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Bush's Efforts to Reach Out to Iraqi Leaders; What Iraq Study Group Might Recommend; Dems Reverse Course on 9/11 Commission Report; U.S. Manufacturing Sector In Trouble

Aired December 1, 2006 - 18:00   ET


KITTY PILGRIM, CNN ANCHOR: Tonight, U.S. and Iraqi troops battle insurgents in central Baghdad. President Bush prepares to meet with top Iraqi leaders at the White House.
And jeers and fistfights in Mexico's congress as Mexico's new president takes office.

All of that and a great deal more straight ahead.

ANNOUNCER: This is LOU DOBBS TONIGHT, news, debate and opinion for Friday, December 1st.

Sitting in for Lou Dobbs, who is on assignment, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

The United States tonight appears to be considering major changes in political and military strategy in Iraq. President Bush has invited top Shiite and Sunni politicians to the White House for separate meetings.

The invitations come as the Iraq Study Group prepares to announce its recommendations on U.S. troop levels. There are reports that as many as 70,000 of our troops could come home by early 2008.

Elaine Quijano reports from the White House on the president's efforts to reach out to Iraq's leaders.

Jamie McIntyre reports from the Pentagon on likely changes in U.S. military strategy.

And Zain Verjee reports from the State Department on possible changes in U.S. political strategy in Iraq.

We turn to Elaine Quijano first -- Elaine.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: And Kitty, it is a clear sign that President Bush is trying to reach out in a very direct way to try to bring together the disparate political factions in Iraq. On Monday, the president will sit down with the top Iraqi Shiite political leader, Abdul Aziz al-Hakim. Al-Hakim is a vice president and a leader of the powerful Supreme Council for the Islamic Revolution in Iraq.

Now, Bush aides say that the agenda is going to be wide-ranging. It comes, of course, at a critical time when the sectarian violence continues to plague Iraq and political pressure continues to mount on the Bush administration to change course. That meeting set to take place just two days before the expected bipartisan Iraq Study Group's report delivering recommendations to Mr. Bush.

Now, the White House is trying to downplay the significance of Monday's meeting. One official noting that the president has met with other Iraqi leaders, and that in January, the president is going to meet with the Sunni vice president, Tariq al-Hashimi. But clearly with these meetings coming on the heels of that summit in Jordan, the meeting with Iraq's prime minister, Nuri al-Maliki, the stakes are high, the pressure continuing to build for the Iraqis to come together and take over their own security responsibilities so U.S. forces can start coming home -- Kitty.

PILGRIM: Thanks very much.

Elaine Quijano from the White House.

New details tonight about what the Iraq Study Group might recommend next week. Now, there are reports the group might propose withdrawing as many as half of our troops from Iraq in the next year.

Jamie McIntyre reports from the Pentagon.


JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice over): The Iraq Study Group reportedly will advocate an ambitious goal of bringing as many as 70,000 U.S. troops home by early 2008 by shifting American forces out of combat and into support roles and redoubling efforts to train Iraqi troops to take their place.

MAJ. GEN. BENJAMIN MIXON, MULTINATIONAL DIVISION-NORTH: I think it certainly reflects what we're doing now.

MCINTYRE: Major General Benjamin Mixon commands troops in northern Iraq, and he's using the proposed strategy already, increasing the number of U.S. trainers in his area of Iraq from 2,000 to 4,000, and forecasting that in the next three to six months, Iraqi forces will take complete control in six northern provinces, which in turn will allow for substantial U.S. troop reductions.

MIXON: I can certainly see a great opportunity to reduce the amount of combat forces on the ground in multinational division north.

MCINTYRE: The Pentagon has no problem with the call for quickly cutting the size of the U.S. force in Iraq by half in as little as 16 months, so long as it's at the discretion of military commanders. The incoming chairman of the Senate Armed Services Committee thinks the study group recommendation will go much farther, calling for a partial U.S. pullout, whether or not Iraqi troops are ready for the Americans to go.

SEN. CARL LEVIN (D-MI), INCOMING ARMED SERVICES CHAIRMAN: And this would represent some significant pressure finally on the Iraqis to face the reality, which is that they must achieve a political settlement and that there is no military solution that can work unless they achieve a political settlement.

MCINTYRE: But congressman John Murtha, who's talked to Iraq Study Group member Leon Panetta, says the call for redeployment of U.S. troops is lacking any firm timetable.

REP. JOHN MURTHA (D), PENNSYLVANIA: The problem is they say it depends on the circumstances on the ground. Well, if it depends on circumstances on the ground, it's not a lot different than what President Bush is saying. And then President Bush says he's going to ignore it anyway.


MCINTYRE: Now, Pentagon officials say there's nothing wrong with calling for deep troop cuts, as long as it's based on reality and not wishful thinking. They also say it's unlikely President Bush would approve any change in strategy if U.S. military commanders believe it will cause more chaos in Iraq -- Kitty.

PILGRIM: Thanks very much.

Jamie McIntyre.

Insurgents in Iraq have killed another one of our troops. The soldier was killed during combat operations in Baghdad yesterday. And that brings the number of our troops killed in Iraq in November to 69.

2,889 of our troops have been killed since the war began. 21,921 troops have been wounded. And of those, 9,847 were seriously wounded.

There are indications tonight that the Bush administration may be considering changes to U.S. political strategy in Iraq. One option is to give more support to the Shia community in Iraq to bolster the authority of Iraq's prime minister.

Zain Verjee reports from the State Department -- Zain.

ZAIN VERJEE, CNN CORRESPONDENT: Kitty, the U.S. has really been trying to reach out to Sunnis over the past years, really trying to include them in the political process and give them -- give them a stake in Iraq's future as a way to curb the insurgency. But many officials are now saying that's just not working, there's more violence, the situation is getting bloodier, the politics is getting messier. And they're really wondering, look, what did we get out of it? A lot of Shias are feeling that they've been very, very alienated by this whole process.

Now, publicly, Kitty, the State Department is saying that they are working still with all groups.


TOM CASEY, DEPUTY STATE DEPT. SPOKESMAN: I think for us, this is not a matter of favoring one group over another, or disfavoring one group over another. It's about helping the Iraqis themselves move -- move forward to develop the kind of political consensus and develop the kind of participatory process that allows everyone in Iraq to have a voice in the country.


VERJEE: That's what's being said publicly, but privately, Kitty, U.S. officials are examining other routes. They're wondering whether they should be focusing a little more instead to reach out to the Shias. As the majority they constitute about 60 percent of Iraq.

Abdul Aziz al-Hakim, an influential Shia leader, is going to be coming to the U.S. to meet with President Bush on Monday. That's just one signal in that direction.

The other idea, U.S. officials told us here, is that considering to ease pressure on Prime Minister Nuri al-Maliki on the issue of militias, there's been a lot of pressure on him to crack down on those militias, and there's a sense that they may back off on that just a little bit. That's just one of the proposals being bandied around, but it's certainly not a definitive policy shift. And the State Department here also says that they're not giving up on the Sunnis either -- Kitty.

PILGRIM: Thanks very much.

Zain Verjee.

Well, the United States tonight is accusing Syria and Iran of trying to stage a coup in Lebanon. As many as one million people took part in a rally against the U.S.-backed government in Beirut. That demonstration was led by the radical Islamist group Hezbollah, and it is a close ally of Syria and Iran.

A major shakeup in the House Intelligence Committee tonight. Incoming House Speaker Nancy Pelosi has selected Congressman Silvestre Reyes to lead the Intelligence Committee. Congressman Reyes is a leading opponent of the war in Iraq. He is a Vietnam veteran and served more than a quarter century in the Border Patrol.

Congressional Democrats tonight are preparing to reverse course on one of their main campaign pledges. Democratic leaders are backtracking on their promise to implement all of the recommendations of the 9/11 Commission.

Andrea Koppel has our report.


ANDREA KOPPEL, CNN CONGRESSIONAL CORRESPONDENT (voice over): On the campaign trail, Speaker-Elect Nancy Pelosi pledged to implement all the 9/11 recommendations in the first 100 hours of the next Congress.

REP. NANCY PELOSI (D-CA), HOUSE SPEAKER-DESIGNATE: The recommendations are specific and they all address making America safer. It's something we have to do.

KOPPEL: But now that pledge, according to a Democratic aide familiar with Pelosi's plan, will not include one of those recommendations: improving intelligence oversight by reorganizing Congress itself. Instead, Pelosi plans to appoint a bipartisan panel to work out details of what Democrats say was a vague and complex 9/11 recommendation.

Republicans responded with an "I told you so."

SEN. SUSAN COLLINS (R), HOMELAND SECURITY CHAIRMAN: I'm not surprised that Speaker Pelosi's pledge that she would implement all of the 9/11 Commission's recommendations as running into a brick wall of reality.

KOPPEL: Of the 9/11 Commission's 41 recommendations, at least 16 remain unfinished. Among them, improving screening for explosives on airline passengers; providing adequate radio frequencies for first responders; and moving to streamline intelligence oversight, which the 9/11 Commission called "dysfunctional."

If implemented, the House and Senate intelligence committees would have the power not only to approve new programs, they'd be able to fund them, too. Currently the appropriations committees hold the purse strings.

California Congresswoman Jane Harman is the top Democrat on the House Intelligence Committee.

REP. JANE HARMAN (D-CA), INTELLIGENCE COMMITTEE: Money talks, and if we don't control the money we don't get the committee to follow our direction.

KOPPEL: But to do so could mean igniting turf wars as some of the most powerful lawmakers whose committees like Defense Appropriations now control the money and will fight to keep the intelligence committees from taking some of it away.

Still, according to one of the members of the 9/11 Commission, it's essential to keep the nation safe.

TIM ROEMER, FMR. 9/11 COMMISSIONER: They result in better expenditure of taxpayer money when you base your spending on benchmarks and risk and intelligence, rather than pork barrel spending.


KOPPEL: Now, implementing all of the 9/11 Commission recommendations is just one of the campaign pledges Democrats are now going to have to make good on. Others include cutting interest rates in half on student loans. And also, severing the link between lobbyists and lawmakers -- Kitty.

PILGRIM: Thanks very much.

Andrea Koppel.

Still to come, chaos in the Mexican congress as the country's new president takes office. We'll have a special report.

Also, did communist Chinese spies launch a cyber attack against the U.S. Navy? We'll have that story.

And new evidence of the huge scale of war on the middle class. Our manufacturing industry being overwhelmed by cheap foreign imports.


PILGRIM: Fists flew as Mexico's new president was inaugurated today. Conservative Felipe Calderon took power amid brawling Mexican lawmakers. Will this new government do anything to control drug smugglers or prevent its citizens from becoming illegal aliens in the U.S.?

Harris Whitbeck reports on the ceremony and the protests at today's presidential inauguration, which included such notables as California's governor, Arnold Schwarzenegger, and former U.S. president George Bush.

Case Wian reports on whether the Calderon government can meet the challenges of facing -- of critical issues it faces.

We begin with Harris Whitbeck in Mexico City -- Harris.

HARRIS WHITBECK, CNN CORRESPONDENT: Kitty, Felipe Calderon's inauguration began at midnight Friday in a small ceremony at the official presidential residence. Outgoing president Vicente Fox handed the presidential sash to his successor. But next, Calderon had to be officially sworn in by Congress, and that was a problem.


WHITBECK (voice over): Many in the Mexican parliament were in no mood to take part in Calderon's inauguration. Calderon won Mexico's presidential election last July by a razor-thin margin. Opposition lawmakers loyal to Calderon's defeated rival, leftist Andres Manuel Lopez Obrador, attempted to take control of the podium to prevent the ceremony from taking place.

After fistfights and catcalls, Calderon suddenly appeared at the podium, raised his right arm, and shouted his oath of office amid roars of approval from his followers and jeers and insults from his detractors. The opposition lawmakers said even though they were not able to preempt Calderon's swearing in, they were able to make a point.

"In the eyes of Mexico and the entire world, he is the weakest president to take office in decades," says this opposition lawmaker. He has a minority in the parliament, had to enter congress by the back door and exit by the back door on his inauguration day."

Later, the new president called for conciliation. "Disputes between politicians only hurt those who have the least," he said, "and for that reason, dialog cannot wait. I will talk with whoever wants to talk."

(on camera): Analysts believe the protests surrounding Calderon's inauguration were mostly symbolic and that they will eventually blow over. For a nation that has spent the five months since the presidential election dealing with street protests and calls for vote recounts by the opposition, a bit of political tranquility sounds like a good thing. But that will only be achieved if the new president can convince the opposition to work with him.

Harris Whitbeck, CNN, Mexico City.


PILGRIM: And the challenges Calderon faces include many of the issues this program has reported on for years: out-of-control illegal immigration, drug trafficking, violence and corruption.

Casey Wian reports.


CASEY WIAN, CNN CORRESPONDENT (voice over): Shocking events at the inauguration of Mexican president Felipe Calderon are tame compared with everyday events elsewhere in the country.

Violent protests in Oaxaca resulting in nine deaths, including an American journalist, beheadings and out-of-control drug wars throughout Mexico's northern border. More than 100 law enforcement officers and 2,000 citizens have been killed in those battles this year.

FELIPE CALDERON, MEXICAN PRESIDENT (through translator): The country has confirmed me as president, looking out for the best interests of the nation and the prosperity of the union.

WIAN: Mexico's crawl toward prosperity is at risk unless Calderon succeeds where predecessor Vicente Fox failed. Fox counted on his personal relationship with President Bush to win amnesty for millions of Mexican citizens living illegally in the United States. Instead, the United States has made half-hearted attempts to secure its side of the border, while the Mexican federal government has lost control of much of its side.

PROF. CAROL WISE, UNIVERSITY OF SOUTHERN CALIFORNIA: I think that Mexico would probably be happy at this point to just stay out of any kind of major conflict with the U.S. over people flows and border security.

WIAN: The Mexican economy has stabilized, but still fails to produce enough jobs to prevent an estimated 10 percent of its population from fleeing. They help prop up the economy by sending home $25 billion a year, yet 40% of the wealthy nation's citizens live in poverty. And many of them are continuing to support Andres Manuel Lopez Obrador, who lost the election by about one half of a percentage point and vows to maintain a shadow government during Calderon's six- year term.

The Bush administration continues to express optimism.

CASEY: We have confidence in Mexico's democratic institutions, and we believe that these issues are best resolved and can be resolved by Mexican political leaders themselves.

WIAN: Calderon says his first order of business is to track down on drug traffickers and other criminals.


WIAN: The Mexican president says he will present a plan to fight organized crime within 90 days. He says it will take time and cost money and lives -- Kitty.

PILGRIM: Thanks very much. Casey Wian.

Well, joining us now from Mexico City is George Grayson. He's one of the world's leading experts on Mexico.

And thanks for being with us.

Professor Grayson, what do you make -- this is a fractious election. The swearing-in was just horrific, actually. What do you make of this scene?

PROF. GEORGE GRAYSON, COLLEGE OF WILLIAM & MARY: Kitty, I think that -- Kitty, I think that people are underestimating Felipe Calderon. And that's good, because six years ago, expectations were sky high that Fox was going to create a heaven on earth.

Calderon is intelligent. He has a brief agenda, but an important agenda. And he's put together a good team.

So I'm relatively optimistic. In the area of immigration, he didn't go into a whine or talk about victimization, but rather, he said he would much prefer to keep Mexican workers at home and attract investment to Mexico so that jobs could be created here.

PILGRIM: That's commendable talk. Will he be able to put all that into action with Obrador threatening a shadow government?

GRAYSON: Well, Lopez Obrador is losing momentum every day, and he tried to assemble a rally this morning at 7:00 a.m., and it was quite a modest turnout. Of course, 7:00 a.m. isn't the best time to try to put together a demonstration. But the people are tired of his back-biting and bickering, and they're ready for the new president to get on with his job.

But having said that, Calderon has taken two pages from Lopez Obrador's book. First, he said he's going to cut his salary and the salaries of other high officials. And secondly, he said that he's going to reach out to poor people, and that no child in Mexico should go without health care. And that's going to be one of his highest priorities. PILGRIM: Of very deep concern for U.S. citizens is the drug problem. The cartels have killed thousands of people just south of our border. It spilled over into the United States.

Do you see any improvement on that?

GRAYSON: Kitty, I think improvement has to come north of the Rio Grande. The demand is in the United States. And until the U.S. can develop a policy to cut that demand or to move toward decriminalizing some controlled substances, the Mexicans aren't going to be able to prevent...

PILGRIM: Certainly not all the blame belongs on the United States, though, sir.

GRAYSON: No. I think, though, that the demand is there. And there are just tens of billions of dollars to be made in drug trafficking. And it's so easy to corrupt police officers, judges, and even military officers.

PILGRIM: Thanks very much.

George Grayson.

Thank you.

Professor of government, College of William & Mary.

GRAYSON: Thank you.

PILGRIM: Coming up, a major overhaul in the tests that immigrants must take to become American citizens. We'll have a special report on that.

Plus, shocking new evidence tonight of the drag that outsourcing is having on our economy, particularly on good-paying jobs in manufacturing.

And the latest on a powerful winter storm that's marching from one side of this country to the other.

Stay with us.


PILGRIM: A new citizenship test is being introduced next year. The new test is aimed at making sure that new citizens have a better understanding of how this country works.

Christine Romans reports.


CHRISTINE ROMANS, CNN CORRESPONDENT (voice over): What are the colors in the American flag? What is the name of the form to apply for U.S. citizenship? Critics have long said the American citizenship test is nothing more than a game of Trivial Pursuit. But a new exam is coming meant to test an understanding of American values, not of memorization skills.

EMILIO GONZALEZ, DIRECTOR, CITIZENSHIP AND IMMIGRATION SERVICES: Well, the improved questions will allow the individual, when you study, to have a deeper meaning of what it is to be an American.

ROMANS: New questions will be road-tested to volunteers in these cities this winter to fine-tune a new test to be introduced in 2008. No more multiple choice. Instead, immigrants will fill in the blank to questions like, "What is the law of the land?" The answer, of course, is the Constitution.

But groups that help immigrants through the citizenship process are worried a new test may be too difficult.

ALI NOORANI, MASS. IMMIGRATION & REFUGEE COALITION: To suddenly be thrown a test that is much harder to understand, much harder to answer, it kind of seems unnecessary. I mean, there's no -- there's no question about an immigrant's patriotism or civic duty after waiting in line to become a citizen.

ROMANS: Architects of the new test say it's just that patriotism the new questions are meant to reveal.

UNIDENTIFIED MALE: The assumption that immigrants are unintelligent and capable of learning basic concepts -- this is not complicated, basic concepts -- is just untrue. The reason they come here most of the time, is, what? For economic freedom, for religious freedom, for legal and political freedom. That's what we want to test them on.

ROMANS: Potential new Americans must correctly answer six of 10 randomly chosen questions.


ROMANS: Another concern is the cost of applying for citizenship at $390 per person. People who help immigrants navigate the process say potential Americans simply cannot afford to fail a new test. They're a little concerned about any changes at all.

PILGRIM: Well, that might help them study harder.

ROMANS: Maybe, yes.

PILGRIM: Thanks very much.

Christine Romans.

That brings us to the subject of tonight's poll. Do you believe that the new U.S. citizenship test should be easier or harder?

Cast your vote at, and we'll bring you the results a little bit later in the broadcast.

More evidence of our democracy at risk. The U.S. Election Assistance Commission has been told that paperless electronic voting machines cannot be made secure. That assessment comes from the National Institute of Standards and Technology, which says the absence of a paper trail leads to continued questions about voting security and diminished public confidence in the elections.

The machines were used in Washington, D.C., and elsewhere across the country in the November elections.

Coming up, were the computers at the U.S. Naval College the target of Chinese spies?

We'll have a report.

A new airport screening device gives security officials a detailed picture of airline passengers. Perhaps too detailed a picture.

We'll have a report.

And harsh winter weather hits the Plains and Midwest. Hundreds of flights have been canceled.

We'll have the very latest on that.

Stay with us.


DOBBS: Now our top stories. President Bush tonight appears to be considering major changes in U.S. political and military strategy in Iraq. The president has invited top Iraqi political leaders to the White House, and the Iraq Study Group is likely to recommend big changes in U.S. military strategy.

Congressional Democrats are expected to abandon one of their main campaign pledges. Sources say Democrats will not implement all the recommendations of the 9/11 Commission as promised. Democrats do not want to reorganize the way Congress oversees our intelligence agencies.

And there were chaotic scenes in the Mexican Congress today when the new president took office. Lawmakers from both main parties were involved in fist fights. The fighting reflects the deep divisions in Mexico after the presidential election.

Two more cases of radiation poisoning from polonium-210 have been confirmed in Britain. And that is the same rare radioactive element that killed a former Russian spy.

Paula Newton joins us live with the very latest from London -- Paula.

PAULA NEWTON, CNN CORRESPONDENT: Kitty, one of the people involved here is actually the wife, the widow of Alexander Litvinenko. She apparently has tested positive for polonium-210 in very minute traces. And add to that another close associate of Alexander Litvinenko, one that's involved in this whole mystery. Tonight, a London hospital confirmed that he, in fact, is also infected.


DR. KEITH PATTERSON, HEMATOLOGIST: The patient in question is Mario Scaramella, who met with Mr. Litvinenko on November the 1st, before Mr. Litvinenko was admitted to this hospital. Tests have detected polonium-210 in Mr. Scaramella's body, but at a considerably lower level than Mr. Litvinenko's.


NEWTON: Now, what that means, Kitty, is that these levels are so low, doctors are hoping that, in fact, it will just come out of the body naturally, without harming any internal organs.

In the meantime, though, this investigation continues, Kitty, and more places in London are being tested for radiation. Again, it's always trace levels, but they did take some pretty dramatic precautions in evacuating a hotel in southern England today.

And through all of this, Scotland Yard is still trying to figure out who killed Alexander Litvinenko. This investigation continues, there are many different angles on it, and now here in Britain they're saying that they will involve the Russian authorities and that the Russian authorities counter that they are fully prepared to cooperate -- Kitty.

PILGRIM: Thanks very much, Paula Newton.

Severe storms with powerful winds will move through the Northeast tonight, but across the rest of the country, the damage has already been done. Traffic slowed to a crawl in much of the plains and Midwest, including Oklahoma, in this picture.

Now, the governor of Kansas declared 27 counties disaster areas. Missouri, plastered, up to 18 inches of snow forcing the closure of stretches of Interstate 70. A cargo plane skidded off the runway at Chicago's O'Hare Airport, where hundreds of flights were canceled there, stranding thousands of travelers.

A new export x-ray security system that makes graphic images of passengers' bodies is being tested by security officials. The technology hasn't been used much in the United States because of privacy concerns over the detailed images the machine produces.

The Transportation Security Administration officials say they have a way for the equipment to blur some areas, but they say it will still be effective in detecting weapons or explosives.

The incoming Senate Judiciary Chairman Patrick Leahy pledges to take a closer look at the government's anti-terrorist screening systems. Now, for the past four years, Homeland Security's automated targeting system has given airline passengers a terror score.

It rates passengers on travel information, including seat preference and what meals they order, and passengers are not allowed to know what their scores are or to challenge them. The government calls the ATS program critical to national security. Privacy advocates object, calling the system invasive.

New evidence tonight of rising communist Chinese threats to this country. Communist China is stepping up its cyber attacks on U.S. military targets.


PILGRIM (voice-over): Chinese computer hackers attack the computer system at the Naval War College. The intrusion was detected on November 15th, and computer and e-mail systems at the college have been completely shut down.

The Navy would not comment on the source of the attack, but admitted "There was an intrusion, and the computer network was taken offline by the Navy Cyber Defense Operations Command. The affected systems were removed and are now being examined for forensic evidence."

Knowledgeable sources believe the origin of the attack was from China, and other experts point out the computer attacks are part of China's military strategy.

JAMES CARAFANO, HERITAGE FOUNDATION: Well, I don't think it's any great secret, that China does do a lot of Internet hacking and computer spying. If you read the Chinese military doctrine, they talk about doing information warfare. They talk about doing this as a matter of course.

PILGRIM: Two days after the attack at the Naval War College, the Department of Defense raised its security alert level on its 12,000 computer networks and five million computers. But DOD insists the two incidents are not related.


PILGRIM: Communist China, of course, is also trying to steal our most sensitive military secrets. Beijing has launched a huge military buildup to challenge U.S. global power.

Well, corporate America tonight is putting its business interests in China ahead of this country's national security. Some of the biggest U.S. companies are trying to stop the Commerce Department from introducing tougher controls on exports to China. The government says those controls are necessary to prevent the Chinese military from acquiring U.S. technology.

There's new evidence tonight showing just how grim the picture is for American manufacturing. Using government numbers, the U.S. Business and Industry Council reports that manufacturing in this country is being overwhelmed by cheap foreign imports. Bill Tucker reports.


BILL TUCKER, CNN CORRESPONDENT (voice-over): 2005 was a bad year for auto parts workers -- jobs cut, pay slashed, and imports in the sector grew by more than 20 percent. The auto parts sector is not unique, and this is not a one-year trend; 110 manufacturing sectors lost market share to imports in the past seven years. Only four gained.

ALAN TONELSON, U.S. BUSINESS & INDUSTRY COUNCIL: Dozens and dozens of U.S. manufacturing industries are experiencing the exact same kinds of market share losses in their home market that the U.S.- owned automobile industry has been suffering in recent years, which has driven it to the brink of receivership.

TUCKER: U.S. manufacturing can't compete with the flood of imports. So more and more job opportunities that could have been created for American workers have gone to workers in other countries.

ROBERT SCOTT, ECONOMIC POLICY INSTITUTE: It's a major buyer for all kinds of high-value added, high-wage services, from engineering to law to accounting. So if we want to create goods jobs in this country, keeping the manufacturing sector vital is key to doing that.

TUCKER: Imports now account for 46 percent of the computer market, 56.5 percent of the telephone switching market. The machine tool industry has been decimated with imports dominating more than 78 percent of the sector. Industries in that group are necessary to the building of sophisticated equipment like jet engines and engine parts, which may explain why imports in that sector spiked from a 40 percent share in 1997 to a 62 percent share last year.

BOB BAUGH, AFL-CIO INDUSTRY UNION COUNCIL: Most people have thought of what's going on here for the last number of years as -- you know, they tend to think, oh, it's just those people with those low- end factory jobs. It's not. It's very skilled workers in our manufacturing facilities.

TUCKER: Despite the job losses and the mounting trade deficit, the National Association of Manufacturers doesn't agree that manufacturers are in bad shape.


TUCKER: However, NAM does agree that the playing field is now tilted in favor of imports. Alan Tonelson of USBIC calls what's happening to American manufacturing, Kitty, a "slow-motion bloodbath."

PILGRIM: It's just tragic. Thanks very much, Bill Tucker.

Well, we invited the National Association of Manufacturers on to this program to address the incredible deterioration of the manufacturing industry, and the toll it takes on middle class American workers. The National Association of Manufacturers declined our invitation, citing what was described as a scheduling conflict. The invitation stays open.

The value of the dollar has fallen sharply against other currencies this week, particularly against the euro and the yen, the sell-off reflecting deep concerns about the staggering U.S. trade deficit, and the massive budget deficit.

The major reason for the trade deficit is the commitment of successive administrations to so-called free trade policies. Those policies have allowed imports from cheap, overseas labor markets to flood into the country. Millions of well-paid middle-class jobs have been lost in both manufacturing and services.

Still ahead, a melee at Mexico's presidential inauguration. I'll ask our political panel what that augers for the effectiveness of the nation's new leadership.

And "Heroes" -- tonight, we turn our lens to a soldier who insists on being sent to the frontlines in Iraq. We'll be back.


PILGRIM: Joining me now, three of the brightest political minds in the country. Columnist for the "New York Daily News" Michael Goodwin, editor of James Taranto, and Democratic strategist Robert Zimmerman. Gentlemen, always a pleasure. And we have a lot to talk about this week.

Let's start with the Iraq study group, because that seems to be the big topic, and hanging over this whole week, actually, without any real defined results from this. What's your view of the sort of Iraq study group effect, and will it really shape policy going forward?

ROBERT ZIMMERMAN, DEMOCRATIC STRATEGIST: I think it's going to have a very significant effect. You know, Kenneth Pollack of the Brookings Institute pointed out there aren't solutions to this quagmire, this tragedy, this colossal policy error, but there are -- while there may not be solutions -- there are choices.

And the Iraq study group at least makes clear that in fact this is not going to be an open-ended engagement. And there has to be a commitment to bring about a resolution.

Of course, the problem is, President Bush has repeatedly failed to follow up on that point. In fact, he has not turned down the concept of having a permanent base in the region. And he has put the -- and he has through his policies, made it clear that we're in for the duration.

PILGRIM: As long as we're quoting President Bush, let's turn to something he said yesterday about Iraq. Let's listen to it.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: So we'll be in Iraq until the job is complete at the request of a sovereign government elected by the people. I know there's a lot of speculation that these reports in Washington mean there's going to be some kind of graceful exit out of Iraq. We're staying in Iraq to get the job done so long as the government wants us there.


PILGRIM: James, doesn't it set up the possibility that we could be at odds, the president, versus the Iraq study group?

JAMES TARANTO, OPINIONJOURNAL.COM: Well, in some ways, given what we've heard about what the Iraq study group says, I certainly hope so. One of the things that's said is we're going to -- the Iraq study group is going to recommend essentially relying on the good will of the Syrian and Iranian regimes, and that's a recipe for disaster.

I mean, these are regime you can rely on. For some reason, relying on the good will of these dictatorial, and in Iran's case, crazy regimes is considered realism. It's about as unrealistic as you can get.

PILGRIM: It does somewhat legitimatize regimes that are labeled as rogue regimes.

MICHAEL GOODWIN, "NEW YORK DAILY NEWS": I think one of the problems I had, too, still is, whether the Iraqi government can do what we want it to do. Everyone seems to be suggesting that Maliki really just is kind of dogging it, that he's not making any effort, that he's maybe corrupted in some way or he's weak. I don't -- I'm not sure he can do what we expect him to do, which is to crack down on the death squads. He may simply be unable, and not really be a government as we understand a government. So I think that has yet to be tested.

ZIMMERMAN: The other issue, too, is whether he has the will to do it. And that also is an important point. One of the most disturbing aspects of President Bush's press conference with the prime minister was the fact that he refused to place any demands on Prime Minister Maliki, regarding what timetable -- timelines he would meet and deadlines he would meet.

And just to James' point, no one is referring to the good will of Iran or Syria. But as former Secretary of State Baker said, it does take the strength to have a dialogue. It takes courage to dialogue.

Certainly we're not relying on the good will of the evil empire when Ronald Reagan sat down with them, yet it proved to be effective.

PILGRIM: There is, though, a fine line between President Bush seeming to dictate to al Maliki that is a very fine line and something that he has to worry about not undercutting his authority.

ZIMMERMAN: The bigger problem is whether we're going to make -- whether we're going to be an occupying power in the region or whether we're going to in fact pursue another agenda which is to bring stability to the region. And we're not going to do it as long as the Iraqi army knows that we're there to fight the battle for them. TARANTO: I don't think we'll have it by having, quote unquote, dialogue with a country that wants to wipe Israel off the map. Let's be realistic here for crying out loud.

ZIMMERMAN: That's exactly what we have to be, is realistic. And President Bush, the reason we're in this mess is because President Bush has been totally unrealistic in his assumptions and his conclusions there.

GOODWIN I think the notion somehow there's a button we can push, if only we can do the right thing, everything will be okay. It's much too complicated than that. There really is a regional issue. And there are real weaknesses within Iraq. And I'm not sure that the Iraqi government can do anything right now.

And that is ultimately the problem. We cannot extract or redeploy, whatever the Democrats want to call it, unless the Iraqi government can maintain security.

TARANTO: I think it was encouraging today there was an article in the New York Times that said essentially everyone agrees there is not going to be a quick pullout of Iraq. That's actually the third such article that's appeared in the New York Times, the voice of the liberal establishment since the election. There's not going to be a redeployment. We're not going to cut and run and go to Okinawa as Jack Murtha crazily suggested a few months ago. Cut and run turned out to be bait and switch.

ZIMMERMAN: James, no one said there would be a fast redeployment. In fact, the proposal that Jack Murtha put forward with Senator Kerry was giving a year's redeployment. General Casey, now, is talking about 12 to 18 months. The strategy...

GOODWIN: Wait a minute, Carl Levin is pushing a four to six- month plan.

ZIMMERMAN: But the point is, there's a recognition that we cannot have an open-ended commitment to the region.

GOODWIN: But that's not a recognition, that's a real specific date.

ZIMMERMAN: But redeploying -- well first of all, the date had a lot of caveats in it depending on how they were doing.

GOODWIN: As most Democratic plans to.

ZIMMERMAN: Well, actually most realistic plans do. The goal here is to make sure that we do begin to remove our soldiers from fighting in the middle of a civil war and it takes President Bush the courage to acknowledge we are in a civil war.

TARANTO: And by the way, just to be faithful to the historical record here, Jack Murtha at his famous press conference did say immediate, he later denied that that is what he meant. I guess it was another botched joke. PILGRIM: Timetables aside, there is some creative thinking going on about who to talk to. We have al Hakim coming into Washington. There's a reaching out to other leaders in Iraq. Do you think that perhaps there is a formula that the right combination of talks and we could cobble together some sort of arrangement or do you think this is an exercise in futility?

ZIMMERMAN: In fact, Ambassador Satterfield who is a leading foreign policy expert -- a leading State Department official regarding Iran has indicated that the administration is prepared to dialogue informally with Iran. So, clearly there are going to be dialogues that have to take place. It would be very worrisome, though, if our government started taking sides in this civil war. And that's what worries me about this discussion.

PILGRIM: You know, I really want to get to Mexico, because it was way too interesting a week. And what a fiasco the swearing-in was. What do you make of the situation on the southern border here?

ZIMMERMAN: You know, I have to tell you, I can't help but reflect upon our election in 2000. And I admire Al Gore more and more for the patriotism he showed by unifying behind the winner. It speaks to the strength of our government this happened.

PILGRIM: Michael?

GOODWIN: The Democrats are such heroes.

ZIMMERMAN: I'm glad you're picking that up.

TARANTO: Well, wait, I'll second that. Three cheers for Al Gore. But Lopez Obrador, the loser in the election, is following advice that was given by a former Gore adviser, Ron Klein (ph), in a Washington post op-ed back in July entitled, "Don't Take the High Road." This after an election, I mean, OK, maybe questionable things went on in Florida.

The Mexican election, the actual vote, everyone said, it was the fairest best run vote in history just about. And, you know, we see sort of some American Democrats, not Al Gore, thank goodness, kind of living vicariously on what's going on in Mexico.

PILGRIM: Any thoughts on Mexico, Michael?

GOOD: Well, it does appear that the country is unraveling somewhat. Now, I hope that that doesn't keep happening. I hope it kind pulls itself back.

Because there are serious problems not just with the U.S. border, but within Mexico itself. That's what's causing the flood of immigrants to the United States. So, hopefully Mexico will pull itself together.

PILGRIM: Gentlemen, we have to call it quits for at least this week. James Taranto, Robert Zimmerman, Michael Goodwin, thank you.

And coming up shortly here on CNN, "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Kitty, thank you. X-ray vision: looking through your clothes at the airport, the newest tool in the war on terror. And we'll find out why some privacy groups are now calling it a virtual strip search.

Also, party crash. Senator John McCain upstages a potential rival for the White House. The posturing beginning for 2008.

Plus, Congressman John Murtha on redeploying U.S. troops in Iraq. We'll hear his tough words for the White House in my one-on-one interview.

An election brawl, presidential politics getting down and dirty. Jeanne Moos on the story. All that, Kitty, coming up at the top of the hour.

PILGRIM: Thanks, Wolf.

A reminder now to vote in tonight's poll. Do you believe the new U.S. citizenship test should be easier or harder? Cast your vote at and we'll bring you the results in just a few minutes.

Still ahead tonight, we'll have the results of the poll, and also our tribute to the nation's heroes. Meet a member of the 101st Airborne Division who is determined to fight adversity and exceed expectations.


PILGRIM: Now, heroes -- our tribute to the men and women in uniform serving this nation around the world. Army specialist Maxwell Ramsey was determined to serve his country, and now he's even more determined to overcome adversity.

Lisa Sylvester has his story.


LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Maxwell Ramsey joined the army at the age of 35 after a successful civilian career. He reached a point in life when he realized it's important to show up and be of service. He signed up for infantry because he wished to be on the front lines in Iraq.

MAXWELL RAMSEY, U.S. ARMY: I didn't want to be a cog in the middle of the machine. I wanted to be the blade at the end of the cog, if you will.

SYLVESTER: An Army specialist with the 101st Airborne, he was flown into Ramadi in the al-Anbar province, the most dangerous in the war zone. Five months after landing in Iraq, out on a mission to check the progress of a school being built, his convoy was ambushed, an IED exploded.

RAMSEY: The blast went through the armor, a big chunk of it went through my knee of my left leg. And the truck got lifted off the ground like four or five feet and I got lifted out of the turret three or four feet.

SYLVESTER: Max knew he was hurt badly and he had his own quiet conversation with God.

RAMSEY: The body works 60 percent harder when you lose a leg.

SYLVESTER: Months later, he's learned many lessons, including how to walk again.

RAMSEY: Getting used to the feeling of having a prosthetic leg, because it's a completely alien feeling. You have no proprioception (ph) of where your false foot and leg are actually are in space.

SYLVESTER: Max is using horses from the Army's famed old guard to rehabilitate. The feel of a horse mimics a walking motion, and teaches balance. He's also logged hours of physical therapy. Max says he's a doer, not a watcher. Walking may be difficult, but he can still soar. Sky diving.

RAMSEY: It reaffirmed that you can do anything if you put your mind to it. I don't know if I actually was able to live that fully before my experience in the Army, and experience with combat in Iraq. And experience recovering from the injury.

SYLVESTER: His experience has only strengthened his resolve to do more, to go further, and exceed expectations.

Lisa Sylvester, CNN, Washington.


PILGRIM: Max Ramsey hopes to remain on active duty and rejoin his unit at Fort Campbell, Kentucky, where they're holding a place for him on the parachute demonstration team. And we wish him the best.

Still ahead, the results of tonight's poll, some of your thoughts. Stay with us.


PILGRIM: The results of tonight's poll, 94 percent of you think the U.S. citizenship test should be harder. Just 6 percent of you said it should be easier. Here's some more of your thoughts.

Now Fred in Georgia wrote to us: "On the citizenship exam, an applicant only has to get six out of ten answers correct, with multiple correct answers per question. This makes my drivers test look difficult."

And Roger from Minnesota writes: "I did not vote the Democrats in give illegal aliens amnesty. I thought they were for working Americans."

Marie in Connecticut writes: "The way I see it, employers will have to increase the minimum wage with the cost of everything else going up, if wages don't increase there will be few people able to purchase the stuff that corporate America tries to sell to us."

Larry in Oklahoma: "If this is a country by the people and for the people, how can Congress give themselves a pay raise without the people's approval? Shouldn't we be able to vote on this issue?"

And Don from New York writes: "I read a quote today that describes our politicians -- a politician thinks of his next election; a statesman, of the next generation."

Send us your thoughts at and each of you who's e- mail is read here will receive a copy of Lou's best-selling book "War on the Middle Class." Thanks for being with us tonight. Please, join us tomorrow and Sunday for "Lou Dobbs this Week" at 6:00 p.m. eastern. For all of us here, have a great weekend. Good night from New York. "THE SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.


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