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LOU DOBBS TONIGHT

Iraq Strategy Debate; Could WTO Deal Usurp Congress on Immigration?; Israel To Buy Security Equipment From Germany And China Instead Of U.S.; Sergeant Learns To Walk Again; Costa Mesa Allows Cops To Check Legal Status Of Criminals

Aired December 9, 2005 - 18:00   ET

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


LOU DOBBS, CNN ANCHOR: Good evening, everyone. We begin tonight with the rising political debate in this country over the direction of the war in Iraq. With less than a week to go before critical Iraqi elections, President Bush once again today defending his Iraq war policies at a fundraising appearance in Minnesota today. With Democrats struggling to find a unified voice on Iraq and being accused of outright surrender, the Republican Party is ending the week on the offensive with a strong new attack against Democratic leadership.
Tonight Dana Bash from the White House on the Republican Party's new efforts to capitalize on a Democratic Party in disarray. Bill Schneider on this dismal week for this increasingly divided Democratic Party.

We begin tonight with Dana Bash at the White House. Dana?

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, Lou, as Republicans start to gear up for the re-election campaign, a lot of Republicans, certainly all of them in the House of Representatives and many in the Senate, they are trying to figure out just exactly how to deal with the fact that there are very real growing doubts about the Iraq war. And that is especially true in Minnesota where the president was today. That is, of course, a swing state.

But there is one thing that Republican pollsters and strategists working on campaigns for next year say they feel confident about, and that is that Americans do not want troop withdrawal so soon or so fast that it actually will make things even worse in Iraq.

So it was noteworthy that Mr. Bush not only slapped back at Democrats calling for immediate withdrawal today when he was there in Minnesota, but he also made clear that the candidate he was there to raise money for, Mark Kennedy, also agrees.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: There are some who are arguing for a fixed timetable of withdrawal. I think it's the wrong policy, and so does Mark Kennedy. A fixed timetable of withdrawal would embolden the enemy, would confuse the Iraqis, and would send the wrong signal to our young men and women in uniform.

(END VIDEO CLIP) BASH: Now the president just suggested Democrats are sending the wrong signal. There you see a Republican National Committee new ad on their Web site. The symbol they chose is a white flag to show what they see are two really critical things that they are trying to take advantage of, even exploit. One is a statement earlier this week from Howard Dean, the Democratic chairman, something that they saw as a really big political blunder, suggesting that the war is un-winnable. And the other is something you mentioned in the open there, Lou, and that is the fact that they do see a lot of different voices coming from the Democratic Party.

That is something that Republicans are hoping to take advantage of in order to make it harder for them to have a unified message to really hit back at President Bush in a really strong way that will really take a bite out of him politically, that will take advantage of this at the polls in 2006. That is something that Republicans are working very hard to try to stop.

DOBBS: Dana Bash, thank you, from the White House.

After months of dismal news for this White House and the Republican Party, this week it appears it's the Democrats' turn to suffer self-inflicted political wounds.

Bill Schneider joins me now from Washington. Bill, the Democrats' inability this week to find a unified voice on Iraq making this simply a week to forget for them.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That's right. All the stories that have been out of Washington have been about Democrats in disarray. They have had a lot of voices speaking out with a lot of plans, a lot of proposals. And some of them have been quite controversial.

Howard Dean, of course, saying that the United States could not win in Iraq. He later had to back away from those comments. Now you have had Nancy Pelosi, the House Democratic leader, joining and endorsing the position of John Murtha for a rapid redeployment, a timely redeployment of American troops in Iraq, which is not actually a very popular position even though most Americans would like to see a beginning of a withdrawal.

So Democrats are kind of all over the place, not to mention the president of the United States for the second time in a speech about Iraq citing a Democrat who was on the national ticket in 2000 against him -- and that's Joe Lieberman -- as someone who supports his position.

DOBBS: And from other directions, Senator John Kerry, the Democratic Party standard-bearer, of course, in the 2004 election, and also Harry Reid, the Senate minority leader. There is a diffusion here. Let me ask you this question, Bill Schneider, as the de facto leader of the party, I think as the standard-bearer in 2004, why isn't Senator Kerry getting more attention?

SCHNEIDER: Well, he lost. That's the simple answer. And the problem is the Democrats really don't have a true standard-bearer. The closest they have would be former President Bill Clinton, who has been very cautious about criticizing President Bush on the Iraq war. He wasn't so cautious today when he criticized him on global warming and said he thought the president was completely wrong. But on Iraq he has been very cautious. So the Democrats really don't have a leader, Nancy Pelosi in the House, Harry Reid in the Senate. There is a diversity of voices.

DOBBS: A diversity and as well a divergence. Bill Schneider, thank you very much.

SCHNEIDER: Sure.

DOBBS: The growing political battle in Washington over our nation's involvement in Iraq comes as a new hostage deadline is nearing. Despite pleas from countries all around the world to free American Tom Fox and three other Western hostages, the kidnappers say they will kill all four hostages tomorrow.

Aneesh Raman reports from Baghdad.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT: A Saturday deadline fast approaching for four Western aid workers in insurgent control. The four aid workers part of a group called Christian Peacekeepers Team, kidnapped now almost two weeks ago from the capital.

The group holding them, previously unknown, called Swords of Justice, is demanding all prisoners be released and that the British and U.S. governments begin withdrawing troops from Iraq.

On Wednesday, a video was released showing two of the four captives, American Tom Fox and a British national. They were both shown in orange jumpsuits as prisoners. They were blindfolded. A previous video showed all four of the Western aid workers, the other two being Canadian. Those governments clearly working endlessly to try and return these hostages.

Meantime the fate of American Ronald Schulz remains unclear. He was kidnapped on or around November 25. He's being held by a known insurgent group called the Islamic Army in Iraq. Yesterday there had been Web postings on Islamic extremist Web sites that he had been killed. The U.S. government, though, says it has no knowledge that anything has happened yet to Ronald Schulz.

In the past two weeks in Iraq, some seven Westerners have been kidnapped -- a notable rise in a tactic that insurgents used in 2004 into the early part of this year, but we had not seen for months until the past few weeks. It is a tactic, though, we should mention that is often felt by the Iraqi community -- Iraqis on a near daily basis kidnapped for ransom as well as for political purposes.

Aneesh Raman, CNN, Baghdad.

(END VIDEOTAPE) DOBBS: Also in Iraq tonight, the U.S. military is giving details now of a deadly new threat to our troops. For the first time, the military is releasing graphic images of the damage caused by a new generation of powerful explosives being used now by Iraqi insurgents.

Barbara Starr with the exclusive report.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): When this vehicle was blown apart by an improvised explosive device, an IED, debris flew in every direction. IEDs remain the number one killer of U.S. troops in Iraq.

But look at this picture provided to CNN by the Army. It's one of the first images shown publicly of the damage caused by a new type of IED, a so-called explosively formed projectile that can penetrate U.S. armored vehicles. The energy of an EFP blast is focused in one direction, right at the vehicle, leaving the armor full of blast holes. In this case, four soldiers were badly wounded.

Lieutenant General Russel Honore, who trained soldiers headed for Iraq, is one of the few talking about this type of danger.

GEN. RUSSEL HONORE, U.S. ARMY: When the energy is concentrated in a small area, it projects out that metal, and that metal cause -- can be effective against almost any armor, including the M-1 tank.

STARR: In this photo from May, two explosively formed projectiles hit the door, penetrating the armor. The driver was killed instantly. Another photo shows an attack against a contractor's armored vehicle by two of the new types of bombs.

Army documents accompanying the photos call these weapons an extremely serious threat. U.S. and British intelligence believes Iran and Hezbollah has now provided expertise to the insurgents to make the weapons. These new bombs have even been packaged inside foam and painted gray to match concrete. And they are set off using infrared devices much like you might find on an automatic garage door.

(END VIDEOTAPE)

STARR: Lou, how deadly are these? Well, the Army calculates insurgents can now set roadside bombs and be gone in under two minutes. These new types of IEDs, they can penetrate several inches of armor. And once they fire, they detonate at a velocity rate of more than a mile per second.

But to put it all into perspective, what commanders are saying is that armored vehicles are no safety measure, if you will. You simply can't put enough armor on a vehicle to make it survive one of the very large bomb blasts. That is why they are working so hard on new detection technologies, trying to find these IEDs before they go off.

Lou. DOBBS: A disturbing report, Barbara. Disturbing as well, links to Hezbollah and Iran if -- and while there's so much focus provided in terms of what our intelligence agency had done in the course of this war, particularly at the outset, what in the world, if we know that Hezbollah and Iran are behind this, why are we not holding them accountable and doing so immediately if American lives are being lost?

STARR: Let's be very clear, of course, this is a great suspicion of both U.S. and British intelligence agencies, indeed, Lou, that the expertise to make these emerges from Iran and the Lebanese Hezbollah. No one has been able to prove it. No one has been able to prove that the central government Tehran is in control of the factions that have this type of expertise.

They have had it for a very long time. And, you know, it was a few months back that these weapons first started turning up in southern Iraq where the British are in control. They are the ones that have so far have traced it to Iran. They are watching very carefully.

Of course, the U.S. has been very adamant in telling Iran to not cause problems inside Iraq. But still they do seem to be causing a good deal of trouble, Lou.

DOBBS: Well, as the saying goes, we don't pay our intelligence agencies to suspect, we pay them to find out. This war is now two-and- a-half years in the making. When will we have definitive information which is what we do pay them for?

STARR: Lou, that is a very good question. What the intelligence community knows, they usually keep pretty close hold and don't tell reporters.

DOBBS: Barbara Starr, thank you very much for that exclusive report, disturbing as it is.

Valerie Plame, the CIA official whose outing in the press sparked the White House CIA leak investigation, today left her job at the CIA. Plame, who has worked at the CIA since the 1980s, reportedly says she can no longer work effectively. The CIA leak scandal broke in 2003 when Plame's name appeared in an article written by columnist Robert Novak.

The original source of the leak is still not known. Special prosecutor Patrick Fitzgerald's investigation of who leaked Plame's identity is now in its 709th day. To put that in perspective, the entire Watergate investigation lasted a mere 288 days.

But the CIA leak investigation is still well behind that of the Whitewater investigation. Compared to Kenneth Starr's Whitewater investigation, Fitzgerald's probe has lasted almost two years and has cost U.S. taxpayers less than $800,000. The Whitewater probe, which lasted a total of six years, cost taxpayers more than $52 million.

Still ahead here, new questions into what caused last night's fatal plane crash at Chicago's Midway Airport. We'll have a live report for you next. And new outrage over our nation's "Great American Giveaway." Congress now wants to stop -- at least some members of Congress want to stop the World Trade Organization from controlling U.S. immigration policy.

Also if you think the days of the $200 toilet seat are over, think again. Shocking new details tonight about how the Pentagon is wasting your tax dollars in time of war.

(COMMERCIAL BREAK)

DOBBS: Tonight federal investigators have begun the investigation into last night's deadly plane crash at Chicago's Midway Airport. The crash of Southwest Flight 1248 during a blinding snowstorm in Chicago is raising new questions about the safety of Midway Airport and whether that airport's runways may have had something to do with the crash.

Brian Todd is live tonight in Chicago and has the latest for us. Brian?

BRIAN TODD, CNN CORRESPONDENT: Lou, that is one of many factors that they are looking at in this investigation, the length of the runway here at Midway Airport. First I'm going to show you a close-up of the plane. We're going to ask our cameraman, Bruce Fine (ph), to zero in on it.

You see the plane there -- it's getting dark here, obviously -- but the nose you can see is still touching the street. That's the corner of 55th Street and Central Avenue here in Chicago, just off the northwest corner of the airport grounds.

We just heard from the NTSB a moment ago during a briefing. The official who led that briefing was asked about conditions inside the plane that they monitored in the cockpit voice recorder as the plane approached the landing, and here's what she said.

(BEGIN VIDEO CLIP)

ELLEN ENGLEMAN CONNERS, NTSB: On the CVR, the airplane had been in a normal hold position. The approach was normal with normal conversations. The crew did not mention problems with the airplane.

(END VIDEO CLIP)

TODD: Now just a short time ago we asked a witness, a passenger on the plane, what it was like inside the cabin as the plane approached and as the plane touched down.

(BEGIN VIDEO CLIP)

MIKE ABATE, SOUTHWEST PASSENGER: The oh my God moment was the big huge bump. You know, it's at this point you just don't know where you're at. But it was a quick oh my God, you know, it was one of those things, and then we stopped within probably three to five seconds after that. And then you look out the window and you realize you're in the middle of a city street.

(END VIDEO CLIP)

TODD: Several conditions that they are examining now in the investigation, one of them is visibility. Southwest Airlines officials say there was about a quarter to a half mile of visibility through heavy snow at the time the plane touched down. Runway conditions are a factor they are looking at.

Some witnesses say you couldn't tell the difference between the grass, which was heavy with snow, and the runway. But officials have said that the runway was salted throughout the day before the plane touched down.

Also, as Lou mentioned just a short time ago, the length of this runway is going to be a key factor in this investigation. The runway here at Midway Airport is only 6,500 feet long. That is one of the shortest runways in the United States. It also has what they call very little overrun protection, meaning any kind of barrier to keep the plane from sliding into the street when it's skidding off the runway.

Lou.

DOBBS: It is remarkably short, that runway, for any aircraft, a jetliner. But secondly, whether you look at the visibility or whatever, the fact is it was a heavy snowstorm, six to eight inches of snow. Do we yet know what the condition of that runway was?

TODD: Well, Lou, it is variable at this point. You're right. It was about seven inches of snow on the ground at the time the plane was coming in. And there were questions raised as to whether the pilot should have made the decision to land.

What we're told is that on the runway itself it was about a 16th of an inch of snow on the ground. Aviation officials here have said that the conditions were passable for landing. So that's again something that they are going to kind of have to hash out in the investigation.

DOBBS: All right. Well, it's a great tragedy that the family in the car and the 6-year-old boy were killed. It is remarkable that all of the passengers and crew of that flight were safe in that landing. Thank you very much. Brian Todd from Midway Airport in Chicago.

That same snowstorm that blanketed Chicago slammed into the Northeast today -- more than 10 inches of snow falling in New England. Parts of Massachusetts and New Hampshire hit with two inches per hour. More than 100,000 people tonight without power. High wind warnings are in effect along parts of the East Coast. Up to 10 inches of snow also falling in parts of New York and New Jersey, causing major highway and airport delays. In all, the storm is being blamed for at least 19 deaths in New Jersey, the Midwest, and Kentucky. Forecasters say that storm is now moving offshore. Warmer temperatures are forecast for New England over the weekend.

Just ahead, President Bush defending his strategy in Iraq while the Republican Party launches an aggressive attack on Democrats. We'll have the latest for you on an escalating political battle and national debate.

And then, "War on the Middle Class," why some in Congress say the World Trade Organization is meddling in our immigration policy and could take sovereignty from this nation. We'll have a special report. Stay with us.

(COMMERCIAL BREAK)

DOBBS: The latest now on the "War on the Middle Class." Outrage in Congress over the idea that U.S. immigration policy could be decided in the backrooms of the Hong Kong talks of the World Trade Organization. Developing nations and big U.S. multinationals want more work visas for poor country so more foreign workers can take middle class American jobs. And lawmakers have begun to realize their immigration authority could be handed over to a world body.

Christine Romans has the report.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): A stern warning to U.S. Trade Representative Robert Portman: Don't use American jobs as a bargaining chip in WTO negotiations. A bipartisan group of senators led by Dianne Feinstein, in a letter to Portman write: "We should not give any false hopes that American immigration policy is up for discussion. Inclusion of immigration matters in free trade agreements degrades Congress' ability to exercise its plenary power."

The senators, all supporters of free trade, warn their support for American negotiated trade agreements ends if immigration is handed over to the WTO. The U.S. trade representative has not commented publicly on the Feinstein letter, but a trade office spokesman referred us to another letter from Congressman Clay Shaw and three others. In it, the congressman writes: "Calls are being made for reduced expectations, and for taking issues off the table, we urge you to resist such calls."

But Shaw says his letter by no means suggests Portman should bargain with visas for a trade deal.

REP. CLAY SHAW (R), FLORIDA: So this brings up a whole new can of worms when this gets back to the Congress of the United States because the immigration policy is controlled strictly by the Congress.

ROMANS: But the administration is being lobbied hard by big business and developing countries who want more visas and they want them binding under WTO's rules.

LORI WALLACH, PUBLIC CITIZEN GLOBAL TRADE WATCH: What we're talking about here is a sneaky Trojan horse maneuver. You have got the World Trade Organization and people are thinking it's about trade. But actually what is at stake here is an attempt to get written into the WTO guaranteed access for hundreds of thousands of foreign workers, basically usurping U.S. immigration law. ROMANS: Authority over visa limits belongs to the U.S. Congress and its judiciary committees. And House Judiciary Chairman James Sensenbrenner has repeatedly warned that immigration not be an element in trade agreements.

(END VIDEOTAPE)

ROMANS: And now some members of Congress are starting to realize that in past free trade agreements they have unwittingly made concessions on immigration. Already under WTO rules we are required to offer 65,000 H-1B visas each year, if for any reason we don't, it goes to international arbitration and penalties can be levied against the United States.

DOBBS: Two things, one, degrade the U.S. Congress's power over immigration policy? It eliminates it. Secondly, Congress has already abdicated its constitutional responsibility by turning over fast track authority in the White House. They did that in 1976 and haven't had the guts to reassert their congressional responsibilities and take oversight of what has been a disastrous trade policy over the course of the past 25 years.

It appears Congress is actually standing up for a change for middle class workers in this country.

ROMANS: We'll see if they can stand up strongly enough to make sure they don't get some of these concessions at WTO next week.

DOBBS: You know, it will be very interesting to see and we're going to be watching more closely than anyone else. We can guarantee you that.

Thanks, Christine.

Coming up next here, outrage over a Pentagon program paying severely inflated prices, sometimes double for everyday household items. The program is designed to save the Pentagon money. Others say it's designed for the Defense Department to take care of its special friends. We have a special report on them next.

And then the very latest on Able Danger that many say identified Mohamed Atta a year before September 11. Stay with us.

(COMMERCIAL BREAK)

DOBBS: Tonight, "Your Government at Work" -- shocking new details about a Pentagon program that is severely short changing American taxpayers. The Pentagon is buying basic supplies and equipment at prices sometimes double what civilian prices are.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): This plastic ice cube tray costs 89 cents or less. The Pentagon paid $20 for one just like it, a mark-up of more than 2,000 percent. Coffee-makers that retail for up to $40, the Pentagon spent $81, a 102 percent mark-up. And $23,000 airplane refrigerators cost the Pentagon $31,000, a 35 percent mark-up.

KEITH ASHDOWN, TAXPAYERS FOR COMMON SENSE: At a time of record deficits this sends a horrible message to the country. We're fighting a war on terrorism. We have all these other costs. We have to pay for Katrina. And now we see these guys, you know, paying Paris Hilton prices when we should be getting bulk discounts.

SYLVESTER: The Pentagon uses the prime vendor program to buy nearly everything, excluding weapons, to outfit troops in military installations. A group of favorite defense contractors serve as middlemen purchasing from manufacturers. Ironically, the program was designed to save money.

Representative James Clyburn wrote a letter to the head of the Defense Logistics Agency sharply criticizing the program.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: Number one, they stymie competition. Number two, they drive up costs. And number three, they shut out women and minorities.

SYLVESTER: The Defense Logistics Agency had to cancel our on camera interview due to the snow, but in an answer email to CNN defended the program, saying customer wait time has been cut and inventory costs have been reduced.

The DLA adds that it's currently investigating the possibility of price inaccuracies within its food service equipment prime vendor program. Critics say no one has been keeping a close eye on taxpayer money.

UNIDENTIFIED MALE: If contractors know nobody is watching them, they are going to put their hand in the taxpayer cookie jar and take more money out of it as much as they can out of that cookie jar until they get caught.

(END VIDEOTAPE)

SYLVESTER: The House Armed Services Committee has started its own investigation. A hearing is tentatively scheduled for early next year. And lawmakers are expected to introduce some type of legislation to provide additional oversight.

Lou.

DOBBS: Lisa, thank you very much. Lisa Sylvester from Washington.

It's been 21 days since Congressman Curt Weldon and more than half the members of the House of Representatives sent their Able Danger letter to Defense Secretary Rumsfeld demanding an Able Danger hearing on Capitol Hill. They have still not received a response from the Defense Secretary.

Able Danger Army Intelligence officials say they identified 9/11 mastermind Mohamed Atta and other 9/11 radical Islamist terrorists more than a year before 9/11. And they say Pentagon officials refused to allow them to share the information with the FBI.

Congressman Curt Weldon will be our guest here Monday with the latest on this Able Danger controversy.

Joining me tonight, former White House Political Director Ed Rollins, CNN Senior Legal Analyst Jeffrey Toobin, and former adviser to just four presidents David Gergen. Thank you all for being here.

Let's begin with what has been -- there's nothing less than a dismal week for the Democrats, Ed Rollins, just as we come off what has been a dismal performance for this White House over the course of the last several. What's going on?

ED ROLLINS, FORMER WHITE HOUSE POLITICAL DIRECTOR: Well, Howard Dean certainly is the gift that keeps on giving. And I think the more that he goes out and articulates what he perceives to be the Democrat defense policy, the better it makes it for the president.

I think the president has also been on the offensive, which I think has certainly helped him. He's comfortable with it. He's starting to bring some of the Republicans back in the polls. And that is certainly giving him some momentum.

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Senator Reid said something kind of amazing this week. You know, in reaction to all of the Democratic disarray, he basically said please just stop talking.

I mean these people, you know, are -- he basically said unless it's the most unobjectionable statement, please just stop talking about Iraq, which, you know, for a party that supposedly wants to run the country it's kind of a remarkable request.

DOBBS: It's remarkable and the Democrats, David Gergen, are as defuse and divergent in their views as one could imagine. The Democrats are proud of having a large tent, but this one is swelling to the point that it's almost ineffective opposition when the war in Iraq is a critically important issue for our political leaders of both parties to be debating.

DAVID GERGEN, FORMER WHITE HOUSE ADVISER: What was that Will Rogers said? You know, I don't belong to an organized party. I'm a Democrat. And boy, it really came back to haunt them this week.

It was one thing for Jack Murtha to go out, as he did, given his experience as a Marine and his courage and valor and his commitment to the military, and say we got to be on a timetable to get out.

It's another thing then to set off a whole epidemic of conversation which is going nowhere and has no discipline to it. I think it's often the danger, as Ed Rollins knows so well, for a party out of power. There's no Mr. Democrat or Mrs. Democrat to hold them in line. And it really came back to haunt them this week. I think they need to, in effect, say, Lou, this is the president's war. It's up to him to solve it. We will support him, but we do have a deadline of our own that's November of 2006. If they haven't solved that by 2006, we'll meet them at the polls.

DOBBS: That's obviously a deadline more than the Iraqis that are coming up -- the middle of this month in Iraq that many Democrats and Republicans are focusing on.

We saw a five-point jump in the latest polls for the president, which is impressive except the jump had nothing to do with the war in Iraq. It was based on, at least in that survey, on improvement in the economy.

TOOBIN: Well, and there has been a real improvement in the economy. And I thought it was smart of the White House to start taking credit for it. Now, how long this will last and whether the budget deficit will come back to get future generations is very much an open question.

But when you have got some good news -- and this White House hasn't exactly had an abundance of it -- they might as well grab it while they can.

DOBBS: Ed Rollins, John Kerry, Howard Dean, this week, with entirely different tones and approaches, basically being very anti-war in their positions. Is that going to be, in your judgment, the prevailing view of the Democrats as we go into the midterm elections?

ROLLINS: If it is, it will be a losing strategy again. There's plenty you can run against this president on, but certainly that's not what it is right now.

And particularly there's a very important election going on a week from today in Iraq. And we have to see what comes out of that. And I think anything that looks like you are undercutting the troops is absolutely detrimental.

TOOBIN: Is that true even though the polls show people want our troops out? I mean, why is it so bad for Democrats to be calling for troops to be pulling out?

ROLLINS: I think when you call for an immediate withdrawal -- I mean, it's one thing to say...

TOOBIN: No one said that.

ROLLINS: Howard Dean said that. And John Kerry is back in the mix. And Nancy Pelosi did.

TOOBIN: But the public is very much it seems -- a large part of the public shares that view. So it's not like it's some crazy...

ROLLINS: The public, well -- if you want to go out and basically just take polls and run your public policy on that, you will end up in a very detrimental place.

My stance is that the country today would like this thing to be over, but they don't want it to be over by us cutting and running and leaving Americans behind in vain. And I think that's the issue we love to debate.

GERGEN: That's right.

DOBBS: David.

GERGEN: That's right. I think Ed is absolutely right. People have a lot of discomfort with this war. They are opposed to a lot of what has happened, but they don't want to see us cut and run. And I think the Democrats are making a mistake by saying this is un-winnable. That does undercut troop morale. And a lot of people have kids over there, who resent that kind of language.

But the other thing, Lou, is I would not over-exaggerate the importance of this bounce for the president. Five points is important. But let's remember he's coming from a terrible place in the mid 30's to get up to 40. And it's mostly his base that is coming back.

The real test is can he get beyond his base? Can he rebuild his support among independents? And maybe even bring a few Democrats with him? He can't govern with 40, 45 percent of the country with him and half the country against him.

DOBBS: I think it's interesting, what you have all said here, and Ed Rollins talking about you can't govern by running by polls. But let me, nonetheless, share a poll with all of you and our viewers. And that's the Harris Interactive Poll, which shows three quarters of all American adults say they feel the rich are getting richer and the poor getting poorer in this country. And to me extraordinarily astonishingly, this number almost three quarter, 74 percent of Americans saying in this poll people in Washington are out of touch with the rest of the country.

This looks like a recipe for utter disaster for a Republican administration.

ROLLINS: It is a disaster. And I think a lot of Republicans are out of touch with the country. You can't be cutting educational programs, social welfare programs and what have you, and pushing tax cuts -- which I think are very important for the economy -- at the same time. I think to a certain extent Republicans have not articulated what they are about anymore either.

DOBBS: Ed Rollins, David Gergen, Jeffrey Toobin, gentlemen, thank you very much.

GERGEN: Thank you.

ROLLINS: Thank you.

DOBBS: Last night we spoke with the mayor of Costa Mesa, California, about his city's new plan to allow local police to investigate the national status of criminal suspects in their custody. Imagine that. They would be the first city in the country to do so. Tonight we will be talking with City Councilwoman Katrina Foley. She opposed the plan and voted against the mayor's proposal. But first we want to know what you think in tonight's poll. Do you believe our law enforcement officers -- federal, state and local -- should be able to ask where a criminal suspect comes from? Yes or no. Cast your vote at LOUDOBBS.com. We'll have the results coming up here later.

Still ahead, why American tax dollars intended to aid Israel may be ending up in communist China. We'll have that special report.

And also ahead, one local community has decided to do what the federal government has failed to do, crack down on illegal immigration and establish some semblance of security. I'll talk with one city councilwoman who, however, opposed the idea.

We'll have those stories. All of that, and I'll be responding next here to a lead editorial, in fact, in today's "Wall Street Journal" that reports to be all about spin control but turns out it's all about spin.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: We've been covering (ph) over the course of this past year, a shameful story about a U.S. development agency that has somehow refused to stand up for American workers and American products.

The Israeli government wants to buy security equipment from the Germans and the communist Chinese instead of buying American. And the United States Agency for International Development appears to be more than willing to help them do just that.

Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): Chances are air travelers know Rapiscan, even if they don't know the name. Half the metal scanners and x-ray machines, baggage inspection machines at airports in the United States are made by Rapiscan. Their products are in use at border crossings, scanning trucks. The Port of Baltimore uses their equipment to scan cargo containers. Their equipment is used throughout the world and throughout Israel.

PETER KANT, RAPISCAN SYSTEMS: So if you walk into the U.S. Embassy in Israel, you are going to walk through Rapiscan equipment.

TUCKER: Yet the taxpayer-funded United States Agency for International Development appears ready to spend 50 million American taxpayer dollars for German and Chinese scanning technology at the border between Gaza and Israel. Is it because the technology is better?

We called USAID, and in a statement the agency says the current agreements -- quote -- "call for the free movement of cargo between Gaza and Israel by early January. To achieve this critical foreign policy objective requires the action currently being taken."

In other words the agency waited so long to award the contract that Rapiscan could not meet a delivery requirement of the end of this month and taxpayer dollars go to foreign companies.

KANT: We're pretty outraged. I'm outraged for my employees and my engineers who make this equipment, who've worked hard to build it. I'm also outraged because this makes it harder for me to employ people here in the United States.

(END VIDEOTAPE)

TUCKER: And on top of all of this, USAID by law is obligated to buy American unless it writes its own waiver, Lou, which it has done in this case, and chose in favor of foreign companies.

DOBBS: That is absolutely not only disappointing but just infuriating on the part of the U.S. government and the Israeli government. I think the word is chutzpah, isn't it?

TUCKER: I think that's the word.

DOBBS: All right. Bill Tucker, thank you very much.

The lead editorial in the "Wall Street Journal" this morning is entitled "Immigration Spin Control." And then, without embarrassment or even a remote sense of irony, goes on to spin the issues of border security and illegal immigration.

The "Journal" editorial writer, in fact, managed in limited space to confuse illegal immigration and legal immigration, dismiss the significance of border security altogether. And while the "Journal" pandered to big business and the open borders advocates, it managed to suggest the Republican winner of the Orange County, California congressional election is panicked because he's smart enough to listen to the concerns of his new constituents and to insist on border security before he pledges to take on the issue of immigration reform.

At the same time, the "Journal" editorial basically suggested that Bill O'Reilly and I are somehow relentless in our support of the Minuteman Project, the volunteer group that works hard to bring attention to our border security crisis.

And I just want to be clear to the "Journal" and to this audience, I support the Minuteman Project and the fine Americans who make it up in all they've accomplished fully, relentlessly and proudly.

The "Journal" goes on to conclude all of its hyper-spin by calling for support of President Bush's guest worker program. I predict soon the "Journal" will be calling for a new term for Mexico's president, Vincente Fox.

Now our weekly salute to this nation's heroes, the men and women in uniform who serve the nation around the world. Staff Sergeant Christian Bagge, wounded by a roadside bomb in Iraq just three months ago, today determined to make a full recovery in spite of devastating injuries.

Casey Wian has his story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Take short steps. Just make sure -- slowly.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Staff Sergeant Christian Bagge is learning to walk again.

STAFF SERGEANT CHRISTIAN BAGGE, OREGON NATIONAL GUARD: I still have to come to terms with losing my legs. I don't know. It's not something that I can just do. And I remember how good it felt to just bend your knees and stretch in the morning and those little, tiny things that we're born with we take for granted. And they're just so -- I don't know. I miss those things so much.

WIAN: It's been three months since a roadside bomb ripped through his legs while patrolling this road near Kirkuk, Iraq.

C. BAGGE: I really vividly remember, you know, the sound and what it felt like and just the complete shock and awe of being hit with such a big bomb.

WIAN: It took 90 minutes for help to arrive. Fellow soldiers kept Bagge from bleeding to death.

C. BAGGE: Yes, I was really preparing myself for death. I mean, I was asking forgiveness one last time. I thought that was it. I thought it was coming.

WIAN: But he held on, thinking of his wife Melissa, insisting his wedding band be tied to his wrist before he passed out. He woke up to shocking news.

C. BAGGE: And they told me, hey, bud, you know, I had to amputate your legs to save your life. And I was just like, what? I knew that it was bad. I knew that so much had happened, but I didn't really understand the intensity of it all. And I really broke down and started crying and just had a really hard time.

WIAN: Days later, Bagge landed at the Brooke Army Medical Center in San Antonio. While doctors worked to heal his body, he drew on faith and the support of his wife to heal his mind.

MELISSA BAGGE, WIFE: We know that things can only get better and that he's going to walk and he's going to do all the things that he did before.

C. BAGGE: I try and view this as character building. I don't know what else to do. I mean, I can be angry, I can be mad, and I can, you know, wheel myself into a hole and just sit there for the rest of my life. Or I can really try and succeed. I can really try and beat this. And that's what I want to do. And I want to overcome this. And I want to -- I want to finish strong. That's what I really want to do.

WIAN: Casey Wian, CNN, reporting.

(END VIDEOTAPE)

DOBBS: You get the distinct feeling the sergeant will succeed, and we wish him all the very best as he does so.

Up next here, determined to succeed where the federal government has failed. We'll be talking about immigration enforcement or the lack of it. We'll be talking about what one local community has done to fight illegal immigration. And I'll be talking with a city councilwoman who says that's a bad idea.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: We reported here last night the city of Costa Mesa, California, has taken a bold step in the fight to crack down on illegal immigration in this country. The Costa Mesa City Council approved a plan to grant local police the power to investigate the legal status of criminal suspects in custody and to be part of a broader county program conducted by the sheriff's office. Opponents of the plan, however, say it will divide the immigrant community, and alienate Hispanics.

Mayor Allan Mansoor addressed the concern here on this broadcast last night.

(BEGIN VIDEO CLIP)

MAYOR ALLAN MANSOOR, COSTA MESA, CALIFORNIA: I don't see how anyone can object to this. This is the very least that the American public expects from its elected officials and its law enforcement. And the fact is that this will even make the community safer for those that are here illegally, but are otherwise law abiding in this country.

(END VIDEO CLIP)

DOBBS: Costa Mesa City Councilwoman Katrina Foley is one of two council members who voted against expanding police powers. Councilwoman Foley, just what are your objections?

KATRINA FOLEY, COSTA MESA, CALIF. CITY COUNCIL: Well, Lou, my objections are because this is a federal issue. And I defer to our police chief and police chiefs like him around the nation who think that this kind of law enforcement is a bad idea. It drains resources. It actually increases crime. It prevents our community policing from working. And they just don't have the resources to become immigration agents. We need them out protecting our residents, not processing paperwork.

DOBBS: And according to the motion passed by the city council it targets enforcement efforts against those who are involved in aggravated felonies and criminal street gang activity. It seems straight forwardly from that language at least to be the inverse -- focused on making the community safer and deporting criminal illegal aliens.

Why would you oppose that?

FOLEY: Actually crime is down in Costa Mesa. Violent crime is down in Costa Mesa. And our police can already ask whether or not someone is here illegally if they feel that it will assist in the deportation process with the federal agents. That's not the issue.

This is a matter of taking time away from their job working in our community and not getting reimbursed by the federal government for what is a federal issue. It doesn't result in any less illegal immigration because we're not addressing the problem, which is, as you know, Lou, border control.

DOBBS: Border security is absolutely critical but so is interior enforcement.

You have said that this would divide the immigrant community in your city. Why is that?

FOLEY: I think it will divide the entire community, not just the immigrant community. We have already had calls put into the chief, as well as myself, about parents who are afraid to send their children to school -- children who are American citizens -- because they are afraid that on the way to school that they might be picked up by the police.

DOBBS: What did you say to them? Did you explain to them that this will only apply to those illegal aliens incarcerated for serious crimes?

FOLEY: Oh, I absolutely explained to them. And I have tried to set up a time to have a public meeting so we can educate the public. That's one of the problems I had with this proposal is we didn't do public outreach.

DOBBS: All right. Well, Councilwoman, we thank you for being here to present your views. Christina Foley, thank you.

FOLEY: It's Katrina. Thank you.

DOBBS: A reminder now to vote in our poll. Do you believe law enforcement officers should have the power to ask where criminal suspects come from, their nation of origin? Yes or no. Cast your vote please at LOUDOBBS.com. We'll have those results coming up here in just a few minutes.

Coming up at the top of the hour here on CNN, none other than Wolf Blitzer with THE SITUATION ROOM. What have you got, Wolf?

WOLF BLITZER, CNN ANCHOR: Thanks very much, Lou. She's the CIA officer at the center of a political firestorm. Today's her last full day over at the CIA. We'll take a closer look at Valerie Plame Wilson, her departure, what it means.

Security extra tight in Iraq right now, where a major election is less than a week away. We'll go live to our Nic Robertson. He's embedded with U.S. troops in Ramadi.

And a new role for the NBA's big man. We'll tell you what Shaquille O'Neal is doing off the court.

All that coming up right at the top of the hour.

Lou.

DOBBS: Wolf, thank you very much. Looking forward to it.

Still ahead, our nightly tribute to our troops around the world.

Stay with us.

(COMMERCIAL BREAK)

DOBBS: At least one small community is fighting back against the so-called PC Christmas craze. A Christmas tree lighting in Manhasset, New York, turned ugly when a town official interrupted a Catholic priest in the middle of a Christmas blessing. The North Hempstead Town supervisor, John Kaiman, stunned the local crowd when he said -- quote -- "we're here to celebrate a holiday tree lighting."

The town reacted with outrage. And Kaiman has now changed his tune. He says he apologizes for diminishing the event in any way. And he says he now sees that it is okay to call a Christmas tree a Christmas tree.

The results of our poll tonight, 92 percent of you say law enforcement officers should be able to ask where a criminal suspect comes from. And we thank you for voting.

Finally, thoughts and greetings from a few of our men and women serving this country in uniform all around the world this holiday season.

(BEGIN VIDEO CLIP)

MAJOR WANDA JENKINS: Hi, my name is Major Wanda Jenkins (ph). I'm here at Al Asad, Iraq. I'd like to say hi to my mom and my dad in Smithfield, Virginia. Happy holidays.

CAPTAIN JESSE MARSELLES, U.S. ARMY: This is Captain Jesse Marselles (ph) with the 101st Airborne Division, First Brigade Combat team in Kirkuk, Iraq. And I want to say Happy Holidays and Merry Christmas to my wife, Sheralyn (ph), my children Jonathan, Ellie (ph) and Riley (ph) in Carmel, New York. I miss and love you very much.

SERGEANT MICHELLE SATTERFIELD: Hi, I'm Sergeant Michelle Satterfield (ph) with the 14th Quartermaster Station in Balad, Iraq. I want to say Happy Holidays to my husband, Rob, my daughter, Alexis (ph), and my son Hunter and all the Satterfields. I love you guys. I miss you and thank you for your support.

MARCUS DANIELS: Hello, my name is Marcus Daniels (ph) with the 122nd Striker Brigade in Mosul, Iraq. I would like to say Happy Holidays to my mother and all my family in Goldsboro, North Carolina. Happy Holidays, guys.

(END VIDEO CLIP)

DOBBS: And Happy Holidays to all of you.

We thank you for being with us tonight. Good night from New York. Have a great weekend.

THE SITUATION ROOM and Wolf Blitzer begin right now.

Wolf?

BLITZER: Thanks very much, Lou.

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

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