizona, the ladies of the Granite Oaks Quilting Club are gathering for one last meeting before Christmas.

UNIDENTIFIED FEMALE: You sew these four together, these four together, and then you sew it across the center.

WIAN: They meet in Diane Silva's garage. It used to house an RV. Now it's filled with sewing machines, tables, fabric and conversation.

UNIDENTIFIED FEMALE: You're making another flag.

WIAN: It's a profusion of red, white and blue. A week earlier, the Grant Oak quilters sent their first batch of quilts to soldiers wounded in Iraq.

BEVERLY CLAUCH, GRANITE OAKS QUILTERS: I just feel blessed to be able to do something for the soldiers, because they're giving of themselves to us. I've made quilts for my grandchildren and that, but it's -- it's not the same.

WIAN: Susie Johnson brought the idea to the group in September. A group in Maryland was coordinating an effort to provide quilts for wounded servicemen and women arriving at Andrews Air Force Base. They wanted other quilters to join in.

SUSIE JOHNSON, GRANITE OAKS QUILTERS: Everybody was thrilled with the idea.

SUE WEISHAUPFT (ph), GRANITE OAKS QUILTERS: The project was easy to do because I have kids who are the age that could be in Iraq, you know, and I think about what their moms must be thinking, and I can't imagine what they're thinking, especially if they come home wounded.

WIAN: The work is detailed...

UNIDENTIFIED FEMALE: One, two, three, four, five, six and a half. Yes.

WIAN: ... and time consuming...

UNIDENTIFIED FEMALE: There's 16 to 20 hours in them. That's the simplest.

WIAN: ... but rewarding.

JOHNSON: My son was in the first Gulf War, and I would have been really thrilled if a mother had made him something if he'd have been injured.

DIANE SILVA, GRANITE OAKS QUILTERS: As long as there's a war, there's going to be wounded servicemen, and, as long as we have wounded servicemen coming home, they're going to need quilts.

WIAN: The Granite Oaks group has sent 13 quilts so far. They plan to have at least six more ready in January.

Casey Wian, CNN, reporting.

(END VIDEOTAPE)

PILGRIM: What an amazing group of women.

Coming up next, a deep freeze across much of the country. And, tonight, a winter storm spreads from New Mexico to the Great Lakes. We'll have a report from Southwest Indiana, which is covered with seven inches of snow.

And wishing you a politically correct holiday season. A new wave of PC everything is swamping Christmas in this country, and two experts will face off on whether the separation of church and state has gone too far.

Stay with us.

(COMMERCIAL BREAK)

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

PILGRIM: In a moment, we'll have tonight's Face Off. Has the Christmas season become too politically correct?

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

Former New York City Police Commissioner Bernard Kerik has resigned from his position at Giuliani Partners. Kerik helped former New York Mayor Rudy Giuliani open the consulting firm almost three years ago.

Kerik's resignation comes less than two weeks after he withdrew his nomination as Homeland Security secretary nominee. Kerik admitted he failed to pay proper taxes on a nanny who was in this country illegally.

(BEGIN VIDEO CLIP)

BERNARD KERIK, FORMER NYC POLICE COMMISSIONER: I plan to take some time off to focus on my family, on the things that have to be focused on at this point and to clear my good name.

(END VIDEO CLIP)

PILGRIM: This Census Bureau says this country's population grew by almost three million people in the last year to just under 294 million. Most of the fastest-growing states are in the West and South. Nevada tops the list for the 18th year.

In Arizona tonight, a federal judge ended a temporary restraining order blocking the enforcement of Proposition 200. The voter-approved initiative denies illegal aliens from using public benefits. Today's order means Proposition 200 immediately becomes law in Arizona.

And Boeing says its Delta IV rocket launch yesterday was a success, and that is despite the fact Boeing says the rocket failed to send a dummy satellite into its intended orbit. Boeing says it knows what went wrong. The company says it's still on track to use the rocket to send a real satellite into orbit next year.

A massive winter storm across much of the eastern half of the nation is playing havoc with Christmas travel for millions of Americans. Saline County in southeastern Illinois so far has the heaviest snowfall. That's 14 -- more than 14 inches. Roughly a foot of snow has fallen in several places in Illinois and Indiana, Ohio and Missouri. More is on the way.

CNN Meteorologist Jacqui Jeras reports from Evansville, Indiana.

(BEGIN VIDEOTAPE)

JACQUI JERAS, CNN METEOROLOGIST (voice-over): To some, it's a winter wonderland. To others, it's a travel nightmare! We're along U.S. 41 and Interstate 64 in Evansville, Indiana, where travel has been hazardous all day and slow at best, averaging about 30 to 35 miles per hour.

There have been dozens of accidents, and a good foot of snow has fallen in this area. The powerful winter storm has been effecting southern parts of Missouri extending all the way into parts of New York state.

(on camera): It started out as freezing rain, so there's a glaze of ice on the roadways and then, on top of that, about a foot of white fluffy snow, and strong winds have been coming in behind it. You can see there are dozens of truckers lined up behind me here that have decided to just wait out the storm.

There's a nice break from the snow right now. However, another wave should be pushing through, and an additional six to 12 inches of snow will be possible overnight tonight and into your Thursday.

(voice-over): If you're traveling to the eastern Ohio Valley for tomorrow, you'll have more travel headaches, as we'll see some freezing rain overnight and some more snow on the way.

(END VIDEOTAPE)

PILGRIM: Thank you.

Jacqui Jeras reporting from Evansville, Indiana.

Well, political correctness is taking Christmas out of the holiday season in many parts of this country, and schools are told that they can't include Christmas carols in their holiday concerts. Employees in some department stores are told not to wish their customers a merry Christmas.

Well, my next guests have different viewpoints on whether celebrating Christmas in public places violates the Constitution. Mike Johnson of the Alliance Defense Fund joins us from Shreveport, Louisiana, and Barry Lynn is the executive director of Americans United for the Separation of Church and State, and he joins us from Washington.

And thanks very much for joining us, gentlemen.

REV. BARRY LYNN, AMERICANS UNITED FOR THE SEPARATION OF CHURCH AND STATE: Thank you.

MIKE JOHNSON, ALLIANCE DEFENSE FUND: Great to be with you. PILGRIM: This is an emotional issue. It's also a very logical and legal issue, and I don't think we can divorce ourselves from the emotion of it. But let's try to stay factual.

And let me ask you, Mike, are we seeing more challenges to the traditional nativity scene, the sort of Christ entry into Christmas?

JOHNSON: We absolutely are, and we at the Alliance Defense Fund believe that Americans deserve to know the truth. The latest Gallup poll says that 96 percent of Americans celebrate Christmas. Now that's Americans of all faiths.

But, in spite of that, we see the attacks on the celebration of Christmas accelerating over the last few years. That's why we launched our Christmas project to try to set the record straight and legally defend people of faith who want to celebrate the holiday.

PILGRIM: OK, Barry. What do you think about this effort to defend the institution?

LYNN: Well, Christmas doesn't need much defending. All you have to do is walk outside...

Christmas project to try to set the record straight and legally defend people of faith who want to celebrate the holiday.

PILGRIM: Barry, what do you think about this effort to defend the institution?

BARRY LYNN, AMER. UNITED FOR SEP. OF CHURCH & STATE: Well, Christmas doesn't need much defending. All you have to do is walk outside in any city in this country, and you'll notice that almost everything is festooned with Christmas decorations. That's still the majority way that people support this holiday season. They celebrate Christmas as the other guest just indicated. The real legal dispute is whether governments should be forced into also displaying Christian and other religious symbols and whether our public school students should be required to sing Christmas carols, most of which are hymns, that is prayers, set to music. I have no problem with the celebration of Christmas on the lawns of churches, I love to see them in my own house. We celebrate Christmas. But I don't think we need to get the government involved in promoting the baby Jesus' birth along with Santa Claus and Rudolph the red nosed reindeer. I can't imagine what Christian would want that.

PILGRIM: Let me just throw this out, it is a traditional way to celebrate the holiday. Does tradition not count, Barry?

LYNN: Tradition counts but I think the important thing is that we can do that traditional celebrating in a very public way, but using private space. We don't need to go to the courthouse lawn. We don't need to go out in front of the city council building and promote it. And we can, even in the setting of private companies, we can suggest that in order to be respectful of the incredible diversity in this country, 2,000 different religions, 20 million nonbelievers, it's OK to say happy holidays, be inclusive about it, instead of just assuming that everyone is a Christian and say merry Christmas. That's just good business. It's sensible.

JOHNSON: Barry, let's be honest about what your group -- Barry has been on a search and destroy mission with his organization for a long time. They're trying to remove all religious expression from the public square. He characterized it in very nice words but he's not being very genuine about what he's about and what his organization is about. They have a very different vision for America. The first amendment guarantees the rights of all citizens to express their faith in public as well as in private. That is a principle that this country was built upon and it's the America that we are trying to defend. For 30 years you've been trying to obscure that fact, Barry.

LYNN: No...

JOHNSON: These cases are factual.

LYNN: Let me finish. There is no government official out there trying to knock down nativity scenes. There is no war against Christmas. This is a myth that folks on the religious right including yourself have been propagating. Go outside, look and see whether you think there is any diminution of the celebration of Christmas. I defy you to find it anywhere in this country.

JOHNSON: Your organization just like the ACLU, your former employer and many of your friends have filed a number of these cases across the country. They're going to the courts to remove the religious expression of American citizens. They want students not to be able to sing Christmas carols. They want to remove the nativity scenes from the public lawns. That is what your organization is trying to do.

We are there to defend that liberty.

PILGRIM: Let me get a question in here. Where does the Supreme Court stand on this? Let's try to go back to fact.

JOHNSON: The Supreme Court has never said...

PILGRIM: Go ahead, Mike. You first.

JOHNSON: The Supreme Court never said that students need to censor their speech in the school house once they walk through the school house gates, for example. They said very specifically that teachers and students do not surrender their first amendment rights to free speech just because they happen to be on a school campus. The same principle applies in the public square, in municipalities, on the courthouse lawns as Barry says. The government has never said that the -- the Supreme Court has never said that the government has to censor the Christ out of Christmas. That's what this is about.

LYNN: We're not talking about any kind of censorship, but the Supreme Court has also said you can't just put up religious symbols at this time of year. You have to mix religious and secular symbols together. Gives you the Santa Claus and Baby Jesus appearance which I think is degrading and insulting to Christians, as well as to the separation of church and state but more importantly the Supreme Court has never, never said that students -- Mike is right -- that they could be censored from saying something like merry Christmas. No one is trying to do that. We're trying to say, if have an official school program, don't have a nativity play as they tried to do in Wyoming. Don't put together a set of music that is essentially Christmas carols, those are hymns, prayers set to music, and basically require all students to participate. That means all students aren't Christians.

PILGRIM: Do you think in the workplace it's appropriate to censor employees from saying happy Hanukkah, merry Christmas, happy Kwanzaa. Should it be a broadbase thing or is that censorship? Should they be allowed to say whatever they like in the workplace and retail environment is basically work environment. We'll start with you, Barry.

JOHNSON: That is censorship.

LYNN: I think retail merchants have to make that decision for themselves. Many have gone to the phrase happy holidays. Many of the television networks including this one have done that. Not because you're anti-Christmas or anyone at Macy's is anti-Christmas but because we're trying to be respectful of the diversity we have in this country. This is a time when we don't need to have war, unfortunately these so-called religious right legal groups are out there on a hustings (ph) this year, feeling their oats, apparently believing that the election of George Bush also meant we need to have more government-promoted Christmas carols and nativity scenes and really trying to force the inclusion in purely secular services...

JOHNSON: Absolutely not.

LYNN: ... of religious materials. That's what you tried to do in Maplewood, New Jersey, in a school concert, you almost had the concert canceled for these kids. Don't tell me I'm the grinch, this year. Frankly, you are the grinch.

JOHNSON: You are indeed the grinch. We are defending these cases that have been filed by the ACLU, your organization has been involved in these...

LYNN: We didn't file any case this year at all. We haven't filed a single case this year.

PILGRIM: Gentlemen, we do have to end this.

LYNN: This is a real issue, and we're there to defend liberty and glad to do so.

PILGRIM: The emotion and the tradition in this, it really -- you can't divorce from it. It's very much a heart felt issue, and I thank you both, very much for bringing your viewpoint to this program.

JOHNSON: Merry Christmas, Kitty.

PILGRIM: Thank you very much. That brings us to the subject of tonight's poll. Now, do you think that the Christmas spirit has been eroded by the debate over political correctness? You vote, yes or no. Cast your vote at loudobbs.com. And we'll bring you the results later in this show.

There are red faces at the Pentagon tonight after one of the Air Force's newest most expensive fighter jets crashed in Nevada. The F- 22 Raptor crashed near Las Vegas on Monday. The pilot ejected safely, he was unharmed and it was the first crash of a preproduction version of that aircraft. The cost of each Raptor has escalated to more than $258 million, and the Air Force wants to buy at least 270 of the jets to replace the F-15 fighters. Critics say that aircraft is too expensive and no longer necessary.

Still ahead here tonight -- who's been naughty? Who's been nice? A new CNN/"USA Today"/Gallup poll asked Americans exactly that about some very popular personalities, and we will reveal all, next.

(COMMERCIAL BREAK)

PILGRIM: Joining me now are three of the nation's top political journalists. From Washington, Karen Tumulty of "Time" magazine. Roger Simon of the "U.S. News & World Report," and Tom DeFrank of "The New York Daily News." Thank you for joining us.

KAREN TUMULTY, "TIME" MAGAZINE: Hi, kitty.

PILGRIM: Let's start with Mosul. And in fact, the suspicion that this may have been a suicide bomber or inside job, doesn't this indicate to you that the insurgents may be more daring (UNINTELLIGIBLE) or adventurous attempts to undermine U.S. efforts. Lets start with you, Karen?

TUMULTY: Absolutely. And they were convinced that they had adequate security procedures in place at this base. That, you know, everyone coming in was being thoroughly checked. So, I think there are going to be a lot of questions raised. And once again I think it is going to increase public pressure here in the United States for some sort of sense of what the end game is in Iraq.

PILGRIM: The in one respect, is it fair to point fingers at this point? We are basically still engaged in battle with insurgents, and this sort of situation, I don't know, there's a lot of finger-pointing going on today.

Do you think it's justified -- Roger.

ROGER SIMON, "U.S. NEWS & WORLD REPORT: Yes, I do, I think we should do more finger-pointing. We have a responsibility to our troops to keep them alive, number one, to give them the best possible equipment, protection and procedures. And it was a terrible loss of life. No one I know of believes it will be the last loss of life. And we seem to be always reacting to the insurgents. We seem to be on the defensive. We're the people with the tanks and the planes and the helicopters and the heavy artillery and other intelligence satellites. The other guys don't have any of that, but they're doing just fine in attacking us. Something is seriously wrong there.

PILGRIM: It seems to me that this is so serious, and that it may undermine the relationship between the American soldiers and the Iraqi forces -- Tom.

TOM DEFRANK, "NEW YORK DAILY NEWS": I don't think that's the case. I mean, it was interesting though to see this press conference the other day. President Bush took a shot at Iraqi security forces talking about how they cut and run a couple of times and that was unacceptable to him. I don't think that's the problem. I think it's more likely what has happened is more likely to undermine political support for the war. At least in the long term.

SIMON: Actually, Kitty, I tend to agree with your point. This drives a wedge between the American troops and the Iraqi civilians and the Iraqi National Guard. And now these people are all over our bases, they're doing essential jobs. If they go home or we're not going to let them on our bases, we're going to have to send more U.S. troops to replace them. And now they don't know who to trust. Our troops don't know who to trust any more. Can they trust Iraqi working next to him or is he a suicide bomber? And this is why the insurgents did, it one of the reason yes.

PILGRIM: Karen, do you want to weigh in on this?

TUMULTY: Well, only that, you know, the president had said that there were going to be more of these sorts incidents going up to the election. We have now passed a number of benchmarks starting with the capture of Saddam Hussein, that were really -- things were supposed to get better after that. Things were supposed to get better after the handoff of power to the interim government. Things were supposed to get better after our troops went in and cleaned out Fallujah. It keeps not happening, and I do think that at some point, support back here at home is already eroding, buts at some point, we do reach a tipping point.

PILGRIM: You know, just a day or so ago, we were discussing securing the polls during the Iraqi election at the end of January. And now seems our bases may be at risk or vulnerable. That takes it back a step, doesn't it.

Tom, lets start with you?

DEFRANK: Well, I think it does take it back a step. But I do think one of the real keys to this election is what percent of the Sunni Muslim population votes. If it's not a very big number, then that's going to be an embarrassment. If it's a very big number of Sunnis saying in effect supporting democracy, even though we feel like we're getting the short end of the stick in the new government, that's going to be significant. I just think the security situation around the election is going to be critical, and it's hard not to believe that there's going -- that there won't be some more of this on January the 30th.

PILGRIM: You know, I want to switch topics just for a moment, because it is the holiday season, and we'd like to take a moment to be a little bit light. And I know it's an abrupt subject switch. But we did do this poll or looked at this poll of celebrities. So on a much lighter note, I'd like to ask you to vote spontaneously, when I name a name, and tell me whether you think they are naughty or nice. Just blurt it out.

Janet Jackson.

TUMULTY: No question, naughty.

PILGRIM: You can do it all together. Go ahead.

DEFRANK: Naughty, triple naughty.

SIMON: America has never seen that before. It was revelation to me.

PILGRIM: 64 percent naughty according to votes.

Paris Hilton, another one, no-brainer I think.

SIMON: She's my hero.

PILGRIM: Really?

DEFRANK: When President to -- when President Bush went to Normandy for D-Day I stayed at Paris Hilton, the real one, is a much more rewarding experience than having to deal with anything else.

PILGRIM: That sounds naughty in itself.

OK, Martha Stewart.

TUMULTY: Hey, why are we picking on women here?

PILGRIM: We're not. We're going to get to some -- we're going to get to doozies. Don't worry about it Karen. Believe me, I wouldn't let them do that.

Martha Stewart.

SIMON: Obviously naughty, but she's paying the price, and we'll forgive her.

DFRANK: And she will have the nicest decorated cell in the prison.

PILGRIM: That's what the poll thought.

Donald trump, now that's kind of a split decision here, go ahead?

SIMON: I got vote against the hair, I'm sorry. He's got too much of it. I don't have enough. I'm not going to vote a nice for him.

PILGRIM: All right, Barry Bonds, interesting -- interesting subject. I guess you could get all kinds of opinions on that? DEFRANK: Well, naughty I think, I think he's let down tens of thousands of idealistic kids.

SIMON: He's the only man in America who didn't know what steroids were. I mean, he was taking that stuff. He thought it was Kool-aid. He didn't notice his biceps were increasing by inches every hour.

PILGRIM: OK, this is politically charged, Michael Moore. Tough one. Tough one.

SIMON: Karen, we haven't heard from you?

TUMULTY: I don't know. I think naughty all around on this one. Because I think in the end, his movie didn't help even the people he thought it was going to help.

SIMON: Yes, but he's a journalist -- not a journalist, he's a partisan.

TUMULTY: Wait, he's not a journalist.

SIMON: He's not a journalist. I take it back. But he's a partisan acting out of his political belief, and there seems to be a lot of that in this country.

DEFRANK: He's not a good representative for his point of view, that's for sure.

PILGRIM: Well, if anything, he suggested the top take was widely discussed. So in a journalistic sense, perhaps he succeed, huh?

Anyway.

(CROSSTALK)

PILGRIM: I'm afraid that's my nature. Oprah Winfrey.

TUMULTY: Nice! Nice! Finally, somebody nice!

SIMON: If she gives us a car, she'll be even nicer.

PILGRIM: I don't know how you lose when you give everyone a car. That pretty much sells it for me. And Mel Gibson, let's do Mel Gibson. Very much discussed and generated a very big national debate on a subject that normally doesn't claim much attention in terms of dinner table conversation.

SIMON: Having not seen the movie, I'm going to reserve judgment.

DEFRANK: I don't think that issue has any legs, Kitty. That was an issue for a couple of months and then the movie came and went and it's yesterday's story now will.

SIMON: But will he get an Oscar nomination, that's the question.

PILGRIM: Well, and then he'll have to recall this vote. But anyway, 87 percent said Mel Gibson was nice.

Let's go to some of our colleagues here, Dan Rather?

Just to put you on the spot.

TUMULTY: Kick a guy when he's down.

SIMON: You know, he's going to be unemployed soon. Com on give him a break.

PILGRIM: Take a look how this turned out, 63 percent said nice. Sixty three percent said nice.

DEFRANK: Dan deserves a really nice retirement. He's been a great reporter for a long time.

PILGRIM: And I think that's what -- his legacy really is what factored into this vote. I think people do recognize his work. And he says he's going to continue to work full time as a correspondent for the network magazine, "60 Minutes." And he's a true journalist.

Let's talk about Tom Brokaw. So, we have two big names in journalism to talk about here?

SIMON: I really like Tom Brokaw, I'm giving him a nice, 100 percent.

DEFRANK: Double nice.

TUMULTY: Absolutely nice.

PILGRIM: OK, I don't think there are very many people who would quibble with that. And I won't put myself in there, because I really don't want the voting. But anyway, thank you very much for joining us, and giving us your votes on naughty and nice. And we will take suggestions on other people to vote on.

Karen Tumulty of "Time," Roger Simon of "U.S. News & World Report" and Tom DeFrank of the "New York Daily News."

Thanks a lot guys.

(CROSSTALK)

PILGRIM: Reminder now to vote in "Tonight's Poll." Do you think the Christmas spirit has been eroded by the debate over political correctness? Do vote yes or no, and cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

Also ahead here tonight, a fascinating year in space from a new view of Saturn's rings to the earth shattering discoveries on Mars. Astrophysicist Charles Liu will talk to us about all of that next.

(COMMERCIAL BREAK)

PILGRIM: This past week has capped an extraordinary year in space. Just yesterday, researchers announced that they discovered evidence of forming galaxies that are massive in size. And that shatters the belief that so-called baby galaxies are only small. We also had stunning images of Saturn's rings from the Cassini spacecraft, startling revelations about our neighboring planet Mars and joining me to sort all these planets out and talk about the exciting discoveries is astrophysicist Charles Liu from the American Museum of Natural History. Thank you very much for joining us.

I love it the way you explain space, because it's so accessible. It's so far, but it's so accessible. Let's talk about the baby galaxies and it sounds, oh, so cute but they're big, right?

CHARLES LIU, PROFESSOR OF ASTROPHYSICS, CUNY: Absolutely. Our Milky Way galaxy is about 10 billion years old and most people think that big galaxies like ours formed a long time ago. But these new discoveries seemed to suggest that big galaxies can form relatively young, too. So these are really infants in age but just as large and massive as the Milky Way. It's very exciting.

PILGRIM: So baby refers to not the size but the age of the galaxy.

LIU: Well, if you can consider a 3 billion-year-old galaxy a baby, that would be fine.

PILGRIM: How do you find something like that just suddenly now?

LIU: Young galaxies give off a lot of ultraviolet light but not so much visible and even less infrared. This particular mission is a space mission that looks specifically for ultraviolet light. In other words we have never had the sensitivity in the wavelength range to find them. So that's why they're so new, because we've just had the technology to find them.

PILGRIM: So we can see new things, we have new glasses, so to speak.

LIU: Exactly.

PILGRIM: The other thing that is very interesting is frost on Mars, and like the Christmas spirit, let's talk about frost on Mars. Why is that so significant?

LIU: Well, all of us have gone outside on a cold morning and found frost on the cars or the windows. But if we find that on the Mars rovers, that means there's enough humidity or water vapor in the atmosphere to suggest that there are weather patterns or environmental conditions very similar to what we might find in an earth-like environment. The atmosphere is very thin and the water vapors are very thin. But if there is water vapor enough to form frost on the Mars rovers as we found in October of this year, then in fact, there may be even more evidence that life once existed or may even yet exist on Mars somewhere, waiting for us to find.

PILGRIM: And they're really focused in on would there be water on Mars and that would suggest that there might be life on Mars. The rovers, how are they doing?

LIU: Wonderfully. Beyond all expectations. They were designed to last for three months. They've now lasted for 12. And the scientists that have been working on the Mars rovers have jokingly said they'll last longer than the scientists will because these days, weeks, months of discovery have been so remarkable, every time they found something new, they found something else new, and they keep pushing these probes, these rovers and they keep performing. It's marvelous.

PILGRIM: I remember when everyone worried if they would last for ten minutes versus now the duration of time that they have managed to function. That's an enormous success and what a wonderful thing to happen.

LIU: It's a great thing when have you something like this work so well, it's an example of how combination of government and scientists and academia can put something remarkable somewhere successfully.

PILGRIM: Let's talk about the Cassini, and that's Saturn to underline this so we can sort out our planets. How is that going?

LIU: Cassini mission is going perfectly. Everything is moving along as expected and on Christmas Eve, couple days from now, the probe which has been attached to Cassini will slowly release itself from the probe. And the probe will drop into Titan's atmosphere, this is the largest moon of Saturn and for about 2 1/2 hours will send back telemetry about an area which astronomers think, we think it's a laboratory for possibly the first signs of organic materials chemically transforming themselves into biological life.

PILGRIM: Why did they pick Christmas Eve? Just because everyone's working, it just worked out that way?

LIU: Usually, things just work out that way. Because even though it gets released now, it has been very carefully timed. The probe won't actually reach the atmosphere of Titan for three more weeks and meanwhile Cassini has to gently veer off so it doesn't go plunging into the atmosphere as well.

PILGRIM: Sounds very complicated. We're out of time. We have a lot more space to talk about, so you'll have to come back. Thank you very much.

LIU: Always a pleasure.

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

(COMMERCIAL BREAK)

PILGRIM: Here are the results of tonight's poll. More than two- thirds of you think the Christmas spirit has been eroded by the debate over political correctness. Thanks for being with us tonight. Please join us tomorrow for our special report Holiday Home Front. Also what we owe Iraq. Author Noah Feldman will join us to talk about his new book by that title.

Plus retired coast guard commander Steven Flynn will tell us why he believes the government is failing to protect us from terrorism. 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 December 22, 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, the Pentagon blames a suicide bomber for the Mosul massacre. Eighteen Americans were killed.

RICHARD MYERS, CHAIRMAN, JOINT CHIEFS OF STAFF: At this point, it looks like it was an improvised explosive device worn by an attacker.

PILGRIM: The rising threat to American jobs from overseas outsourcing. A new report says many more companies are likely to export jobs to cheap overseas labor markets.

Winter wallop! A massive snowstorm stretching from New Mexico to Ohio, causing dozens of accidents.

UNIDENTIFIED MALE: If you don't have to get out today, just simply stay home. You're going to be much, much safer inside your home.

PILGRIM: And in "Face Off," is it "merry Christmas" or "happy holidays"? The battle over political correctness at Christmas escalates. We'll have a vigorous debate.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Wednesday, December 22. Here now for an hour of news, debate, and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

The Pentagon tonight says a suicide bomber likely caused the huge explosion at a U.S. Base in Mosul. Twenty-two people were killed in yesterday's attack, 18 of them Americans.

And tonight, there are troubling new questions about security at U.S. bases in Iraq.

Kathleen Koch reports from the Pentagon.

(BEGIN VIDEOTAPE)

KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Not a rocket, not a mortar but a bomb, says the Pentagon, was carried right into the midst of the Camp Marez mess hall Tuesday just as soldiers were sitting down to eat.

GEN. RICHARD MYERS, JOINT CHIEFS CHAIRMAN: We had a suicide bomber apparently strapped something to his body, apparently a him, and go into a dining hall. We know how difficult this is, to prevent suicide -- people bent on suicide and stopping them.

KOCH: An Iraqi militant group had claimed responsibility, saying it was a suicide attack carried out by a single individual. The coalition says among the dead is one unidentified non-U.S. person. The Pentagon says it does not know whether or not that person was the bomber.

It's believed key evidence came from small circular holes found in metal kitchen equipment in the mess hall. Signs of ball bearings used as shrapnel to increase the deadliness of the bomb.

Secretary Rumsfeld, under fire recently for perceived insensitivity to troops and their families, tried to wipe the slate clean.

DONALD RUMSFELD, DEFENSE SECRETARY: I am truly saddened by the thought that anyone could have the impression that I or others here are doing anything other than working urgently to see that the lives of the fighting men and women are protected and are cared for and in every way humanly possible. And I hope and pray that every family member of those who have died so bravely knows how deeply I feel their loss.

KOCH: A multinational force spokesman says Iraqis working at U.S. bases do have to show I.D. to gain entry but are not always bodily searched.

(END VIDEOTAPE)

KOCH: Nor are they always accompanied when they enter those U.S. facilities. Those are the types of things that could change because of yesterday's attack.

But what won't change is large numbers of U.S. troops gathering three times a day for meals. As General Richard Myers said today, quote, "It's not a viable strategy to ask everybody to separate."

Back to you.

PILGRIM: All right. Thanks very much, Kathleen Koch.

More than 40 troops and civilians wounded in the Mosul attack arrived in Germany today for medical treatment. The casualties were flown from Iraq to Ramstein Air Base in a U.S. Air Force plane, and they were then transferred to a military hospital in Landstuhl.

Matthew Chance reports.

(BEGIN VIDEOTAPE)

MATTHEW CHANCE, CNN CORRESPONDENT: In the biting cold of southern Germany, we've been witnessing the painstaking transfer of between 40 and 50 of the injured from this devastating Mosul attack from the aircraft behind me onto ambulances and onward to the massive U.S. Army medical facility at Landstuhl here in southern Germany.

Many of the injured were taken off in stretchers. In fact, only 15 of them, we're told, were actually able to walk unassisted. The rest were carried off by stretchers.

Eight of the injured said to be in extremely critical condition, which means their injuries are so serious that they may, indeed, be life threatening if they don't get the specialist medical attention the medical teams at the Landstuhl hospital are able to give them.

It's been a bit of a struggle from the point of view of the Landstuhl hospital, because this was a particularly slow period in what's been a very sort of busy few months from Iraq. It's obviously the holiday period. There were no battles under way in Iraq. There were no offensives being planned. And so these influx of casualties were somewhat unexpected.

As a result, they had to call back many of their staff that they'd allowed to go on holiday leave back from their families to make sure the right medical teams, the right doctors, the right nurses, the right support staff were there to give these soldiers the kind of medical attention that they will need to make a full recovery.

They will be getting that intensive care now. It may take only a few days for some of them to be back on their feet and able to be flown back to the United States, but for others, particularly those in critical condition, it may take a good deal longer than that before they can return home.

Matthew Chance, CNN, Ramstein Air Base, southern Germany.

(END VIDEOTAPE)

PILGRIM: American troops and armored vehicles today launched a huge security operation in Mosul. The troops blocked roads and searched city neighborhoods for terrorists and insurgents.

Karl Penhaul reports from Baghdad.

(BEGIN VIDEOTAPE)

KARL PENHAUL, CNN CORRESPONDENT: U.S. military commanders on the ground in Mosul said they'd been working on the theory that a suicide bomber caused Tuesday's explosion at Camp Marez.

They say that among the telltale signs found by FBI experts were a series of perfectly symmetrical round perforations in some of the stainless steel kitchen equipment in the dining hall. That was indicative that ball bearings, a favorite used by home made bombers, had been include in the explosive device.

The group Ansar al-Sunnah, an insurgent group based largely in northern Iraq, has claimed responsibility for this bombing in a web site. It's impossible at this stage to authenticate that claim.

Of course, this won't be the first time that insurgent bombers have penetrated heavily fortified U.S. compounds. Back in October, October the 14th, a suicide bomber or two suicide bombers took backpacks laden with explosives into the Green Zone in Baghdad. That's the center of the U.S. administration and Iraqi government here.

Those bombs exploded, killing at least 10 people, including four Americans.

From now on, we understand that U.S. military commanders will be investigating how this suicide bomber entered the camp in Mosul and whether possibly he was a trusted contractor or possibly even a member of the Iraqi security forces based there.

Karl Penhaul, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: The escalating violence in Iraq has forced a leading U.S. contractor to withdraw from a major Iraqi transportation project.

Contract International is the first American contractor to pull out of Iraq. This year, 182 contractors have been killed in Iraq and more than 1,600 others have been wounded.

Well, as the nation mourned the loss of our soldier in Mosul, there was an emotional ceremony at the Vietnam Memorial Wall in Washington. Veterans and active duty military troops read out personal greetings to our servicemen and women. It was part of the annual holiday tree at the wall ceremony.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I would like to say happy holidays to all the servicemen and women serving overseas in Iraq and Afghanistan.

UNIDENTIFIED MALE: Your courage and dedication to the freedom of our country will always be remembered by our family.

UNIDENTIFIED FEMALE: God bless you and keep you throughout eternity and hope all our guys come home and our women. Thank you.

UNIDENTIFIED MALE: I want to send my thoughts and prayers to my comrades over there now, and all the soldiers, especially the ones in Mosul yesterday.

UNIDENTIFIED FEMALE: May the joy and the spirit of holiday season heal the hearts of the families and friends of the soldiers who gave the ultimate sacrifice.

UNIDENTIFIED MALE: All of you war heroes are truly honorable men and women with dignity. I salute you and support you to the fullest. Happy holidays, merry Christmas and thanks for the service and devotion to this great country. UNIDENTIFIED MALE: With our son in the hospital, we didn't want to go anywhere but be by his side. But the one place I did want to come to is the Vietnam Memorial.

He was hit on Thanksgiving day, just north of Sadr City by IED. He lost both his legs and his right thumb. We found out Thanksgiving. We said this is the best Thanksgiving we had, and this is the best Christmas.

It's really, you know, your child is born, it's like our child was born twice to us. We're getting him back another time, and it's just a blessing.

(END VIDEOTAPE)

PILGRIM: A moving ceremony there to the men and women who are serving our country now, and those who have served our country in the past.

Well, still to come, the rising overseas threat to American jobs. We'll tell you which U.S. professions are likely to suffer the most in the next wave of overseas outsourcing.

And whatever happened to Christmas goodwill? The debate over Christmas and the holiday season turns nasty, and that's our "Face Off" tonight.

(COMMERCIAL BREAK)

PILGRIM: A shocking new report tonight about the escalating threat to American jobs from overseas outsourcing, and the study says small-and medium-sized businesses are now joining large corporations in exporting American jobs to cheap overseas labor markets.

Now Christine Romans is here with our report -- Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Kitty, by the end of next year, 80 percent of the biggest 2000 companies in the world will have moved jobs to cheaper overseas labor markets.

The researchers in this new report say a more accepting political environment will encourage many small- and medium-sized companies to send jobs abroad as well, and companies will find new industries to outsource, including retail, health care and manufacturing.

The report concludes that sending American jobs overseas is a corporate must-have, but not without risks. The researchers concede that 40 percent of outsourcing deals don't save any money or the quality of the work is just too poor.

Now India will remain the center of the outsourcing boom. China and the Philippines will rapidly mature as new cheap labor markets, with Poland, the Czech Republic and Hungary following close behind.

The consultants say many more jobs move overseas next year and the year after. Mike Gilday (ph) at the AFL-CIO -- he think so, too, but, unlike the consultants, he's not happy about it.

He says more Americans are going to lose their jobs in the global chase for cheap labor, that American companies are pulling out of this economy hundreds of thousands of dollars in wages, benefits and taxes, and that, Kitty, will eventually have some dangerous consequences.

PILGRIM: Some of the smaller companies are anxious to get on the wave, but they may learn a hard lesson.

ROMANS: A hard lesson. Forty percent of those deals, according to this I.T. consulting firm -- they don't really pan out. There are simply too many risks.

PILGRIM: Very interesting. Thanks very much.

Christine Romans.

Overseas outsourcing is not the only threat to the jobs of American workers. The United States has also become dependent on cheap foreign imports from China and other countries. Now with the Christmas shopping season in full swing, Wal-Mart alone says it will import $18 billion worth of Chinese goods this year.

Peter Viles reports.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): As partnerships go, it's a friendly one. American business loves to invest in China, loves the cheap labor and loves to buy Chinese products. Wal-Mart alone buys $50 million worth of Chinese products every day.

But the partnership is so one-sided it's beginning to look like a takeover. First clothing and toys, but now it's high-tech. From DVDs to microchips, China is taking over more and more manufacturing for the U.S. economy.

ALAN TOMELSON, U.S. BUSINESS AND INDUSTRY COUNCIL: Well, the risk is that China will control more and more of our country's future. Now we can assume that China will remain as it's been in the recent past, relatively friendly, or we could recognize that China's future, both in terms of economics and politics and also geopolitics, could be as unstable and unpredictable as China's past was.

VILES: The U.S. trade deficit with China is running at half a billion dollars a day. The booming Chinese economy is creating new consumer brands almost overnight, like Apex, maker of that famous $29 DVD player, and its new competitor, Norcent, which makes a $38 DVD player, which is why the three scariest words in U.S. industry today, according to "BusinessWeek" are "the China price," a pressure felt as far away as South Korea.

WILL DOBSON, FOREIGN POLICY MAGAZINE: The South Korean Ministry of Commerce warned recently that they believe that South Korea is going to lose its competitive edge to China in key industries where they're currently the leader, particularly cell phones and flat-screen televisions.

VILES: The latest concern is that China will enter the already glutted global market for auto production. Honda and Nissan now plan to export cars from China.

(voice-over): There is no mystery to China's economic success. It has a huge supply of cheap labor, a pro-growth government and, most important right now, it has a very friendly relationship with its biggest customer, the United States.

Peter Viles, CNN, Los Angeles.

(END VIDEOTAPE)

PILGRIM: A town called Luck has proved lucky for lottery winners in Spain. Tickets sold in the town won the biggest prize in Spain's Christmas lottery, which is otherwise known as El Gordo or the fat one.

Now the winning ticket this year pays $522 million, and people from around Spain flock every year to buy tickets in the town of Sort, which means luck in Catalan.

Now, for those that can't make it to Spain but want to try their own luck in a lucky town, there are two towns named Luck in this country. One is in Wisconsin, and the other one is in North Carolina.

Still ahead here tonight, an extraordinary gift from one American to another. How some women in Arizona are paying tribute to American troops wounded overseas. Our special report is next.

And then, the growing debate on whether Christmas has become too politically correct. We'll talk with two officials with very different ideas with about how we should celebrate Christmas.

That and a great deal more still ahead here tonight.

(COMMERCIAL BREAK)

PILGRIM: Now our special report on the many Americans spreading holiday joy to our troops stationed around the world. Tonight, a group of women in Arizona giving a special kind of comfort and joy to troops who are wounded overseas.

Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): At sunset in the desert outside Prescott, Arizona, the ladies of the Granite Oaks Quilting Club are gathering for one last meeting before Christmas.

UNIDENTIFIED FEMALE: You sew these four together, these four together, and then you sew it across the center.

WIAN: They meet in Diane Silva's garage. It used to house an RV. Now it's filled with sewing machines, tables, fabric and conversation.

UNIDENTIFIED FEMALE: You're making another flag.

WIAN: It's a profusion of red, white and blue. A week earlier, the Grant Oak quilters sent their first batch of quilts to soldiers wounded in Iraq.

BEVERLY CLAUCH, GRANITE OAKS QUILTERS: I just feel blessed to be able to do something for the soldiers, because they're giving of themselves to us. I've made quilts for my grandchildren and that, but it's -- it's not the same.

WIAN: Susie Johnson brought the idea to the group in September. A group in Maryland was coordinating an effort to provide quilts for wounded servicemen and women arriving at Andrews Air Force Base. They wanted other quilters to join in.

SUSIE JOHNSON, GRANITE OAKS QUILTERS: Everybody was thrilled with the idea.

SUE WEISHAUPFT (ph), GRANITE OAKS QUILTERS: The project was easy to do because I have kids who are the age that could be in Iraq, you know, and I think about what their moms must be thinking, and I can't imagine what they're thinking, especially if they come home wounded.

WIAN: The work is detailed...

UNIDENTIFIED FEMALE: One, two, three, four, five, six and a half. Yes.

WIAN: ... and time consuming...

UNIDENTIFIED FEMALE: There's 16 to 20 hours in them. That's the simplest.

WIAN: ... but rewarding.

JOHNSON: My son was in the first Gulf War, and I would have been really thrilled if a mother had made him something if he'd have been injured.

DIANE SILVA, GRANITE OAKS QUILTERS: As long as there's a war, there's going to be wounded servicemen, and, as long as we have wounded servicemen coming home, they're going to need quilts.

WIAN: The Granite Oaks group has sent 13 quilts so far. They plan to have at least six more ready in January.

Casey Wian, CNN, reporting.

(END VIDEOTAPE)

PILGRIM: What an amazing group of women.

Coming up next, a deep freeze across much of the country. And, tonight, a winter storm spreads from New Mexico to the Great Lakes. We'll have a report from Southwest Indiana, which is covered with seven inches of snow.

And wishing you a politically correct holiday season. A new wave of PC everything is swamping Christmas in this country, and two experts will face off on whether the separation of church and state has gone too far.

Stay with us.

(COMMERCIAL BREAK)

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

PILGRIM: In a moment, we'll have tonight's Face Off. Has the Christmas season become too politically correct?

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

Former New York City Police Commissioner Bernard Kerik has resigned from his position at Giuliani Partners. Kerik helped former New York Mayor Rudy Giuliani open the consulting firm almost three years ago.

Kerik's resignation comes less than two weeks after he withdrew his nomination as Homeland Security secretary nominee. Kerik admitted he failed to pay proper taxes on a nanny who was in this country illegally.

(BEGIN VIDEO CLIP)

BERNARD KERIK, FORMER NYC POLICE COMMISSIONER: I plan to take some time off to focus on my family, on the things that have to be focused on at this point and to clear my good name.

(END VIDEO CLIP)

PILGRIM: This Census Bureau says this country's population grew by almost three million people in the last year to just under 294 million. Most of the fastest-growing states are in the West and South. Nevada tops the list for the 18th year.

In Arizona tonight, a federal judge ended a temporary restraining order blocking the enforcement of Proposition 200. The voter-approved initiative denies illegal aliens from using public benefits. Today's order means Proposition 200 immediately becomes law in Arizona.

And Boeing says its Delta IV rocket launch yesterday was a success, and that is despite the fact Boeing says the rocket failed to send a dummy satellite into its intended orbit. Boeing says it knows what went wrong. The company says it's still on track to use the rocket to send a real satellite into orbit next year.

A massive winter storm across much of the eastern half of the nation is playing havoc with Christmas travel for millions of Americans. Saline County in southeastern Illinois so far has the heaviest snowfall. That's 14 -- more than 14 inches. Roughly a foot of snow has fallen in several places in Illinois and Indiana, Ohio and Missouri. More is on the way.

CNN Meteorologist Jacqui Jeras reports from Evansville, Indiana.

(BEGIN VIDEOTAPE)

JACQUI JERAS, CNN METEOROLOGIST (voice-over): To some, it's a winter wonderland. To others, it's a travel nightmare! We're along U.S. 41 and Interstate 64 in Evansville, Indiana, where travel has been hazardous all day and slow at best, averaging about 30 to 35 miles per hour.

There have been dozens of accidents, and a good foot of snow has fallen in this area. The powerful winter storm has been effecting southern parts of Missouri extending all the way into parts of New York state.

(on camera): It started out as freezing rain, so there's a glaze of ice on the roadways and then, on top of that, about a foot of white fluffy snow, and strong winds have been coming in behind it. You can see there are dozens of truckers lined up behind me here that have decided to just wait out the storm.

There's a nice break from the snow right now. However, another wave should be pushing through, and an additional six to 12 inches of snow will be possible overnight tonight and into your Thursday.

(voice-over): If you're traveling to the eastern Ohio Valley for tomorrow, you'll have more travel headaches, as we'll see some freezing rain overnight and some more snow on the way.

(END VIDEOTAPE)

PILGRIM: Thank you.

Jacqui Jeras reporting from Evansville, Indiana.

Well, political correctness is taking Christmas out of the holiday season in many parts of this country, and schools are told that they can't include Christmas carols in their holiday concerts. Employees in some department stores are told not to wish their customers a merry Christmas.

Well, my next guests have different viewpoints on whether celebrating Christmas in public places violates the Constitution. Mike Johnson of the Alliance Defense Fund joins us from Shreveport, Louisiana, and Barry Lynn is the executive director of Americans United for the Separation of Church and State, and he joins us from Washington.

And thanks very much for joining us, gentlemen.

REV. BARRY LYNN, AMERICANS UNITED FOR THE SEPARATION OF CHURCH AND STATE: Thank you.

MIKE JOHNSON, ALLIANCE DEFENSE FUND: Great to be with you. PILGRIM: This is an emotional issue. It's also a very logical and legal issue, and I don't think we can divorce ourselves from the emotion of it. But let's try to stay factual.

And let me ask you, Mike, are we seeing more challenges to the traditional nativity scene, the sort of Christ entry into Christmas?

JOHNSON: We absolutely are, and we at the Alliance Defense Fund believe that Americans deserve to know the truth. The latest Gallup poll says that 96 percent of Americans celebrate Christmas. Now that's Americans of all faiths.

But, in spite of that, we see the attacks on the celebration of Christmas accelerating over the last few years. That's why we launched our Christmas project to try to set the record straight and legally defend people of faith who want to celebrate the holiday.

PILGRIM: OK, Barry. What do you think about this effort to defend the institution?

LYNN: Well, Christmas doesn't need much defending. All you have to do is walk outside...

Christmas project to try to set the record straight and legally defend people of faith who want to celebrate the holiday.

PILGRIM: Barry, what do you think about this effort to defend the institution?

BARRY LYNN, AMER. UNITED FOR SEP. OF CHURCH & STATE: Well, Christmas doesn't need much defending. All you have to do is walk outside in any city in this country, and you'll notice that almost everything is festooned with Christmas decorations. That's still the majority way that people support this holiday season. They celebrate Christmas as the other guest just indicated. The real legal dispute is whether governments should be forced into also displaying Christian and other religious symbols and whether our public school students should be required to sing Christmas carols, most of which are hymns, that is prayers, set to music. I have no problem with the celebration of Christmas on the lawns of churches, I love to see them in my own house. We celebrate Christmas. But I don't think we need to get the government involved in promoting the baby Jesus' birth along with Santa Claus and Rudolph the red nosed reindeer. I can't imagine what Christian would want that.

PILGRIM: Let me just throw this out, it is a traditional way to celebrate the holiday. Does tradition not count, Barry?

LYNN: Tradition counts but I think the important thing is that we can do that traditional celebrating in a very public way, but using private space. We don't need to go to the courthouse lawn. We don't need to go out in front of the city council building and promote it. And we can, even in the setting of private companies, we can suggest that in order to be respectful of the incredible diversity in this country, 2,000 different religions, 20 million nonbelievers, it's OK to say happy holidays, be inclusive about it, instead of just assuming that everyone is a Christian and say merry Christmas. That's just good business. It's sensible.

JOHNSON: Barry, let's be honest about what your group -- Barry has been on a search and destroy mission with his organization for a long time. They're trying to remove all religious expression from the public square. He characterized it in very nice words but he's not being very genuine about what he's about and what his organization is about. They have a very different vision for America. The first amendment guarantees the rights of all citizens to express their faith in public as well as in private. That is a principle that this country was built upon and it's the America that we are trying to defend. For 30 years you've been trying to obscure that fact, Barry.

LYNN: No...

JOHNSON: These cases are factual.

LYNN: Let me finish. There is no government official out there trying to knock down nativity scenes. There is no war against Christmas. This is a myth that folks on the religious right including yourself have been propagating. Go outside, look and see whether you think there is any diminution of the celebration of Christmas. I defy you to find it anywhere in this country.

JOHNSON: Your organization just like the ACLU, your former employer and many of your friends have filed a number of these cases across the country. They're going to the courts to remove the religious expression of American citizens. They want students not to be able to sing Christmas carols. They want to remove the nativity scenes from the public lawns. That is what your organization is trying to do.

We are there to defend that liberty.

PILGRIM: Let me get a question in here. Where does the Supreme Court stand on this? Let's try to go back to fact.

JOHNSON: The Supreme Court has never said...

PILGRIM: Go ahead, Mike. You first.

JOHNSON: The Supreme Court never said that students need to censor their speech in the school house once they walk through the school house gates, for example. They said very specifically that teachers and students do not surrender their first amendment rights to free speech just because they happen to be on a school campus. The same principle applies in the public square, in municipalities, on the courthouse lawns as Barry says. The government has never said that the -- the Supreme Court has never said that the government has to censor the Christ out of Christmas. That's what this is about.

LYNN: We're not talking about any kind of censorship, but the Supreme Court has also said you can't just put up religious symbols at this time of year. You have to mix religious and secular symbols together. Gives you the Santa Claus and Baby Jesus appearance which I think is degrading and insulting to Christians, as well as to the separation of church and state but more importantly the Supreme Court has never, never said that students -- Mike is right -- that they could be censored from saying something like merry Christmas. No one is trying to do that. We're trying to say, if have an official school program, don't have a nativity play as they tried to do in Wyoming. Don't put together a set of music that is essentially Christmas carols, those are hymns, prayers set to music, and basically require all students to participate. That means all students aren't Christians.

PILGRIM: Do you think in the workplace it's appropriate to censor employees from saying happy Hanukkah, merry Christmas, happy Kwanzaa. Should it be a broadbase thing or is that censorship? Should they be allowed to say whatever they like in the workplace and retail environment is basically work environment. We'll start with you, Barry.

JOHNSON: That is censorship.

LYNN: I think retail merchants have to make that decision for themselves. Many have gone to the phrase happy holidays. Many of the television networks including this one have done that. Not because you're anti-Christmas or anyone at Macy's is anti-Christmas but because we're trying to be respectful of the diversity we have in this country. This is a time when we don't need to have war, unfortunately these so-called religious right legal groups are out there on a hustings (ph) this year, feeling their oats, apparently believing that the election of George Bush also meant we need to have more government-promoted Christmas carols and nativity scenes and really trying to force the inclusion in purely secular services...

JOHNSON: Absolutely not.

LYNN: ... of religious materials. That's what you tried to do in Maplewood, New Jersey, in a school concert, you almost had the concert canceled for these kids. Don't tell me I'm the grinch, this year. Frankly, you are the grinch.

JOHNSON: You are indeed the grinch. We are defending these cases that have been filed by the ACLU, your organization has been involved in these...

LYNN: We didn't file any case this year at all. We haven't filed a single case this year.

PILGRIM: Gentlemen, we do have to end this.

LYNN: This is a real issue, and we're there to defend liberty and glad to do so.

PILGRIM: The emotion and the tradition in this, it really -- you can't divorce from it. It's very much a heart felt issue, and I thank you both, very much for bringing your viewpoint to this program.

JOHNSON: Merry Christmas, Kitty.

PILGRIM: Thank you very much. That brings us to the subject of tonight's poll. Now, do you think that the Christmas spirit has been eroded by the debate over political correctness? You vote, yes or no. Cast your vote at loudobbs.com. And we'll bring you the results later in this show.

There are red faces at the Pentagon tonight after one of the Air Force's newest most expensive fighter jets crashed in Nevada. The F- 22 Raptor crashed near Las Vegas on Monday. The pilot ejected safely, he was unharmed and it was the first crash of a preproduction version of that aircraft. The cost of each Raptor has escalated to more than $258 million, and the Air Force wants to buy at least 270 of the jets to replace the F-15 fighters. Critics say that aircraft is too expensive and no longer necessary.

Still ahead here tonight -- who's been naughty? Who's been nice? A new CNN/"USA Today"/Gallup poll asked Americans exactly that about some very popular personalities, and we will reveal all, next.

(COMMERCIAL BREAK)

PILGRIM: Joining me now are three of the nation's top political journalists. From Washington, Karen Tumulty of "Time" magazine. Roger Simon of the "U.S. News & World Report," and Tom DeFrank of "The New York Daily News." Thank you for joining us.

KAREN TUMULTY, "TIME" MAGAZINE: Hi, kitty.

PILGRIM: Let's start with Mosul. And in fact, the suspicion that this may have been a suicide bomber or inside job, doesn't this indicate to you that the insurgents may be more daring (UNINTELLIGIBLE) or adventurous attempts to undermine U.S. efforts. Lets start with you, Karen?

TUMULTY: Absolutely. And they were convinced that they had adequate security procedures in place at this base. That, you know, everyone coming in was being thoroughly checked. So, I think there are going to be a lot of questions raised. And once again I think it is going to increase public pressure here in the United States for some sort of sense of what the end game is in Iraq.

PILGRIM: The in one respect, is it fair to point fingers at this point? We are basically still engaged in battle with insurgents, and this sort of situation, I don't know, there's a lot of finger-pointing going on today.

Do you think it's justified -- Roger.

ROGER SIMON, "U.S. NEWS & WORLD REPORT: Yes, I do, I think we should do more finger-pointing. We have a responsibility to our troops to keep them alive, number one, to give them the best possible equipment, protection and procedures. And it was a terrible loss of life. No one I know of believes it will be the last loss of life. And we seem to be always reacting to the insurgents. We seem to be on the defensive. We're the people with the tanks and the planes and the helicopters and the heavy artillery and other intelligence satellites. The other guys don't have any of that, but they're doing just fine in attacking us. Something is seriously wrong there.

PILGRIM: It seems to me that this is so serious, and that it may undermine the relationship between the American soldiers and the Iraqi forces -- Tom.

TOM DEFRANK, "NEW YORK DAILY NEWS": I don't think that's the case. I mean, it was interesting though to see this press conference the other day. President Bush took a shot at Iraqi security forces talking about how they cut and run a couple of times and that was unacceptable to him. I don't think that's the problem. I think it's more likely what has happened is more likely to undermine political support for the war. At least in the long term.

SIMON: Actually, Kitty, I tend to agree with your point. This drives a wedge between the American troops and the Iraqi civilians and the Iraqi National Guard. And now these people are all over our bases, they're doing essential jobs. If they go home or we're not going to let them on our bases, we're going to have to send more U.S. troops to replace them. And now they don't know who to trust. Our troops don't know who to trust any more. Can they trust Iraqi working next to him or is he a suicide bomber? And this is why the insurgents did, it one of the reason yes.

PILGRIM: Karen, do you want to weigh in on this?

TUMULTY: Well, only that, you know, the president had said that there were going to be more of these sorts incidents going up to the election. We have now passed a number of benchmarks starting with the capture of Saddam Hussein, that were really -- things were supposed to get better after that. Things were supposed to get better after the handoff of power to the interim government. Things were supposed to get better after our troops went in and cleaned out Fallujah. It keeps not happening, and I do think that at some point, support back here at home is already eroding, buts at some point, we do reach a tipping point.

PILGRIM: You know, just a day or so ago, we were discussing securing the polls during the Iraqi election at the end of January. And now seems our bases may be at risk or vulnerable. That takes it back a step, doesn't it.

Tom, lets start with you?

DEFRANK: Well, I think it does take it back a step. But I do think one of the real keys to this election is what percent of the Sunni Muslim population votes. If it's not a very big number, then that's going to be an embarrassment. If it's a very big number of Sunnis saying in effect supporting democracy, even though we feel like we're getting the short end of the stick in the new government, that's going to be significant. I just think the security situation around the election is going to be critical, and it's hard not to believe that there's going -- that there won't be some more of this on January the 30th.

PILGRIM: You know, I want to switch topics just for a moment, because it is the holiday season, and we'd like to take a moment to be a little bit light. And I know it's an abrupt subject switch. But we did do this poll or looked at this poll of celebrities. So on a much lighter note, I'd like to ask you to vote spontaneously, when I name a name, and tell me whether you think they are naughty or nice. Just blurt it out.

Janet Jackson.

TUMULTY: No question, naughty.

PILGRIM: You can do it all together. Go ahead.

DEFRANK: Naughty, triple naughty.

SIMON: America has never seen that before. It was revelation to me.

PILGRIM: 64 percent naughty according to votes.

Paris Hilton, another one, no-brainer I think.

SIMON: She's my hero.

PILGRIM: Really?

DEFRANK: When President to -- when President Bush went to Normandy for D-Day I stayed at Paris Hilton, the real one, is a much more rewarding experience than having to deal with anything else.

PILGRIM: That sounds naughty in itself.

OK, Martha Stewart.

TUMULTY: Hey, why are we picking on women here?

PILGRIM: We're not. We're going to get to some -- we're going to get to doozies. Don't worry about it Karen. Believe me, I wouldn't let them do that.

Martha Stewart.

SIMON: Obviously naughty, but she's paying the price, and we'll forgive her.

DFRANK: And she will have the nicest decorated cell in the prison.

PILGRIM: That's what the poll thought.

Donald trump, now that's kind of a split decision here, go ahead?

SIMON: I got vote against the hair, I'm sorry. He's got too much of it. I don't have enough. I'm not going to vote a nice for him.

PILGRIM: All right, Barry Bonds, interesting -- interesting subject. I guess you could get all kinds of opinions on that? DEFRANK: Well, naughty I think, I think he's let down tens of thousands of idealistic kids.

SIMON: He's the only man in America who didn't know what steroids were. I mean, he was taking that stuff. He thought it was Kool-aid. He didn't notice his biceps were increasing by inches every hour.

PILGRIM: OK, this is politically charged, Michael Moore. Tough one. Tough one.

SIMON: Karen, we haven't heard from you?

TUMULTY: I don't know. I think naughty all around on this one. Because I think in the end, his movie didn't help even the people he thought it was going to help.

SIMON: Yes, but he's a journalist -- not a journalist, he's a partisan.

TUMULTY: Wait, he's not a journalist.

SIMON: He's not a journalist. I take it back. But he's a partisan acting out of his political belief, and there seems to be a lot of that in this country.

DEFRANK: He's not a good representative for his point of view, that's for sure.

PILGRIM: Well, if anything, he suggested the top take was widely discussed. So in a journalistic sense, perhaps he succeed, huh?

Anyway.

(CROSSTALK)

PILGRIM: I'm afraid that's my nature. Oprah Winfrey.

TUMULTY: Nice! Nice! Finally, somebody nice!

SIMON: If she gives us a car, she'll be even nicer.

PILGRIM: I don't know how you lose when you give everyone a car. That pretty much sells it for me. And Mel Gibson, let's do Mel Gibson. Very much discussed and generated a very big national debate on a subject that normally doesn't claim much attention in terms of dinner table conversation.

SIMON: Having not seen the movie, I'm going to reserve judgment.

DEFRANK: I don't think that issue has any legs, Kitty. That was an issue for a couple of months and then the movie came and went and it's yesterday's story now will.

SIMON: But will he get an Oscar nomination, that's the question.

PILGRIM: Well, and then he'll have to recall this vote. But anyway, 87 percent said Mel Gibson was nice.

Let's go to some of our colleagues here, Dan Rather?

Just to put you on the spot.

TUMULTY: Kick a guy when he's down.

SIMON: You know, he's going to be unemployed soon. Com on give him a break.

PILGRIM: Take a look how this turned out, 63 percent said nice. Sixty three percent said nice.

DEFRANK: Dan deserves a really nice retirement. He's been a great reporter for a long time.

PILGRIM: And I think that's what -- his legacy really is what factored into this vote. I think people do recognize his work. And he says he's going to continue to work full time as a correspondent for the network magazine, "60 Minutes." And he's a true journalist.

Let's talk about Tom Brokaw. So, we have two big names in journalism to talk about here?

SIMON: I really like Tom Brokaw, I'm giving him a nice, 100 percent.

DEFRANK: Double nice.

TUMULTY: Absolutely nice.

PILGRIM: OK, I don't think there are very many people who would quibble with that. And I won't put myself in there, because I really don't want the voting. But anyway, thank you very much for joining us, and giving us your votes on naughty and nice. And we will take suggestions on other people to vote on.

Karen Tumulty of "Time," Roger Simon of "U.S. News & World Report" and Tom DeFrank of the "New York Daily News."

Thanks a lot guys.

(CROSSTALK)

PILGRIM: Reminder now to vote in "Tonight's Poll." Do you think the Christmas spirit has been eroded by the debate over political correctness? Do vote yes or no, and cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

Also ahead here tonight, a fascinating year in space from a new view of Saturn's rings to the earth shattering discoveries on Mars. Astrophysicist Charles Liu will talk to us about all of that next.

(COMMERCIAL BREAK)

PILGRIM: This past week has capped an extraordinary year in space. Just yesterday, researchers announced that they discovered evidence of forming galaxies that are massive in size. And that shatters the belief that so-called baby galaxies are only small. We also had stunning images of Saturn's rings from the Cassini spacecraft, startling revelations about our neighboring planet Mars and joining me to sort all these planets out and talk about the exciting discoveries is astrophysicist Charles Liu from the American Museum of Natural History. Thank you very much for joining us.

I love it the way you explain space, because it's so accessible. It's so far, but it's so accessible. Let's talk about the baby galaxies and it sounds, oh, so cute but they're big, right?

CHARLES LIU, PROFESSOR OF ASTROPHYSICS, CUNY: Absolutely. Our Milky Way galaxy is about 10 billion years old and most people think that big galaxies like ours formed a long time ago. But these new discoveries seemed to suggest that big galaxies can form relatively young, too. So these are really infants in age but just as large and massive as the Milky Way. It's very exciting.

PILGRIM: So baby refers to not the size but the age of the galaxy.

LIU: Well, if you can consider a 3 billion-year-old galaxy a baby, that would be fine.

PILGRIM: How do you find something like that just suddenly now?

LIU: Young galaxies give off a lot of ultraviolet light but not so much visible and even less infrared. This particular mission is a space mission that looks specifically for ultraviolet light. In other words we have never had the sensitivity in the wavelength range to find them. So that's why they're so new, because we've just had the technology to find them.

PILGRIM: So we can see new things, we have new glasses, so to speak.

LIU: Exactly.

PILGRIM: The other thing that is very interesting is frost on Mars, and like the Christmas spirit, let's talk about frost on Mars. Why is that so significant?

LIU: Well, all of us have gone outside on a cold morning and found frost on the cars or the windows. But if we find that on the Mars rovers, that means there's enough humidity or water vapor in the atmosphere to suggest that there are weather patterns or environmental conditions very similar to what we might find in an earth-like environment. The atmosphere is very thin and the water vapors are very thin. But if there is water vapor enough to form frost on the Mars rovers as we found in October of this year, then in fact, there may be even more evidence that life once existed or may even yet exist on Mars somewhere, waiting for us to find.

PILGRIM: And they're really focused in on would there be water on Mars and that would suggest that there might be life on Mars. The rovers, how are they doing?

LIU: Wonderfully. Beyond all expectations. They were designed to last for three months. They've now lasted for 12. And the scientists that have been working on the Mars rovers have jokingly said they'll last longer than the scientists will because these days, weeks, months of discovery have been so remarkable, every time they found something new, they found something else new, and they keep pushing these probes, these rovers and they keep performing. It's marvelous.

PILGRIM: I remember when everyone worried if they would last for ten minutes versus now the duration of time that they have managed to function. That's an enormous success and what a wonderful thing to happen.

LIU: It's a great thing when have you something like this work so well, it's an example of how combination of government and scientists and academia can put something remarkable somewhere successfully.

PILGRIM: Let's talk about the Cassini, and that's Saturn to underline this so we can sort out our planets. How is that going?

LIU: Cassini mission is going perfectly. Everything is moving along as expected and on Christmas Eve, couple days from now, the probe which has been attached to Cassini will slowly release itself from the probe. And the probe will drop into Titan's atmosphere, this is the largest moon of Saturn and for about 2 1/2 hours will send back telemetry about an area which astronomers think, we think it's a laboratory for possibly the first signs of organic materials chemically transforming themselves into biological life.

PILGRIM: Why did they pick Christmas Eve? Just because everyone's working, it just worked out that way?

LIU: Usually, things just work out that way. Because even though it gets released now, it has been very carefully timed. The probe won't actually reach the atmosphere of Titan for three more weeks and meanwhile Cassini has to gently veer off so it doesn't go plunging into the atmosphere as well.

PILGRIM: Sounds very complicated. We're out of time. We have a lot more space to talk about, so you'll have to come back. Thank you very much.

LIU: Always a pleasure.

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

(COMMERCIAL BREAK)

PILGRIM: Here are the results of tonight's poll. More than two- thirds of you think the Christmas spirit has been eroded by the debate over political correctness. Thanks for being with us tonight. Please join us tomorrow for our special report Holiday Home Front. Also what we owe Iraq. Author Noah Feldman will join us to talk about his new book by that title.

Plus retired coast guard commander Steven Flynn will tell us why he believes the government is failing to protect us from terrorism. 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