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LOU DOBBS TONIGHT

Justice Department Launches Probe Into Leak of Top Secret Domestic Spying Program; Top U.S. Commander Says Iraqi Insurgency Weakened

Aired December 30, 2005 - 18:00   ET

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


CHRISTINE ROMANS, GUEST HOST: Good evening, everyone.
Tonight, the Justice Department launches a sweeping investigation into the leak of a top secret domestic spying program. President Bush has called the leak shameful. We'll have live reports from Washington and Crawford, Texas.

In Iraq tonight, new insurgent violence but also new hope from the United States military. A top commander says the insurgency is weakening.

2005 saw the assault on the middle class turn into the war on the middle class. From outsourcing to soaring energy prices to cuts in student aid, working class families have been left reeling at year's end. We'll have a special report.

Plus, Oklahoma and Texas on alert tonight for new possible wildfires. We'll have the very latest there.

And along the rain-soaked West Coast, new worries tonight as relentless storms pound the region and no signs of relief in the days ahead.

We begin tonight with new fallout from the Bush administration's secret domestic spying program. The Justice Department confirmed today it's launching an investigation into a leak -- into who leaked the existence of this classified program to the press. President Bush has called the leak a shameful act that puts American lives at risk.

National security correspondent David Ensor is in Washington. And Suzanne Malveaux is traveling with the president to Crawford, Texas. We begin with David Ensor in Washington -- David.

DAVID ENSOR, CNN CORRESPONDENT: Christine, the National Security Agency and other intelligence agencies are required by law to refer any leak of classified material to the Justice Department. So it's not really a surprise that the department has started this probe.

Legal experts say it may be tough going, though, to find out who were the leakers.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The investigation by FBI agents and Justice Department officials will focus on the relatively small number of U.S. officials who knew that President Bush had ordered the National Security Agency to eavesdrop on some in the U.S., locking for evidence of terrorist activity and to do so without a court warrant.

"The New York Times" revelation December 16 ignited a firestorm, with critics charging the president had exceeded his authority and broken the law. President Bush and his aides have strongly defended the top secret wiretapping program, saying it is a legitimate tactic in the war on terror.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My personal opinion is it was a shameful act for someone to disclose this very important program in a time of war. The fact that we're discussing this program is helping the enemy.

ENSOR: The leak investigation may also involve tracking the contacts of James Risen, the "New York Times" reporter who co-authored the story and who has a book coming out soon. Leak investigations are usually unsuccessful, but Patrick Fitzgerald, a special prosecutor appointed to find out who leaked the name of Valerie Plame Wilson, the former CIA officer, pioneered a new tactic: going after journalists, jailing one, Judy Miller of "The New York Times," when she at first refused to reveal her sources.

Former prosecutor Dick Sauber represents another journalist in that case.

DICK SAUBER, MATTHEW COOPER'S ATTORNEY: Now we have what I think is going to be a titanic clash this year between the government's right to keep classified secret and the public's right to know. And caught in the middle are going to be a fairly significant number of journalists who are going to face a very challenging year.

(END VIDEOTAPE)

ENSOR: A challenging year as the nation seeks to find a new post-9/11 balance between liberty and security -- Christine.

ROMANS: A delicate balance. But how likely are there -- how difficult will it be to fine who actually did the leak?

ENSOR: You know, I would have said very difficult until recent months. These leak investigations very seldom have been successful historically. But given the recent precedent I just mentioned in the piece of the Valerie Plame Wilson case, where -- where a prosecutor went after the journalist, so to speak, and threatened them and appears to have gotten the information he needed that way, who's to say? It's possible they might be able to find out who -- who leaked this information.

And this is a very different sort of case. These -- these people are considered to be whistle blowers. They felt they were doing something for the country, presumably, when they told "The New York Times" about this program.

ROMANS: All right. David Ensor. Thank you so much, David. Meanwhile, Suzanne Malveaux is traveling with the president tonight in Crawford, Texas. Suzanne, what's the word there?

SUZANNE MALVEAUX, CNN CORRESPONDENT: Well, Christine, White House spokesman Trent Duffy making it very clear. He says the White House did not pressure the Justice Department when it came to this decision, that the president was notified between a bike ride and also clearing some brush as the administration was notified.

But as David Ensor rightly points out, it was very clear the president's position. He called it shameful, this whole leaking.

Trent Duffy earlier today saying, I'm quoting here, "The leaking of classified information is a serious issue. The fact that al Qaeda's playbook is not printed on page one when America's is, it has serious ramifications. You don't need to be Sun Tzu to understand that."

And of course, a little esoteric mention there of the Chinese scholar and general who authored "The Art of War" in 500 B.C. But very clearly, the White House making it known its positions on this, backing the Justice Department today.

The ACLU very upset about this. They released a statement, as well, saying, "President Bush broke the law and lied to the American people when he unilaterally authorized secret wiretaps of U.S. citizens. But rather than focus on this constitutional crisis, Attorney General Gonzales is cracking down on critics of his friend and boss. Our nation is strengthened, not weakened by those whistle blowers, who are courageous enough to speak out on violations of the law."

And of course, they are calling for the Justice Department to appoint a special counsel to investigate this matter -- Christine.

ROMANS: And also, the president today signing the Patriot Act.

MALVEAUX: Well, that's right. And this is not what the president really wanted here. He wanted the whole thing signed for the next year. Realized the Senate was pushing for a six-month extension, the House five weeks. Ultimately Congress decided five weeks was the extension they were going to give the president here.

So it means it really just presses the reset button, if you will, on this debate over civil liberties. There's some Democrats and Republicans who are looking at those provisions of the Patriot Act and saying, "Look, we are uncomfortable with some of these. We want to debate this and look at it fully." They have until February 3 to straighten out all of that.

ROMANS: All right. Suzanne Malveaux in Crawford, Texas. Thank you, Suzanne.

Coming up a little later in the program, we'll be talking more about the domestic spying uproar and the year ahead for the president. Former White House political director Ed Rollins, "TIME" magazine's Joe Klein and Tom DeFrank of the "New York Daily News" will all join us to look back at 2005 and look ahead to 2006.

The Pentagon announced today that two more U.S. soldiers have been killed in combat in Iraq. The number of U.S. troops killed in Iraq now stands at 2,177.

Jennifer Eccleston is live in Baghdad with more on the latest violence -- Jennifer.

JENNIFER ECCLESTON, CNN CORRESPONDENT: Christine, it is the dichotomy of life here in Iraq. A car bomb and a mortar rip through a commercial area in central Baghdad. Five people died in the blast this afternoon. Two dozen were wounded.

And as you mention the U.S. military today announced the deaths of two soldiers, one on a patrol in southern Baghdad this day, killed when a roadside bomb struck his vehicle. Another died Thursday from small arms fire in Fallujah.

And then earlier today, a desperately ill baby prepares for surgery that will save her life. That's 3-month-old Baby Noor. She left Baghdad today on a military aircraft with her father and grandfather. They stopped over in -- grandmother, rather. They stopped over in Kuwait and are now on their way to Atlanta, where she will undergo a treatment for a spinal cord defect.

Her incredible story, Christine, began three weeks ago when members of the Georgia National Guard and the New York based 10th Mountain Division discovered this sick infant during an anti- insurgency raid on her home outside of Baghdad. And then a mission to get this -- desperate need of medical attention for this young girl, which was unavailable here in Iraq was set in motion. And today she is now on her way -- Christine.

ROMANS: All right. Jennifer Eccleston in Baghdad. Thank you so much, Jennifer.

Despite the renewed violence in Iraq the commander of U.S. troops in Baghdad today said the Iraq insurgency is weakening, particularly since this month's parliamentary election.

Jamie McIntyre reports from the Pentagon.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN CORRESPONDENT (voice-over): Even as fresh explosions rock Baghdad the commander of U.S.-led forces in the capital argues the insurgency has weakened since the December 15 elections. And says, despite and increase in the number of attacks, the insurgents are failing 90 percent of the time.

MAJ. GEN. WILLIAM WEBSTER, MULTINATIONAL DIVISION, BAGHDAD COMMANDER: About a year ago when we took over, about 25 to 30 percent of the attacks were successful. So down to around 10 percent now. And also, the type of attacks has been disrupted so that they are conducting attacks that don't require them, for the most part, to make and plant explosive devices. MCINTYRE: But even as insurgents rely more on ineffective drive by shootings and random mortar attacks, the U.S. death rate in Iraq is nearly unchanged from last year: 843 deaths with 64 so far in December this year. Compared to 849 U.S. deaths in 2004, with 72 in the last month of the year.

General Webster's 3rd Infantry Division will be replaced over the next month with slightly fewer troops from the Army's 4th Infantry Division from Fort Hood, Texas. They will inherit a Baghdad where 50 percent of the urban area is under Iraqi army control. And another 10 percent is patrolled by Iraqi special police.

Concern that the Shia-dominated forces are abusing the Sunni minority, the U.S. is planning to increase the number of American troops advising the Iraqi units.

WEBSTER: We have teams of a hundred or less working with those Iraqi army forces every day. And we currently have teams of 50 or so working with each of the special police brigades. And over time we will increase those numbers.

MCINTYRE (on camera): The idea behind increasing the number of U.S. advisers is to exert firmer control over Iraqi units who are suspected of carrying out human rights violations, including torture and murder. That's seen as vital to persuading Sunni Iraqis, who may support the insurgency, to support the new Iraqi government, which will be dominated by the Shia majority.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

ROMANS: A Florida teenager is flying back to the U.S. tonight after taking a dangerous trip to Baghdad without even telling his parents.

Sixteen-year-old Farris Hassan, a high school junior from Ft. Lauderdale, says he took the trip to better understand conditions in Iraq. He skipped a week of school to do it. And he stayed in Iraq on his own for days, unable to speak a word of Arabic, before U.S. troops located him.

His mother says she's glad her son is safe but she says she has no idea how he was able to do it all by himself.

(BEGIN VIDEO CLIP)

SHATHA ATIYA, FARRIS HASSAN'S MOTHER: I have no idea how he was able to get a visa for a 16-year-old to Kuwait or to Baghdad. I was even shocked to see that he was able to purchase a ticket, being a 16- year-old traveling alone internationally. So these questions he has to answer. I'm still puzzled at that.

(END VIDEO CLIP)

ROMANS: He's got a lot of questions to answer to his parents. Hassan, whose parents were born in Iraq, left the U.S. December 11. He visited Kuwait and Lebanon before arriving in Iraq on Christmas day. The U.S. tonight is warning all Americans once again about the dangers of traveling to Iraq. This young man certainly takes teenage independence to a new level.

Still ahead, illegal aliens who have repeatedly violated this country's immigration laws have one final chance to get a coveted green card. Better act fast. Our special report coming up next.

Then, why Central American countries who pushed so hard for CAFTA are now dragging their feet about putting the so-called free trade agreement in place on January 1.

And the very latest on the severe weather in the west. Rivers are on the rise, with dangerous new storms on the way. A live report coming up.

And the latest on a new tropical storm in the Atlantic. We'll be right back.

(COMMERCIAL BREAK)

ROMANS: The Department of Homeland Security says it's met a critical border security deadline mandated by Congress. The department has completed the U.S. Visit program at 284 airports, seaports and border crossings. U.S. Visit tracks foreigners entering the country using fingerprints and photographs. DHS says the next step, tracking foreigners who leave this country, is still years away.

Tonight, up to 100,000 illegal aliens in this country are eligible for a green card if they act fast. December 31 is the final day illegal aliens who have been in the country for decades and were denied amnesty under a nearly 20-year-old immigration act can make a last attempt to get their green card.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): The countdown is on. If you are a long- time illegal alien in the United States, you may be eligible for a green card. The final deadline for amnesty under the 1986 Immigration and Control Act is tomorrow.

Eligible are people in this country illegally who were denied a green card because they left the country sometime between 1982 and 1987, but after two class action lawsuits, tens of thousands of people are still eligible for green cards under 1986 amnesty.

And any illegal aliens who notify the government that they are here illegally and want to be considered for amnesty have no fear of being deported if they're denied. The government assuring long-time illegal aliens, quote, "Unless you commit fraud, all information you submit may be used only to decide those applications and not to obtain a deportation order against you."

JACK MARTIN, FAIR: It's an example of the type of mess that we have when we adopt an amnesty. And we're sending the message that, in effect, we don't really mind if people ignore our immigration laws and just do whatever they want coming into the country. That we'll clean up their mess for them with an amnesty. It's the wrong message. It encourages people to come here illegally.

ROMANS: But some think there are benefits to rewarding legal residency to people who have broken immigration laws.

TAMAR JACOBY, MANHATTAN INSTITUTE: It's in our interest to bring these people up out of the shadow, so we know who's here and we know what their names are, and we can do background checks on them and we can have them living on the right side of the law.

(END VIDEOTAPE)

ROMANS: That was the hope of the 1986 amnesty, to bring illegal aliens back to the right side of the law. At the time, there were three million people here illegally. Amnesty was supposed to fix the problem of illegal immigration. Today there are as many as 20 million people illegally in this country.

Tonight a major setback for the highly contested Central American Free Trade Agreement. The so-called free trade deal that critics say will cost American jobs is supposed to go into effect on January 1. But now U.S. officials say Central American countries are so far behind in preparing for CAFTA it will have to be delayed for several weeks if not months.

Kitty Pilgrim reports.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): President Bush counted CAFTA among his victories in a speech just before Christmas.

BUSH: This morning I spoke to the speaker who called me. He said, "Mr. President, we had a pretty good -- pretty good couple of days."

Got your budget passed. Got Katrina relief package going forward. We're supporting our troops. We got the free trade. We talked about passing CAFTA. We've done a lot. And it's good for the country, by the way.

PILGRIM: But now it turns out it's still not done. The trade agreement, including Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua, or CAFTA, passed the U.S. Senate in June, the House of Representatives in July and the president signed it in August. All the CAFTA partners set January 1, 2006, for the starting date.

But now the United States is looking at February or March as target dates to implement the agreement, because many of the laws and regulations in CAFTA countries aren't ready.

STEVE NORTON, USTR OFFICE: It's also very important to get it done correctly. And if it takes a little bit more time, to go through the implementing process, we'll just have to do it.

PILGRIM: CAFTA was a hard sell in the United States, bitterly opposed by those who objected to more lax laws for Central America on labor conditions and the environment. And the cells (ph) of the powerful U.S. sugar industry with imports in the first year of CAFTA "will only be about a teaspoon and a half per week per American," unquote.

But today the USTR office said the hold up in CAFTA countries, not the United States. "The United States will implement the CAFTA-DR on a rolling basis as countries make sufficient progress to complete their commitments under the agreement."

(END VIDEOTAPE)

PILGRIM: The CAFTA vote was controversial. U.S. labor groups lobbied against it. Democrats picked it apart, calling it -- calling for stronger labor provisions and environmental safeguards. The final House vote was 217 to 215. And House leaders held the vote open to round up enough votes to win.

Well, with today's news it seems it wasn't votes that CAFTA needed, but it was time -- Christine.

ROMANS: All right, indeed. Kitty Pilgrim. Thank you, Kitty.

Questions about Coca-Cola's labor practices in two cheap foreign labor markets have prompted an American school to kick Coke off campus. The University of Michigan will not renew its $1.4 million contract to sell Coke products on its three campuses next year.

The school said Coke has failed to live up to its promise to begin an independent audit of its labor practices in Colombia and India. Coke has vigorously defended its record in these two countries.

Communist Cuba today gave a rousing welcome to Latin America's newest leader. Bolivia's president-elect, Evo Morales, arrived in Havana to cheering crowds, a military band and a beaming Fidel Castro. The two old friends embraced and praised each other's leadership. Political observers say the rise of Morales is just the latest sign of Latin America's dangerous shift to the left.

Still ahead, it's almost January, but there's a new tropical storm in the Atlantic. We'll tell you all about that one. Also tonight, wild weather in the west as major Pacific storms pour down on already saturated areas. We'll have a live report.

And that rain would be welcome news in Texas and Oklahoma, where the wildfires are finally slowing down. But tonight there are new warnings. The full story there next.

And college tuition, health insurance, the exporting of American jobs, just some of the issues that took a heavy toll on the middle class this year. We'll have a special report.

(COMMERCIAL BREAK)

ROMANS: Officials in Oklahoma today are warning that dangerous new fires could ignite at any time. Texas and Oklahoma residents have had a brief but much needed break today from days of deadly grass fires. Those fires have burned across tens of thousands of acres since early this week. The forecast for the next few days in this drought-plagued region is for more warm, dry, and windy weather.

The governor of Texas says his state is a virtual tinderbox tonight. Only a quarter inch of rain has fallen in this region since mid-October. Five people have died in the Texas and Oklahoma wildfires this week.

The western states have the opposite problem tonight, too much rain. The area is being pounded by its second major Pacific storm this week. Flooding is a very real concern tonight. And another new storm is set to hit Sunday.

Jen Rogers is live tonight in Napa, California.

Hi, Jen.

JEN ROGERS, CNN CORRESPONDENT: Hi, there, Christine.

The rain is picking up here again, and so is the wind. About the only good news I have to report from the banks of the Napa River is that the river is actually receding a little bit right now with the tide moving back out back into the San Francisco Bay.

If you take a look behind me here's a bridge on Third Street in downtown Napa. You can see a darker line there. That's the high water mark that we reached earlier today when the tide was coming in. Obviously, now it's gone down. But it is still substantially higher than were it was this morning when we first arrived.

We've had at least eight hours of really continuous substantial rainfall here. That said, people in downtown Napa, the city officials believe they are going to be able to dodge a bullet here. They think that they are going to be able to avoid widespread flooding now that they've seen what the beginning of this storm can handle down here.

Now, up river it's a bit of a different story. In St. Helena, they still have a flood warning in effect there, that through tomorrow. And they think that they could see some agricultural flooding and some secondary roads flooded out there.

The Russian River west of here also still a trouble spot right now.

Even though Napa may be able to dodge a full widespread, full- blown flood, people are not taking any chances. Over 7,000 sandbags have been distributed here in Napa. Residents have been through this before. More than 20 major floods since 1862. People very well versed in how exactly to get their property prepared to try and fight off the rising waters. People filling up the sandbags. The city gives them out for free. But you have to do the hard work of filling them up yourself -- Christine.

ROMANS: All right. Jen Rogers in California. Thank you, Jen.

In the season of dangerous severe weather, there is yet another milestone. The National Hurricane Center announced today that a new tropical storm has formed in the Atlantic, one month after the official end of the Atlantic hurricane season. This new storm has been named Zeta. It is the 27th named storm in the record-breaking Atlantic storm season. Forecasters say Tropical Storm Zeta poses no threat to land.

Still ahead, gas prices, a new bankruptcy law, falling wages have turned an assault on the middle class into a war on the middle class. Our special report is next.

Then 2005 didn't exactly turn out the way President Bush hoped it would. But could the president rebound for a productive 2006? We'll talk with some of the top political minds next.

(COMMERCIAL BREAK)

ROMANS: The assault on the middle class escalated to an all out war this year. The passage of the bankruptcy bill makes it harder for many Americans to get their lives back on track. And record high oil prices, gas prices squeezed already tight budgets. All of this as wages fell, jobs disappeared, and health care costs rose.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): The president had big ideas for the middle class at the beginning of this year.

BUSH: To make our economy stronger and more productive, we must make health care more affordable. To make our economy stronger and more dynamic, we must prepare a rising generation to fill the jobs of the 21st Century. To keep our economy growing, we also need reliable supplies of affordable environmentally responsible energy.

SYLVESTER: Many middle class Americans wanted the same thing.

LOU DOBBS, HOST: Results of our poll tonight, an interesting breakdown. Fifty percent of you say health care security is the biggest concern to America's middle class. Thirty-three percent say job security. Eleven percent Social Security. Only five percent say national security.

SYLVESTER: But little has changed. The president's proposed Social Security reform went nowhere. Forty-six million Americans have no health insurance. College tuition, drug prices and the cost of health care insurance all greatly outpaced inflation. And the economy...

BUSH: The United States has added 2.3 million new jobs.

SYLVESTER: But many in Congress say those jobs don't benefit the middle class.

REP. BERNIE SANDERS (I) VERMONT: Look, the reality right now is the middle class in this country is collapsing. Poverty is increasing. The new jobs that are being created are by and large low wage jobs with minimal benefits.

SYLVESTER: CEOs saw their salaries jump seven percent. That doesn't include bonuses while middle class wages fell.

JARED BERNSTEIN, ECONOMIC POLICY INST.: And the other piece of this puzzle we often overlook is the fact that for many people their wages and their incomes have not been keeping pace with inflation.

SYLVESTER: And corporate America chose cheap foreign labor over the American worker.

STEVE MILLER, DELPHI: We are in a market for human capital. Supply and demand. If you pay too much for a particular class of employees, you go broke.

SYLVESTER: Oil prices spike to a record. More than $70 a barrel. Outrage as gas prices has skyrocketed across the country. Accusations of price gauging flew.

TYSON SLOCUM, PUBLIC CITIZEN: Congress is clueless. The White House is clueless. They are doing nothing at all to hold oil companies accountable for their price gauging. They are doing nothing to hold energy traders accountable for their price gauging. And Americans are suffering as a result.

SYLVESTER: And this winter the middle class is struggling with higher oil and energy costs. Instead of holding oil companies accountable, Congress went after one area of relief for millions of overextended Americans. Bankruptcy.

SEN. EDWARD KENNEDY (D) MASSACHUSETTS: More than 50 percent of the bankruptcies in this country now is a result of extraordinary health conditions. A majority of those people had health insurance. They are hardworking. They try hard. And this bill if it's permitted to pass will really indenture those individuals and their families to the credit card companies for years.

SYLVESTER: It did pass, and people scrambled to file for bankruptcy ahead of the deadline an average of 40,000 per day. People like Russell Clark were lucky.

RUSSELL CLARK, BANKRUPTCY FILER: Basically being able to pay the bills back before I can be able to buy a house and get another car and anything like that because my credit was shot because of it. So now at least I will have a chance to start over.

SYLVESTER: But the law left many Americans feeling like Congress was out of touch with the middle class.

LOU DOBBS, CNN ANCHOR: Now the results of our poll tonight and the results are overwhelming. Ninety-eight percent of you say Congress is ignoring the interests of our middle class.

(END VIDEOTAPE)

SYLVESTER: And if that's not enough. Before Congress left for the long holiday break, the Senate approved billions of dollars in cuts to health, education and labor programs. Programs that benefit this country's middle class--Christine.

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

Be sure to tune in on Monday for our special report on the war on the middle class. We're going to take a closer look at the crushing debt most families are carrying and how our eight trillion dollar national debt will take its toll on the American middle class.

And that brings us to tonight's poll. What story do you think had the most impact on Americans this year, the economy, the war in Iraq, Hurricane Katrina or gas prices? You can cast your vote at loudobbs.com, and we'll bring you the results later in the broadcast.

By most accounts 2005 was a challenging year for the Bush White House. The president began his second term in January after winning reelection by the lowest margin ever for a sitting president. His second term priority, social security reform, quickly disappeared from the national agenda.

At the same time a surge of violence in Iraq hurt public support for the war. The number of American troops killed in Iraq surpassed the grim mark of 2000 this year.

In Washington White House officials were under investigation for leaking the identity of a covert CIA operative. One of them, Scooter Libby, was indicted. While another, Karl Rove, remains under investigation.

And now the president is facing a rising uproar over the secret domestic spying program.

Joining me now for more on this difficult year for the White House and the challenges ahead are Ed Rollins, former White House political director under President Reagan, Joe Klein, columnist for "Time Magazine" and Tom DeFrank, Washington bureau chief for "The New York Daily News." Thanks all of you for being here.

Tom, I want to start with you in Washington first. Where was the first road block this year for the president's agenda?

TOM DEFRANK, NEW YORK DAILY NEWS: Well, I think the biggest one was Iraq. It began the year, and it continued all through the year. It is the centerpiece of Bush's continuing problem here. As Iraq goes, so goes his presidency, so goes his second term. And I think from start to finish Iraq was his main problem.

ROMANS: Is that the main problem, his first road block? ED ROLLINS, FMR. W.H. POLITICAL DIRECTOR: Well, there is no question that is the main problem. The singular problem, I think, was he started on Social Security he wanted to try and shift some attention to a domestic agenda. And he didn't even have a consensus of his own Republicans.

And obviously never got anywhere. Spent a lot of time in the first couple months trying to sell that. And obviously gave up an opportunity to sell some other things that may have been more palatable to them.

ROMANS: He took taxes on the road. He was all over the country selling--or social security rather, selling social security reform. And is it over?

JOE KLEIN, COLUMNIST, TIME MAGAZINE: For the time being, yes, it is over. And the question is, where does he go with his domestic policy in the next year, but the next segment.

I'm with Tom on this. I think that even the other problems he had, like the incompetent response to Hurricane Katrina, were splash backs from Iraq. Because Iraq was being handled incompetently, the incompetence with Hurricane Katrina became a much, much bigger story.

Because conservatives were angry at him because he wasn't being aggressive enough in Iraq, they took it out on his Supreme Court nomination of his White House counsel.

ROMANS: It all tied in together. There is also the cronyism problems this year. You know, the Abramoff scandal, you've got concerns. And that goes back to the Katrina story as well. Are there people more skeptical now, more kind of concerned, Ed, you think about business as usual in Washington and the White House?

ROLLINS: Well, business as usual is not going to work. I mean, I think to a certain extent, as we saw in the closing days of Congress, Congress is very unhappy. And they are very unhappy with the leadership that is coming out of the White House.

The war certainly is going to be the president's ultimate legacy. And he has to do a much better, effective job of both communicating and fighting that war.

But more important, I think, as far as Republicans are concerned who see the midterm elections is getting some kind of agenda they feel they can run on.

ROMANS: Tom, do you want to jump in there?

DEFRANK: Yes. I was just going to say, Christine, that this is without a doubt this last year has been the worst year of the Bush presidency. But it is also true that he ended the year on an uptick. And that is a double edged sword for him.

The uptick gives him a little more feeling better about himself and about his situation. But it also may give him a false sense of security. Especially the aides around him are saying he's back. He's back. Well, I'm not so sure he's back. He certainly stabilized his political situation. He's not going to fall through the floor. But he's still got a way to go to be completely rehabilitated as a political force.

KLEIN: And it also, it wasn't just a bad year for the president. It was a pretty awful year for the Democrats, as well. I mean, you know, they...

ROMANS: Problems are in Washington around the bend.

KLEIN: You know, they offered no coherent opposition. You know, it's difficult to oppose a war in midstream coherently, but Democrats certainly could have been far more aggressive when it came to domestic policies and a lot of the other areas.

ROMANS: What about ending on an uptick? Do you agree that he did?

ROLLINS: What he did is he got Republicans back by going out and making his case against the Democrats who are against the war, he made some of the Republicans come back to him. And when he dropped to 40 percent in the polls, that was a erosion of the Republicans.

Democrats have been against him since 2000. Independents started going against him the end of last year. Then Republicans started going away from him. He has gotten most of those back now.

ROMANS: But gentleman and Tom, I want to ask you here about the NSA wiretapping controversy. Because members of both parties are hopping mad about that. Has he lost some of his Republicans on that? And is that going to be something, not to sneak into 2006 since we're going to do that after a break, but something that's going to reverberate back into next year?

DEFRANK: Well, it is hard to say. It will reverberate into next year because there are going to be congressional hearings. But since this involves a national security, you might have some segment of the American people who might give President Bush a little bit more of the benefit of the doubt on this one than, say, on some of the other things. We'll just have to see.

ROMANS: All right. Gentleman, don't go anywhere. We are going to leave it right there for now. We just looked back at 2005.

In just a few minutes we're going to chat about 2006 and beyond. So stick by here for your expertise.

Also ahead a very special tribute to our troops.

Plus the mysterious and deadly bird flu was just one of the riveting science stories this is year. We'll talk about the bird flu and a great deal more with the editor and chief of "Discover Magazine."

(COMMERCIAL BREAK) ROMANS: Joining me once again, Ed Rollins, former White House political director; Joe Klein of "Time" magazine, and Tom DeFrank from "The New York Daily News."

I want to start with you, Joe, and ask you about the wiretapping controversy. Is the White House handling it, you think, in a proper way? Are they not really handling it yet? And what are the ramifications for early next year?

KLEIN: Well, I think that we don't know enough yet. From what I can understand, this may just be a case of the judiciary not keeping up with technology. When we bust a bad guy like Khalid Shaikh Mohammed, we get control of his computer and his cell phone, and we want to harvest that as quickly as possible. There has to be some adjustment in the law to make that legal.

I don't think that we're going to be finding that the president has been, you know, wiretapping Barbra Streisand or Arianna Huffington. I think this is going to be a technical issue and not so much a political one.

ROMANS: Ed...

ROLLINS: I would be terribly disappointed if he's not tapping Barbra Streisand and Arianna Huffington. But I agree, I agree with Joe.

I think the reality is that the only danger that I see is not getting the Patriot Act fully extended at the close of the session, I think gives some Democrats an excuse to step forward again at their own peril. But if that act is not passed and fully implemented, which is what law enforcement wants, the 9/11 Commission wants, and I think has worked pretty effectively, I think that will be a real tragedy for the country.

KLEIN: At their own peril are the key words here. You don't want to, if you're a Democrat, you don't want to be going into the 2006 election cycle having voted against the Patriot Act. I can guarantee you that.

ROMANS: Tom, let's talk a little bit about that 2006 election cycle, because the president, beginning next year for his party, is going to have to start, you know, amassing some victories along the way, and he's going to be looking toward, you know, the end of the year for his party as well, isn't he?

DEFRANK: Well, yes, indeed. And I mean, there are high hopes on both sides. There are more Democrats up this year in the Senate than Republicans, but as we all know, the president had a rocky year. He needs to get some legislative victories under his belt before many of his Republican colleagues in the Congress are going to be more comfortable about asking him to come out and campaign.

He ended the session not in a very strong position. We'll have to see whether he's rebounded sufficiently to have some more political strength (ph). ROMANS: Tom, in your best guess, you know, what is his most likely first political victory? I mean, some say it might have to be Sam Alito.

DEFRANK: Well, I think Sam Alito is going to get confirmed pretty quickly. But I also think the Patriot Act is going to be extended. I agree with Ed and with Joe. The Democrats are suicidal if they block an extension of the Patriot Act. They might try to tinker at the edges, but unless they are complete knuckleheads, they are going to go along with extending it in fairly short order.

ROMANS: Is there consensus building, gentlemen, that the Alito confirmation hearings are going if not smoothly, at least....

ROLLINS: I think it's going to be much rougher than Roberts, but I think at the end, he's such a qualified individual that he will be confirmed. And once again, if the Democrats want to make a big fight out of this, they do so at their own peril again.

KLEIN: Yeah, and if they don't want well-qualified conservative judges appointed to the Supreme Court, they are just going to have to start winning elections.

By the way, the other thing about 2006 that we barely mentioned is I think that this burgeoning Abramoff lobbying scandal, which may take down a number of Republican congressmen may really set the tone for this election year.

ROMANS: Really?

DEFRANK: Christine, let me jump in there...

ROMANS: Sure.

DEFRANK: ... because there are close friends of the president who absolutely agree with that. They feel like that the danger to the party from Jack Abramoff is a greater theoretical danger than just about anything else out there on the horizon right now.

ROMANS: Let me ask you all, gentlemen, about immigration and the budget. Let me first ask you about immigration, though, because there was a big fight among House Republicans trying to get an immigration reform through. They got it through without a guest worker program that the president really, really wants. How much of a fight do you all expect over immigration, Joe?

ROLLINS: They will -- oh, sorry.

KLEIN: I think it will be a pretty big one, and I think in the end it will be inconclusive. Because there's a lot of nodding and winking about this issue. You know, everybody talks a good game about it, but I think that the business community really wants to have that uninterrupted source of cheaper labor.

ROMANS: Sure, but their constituents at home are just screaming about this. ROLLINS: I think the House version is really going to be what is going to drive the agenda from here on out. I think the president has lost the amnesty case, whatever the merits of it. I think he's lost it, and I think there's a lot of Republicans who are now emboldened by what they did in the House, and I think that will be the battleground. That will be the first document. And I think the word amnesty, basically...

ROMANS: Guest worker program is...

ROLLINS: ... or guest worker divides Republicans, and at this point in time they don't want that.

ROMANS: Tom, immigration a big story?

DEFRANK: A very big story. And it's going to -- Ed is right. It's going to divide the party. But the president is not going to back off on this one. He may back down a little bit on Social Security, but you're going to hear a lot about immigration in the State of the Union address about a month from today. He's really going to -- he's willing to divide his party. He feels so strongly about this issue.

ROMANS: All right, Tom DeFrank, "New York Daily News," thank you so much for joining us. Also here in the studio, Joe Klein, "Time" columnist, and Ed Rollins, former White House political director. Gentlemen, thank you all for joining us today. Have a wonderful weekend.

American steelworkers are outraged at a decision by President Bush tonight. He rejected their request for limits of Chinese imports of welded steel pipes. American steel pipe producers have repeatedly warned the White House they cannot compete against the flood of cheap Chinese imports into this country. President Bush today said limiting those imports is not in the national interest of the United States.

A reminder now to vote in tonight's poll. What story do you think had the most impact on Americans this year? The economy, the war in Iraq, Hurricane Katrina, or gas prices? Cast your vote at loudobbs.com. We'll bring you the results in just a few minutes.

One Irish citizen found out what happens when you abuse the cabin crew of an airline. You can end up on a deserted island. The 53- year-old man was flying on Monarch Airlines from Manchester, England to the Canary Islands, when airline staff say he started swearing at the staff when they refused to serve him alcohol. The pilot diverted the Airbus charter plane and dropped him off on Porto Santo, a nine- mile long volcanic island. Local police detained him for almost two days over this air rage incident. He has since been released, but he faces now two years in prison under local Porto Santo law. Lesson learned, don't mess with the cabin crew.

Coming up next, the active hurricane season was just one of the top science stories of 2005, but not every major science story made the headlines this year. "Discover" magazine's Steve Petranek will be here next to talk about some other science news that you might have missed, next.

(COMMERCIAL BREAK)

ROMANS: The record-breaking hurricane season was just one of the science stories that ranked among the biggest news stories of 2005. Other major science stories that captured headlines this year include the deadly bird flu and the failure of our education system to prepare our students in science and math. "Discover" magazine has released its annual special issue, ranking the top 100 science stories of 2005, and editor in chief Steve Petranek joins me now.

Welcome to the program.

STEVE PETRANEK, DISCOVER MAGAZINE: Thank you.

ROMANS: Let's start first with global warming. And, I think, the hurricane season really sort of brought this under the microscope, if you will, because a lot of people say the intensity of these storms is increasing because of global warming.

PETRANEK: That's correct. Well, the intensity of the storms is increasing because water temperatures in the ocean are going up. Whether water temperatures in the oceans are going up because of a general pattern of global warming, I'm not sure anyone can say for sure. But the water is getting warmer so the storms are getting more intense, and we're getting more of them.

Now getting more of them probably isn't related to the warming, but having them much more intense is. We have hurricanes now that are 50 to 80 percent more intense on average than they were in the 80's.

ROMANS: And one degree of temperature rise, you say, is what, like 25 percent greater intensity?

PETRANEK: Well, the original models predicted that one degree of temperature rise in the water would create about a seven percent increase in intensity in a hurricane. What we're find something is that those models actually were wrong, and it's somewhere around 50 percent higher.

ROMANS: Interesting.

And now after 25 years of a lot of policy about the ozone layer, we're starting to see regeneration. What is that story?

PETRANEK: What we're seeing is that the ozone layer isn't getting worse. It's not nearly as good as it was in the 1970's, but it's not getting worse.

ROMANS: And that's a victory.

PETRANEK: It's a huge victory.

It looks like the -- our attempt to get chloroflourocarbons and other gases to cause a destruction of the ozone air out of our hair sprays and our refrigerators and stuff like that is actually having an effect.

ROMANS: Wow. To be able to actually see a human behavior and direct impact on the environment that's good.

PETRANEK: Imagine what we could do with global warming.

ROMANS: Imagine what we could do.

Meanwhile, the bird flu. This has been a big story this year. But you don't think it's necessarily as immediate or should be -- what is your status on the bird flu here?

PETRANEK: This avian flu, which is called H5N1, has been around since 1996. It keeps popping up, and yet it has never mutated into a version that actually transmits from humans to humans.

All flus, by the way, every flu that every person ever gets or ever has gotten is a bird flu. It always originates in birds, and it is transmitted by birds.

When it becomes dangerous to humans is when a version of it occurs in a human that transmits it to another human. Now usually the only way that can happen is if you like cut the head off of a duck and drink the blood, and the duck has the flu. And you also have a flu in your body at the same time that is a different flu. The genes merge inside a cell, and all of sudden you have a version that transmits between humans.

It's really hard for it to happen. It has not happened yet. We probably won't see a human-to-human version this year.

But by the same token. It's a really good idea that we're getting scared about this because sooner or later something like this will happen.

ROMANS: Drinking chicken's blood. See, this is a perfect way to bring teenagers into the science debate. You know, education, you make it sound so interesting and so clear, which brings me to science and education in this country. And the travesty, you say, that we're not preparing our students to keep up with students from all over the world.

PETRANEK: We're really falling behind. The National Academy of Sciences issued a report this year saying that the average high school student--and these are good students, these are not students that are getting d's and f's, these are students that are getting a's and b's.

The average high school student is behind the average high school student in 38 other countries. We're like 39. And even the A.P. kids, the kids that are taking advanced placement courses are behind the kids who are the same the same age with the same education in 20 other countries. It's -- we no longer...

ROMANS: We can't lead the world economy if you're not training your students and your children. PETRANEK: Well, language has changed again. In about 1940, language changed from ABC to ones and zeros, binary stuff. It had changed again to the language of genetics, ACTG, the four molecules that make up a gene. And we're not educating our people to know that.

ROMANS: Steve Petranek, "Discover" magazine, Editor in Chief. Thank you so much for joining us.

Still ahead the results of our poll and a special tribute to our troops.

(COMMERCIAL BREAK)

ROMANS: Now the results of tonight's poll. Thirty-five percent of you said the war in Iraq had the most impact on Americans. Thirty- there percent of you said Hurricane Katrina. We thank you for your vote.

Each night we bring you thoughts from some of the thousands of military personnel serving our country all around the world.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: I'm Tech Sergeant J.C. Woodring (ph), and I'm deployed here in Kabul, Afghanistan. I'd like to wish my wife and my daughters a very Merry Christmas and happy New Year. They are back home in San Antonio, Texas. I love you. I miss you. And I hope to see you soon.

UNIDENTIFIED FEMALE: Hi, my name is Crystal Largo (ph). I am from al Asad, Iraq. I just want to wish a happy holidays to my family and friends back in Pennsylvania. I miss you guys, love you.

UNIDENTIFIED MALE: Hello, my name is Fire Patrolmen Second Class Nick Norwood (ph) here with the customs battalion in the U.S. Navy here in Kuwait. I want to wish all my friends and family back home in Tennessee a very happy holidays and merry Christmas.

UNIDENTIFIED FEMALE: This is Corporal Tara Wally (ph) out in al Asad, Iraq. Just want to wish my husband, Faruk (ph), in Newark, New Jersey, a happy holiday and I'll see you soon.

UNIDENTIFIED MALE: Hello, my name is Sergeant First Class Alan McKinney (ph). I'd like to give holiday greetings my wife, my three daughters, all my family friends and associates back in the states. I'll be seeing you soon.

(END VIDEOTAPE)

ROMANS: As 2005 comes to a close, we wanted to revisit some of the remarkable stories of courage and bravery that we have reported to you in our weekly salute to our men and women in uniform.

(BEGIN VIDEOTAPE)

SGT. JONATHAN AYERSMAN, U.S. MARINE CORPS: We had set it for security. And we were keeping an eye out on what was going on in the city to my front. That's when the first mortars, RPGS, small arms started going off.

And I actually had to shove my driver. I actually had to push him down in the driver's compartment and close the hatch and swing my machine gun around when I noticed the insurgents.

I thought I was actually wounded, but I checked myself out real quick, and I was fine and shook it off and grabbed my machine gun again and continued to engage.

SGT. ROBERT BONNER, U.S. ARMY: You hear this loud boom, and I just felt a wetness on my face because I was in the back seat behind the driver. And I looked up to see if he was all right. And I just looked down and noticed my legs. I had gotten hit.

STAFF SGT. JESSICA CLEMENTS, U.S. ARMY: I was rushed to the hospital. And he saw that my brain was swelling. He removed the right portion of my skull. He literally cut it off for safe keeping I had to learn basically to do everything again.

LANCE CPL. RANDY LAKE, U.S. MARINE CORPS: In my mind, I mean, I did what anybody would have done for their best friend. They would have went in there no matter what to get him.

GUNNERY SGT. JIM HANEY, U.S. MARINE CORPS: Receiving the silver star is a very prestigious award. And I'm completely humbled by it. I didn't think that I had done anything spectacular.

CAPT. THOM MERRY, SURGEON, U.S. MARINE CORPS RESERVE: These are brave, young men and women. And it keeps me younger being with them. It's a privilege. These are the finest. They volunteer. They really do understand that it's not an ideal world. And sometimes, you know, we have to...

SGT. PETER BIEBER, IOWA NATIONAL GUARD: Being in the Army, putting on the uniform, you feel like one of the good guys.

UNIDENTIFIED MALE: As long as I breathe and as long, you know, I can still do it, I love to train. I love to lead.

SGT. 1ST CLASS JOHN SETZER, U.S. ARMY: The United States is one of the greatest places on earth, I think. You know, being over there for six months, all the great stuff we have here, freedom.

(END VIDEOTAPE)

ROMANS: We think so too. We wish all of our troops serving our country and all of you a safe, happy and healthy 2006.

Thanks for being with us tonight. "The Situation Room" starts right now.

Hi, Ali.

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