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Lou Dobbs Tonight

U.S. Soldier Killed in Baghdad; A Look Back at Year in Politics; Success Story in the Space Industry

Aired December 29, 2005 - 18:00   ET

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


CHRISTINE ROMANS, CNN ANCHOR: Good evening, everyone.
Tonight, Iraq is reeling from intense new insurgent violence as another U.S. soldier dies in Baghdad. We'll have an update from Baghdad tonight.

Also, new poll numbers for President Bush, as this rough year for the White House finally comes to a close. We'll take a look back at White House setbacks that marked this year in Washington.

Plus, a special report on identity theft. A staggering number. Tens of millions of Americans affected this year. Why the government still refuses to take the steps needed to protect you from an identity theft emergency.

2005 was another year of failing grades for our nation's education system. Our nation is still unable to prepare our students for the changing global economy. A special report ahead.

And you're looking now at pictures of a developing and very dangerous story out of Oklahoma City. New grass fires are quickly spreading tonight over hundreds of acres. These fires have scorched some 20,000 acres of land so far. At least one person has died in Oklahoma. Hundreds of homes burned to the ground.

At least four people in Texas have also died in these intense fires. Officials warn that with no rain in the forecast, these fires could spread even further in the days ahead. We'll continue to bring you the latest developments on the story throughout the program.

Our other top story tonight, a new day of intense violence in Iraq. Insurgent attacks continue, and an improvised explosive device has taken the life of another United States soldier.

Jennifer Eccleston has our report from Baghdad.

JENNIFER ECCLESTON, CNN CORRESPONDENT: Christine, the U.S. military announced the death of a soldier in an eastern Baghdad neighborhood after the convoy the soldier was traveling in was struck by an IED, an improvised explosive device, what a U.S. commander referred to as the insurgents' deadly and effective weapon of choice.

Now, the IED is the primary source of deaths among U.S. forces fighting here and serving here in Iraq. And of the U.S. casualties just this week, a half were a result of the IEDs. Now, also today, a suicide bomber detonated an explosive belt at a checkpoint leading to the central Baghdad office of the Ministry of Interior. Three police died in that early morning attack, as well as one civilian. Eight others, including policemen, were wounded -- Christine.

ROMANS: All right. Thanks, Jennifer.

Also in Iraq today, a shocking act of insurgent violence took the lives of 12 Shiite Muslims. It happened in a town with a predominantly Sunni population 30 miles south of Baghdad.

Insurgents broke into three homes early this morning, forced 12 men outside and shot them to death. The men are thought to be members of the same extended family, and there are fears that this incident could spark new waves of sectarian violence in the days ahead in Iraq.

The United States won a key commitment today from one of its staunchest military allies in Iraq. The president of Poland announced that all 1,500 Polish troops will remain in Iraq through 2006.

Polish troops were set to leave the country over the next few months. The Polish public supports a troop withdrawal, but the Polish president says troops must remain to help bring stability to Iraq.

In Afghanistan today, two U.S. troops were wounded when their vehicle was hit by a roadside bomb. It happened in Afghanistan's Helmand province. One soldier returned to duty, the other was hospitalized.

Taliban fighters have vowed new attacks on U.S. troops in recent days. More than 50 U.S. troops have died in Afghanistan this year, the largest death toll for our troops in Afghanistan since the U.S.- led invasion there in 2001.

Weeks of intense political effort on behalf of the Bush administration to defend the wars in Iraq and Afghanistan have done little to improve President Bush's popularity. A new CNN-"USA Today"- Gallup poll tonight shows 53 percent of Americans still have an unfavorable opinion of the president. Virtually the same number of Americans who gave the president the thumbs down last July.

Tonight's poll caps a year of continued political setbacks for the Bush White House. The president's woes began virtually the moment he took the oath of office for a second term. And with a serious domestic spying scandal raging, this president's fortunes may only worsen in the new year.

Dana Bash reports.

(BEGIN VIDEOTAPE)

DANA BASH, CNN WHITE HOUSE CORRESPONDENT (voice over): He started the first year of his second term in classic Bush style.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I earned capital in the campaign, political capital, and now I intend to spend it.

BASH: With that, he aimed for the scoreboards, vowing not only to touch but revamp the third rail of politics.

BUSH: We must make Social Security permanently sound, not leave that task for another day.

BASH: In Iraq, January's relatively peaceful elections brought hope Americans' support for the mission went up, so Mr. Bush turned nearly full time to Social Security, some 40 carefully choreographed town meetings and speeches across the country. But his "be bold and others will follow" instinct failed him. He could not convince a skeptical public or Congress to go along with his signature issue.

VIN WEBER, REPUBLICAN STRATEGIST: We found that an ambitious domestic agenda which the president outlined at the beginning of this Congress is not necessarily what the country wants right now.

BASH: Meanwhile, Americans continued to see daily violence from Iraq, yet it was not until June that Mr. Bush tried to calm spiking concern with this prime-time address.

BUSH: It is worth it.

BASH: Polls showed it didn't work. Then the summer ushered in Cindy Sheehan's anti-war protests.

UNIDENTIFIED MALE: The biggest lesson the White House has learned is they can't stop communicating about Iraq. Something else cannot take center stage, whether it's Social Security or tax reform or anything else. The nation is at war, the nation wants to know why they are at war.

BASH: Bush aides say they figured that out by summer's end and planned a fall campaign to rally support for Iraq. Then his already bumpy political ride took a nosedive.

Katrina hit, and he was accused of sleeping at the switch. He made a major miscalculation in nominating then withdrawing a top aide for the high court. And the investigation into an administration leak left one top aide indicted for perjury, another in legal limbo, while the U.S. death toll in Iraq passed the 2,000 mark.

There was no doubt Iraq was the biggest force behind the country's souring mood, so the White House belatedly set a methodical plan to try to stop their political free-fall: four speeches and a prime-time address packed into 19 days.

BUSH: I know this war is controversial.

BASH: And the president who began the year with a confident swagger ended with uncharacteristic candor, even contrition.

(END VIDEOTAPE)

BASH: And though Iraq remains the X factor, Bush aides and allies look for a 2006 comeback by better capitalizing on an improving economy and an experienced president who is personally taking more control over the political strategy -- Christine.

ROMANS: All right. Dana Bash in Crawford, Texas.

Thank you, Dana.

Tonight, as U.S. troops fight bravely in the battlefields of Iraq and Afghanistan, the Pentagon is being investigated for a shameful waste of your taxpayer dollars. New records show the Pentagon has paid outrageously inflated sums for a revamped jeep called "The Growler" that many say is outdated and simply unfit for today's combat.

Jamie McIntyre reports.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, Christine, this version of The Growler, this -- this -- Christine, this vehicle that the Marines want to buy, if we take a look at the picture here, it's called the Internally Transportable Vehicle. It's not a very impressive name, but it has an eye-popping price tag of about $100,000.

You can buy these things commercially, or a commercial version of it, for as little as $7,500 in the kit or $14,000 in a more sophisticated version. But this military version costs $100,000. The Marine Corps is planning to buy up to 400 of them for a $300 million price tag altogether.

But this version has other features, including an anti-mine shield, blast-resistant seats, and run-flat tires. The program manager says it may look like a warmed-over jeep, but he says it definitely is not.

(BEGIN VIDEO CLIP)

JOHN GARNER, ITV PROJECT MANAGER: Which it absolutely is not. The prototype started out as a jeep, because when they developed the prototype, that's what they had a very limited time to develop and that's what they did competitively to show that they could shrink it down and fit it. But since then it's been completely rebuilt. Components on this vehicle are state of the art.

(END VIDEO CLIP)

MCINTYRE: The Marines argue that critics who say that this is a waste of money don't really understand how it's going to be used. The key thing is it had to fit into the new V-22 Osprey, this helicopter that takes off like a helicopter, flies like a plane. It's going to be taking Marines to the battlefield, and essentially, if they don't have something light that will fit into the aircraft, they're going to be on the battlefield with nothing to carry weapons around.

They'll be limited to what they can carry by hand. So the vehicle had to be scaled down, had to be made narrow enough to fit in the five-foot-wide, five-foot-high cargo hold of the V-22. And they say that's one of the reasons why it costs more money.

The Marine Corps insists it's going to give their Marines a lot more firepower on the ground and give them more versatility on the ground, and that it's not designed to be a front-line vehicle to survive a powerful roadside bomb or an ambush. It's going to be more of a standoff vehicle to give them extra artillery backup.

So their arguing it's good spending money, even though the price tag at $100,000 sounds expensive for what looks like, frankly, a golf cart that's been pumped up on steroids.

ROMANS: All right. Jamie McIntyre, from the Pentagon.

Thank you very much for that, Jamie.

There are new fears tonight that al Qaeda's military arm in Iraq may be extending its terrorist operations and targeting Israel. Al Qaeda in Iraq, led by Abu Musab al-Zarqawi, is taking responsibility tonight for a missile attack on northern Israel this week.

The missiles were fired from Lebanon and did little damage. But Al Qaeda in Iraq is calling that operation a success.

This would be the first indication that al Qaeda radical Islamist terrorists have expanded their operations into Lebanon. But these claims posted on a Web site have not been independently confirmed.

Iran tonight has reportedly agreed to hold new talks to resolve its nuclear standoff with the West. Top Iranian and Russian officials have reportedly agreed to negotiate a Russian proposal that would, in Russia's view, diffuse this dangerous situation.

Russia has offered to enrich uranium in Russia for Iran's nuclear power needs. This program would theoretically eliminate Iran's stated need for an advanced nuclear energy program of its own. But Bush administration officials fear Iran really wants a nuclear program to build nuclear weapons.

Still ahead, an investigation into loans given out to businesses affected by 9/11. Did the money end up in the wrong hands?

Then, new dangerous brushfires in Oklahoma. Homes are destroyed, residents are at risk. We'll have the latest.

Also tonight, raising the stakes in the effort to seal our broken borders. There could soon be a brand new tool to help fight drug smugglers and terrorists.

And your identity at risk. How corporate America is failing when it comes to keeping your secrets a secret.

We'll be right back.

(COMMERCIAL BREAK)

ROMANS: Oklahoma's wildfire emergency is intensifying tonight. Bone-dry conditions are triggering new wildfires in Oklahoma City. These fires in Texas and Oklahoma have killed at least five people so far.

Firefighters still have not been able to bring them under control, and residents are being warned that without new rain these wildfires may spread. Fires have destroyed some 20,000 acres so far and some 100 homes. They're being whipped by winds of as much as 30 miles an hour.

Residents of Texas and Oklahoma are being ordered to cancel plans for New Year's Eve fireworks because they could set off new wildfires. Forecasters say a mere quarter inch of rain has fallen on these areas since October.

In Georgia tonight, residents are cleaning up after swarms of tornadoes touched down in the middle and southern parts of that state. Golf ball-size hail was reported, but there were no reports of serious injuries.

On the West Coast, residents are bracing for fierce new Pacific storms tonight. In Modesto, California, torrential rains triggered a large mudslide today. This mudslide triggered a four-car pileup that killed one motorist.

Rivers in northern California have swollen to their highest levels in seven years, and flood warnings are up for much of northern California tonight. Officials in California's Napa Valley and other California communities are busy with flood preparations. Evacuations have been ordered in some communities.

And you're looking live at the very latest radar of the West Coast. The new Pacific storms are now approaching and are expected to bring heavy rain and snow throughout the holiday weekend.

Tonight, serious new charges are being leveled against the federal government in its emergency response to the 9/11 terror attacks. New evidence is emerging that federal officials approved emergency assistance for small businesses who weren't even remotely touched by this tragedy.

Gary Nurenberg has the report -- Gary.

GARY NURENBERG, CNN CORRESPONDENT: Well, good evening, Christine.

The SBA was prompted to do an investigation of its post-9/11 loan program following an Associated Press report showing loans going to a dog boutique in Utah, a perfume store in the Virgin Islands, and more than 100 Dunkin' Donut and Subway sandwich shops across the country.

The STAR loan program was designed to help businesses hurt by the 9/11 attacks and their subsequent disruption of the economy. But the new investigation says most companies questioned about getting the STAR loans were not hurt by the terrorist attacks and didn't even know they were getting terrorism relief money. That's what happened to the owner of a muffler shop in New Jersey who told CNN he had just applied for a business loan and wasn't asked if he suffered any 9/11 impact.

(BEGIN VIDEO CLIP)

HAL GLASSER, LOAN RECIPIENT: I just felt that it's a disgrace for somebody to take advantage of the 9/11 situation. And they should be punished, fined, you know -- I mean, if they could be put out of business, that would be, you know, fair too, because nobody should take advantage of, you know, a situation like that. That was a disaster.

(END VIDEO CLIP)

NURENBERG: But this may not be a case of taking advantage. When the program began, there was very little interest. And congressional staff apparently began to pressure the SBA to get the program off the ground. So agency executives put out the word, we're going to say yes a lot more often than we're going to say no.

(BEGIN VIDEO CLIP)

GLENN HARRIS, SBA INSPECTOR GENERAL'S OFFICE: The problem was really in terms of the controls that the agency implemented to determine whether the lenders were exercising good judgment. And what we found is that, although there was written guidance at beginning of the program, that the agency did not implement controls to review the lenders' justifications to determine if the lenders were making good decisions.

(END VIDEO CLIP)

NURENBERG: So now expect congressional hearings. And one bit of good news. The STAR program had a good track record for repayment. A smaller default rate, Christine, than some other post-9/11 programs.

ROMANS: Unbelievable. Gary Nurenberg. Thank you so much for that, Gary.

2005 may be remembered as the year that left Americans with no allusions about the danger and prevalence of identity theft. Numerous companies reported missing personal data on hundreds of thousands of people, tens of millions of people were victims of fraud.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice over): Fifty-eight million people this year had their personal information hacked or stolen by unauthorized people. Thieves break into computer systems and net thousands of victims at a time.

The most recent case, the timeshare unit of Marriott International is telling 200,000 people their data is missing this week. Also this year, a thief swiped a laptop at the University of California Berkeley containing information about 100,000 alumni graduate students and past applicants.

HSBC notified 180,000 customers their credit card information may have been exposed when Polo Ralph Lauren's computer was broken into.

Time Warner reported the loss of computer backup tapes with Social Security numbers of about 600,000 people.

LexisNexis said personal data of 310,000 people may have been stolen.

One in five people in this country were affected by a security breach this year.

JOE WINSTON, FEDERAL TRADE COMMISSION: Fifty-eight million consumers have had their information compromised. A majority of those were actually the result of a single data breach. A processor used by Visa and MasterCard had its computer system hacked into, and the result is over 40 million consumer records, including credit card numbers, were stolen.

PILGRIM: The FACTA Act in June of this year asked consumer report companies, credit reports or banks to keep data safe or dispose of the information so it can't be stolen. But retail and credit card companies have piecemeal regulations. There is no one single federal law that covers all businesses. And 22 states have laws that even make the company notify if you if there is a security breach.

Wendy Johnson Lario is an attorney in New Jersey and says the new law in January will put New Jersey way ahead of other states.

WENDY JOHNSON LARIO, PITNEY HARDIN: New Jersey will now require all companies that are doing business in the state to notify the state police, as well as all individuals who were affected.

(END VIDEOTAPE)

PILGRIM: Now, if a company is hacked, there are no federal laws that say it has to offer credit monitoring to their customers to make sure that they aren't victims of identity theft. It's really up to the company whether they want to offer help with that or not.

Now, Congress is looking into a federal law that would require it, but nothing is in place yet. So for now it's up to the customer to consider every time that they want to give out that information and whether they really want to take the risk -- Christine.

ROMANS: And we do know that our information, our personal information, our Social Security numbers, our tax history, all kinds of things, are held in literally thousands of places. If every time that information could be breached, I get a warning or a consumer gets a warning, do we run the risk of just being overwhelmed?

PILGRIM: Well, that's a great risk that you get -- over- legislate this, and every time you get a warning you throw it out the way you get credit card solicitations in the mail, and you won't pay attention.

ROMANS: Indeed. All right. Kitty Pilgrim.

Thank you, Kitty.

And that brings us to tonight's poll. How should a company be forced to compensate you if your personal information is stolen from them: fraud protection for life, monetary compensation, or essentially as it is right now, nothing at all? Cast your vote at LouDobbs.com. We'll bring you the results later in the broadcast.

Coming up next, a special report on our nation's schools. Student performance still lagging in this country, but new programs changing the way teachers are compensated might just be making a difference.

And the White House agenda for 2006. What will top the administration's list of New Year's resolutions? I'll be talking with Jay Carney, the Washington bureau chief for "TIME" magazine.

Please stay with us.

(COMMERCIAL BREAK)

ROMANS: Our broken borders have allowed millions of illegal aliens to enter this country, and with them, countless drug smugglers and human smugglers. Tonight, one congressman is proposing two bold new measures designed to severely punish these dangerous criminals.

Lisa Sylvester reports from Washington.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice over): Drug smugglers have found another lucrative business: human smuggling. According to congressional estimates, it's a fast-growing crime, topping $10 billion a year. The penalties for human trafficking pale in comparison to drug smuggling.

Representative John Shadegg has offered proposals to deal with these cartels.

REP. JOHN SHADEGG (R), ARIZONA: In order to deter this kind of criminal conduct, where these syndicates set up in Mexico, bring people to the border, then bring them across the border, transport them and get them jobs, we need penalties that count. One of the things you can nail these people for is the creation of these false documents.

SYLVESTER: The Arizona congressman has introduced amendments to the House Immigration Reform Bill that would increase the penalty to a maximum of 20 to 40 years for document fraud committed in drug trafficking. If smuggling is connected to terrorism, there's a mandatory 25-year sentence. It's important, because the 9/11 hijackers had numerous forms of phony identification. Shadegg also wants to make it easier for prosecutors to target money launderers working for so-called coyotes, the people transporting illegal aliens into the United States.

SHADEGG: If you're going to set up a syndicate, the purpose of which is to smuggle people into our country illegally, and in the process of doing that engage in criminal activity, and you're going to victimize Americans, we're going to deal with you as harshly as humanly possible.

SYLVESTER: Shadegg's amendments have prompted some to call for a new national tamper-proof identification.

IRA MEHLMAN, FAIR: What we've always needed in this country is some kind of verifiable Social Security card that allows an employer to verify whether a job applicant is legally in this country. This is not something that's terribly difficult or technologically difficult. It's simply something that we've refused to do so far.

(END VIDEOTAPE)

SYLVESTER: And Representative John Shadegg has offered another plan that would create stiffer criminal penalties for illegal aliens than those for American citizens. For example, an illegal alien who commits a violent or a drug-related crime would automatically have another five years tacked onto whatever sentence is specified by law -- Christine.

ROMANS: Lisa, how many criminal aliens are in this country right now?

SYLVESTER: Well, it's estimated that we have about 100,000 criminal aliens. These are people who are wanted, but are just roaming the streets and living in communities.

ROMANS: All right. Lisa Sylvester. Thank you very much, Lisa, in Washington.

Still to come, the year ahead in the war in Iraq. Just what goals should the U.S. military set for a successful 2006? General David Grange will join us.

It's going to be quite a busy month in January: the surveillance scandal, the Alito hearings, Able Danger. What's a president to do? We'll talk live with "TIME" magazine's Washington bureau chief, Jay Carney.

And traveling to space as a tourist? After this year it might be a legitimate option sooner than you might think.

That and a great deal more coming up.

(COMMERCIAL BREAK)

ROMANS: 2005 was a critical year for American troops fighting in Iraq. We'll talk with General David Grange in a moment. But first, here's some other stories we're following for you tonight.

China is reporting its third human death from the mysterious bird flu. A 41-year-old female factory worker died of this disease last week. China has now reported seven cases in humans so far. The bird flu has spread to humans in five countries in Asia.

Three people were killed when a small plane crashed into a field in Omaha, Nebraska. The wreckage was discovered by a utility worker about a mile from a small airport. Officials say the pilot was not in contact with the airport, and it's not clear when the plane crashed.

And President Bush will spend part of his New Year's Day visiting the wounded American troops. The president will stop at Brooke Army Medical Center in San Antonio on the way back to Washington from his Texas ranch.

2005 has turned into a devastating year for our troops overseas. The U.S. military has lost 843 soldiers in Iraq so far this year. Very close to the 850 soldiers who died in Iraq of all of 2004.

And our military has lost more than 50 troops in Afghanistan this year. The worst loss of life for U.S. troops there since the U.S.-led invasion in 2001. But as this year comes to an end, there is at least some hope that 2006 could bring an improving situation for our armed forces overseas.

General David Grange joins me tonight from Chicago.

Hope, General, that next year will be better for our troops on the ground?

BRIG. GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Well, I think so. I think conditions will improve. The Iraqi forces are taking on more of the responsibilities. They're becoming a trained and viable element in the war against the insurgency.

And so I think so. I think it's going to be a better year for accomplishments. Now it's important to realize that you don't measure these accomplishments just against numbers of casualties on either side. That's only one quantitative way to measure success.

ROMANS: What are some other ways? I mean, we'll need to set some goals for next year. It will be a mid-term election year and of course a lot of people want to measure what's happening there.

GRANGE: Well, I think the goals that are going to be set in Iraq, as an example, would be that we want to withdraw as fast as possible, as conditions dictate that our forces can.

And at the same time, we honor the commitments we've made to the Iraqi government and the Iraqi people. That's one. And the other is, again, to continue to train and turn over responsibilities to a viable Iraqi police and military force. ROMANS: We heard today from a U.S. military spokesmen in Iraq that now Iraqi troops have now doubled to some 223,000, I think. What does that do to your, I guess, prognosis for a draw down of U.S. troops?

GRANGE: Well it definitely helps, but it's not just numbers, it's not just a one-for-one trade out. In fact, at times it may be, you have an Iraqi element that's better trained than a particular allied, a coalition force. But what it will be, it will be tied to the task that those forces are capable of conducting. But the more you have trained and more importantly, the leadership and quality of that training of those units allow U.S. troops to come home.

ROMANS: Let me ask you, we've had some noted successes in Iraq and Afghanistan. But four years now of two different countries and a global battle war on terrorism. What has this done to our military capabilities overall?

GRANGE: Well, first of all, it is without a doubt the finest trained military in the world from all this experience, good or bad, it's the finest trained.

On the other note, on a negative side, that the equipment, the weapons, have been used very hard. Some are worn out. And so there's going to be extensive maintenance requirements, refitting, and even replacement efforts to get those items back up to snuff for future conflict.

ROMANS: At the same time, we have nuclear threats from North Korea and Iran. This whole subject brewing even as we have a global war on terror and these two, Afghanistan and Iraq, wars going on. What is this going to mean for U.S. -- U.S. military capabilities in the coming years?

GRANGE: Well I think in reference to places like Iran and North Korea, there will be containment of their programs to the best of the ability of an international commitment using diplomacy. At the same time, there will be covert and the overt action to disrupt outside support. But I think the bottom line that North Korea and Iran know that the U.S. and other countries have the means to eliminate that threat, if need be.

ROMANS: General David Grange, as always, thank you so much for joining us tonight, Sir.

GRANGE: My pleasure.

ROMANS: The latest polls show many Americans are not happy with how the president is handling this war. A recent CNN/"USA Today"/Gallup poll found only 37 percent of Americans approve of how the president is handling the war. Almost two thirds, 61 percent disapprove.

The president's approval ratings are not much better when it comes to other issues: 56 percent of Americans disapprove of how he's handling the economy, 57 percent disapprove of his handling of world affairs.

The president will face a number of critical domestic challenges as the new year begins. They include the expected battles in Congress over the Patriot Act and the budget cut bill. Plus, confirmation hearings for Supreme Court nominee Samuel Alito will begin. And the controversy over the secret domestic spying is intensifying.

Joining me now for more of the challenges ahead for the White House is the Washington bureau chief for "Time" magazine, Jay Carney. Thanks for being with us, Jay.

JAY CARNEY, WASHINGTON BUREAU CHIEF, TIME MAGAZINE: Thanks for having me.

ROMANS: Does the president need a good solid success or win early in the year to set the agenda and turn the table here for the White House?

CARNEY: Well, he does. Especially if you put it in the context of what happens towards the end of 2006, which are the midterm elections. And he needs to put 2005 behind him, because although he's had a reasonably good couple of weeks, after he bottomed out in the polls, as you just pointed out.

His numbers are still very soft, and public attitudes towards Iraq and a whole host of other issues on his administration's watch are very negative. So January is a big month because if January goes badly with all the things on his plate then 2006 may not be any better than 2005.

ROMANS: January, there will likely be hearings about the domestic spying program that we've been hearing more about in drips and drabs. Also, confirmation hearings for Samuel Alito. Do you think those two things will be at loggerheads with one another or can the president pull out successes in both of these?

CARNEY: Well, there are actually -- there's an Alito eavesdropping connection, which is that Judge Alito will be aggressively questioned about his support in the past for enhanced presidential powers and the right of the president to authorize wiretapping without warrants.

So there will be these two issues will meld together. And the Alito hearings will go first, so those will be the first -- that will be the first opportunity for the general public -- which by and large has been missing this story because of the holidays -- to sort of focus on what exactly the president did, whether it was the right thing to do for security or whether we went too far in maybe even breaking the law.

ROMANS: How critical is Alito's confirmation for the president and for setting his agenda and the tone for the year? And do you expect any serious battles over abortion in these hearings?

CARNEY: Well, it couldn't be more important to get Judge Alito confirmed given what happened to the president's first nominee for this seat, Harriet Miers. And that was a debacle, a political debacle, largely of the president's making. And largely a problem that was on the right, in the Republican Party, not with the Democrats but his own party.

Alito is very well-liked by Republicans. I would say the handicap and the chances are he will be confirmed. But the combination of the privacy/eavesdropping issue, the presidential power issue and then the abortion issue, I think he will have tough hearings, tougher than Judge Roberts did early this year.

ROMANS: Let's talk about the potential intersection of the domestic spying scandal and also the battle over the Patriot Act and then this ongoing war on terror. How will all of these things be drawn together, do you think?

CARNEY: Well we saw that the Patriot Act, the reauthorization was defeated, largely because the vote came right after the first revelation about this domestic spying program, that the president authorized the NSA to conduct.

And you know, there's an unlikely bedfellows in the coalition that is against reauthorization of the Patriot Act and worried in general about civil liberties and what this new program does to them. People on the extreme rights, libertarian right and the sort of pro- civil liberties left, come together and oppose this.

So they may not represent a majority of the country, but by coming from right and left together and unifying, they are a powerful opposition for the president. This is a problem. He may persuade the public if more details don't come out that are troubling that this is a -- the right thing to do.

That their security matters more than some erosion of privacy, and that this was focused only on bad guys. But Americans don't like the notion, I don't think, that the president, without any oversight, without any congressional checks and balances, can authorize the wiretapping and the data mining of communications within the United States.

ROMANS: All right, Jay Carney, Washington bureau chief "Time" magazine. Thanks so much for joining us tonight, Jay.

CARNEY: Thank you.

ROMANS: It's time now to take a look at some of your thoughts. Lynda from Arlington, Virginia writes: We should amend the Constitution, if necessary, to eliminate dual citizenship completely. And that wall along the border should stretch from the Pacific Ocean to the Gulf of Mexico. And it should be higher and thicker than the Great Wall of China. Enough if enough.

Mike from Chandler, Arizona, writes: While listening to the discussion about our broken borders today, it occurred to me that if ever do build that 700 miles of fence, this administration will likely suspend Davis-Bacon, award a no-bid contract to Halliburton, who will then hire undocumented-guest workers to build the fence. Bruce from Champaign, Illinois, writes: It takes more than a speech from the president and empty promises to make our borders secure. This president needs to learn about substance. Perception is not reality, nor is it truth.

Richard from Vineland, New Jersey, writes: It would be easier to build a fence around Crawford, Texas, and send the illegals there.

And Floyd from St. Petersburg, Florida, writes: Voters in the next election cycle should keep the following in mind: Politicians and diapers have one thing in common. They should both be changed regularly.

We love hearing from you, especially when it's clever. Send your thoughts at loudobbs@CNN.com. Each of you whose e-mail is read on this broadcast will receive a copy of Lou's book, "Exporting America." Also, if you'd like to receive our e-mail newsletter, you can sign up on our Web site at loudobbs.com.

The sound of silence will not be coming from the Harlem Boys Choir in the near future. New York's public school system has reached a deal with the historic choir to save it from eviction, while it handles a $5 million cash shortfall. The Harlem Boys Choir will continue to operate as an after-school activity out of public school that has housed it for the past 12 years.

As part of the agreement, the New York Department of Education has asked for outside administrative offices to be instituted. Scandal hit the choir after its founder, Walter Turnbull, failed to fire an employee amid sexual abuse charges, and that scandal resulted in fewer donations.

Still ahead, failing grades for many of our nation's schools. How a lack of quality education is hurting this country.

And the latest on a story of hope from Iraq. Big news in the effort to bring baby Noor to the United States for life-saving surgery. The details there coming up.

(COMMERCIAL BREAK)

ROMANS: The American education system under continued criticism this year. Parents increasingly concerned their children are simply not receiving the necessary preparation to succeed in the global economy. And after four years of No Child Left Behind, there are still too many children who are being left behind. Bill Tucker reports.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): The nation's report card is not one you want to run home and brag about.

PAUL GROSS, THOMAS B. FORDHAM FOUNDATION: We stand pretty low among our peers and competitors in what's known as the developed world. Somewhere in the lower third, on average, for all age groups. TUCKER: For all the intentions of No Child Left Behind, there remains a disturbing achievement gap in our schools. That gap falls along racial lines.

In California, considerably fewer black and Hispanic students pass high school exit exams than white students. The gap also falls along economic lines.

RICHARD KAHLENBERG, THE CENTURY FOUNDATION: We are cheating our low-income and working class kids, and we'll have a society where the very well-off -- the children of the very well-off become highly educated, and then the rest of us don't have the same opportunity.

TUCKER: Overall, according to one of the leading college admission testers, ACT, only 56 percent of students take or exceed the recommended core curriculum for college-bound students.

While those gaps and the slip in our global competitive standings are little changed this year...

UNIDENTIFIED FEMALE: One more minute and I'll collect the papers.

TUCKER: ... one positive sign did emerge: Nationwide, a renewed focus on teachers.

LOWELL MILKEN, MILKEN FAMILY FOUNDATION: I've come to one strong conclusion, that the key ingredient in closing those achievement gaps really revolves around talented teachers. We need to entice our bright young people in the country to feel that if they go into the education profession, they are going to have career opportunities, and they are going to have professional growth.

TUCKER: Teacher pay initiatives took shape and are being implemented in local communities, like Denver, and statewide in places such as Minnesota. These programs peg teacher pay to student performance.

GOV. TIM PAWLENTY (R), MINNESOTA: A great deal of the money that we spend in public schools goes into staff salaries and benefits. And that's not a complaint, it's just a reality. It's a people-intensive business. But it's all aligned to just basically seniority. And that's not a very modern or a professional way to pay people.

And in the year 2005, we can do better than that.

TUCKER: Minnesota is spending $86 million on its program, which not only pays for student performance, but also trains teachers to improve their own performance.

PAUL HEGRE, MATH TEACHER: More importantly, it's an opportunity to have a leadership role, which in teaching there weren't many before.

BILL GIBBS, MATH & LANGUAGE ARTS TEACHER: Outside of my teaching duties, my job is to be in classrooms with the other teachers throughout the day.

TUCKER: The most successful results have come where teachers, administrators and political leaders have come together and worked in a collaborative fashion.

PAWLENTY: The teachers and school staff are good people. They're not in it to get rich. They're in it because they love learning, they love children, they want to have a meaningful life. And so, we don't get very far in being adversaries with them, and we want them to be our partners.

TUCKER: Teacher pay and education concerns were an emerging trend in 2005. Twenty governors mentioned the issue in their state of the state addresses. We'll see if there's a follow-through in 2006.

Bill Tucker, CNN, New York.

(END VIDEOTAPE)

ROMANS: A reminder now to vote in tonight's poll. How should a company be forced to compensate you if your personal information is stolen from them? Fraud protection for life? Monetary compensation? Or nothing at all? Cast your vote at loudobbs.com. We'll bring you the results in just a few moments.

The next story is in the spirit of if at first you don't succeed, try and try again and again and again and again. In last night's Alamo Bowl in San Antonio with just two seconds on the clock, down by four, Michigan quarterback Chad Henne completes a pass to Jason Avant. Now, this is where it starts to get really interesting. There's a lateral, and another lateral and another later and even another one, and even more as the Michigan players try to desperately keep this game alive until the play appears finished.

Game over, right? Well, wrong. As Nebraska players run onto the field -- they're celebrating -- Michigan tight end Tyler Ecker picks up the ball and starts running for the end zone. Only one Nebraska player stood between Ecker and highlight history.

But it was not to be. Ecker was knocked out of bounds at the 15- yard line. Game over. Then the celebrating begins. Michigan loses. But it wasn't for lack of effort. Almost highlight history there.

Still ahead, from the discovery of a new planet to the shuttle Discovery, it was quite a year in space. We'll have all the spectacular sights in space for 2005.

And the very latest on baby Noor and efforts to bring this three- month-old from Iraq to the United States for life-saving surgery. All that and more, next.

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ROMANS: If your plans for new year happen to include a trip to space, the federal government has just released a rule book for your travels. The new book is 120 pages, and includes everything from medical requirements to training standards for the crew. President Bush signed legislation a year ago to help the space industry. It prohibits the Federal Aviation Administration from issuing space travel safety regulations for eight years, unless specific design flaws or operating practices caused serious harm.

Now tourism is just one of several new possibilities emerging in space exploration. My next guest says there are a number of success stories in the field of space this year. Joining me now for more on this issue is Charles Liu, he's a professor of astrophysics at the City University of New York, also an astrophysicist with the American Museum of Natural History. Welcome to the program.

CHARLES LIU, PROFESSOR OF ASTROPHYSICS, CITY UNIVERSITY OF NEW YORK: Thanks, good to be back.

ROMANS: And your students, their favorite development in 2005 is the discovery of what could be a 10th planet.

LIU: That's right. Every year the College of Staten Island, I say, "What do you think was the most important thing?" And they think, "Wow. Wasn't the 10th planet discovered earlier this summer?" And I say, "Well, yes." But I'm thinking about our landing the Huygens probe on Saturn's moon, Titan. I'm thinking about our discovery of the echoes of the Big Bang imprinted in the matter distribution of the universe. Those are, I guess, the three big stories that are coming to my mind.

ROMANS: Those final two are the longer-term -- will have longer- term implications on astrophysics.

LIU: Exactly. But it's so much fun to think about a 10th planet. Wow, that's just fantastic news.

ROMANS: Think of all those Trivial Pursuit games will have to change, science textbooks and the like. It's something definitely interesting to talk about. But let's talk about NASA and what it's preparing for coming up in January. Stardust discovery, what's this all about?

LIU: It's a marvelous thing. About January 15th, about 5:00 in the morning, there's going to be a capsule, yay big, which contains material from a comet. And it's going come through the atmosphere at almost 30,000 miles-an-hour and make a parachute-soft landing in Utah.

The idea was that six years ago, when this was Stardust mission was launched, it launched sort of a fly swatter, with this aerogel sticky substance and it flew through a comet, grabbed little bits of comet, which are sort of the fossilized remains of the early solar system. And it's going to bring it back down to Earth and we'll actually study it in the laboratory.

ROMANS: What's it going to tell us? What could it tell us?

LIU: There are all kinds of things. Because this cometary material is literally billions of years old, we get a first-hand view of what the solar system might have been like when the Earth was still forming.

The other thing is, if we get to know what's inside a comet and how it's constructed, there may be actually be little microorganism -- well, I should say, pre-microorganism things, amino acids, proteins, who knows? There are some people who are starting to think that some of the organic compounds here on Earth might have been deposited by comets.

Imagine if we find something like that. Early proteins, in the early RNA and DNA that built the building blocks of life. Maybe that's what we'll find.

ROMANS: And this is why space and the exploration of space is so important, because it might literally hold the meaning of life.

LIU: Absolutely. We humans have come so used to being just on the ground and thinking about Earth as our home. But we're expanding now. Our civilization is leading us to believe that every time you use a cell phone or use a GPS, that you are using space technology. We're wandering further and further out into space. And not too far from now, we'll be thinking of space not just in your Earth orbit, but say the moon, maybe even Mars, Venus, as parts of our neighborhood, parts of our environment.

ROMANS: You say an important milestone for the year, for NASA in particular, five continuous years of a human living on the International Space Station.

LIU: It's really quite a benchmark. First thing it says is that for all of its flaws, the International Space Station is still valuable and important. It's an important step in human beings going forward.

And second of all, it means that we almost think of people living in space as commonplace now. Some years ago, a human being in space even for a few days, a few hours, was big news. Now every single day there is a human being orbiting hundreds of miles above Earth in the International Space Station.

ROMANS: How long until we're back at the moon and how long until we really do put a man on Mars?

LIU: That's a great question. The current plan that NASA has with the vision for space exploration suggests that around 2018, we will return to the moon. And then some years after, bring a human being to Mars for the first time and come safely back. But that really depends on a combination of societal will and political economic will to do these sorts of things. We have the technology, but we want to develop new technology. We want to understand what we're doing much better now than we did 30 or 40 years ago.

ROMANS: You point out that even for the past 40 years, we're still just putting a man on the tip of a rocket.

LIU: Yes, a firecracker almost. And as safe as we can try to make that, in the end, some shift, some sort of basic technology needs to be developed and support of basic science, basic research, not just astronomy, but biology, chemistry, engineering. These are the kinds of things that NASA, looking forward, will make the biggest contribution to us as humans going into space.

ROMANS: And science education of our children, one of our theme songs around here. Charles Liu, thank you so much, American Museum of Natural History, also the City University of New York. Thank you so much.

LIU: My pleasure.

ROMANS: Still ahead, the results of tonight's poll and update on Baby Noor and our tribute to our troops.

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ROMANS: And now the results of tonight's poll: 54 percent of you believe a company should offer fraud protection for life if your identity is stolen from them, 45 percent of you want monetary compensation and one percent want nothing at all.

Baby Noor now has a passport. All she needs now is a Visa and she'll be on her way from Iraq to the United States for life-saving surgery. We've been telling you about Baby Noor all week. She has spina bifida, a birth defect in which the spinal column fails to completely close.

Doctors in Baghdad gave her 45 days to live when she was born. So far though this little baby has made it three months. She was found by members of the Georgia National Guard serving in Iraq. They decided they were going to go ahead and go above and beyond the call of duty and arrange for a free surgery to save her life, a surgery not available in Iraq. The Atlanta surgeon who offers his services says he wants to do the surgery as soon as possible. We'll continue to update you on her progress.

Finally tonight, our nightly tribute to our troops. Each night we bring you thoughts from some of the men and women serving our country around the world.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Hi, I'm Yeoman Second Class Robert Manuel (ph), currently assigned to commander Fifth Fleet Bahrain. I want to send a holiday greeting to my mother Yvette Manuel from West Palm Beach, Florida. Hi, mom, I love you and I'll be home soon.

UNIDENTIFIED MALE: Hi, I'm Colonel Matt Dezala (ph) from Kabul, Afghanistan. I want to wish my family and friends of Pawtucket, Rhode Island, merry Christmas and Happy New Year. And especially my wife Gail, my kids Heather and George. Merry Christmas.

UNIDENTIFIED FEMALE: Hi, I'm Yeoman Second Class Jennifer Tapia (ph) with Mobile Security Squadron Three in Bahrain. I'd like to say happy holidays to all my family and friends in San Antonio, especially my husband Paul and my dad. I love you. UNIDENTIFIED FEMALE: Hi, I'm P.S. Dee Vulte (ph) from Tikrit, Iraq, and I just want to wish my family a happy holidays in Pompton Lakes, New Jersey.

UNIDENTIFIED MALE: Hello from Kabul, Afghanistan, this is Specialist Michael Caruth (ph). I'd like to wish everyone back home in Summit, Mississippi, a very special holiday season. And especially to my wife Melissa and my kids, Kristen, Cameron, and Drew. Merry Christmas to you all. I love you all and miss you. We'll see you soon.

(END VIDEO CLIP)

ROMANS: We hope so. We wish all the troops a safe return home. Thanks for being with us tonight. Join us tomorrow. Good night from New York. "THE SITUATION ROOM" starts right now with Ali Velshi, filling in for Wolf. Hi, Ali.

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