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Lou Dobbs Tonight

President Bush Wants To Increase Size Of Military; More Violence In Gaza; Vice President Cheney To Be Defense Witness For Scooter Libby; Former Employers Sue Company For Hiring Illegal Immigrants; Hope Fading For Two Climbers Missing On Oregon's Mt. Hood

Aired December 19, 2006 - 18:00   ET

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


KITTY PILGRIM, CNN ANCHOR: Thanks, Wolf.
Tonight, President Bush admits our military is stretched too thin and calls for an increase in the size of U.S. Forces. The president's statement comes among reports of a difference of opinion between the White House and the Pentagon over the number of troops in Iraq.

And a multi-million dollar lawsuit tonight in Texas. Workers sue their former employer. The charge? Replacing them with illegal aliens. We'll have those stories and a great deal more straight ahead.

Good evening, everyone. President Bush tonight is planning to increase the size of the U.S. Military. In an interview with the "Washington Post," the president said, the increase is needed to meet the demands of the war on terror and sustained deployments in Iraq and Afghanistan.

Ed Henry has the very latest -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Good evening, Kitty. A senior administration official here confirming to CNN the president has instructed his new defense secretary to come up with a plan to increase so-called strength, increase the size of U.S. Ground forces. Official here cautions though, that the president has no specific number in mind of an increase in U.S. Troops.

Also cautioning that this is not, not a confirmation that the president is sending a so-called surge of U.S. Troops into Iraq. The president himself first disclosing that he wants to increase the size of the military today in an interview with the "Washington Post" saying, quote, I'm inclined to believe that we do need to increase our troops, the Army the Marines. And I talked about this to Secretary Gates and he's going to spend sue time talking to the folks in the building, come back with a recommendation to me about how to proceed forward on this idea.

This, of course, comes after this past weekend, former U.S. Secretary of State, Colin Powell, the former chairman of the joint chiefs, saying that he agrees with the army chief of staff who testified last week. He believes the army is close to being broken; that changes need to be made, that the army specifically needs more resources. In this interview with the "Washington Post," though the president cautioning that he has not decided exactly what his new strategy in Iraq will be. The president though saying, quote, all options are viable.

As we've been reporting for days now, various people familiar with the discussions say one of those options perhaps most viable is the president sending a surge of some 20,000 to 30,000, maybe even 40,000 U.S. Troops into Iraq on a short-term basis. But again, officials are cautioning that this does not mean the president has decided on a surge.

They point out, this is the budget season here in Washington, that it's going to take months, even years to increase the end strength of the U.S. Military, that instead if, that's a big if, there is a surge of U.S. Troops into Iraq, that would really come from existing troops who are in Iraq who were expected to come home. They would have their tours of duty extended. It would not come necessarily from new troops being added. That would take months or even years, Kitty.

PILGRIM: Ed, is this a departure from the Rumsfeld theory of a light, mobile, lean military, correct?

HENRY: Well, certainly Secretary Rumsfeld thought he could do more with less. But also Secretary Rumsfeld had been talking about the potential to increase the size of the military. He was really mostly talking about transformation; trying to find how to get more out of the military.

But certainly, you're right. This seems to be a bit of a repudiation of what Secretary Rumsfeld was trying to do in terms of more with less. This is a clear sign the president realizes he is going to have to increase the size of the military -- Kitty.

PILGRIM: Thanks very much, Ed Henry.

Well, the news of the president's plan comes amid reports of a possible rift between the White House and the Pentagon over the troop levels in Iraq. Barbara Starr reports from the Pentagon. Barbara?

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT: The Joint Chiefs of Staff are opposed to a White House option to significantly increase the number of forces in Iraq unless there is a well-defined mission for those units, several knowledgeable sources now tell CNN. General John Abizaid, the top commander on the ground, has long been firmly opposed to sending more U.S. Troops.

GEN. JOHN ABIZAID, CENTCOM COMMANDER: The Baghdad security situation requires more Iraqi troops and that's the direction that we're headed right now.

STARR: The White House says no decision to send troops has been made. So there is no problem. TONY SNOW, WHITE HOUSE PRESS SECRETARY: Well, the idea that there is a decision and a squabble would be wrong.

STARR: But what if the White House ideas calls for increasing combat forces by up to 30,000, mainly to deal with security in Baghdad? That means troop levels in Iraq could rise to the highest levels ever, perhaps nearly 165,000. The generals worry more boots on the ground might mean just more targets.

Attacks by extremist elements of the Jaish al Madhi militia now identified as the most dangerous group in the country are still a major concern.

The debate may be Defense Secretary Robert Gates' first test of wills.

LT. GEN. DAN CHRISTMAN (RET.): Well what you've got is a professional military that I think almost to a senior officer has said, please don't do this. But a political inclination to do just the opposite. I think that clash between military and civilian cultures is looming to be a very, very great divide.

STARR: The joint chiefs also warned that the military can't handle an increase for more than a few months. And in congress, some Democrats say, it's just too late.

REP. IKE SKELTON (D), MISSOURI: The time for a troop increase, larger troop increase was about three and a half years ago when we initially went into Iraq.

(END VIDEOTAPE)

STARR: Kitty, again, what we're not talking about is that longer term increase in the size of the military that the president has discussed today. What we are talking about is his other option; his other plan is a short-term surge of troops into Iraq. And that is a big enough problem. Many commanders say unless there is political and economic progress in Iraq, more boots on the ground simply won't make a difference there -- Kitty.

PILGRIM: Thanks very much, Barbara Starr.

Well, two more of our troops were killed in Iraq. One soldier died from his wounds at the Brook Army Medical Center in Texas. 63 of our troops have been killed or died as a result of the war in Iraq so far this month. 2,952 troops have been killed or died since the war began. 22,229 of our troops have been wounded. 10,050 of them so seriously they could not return to duty within three days.

The violence in Iraq is taking a new turn tonight. Murders, robberies and kidnappings that appear to be carried out by members of Iraq security forces, but officials have another explanation.

Ryan Chilcote reports from the Iraqi capital.

(BEGIN VIDEOTAPE) RYAN CHILCOTE, CNN CORRESPONDENT: They read like a police blotter. Million dollar bank heists, a massive kidnapping of 30 humanitarian aid workers. Another mass kidnapping of at least 100 education workers. What do they have in common? It all happened within the last month and all went down without a hitch.

In each one of them, the perpetrators were wearing the uniforms of Iraq security forces. Meaning the crimes were either carried out by people charged with preventing them or by people pretending to be them.

That's what Iraq security forces say. In fact, Iraq security forces maintain the impostors look so genuine, they themselves are sometimes duped. They inadvertently provide criminals with a safe passage to and from the crime scene.

There is some circumstantial evidence to that. Insurgents have been caught red-handed donning Iraqi uniforms. And tailors at Baghdad's infamous Theese (ph) market will make one custom fit for anyone willing to pay.

To combat the freelancers the government came out with new uniforms that they said couldn't be counterfeited. Those, too though are now reportedly being used by impostors. But many Sunnis say the Shiite-dominated police are the perpetrators, accusing them of using uniform death squads to target Sunnis. This week, the United States added its voice to the debate in a new report claiming Iraq's police are at a minimum guilty of complicity in some crimes.

Shia death squads levered support from some elements of the Iraqi police, the report reads. Facilitated freedom and provided advance warning of upcoming operations.

Whether the uniform criminals are behind the kidnappings or bank heists, one thing is clear, they've stolen the public's confidence in their government's ability to provide security. Ryan Chilcote, CNN, Baghdad.

(END VIDEOTAPE)

PILGRIM: Hamas and Fatah agreed tonight to a new cease-fire in Gaza. An earlier truce failed to stop the street battles that have killed 14 people and wounded dozens more. Hamas, the radical Islamist group earlier today accused the United States of trying to bring down its government in the Gaza strip.

Ben Wedeman reports tonight from Gaza.

(BEGIN VIDEOTAPE)

BEN WEDEMAN, CNN CORRESPONDENT (voice-over): It's time to run for your life. This gun battle between Palestinian police and the Hamas militia broke out as school children were out on a lunch break.

Shopkeeper Haddad Alian is closing up. I'm going home, he tells me. I'm done. We're afraid. It's never been this bad. Gang land style warfare seems to be taking hold. Elsewhere in Gaza City, vendors pack up. Another gun battle brewing just up the street. As members of Palestinian military intelligence, angry over the killing of a comrade, try but fail to trash a Hamas banner. They were interrupted by more gunfire.

The bloody confrontation between Fatah, which wants new elections, and Hamas, which rejects them, has left at least 14 dead and dozens wounded.

Every new death brings new cause for revenge, a vicious cycle of killing and counter killing no one seems able to stop.

At this funeral for a Fatah member killed in clashes with Hamas, curses for the militant Islamic group. As they head to the graveyard, yet more shooting, we run into the first open door. We've taken cover inside a vegetable store here in Gaza city. There's gun fire going on outside between members of Palestinian security and unknown others somewhere out there.

Gunmen told us if we videotaped anymore, they'd shoot us. All we could do was set the camera on the ground and let it roll, recording as this city teeters on the brink of chaos. Ben Wedeman, CNN, Gaza.

(END VIDEOTAPE)

PILGRIM: Vice President Cheney will be called as a witness for the defense in the trial of a former aide. The vice president will be called to testify in the perjury and obstruction of justice case against Lewis "Scooter" Libby.

John King reports -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: And Kitty, consider the legal and political stakes of that. The vice president of the United States put on the record today in the Scooter Libby trial as a defense witness. It happened just moments after the prosecutor; Patrick Fitzgerald said he had no plans to call the vice president as a prosecution witness.

One of Mr. Libby's lawyers, Ted Wells at that point stood up in court and said, "We do," meaning the defense does plan to call the sitting vice president of the United States as a defense witness as his former chief of staff goes on trial in mid January on charges of course related to the CIA leak investigation.

Scooter Libby is not charged as the person who initially leaked the information about an undercover or a covert CIA operative but he is charged with lying to investigators as they tried to determine just what the White House knew and who high up in the White House knew about what was going on at that time and who might have had the information and could have been the source of that initial leak.

Mr. Libby has pleaded innocent. He said if he said things to investigators that turned out to be not true it was because he was overwhelmed and busy, not because he was deliberately lying.

Now it has been possible for some months that the vice president would be called as a witness. This official word coming today. But this is an issue I asked the vice president about, about six months ago during an interview at his home.

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: I'm not going to comment on the case. I may be called as a witness. Scooter Libby obviously is one of the finest men I've ever known. He's entitled to the presumption of innocence and I have not made any comments on the case up till now and I won't.

(END VIDEO CLIP)

KING: In the vice president's office in a statement today after it became official that he would be called as a defense witness saying much the same, saying that he would have no comment on the case but that he has cooperated from the beginning.

Again, Kitty, Vice President Dick Cheney; there's no record of a sitting vice president ever before being a witness at a criminal trial, will be a defense witness in Scooter Libby's trial.

It begins in mid January just as the president is preparing for his state of the union. Just as the Democrats take charge of Congress here in Washington, an appearance that would cause high stakes legal drama for Scooter Libby as the prosecutor gets a chance to ask the vice president what was happening at the highest levels of the Bush White House -- Kitty.

PILGRIM: Thanks very much, John King.

Coming up, former workers of the Swift Company take their former employer to court and we'll tell you why.

The Democrats have many promises to keep when the new session of congress begins but will they backpedal? We'll have a report.

And time is running out as the search for the missing mountain climbers continues in Oregon. We'll have a report. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Fired workers are suing a Swift meatpacking plant in Texas. The workers say they were replaced by illegal aliens who worked for less pay.

And in Arizona, state, local and federal officials promise a new partnership to enforce immigration laws. Bill Tucker reports on a company that is accused of hiring illegal aliens to replace legal workers because they will work for less.

And Casey Wian reports tonight from Los Angeles on immigration cooperation along the Arizona border. We begin tonight with Bill Tucker here in New York. Bill?

BILL TUCKER, CNN CORRESPONDENT: Kitty, the lawsuit is very simple in its nature. It contends that Swift actively engaged in hiring illegal alien workers to drive down the wages it pays at its plants.

(BEGIN VIDEOTAPE)

TUCKER (voice-over): This is Cactus, Texas, one grocery store, two liquor stores, six bars and one meatpacking plant. This plant, along with other Swift and company plants in six states, was targeted by immigration and customs enforcement last week in a crackdown on hiring of illegal aliens and identity theft.

Now, 18 former employees who once worked at the Cactus plant are suing Swift. The plaintiffs, all of whom worked at the plant legally, say they lost pay because Swift had a practice of hiring illegal alien workers.

MICHAEL HEYGOOD, ATTORNEY FOR PLAINTIFFS: When you flood the market, certainly a large employer like Swift with illegal immigrants that you then dilute the pool and that the American citizens or the legal residents don't have the bargaining power to command the wages and the employment rates that they otherwise would if that employer had not agreed to accept such a large amount of their work force as being illegal.

TUCKER: We contacted Swift for response. The company declined our request for an interview, but a spokesman did issue the following statement.

Quote, "the claim is completely without merit, the allegations are fabricated and lack any factual support."

Swift contends that it did not knowingly hire any illegal aliens, but there is no denying that wages in the meatpacking industry have been on a steady decline over the past two decades. It's the reason why that's in dispute.

ANGEL REYES, ATTORNEY FOR PLAINTIFFS: We have 18 plaintiffs who believe that in the last few years, wages have been depressed from $20 an hour down to about $12 an hour because Swift has been able to replace U.S. Citizens, most of which, again, are Mexican Americans, and legal resident aliens, with illegal immigrants.

TUCKER: The lawsuit also names H.M. Capital Partners as a defendant. The investment firm owns Swift and Company.

(END VIDEOTAPE)

TUCKER: Now the suit also makes a claim that Swift and Company's activities violated the Racketeer Influence and Corrupt Organization Act. Meaning among other things, Kitty, that if the company is found guilty as charged under this complaint, they will be liable for damages three times greater than what's been claimed.

PILGRIM: It makes somewhat of a test case, doesn't it?

TUCKER: It's not the first of its kind. There was another down in Georgia filed against Mohawk Industries. This is the first that I know of that specifically alleges racketeering to depress wages and deliberately hiring illegal aliens.

PILGRIM: Thanks very much. Bill Tucker.

Well, that does bring us to the subject of tonight's poll. Do you believe that Swift and companies like it conspire to keep wages down for American workers by hiring illegal aliens? Yes or no. Cast your vote at LouDobbs.com. We'll bring you the results later in the broadcast.

Officials along the most poorest stretch of the nations' broken border are promising a new era of illegal alien crackdowns, but can the various federal state and local law enforcement agencies put years of bad blood behind them and work together? Casey Wian reports.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): For years, state and local law enforcement leaders in Arizona have complained when they arrest illegal aliens, federal immigration authorities often refuse to take them into custody.

GOV. JANET NAPOLITANO (D), ARIZONA: If we stop somebody for a potential violation of state law, we're already titled to inquire as to immigration status.

The problem has been that we didn't have a federal partner to turn the immigration part over to. And that converts state and local law enforcement into an immigration replacement.

WIAN: Napolitano and Maricopa County Sheriff Joe Arpaio well known for putting illegal aliens in his Tent City jail and taking them to the border himself held a private meeting with ICE's new Phoenix chief. He promises cooperation.

ALONZO PENA, ICE SPECIAL AGENT IN CHARGE: What we're talking about is trying to develop a comprehensive strategy to deal with the interior problems with immigration and I think it's an effort that we all agree on.

WIAN: Already ICE is picking up and deporting more illegal aliens in local jails. It's training deputies in immigration law enforcement and deploying ICE agents to local gang units.

Pena also says the nationwide crackdown on employers of illegal aliens will help because Phoenix is a key transportation hub for illegal workers.

SHERIFF JOE ARPAIO, MARICOPA COUNTY, AZ: I feel we'll have a good relationship. We have a couple of ideas I'm not going to talk about right now. But I think it will be pretty good, might be a little controversial. WIAN: The sheriff and the governor even wrote a letter to Pena's boss, Homeland Security Secretary Michael Chertoff praising his appointment. They also asked for double the number of ICE. Agents in Phoenix and to end its revolving door leadership. ICE's Phoenix office has been led by six different special agents in charge in just the past four years. Perhaps that's why Napolitano and Arpaio are still struggling to learn special agent in charge, Pena's name.

It's Alonzo, not Alfonzo.

(END VIDEOTAPE)

WIAN: Alonzo Pena began his career as a state trooper in Texas. Before becoming a federal agent. He'll need all that experience to overcome years of distrust between the locals and the feds in the nation's busiest illegal alien smuggling corridor -- Kitty.

PILGRIM: But it's in everyone's interest that it works out, right Casey?

WIAN: It sure it, it sure is.

PILGRIM: Thanks very much Casey Wian.

Now our broken border is expected to be one of the top issues when congress comes back next month. Democrats made promises on immigration, a host of other issues in the November election. Will they keep the promises or backtrack? We'll have a report.

With the 2006 elections barely behind us, pollsters are turning to 2008. Bill Schneider tells us which party is ahead in the presidential race.

And we'll have an update for you on the search for the two missing climbers on Mt. Hood. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: In just over two weeks, congress returns to Washington with Democrats in charge and they'll have to deliver on promises they made that help them become the majority. Lisa Sylvester matches the campaign pledges with political reality.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Democrats are determined to be the do-something congress. They rode in on Capitol Hill on a reform agenda. First on their to-do list, tackle the low hanging fruit. The less controversial stuff, raising the minimum wage and giving college students a tax break.

BILL PRESS, RADIO TALK SHOW HOST: They'll try to do a few things that are very popular that are doable and then they can say, look, we've got success. So they may not achieve everything but their goal is just to achieve enough to show, we know what we're doing. SYLVESTER: But it's questionable if the more difficult promises will be kept. Take Iraq, Democrats on the campaign trail pledge to begin bringing back U.S. Troops from Iraq in phases next year. That may hit a brick wall with the political reality.

MIKE FRANC, HERITAGE FOUNDATION: Suddenly campaign rhetoric may sound a little bit hollow when it comes to actually coming up with on the ground, realistic viable solutions to the situation for the next six months, the next year and thereafter.

SYLVESTER: Democrats also vow to implement all of the 9/11 commission recommendations. They're now conceding that's harder than they thought.

REP. TOM PRICE (R), CONGRESS ELECT: In terms of terrorists, tracking, financing of terrorists, tracking that money, in terms of setting up appropriate committees for homeland security, all those kinds of things ought to be enacted and they're saying that's not what they plan on doing.

SYLVESTER: House Speaker Elect Nancy Pelosi promised to drain the swamp of corruption in Washington. To curb Lobbyist influence on Capital Hill. Lobbyists are already lobbying against any changes. And campaign contributions have a way of winning friends; Republicans and Democrats alike.

FRANC: The question is whether the new boss is going to be like the old boss or whether they will adhere and actually behave at a higher standard of ethical behavior.

SYLVESTER: The minority is now the majority, and sometimes the view may change once you're on top.

(END VIDEOTAPE)

SYLVESTER: One other campaign promise that Democrats may back away from is pay as you go. This is a pledge that congress will not have any new spending unless it's offset by cuts elsewhere or tax increases. That might run against other Democratic campaign pledges including a promise to expand Medicare prescription drug coverage -- Kitty.

PILGRIM: It will be interesting to see how that plays out. Thanks very much, Lisa Sylvester.

Coming up, early predictions for the 2008 presidential race. We'll see what the polls look like.

And a wakeup call for Washington. The federal government about to get a cost breakdown on how much of your local taxpayer dollars are spent to harbor illegal aliens in this country.

And in Oregon tonight, the latest on the remaining missing climbers on Oregon's Mt. Hood.

(COMMERCIAL BREAK) PILGRIM: Now our top stories. Tonight, President Bush admits our military is stretched too thin and calls for an increase in the size of U.S. forces. This amid a dispute over troop levels between the White House and the Pentagon.

Vice President Dick Cheney will be called as a witness for the defense in the trial of aide Lewis Libby. The trial is the result of a federal investigation into the leak of the identity of CIA operative Valerie Plame.

And fired workers are suing a Swift meatpacking plant in Texas for $23 million plus damages. The workers say they were replaced by illegal aliens, who worked for less pay.

Hope is fading for two climbers missing on Oregon's Mt. Hood, even as a scaled-down search does continue. Now, photos found with the body of a third climber suggest that they only had supplies for a quick climb. Rob Marciano joins us live from Mt. Hood with the very latest -- Rob.

ROB MARCIANO, CNN METEOROLOGIST: Kitty, the Oregon National Guard helicopters that have been ferrying rescue teams to the higher elevations of the mountain in the past three days have been sent to their home base camps to be put on stand-by and to regroup, hopefully to be called on if not today later in the week if any other clues are found. But none as of yet today have been found.

There have been two fixed-wing aircraft flying around the mountain, specifically up and down that Elliot glacier, where they think these two last climbers may very well be. But until now, up until now, no such clues.

There are avalanche teams being assembled. One is about a few miles from here, 6,000 foot near the base, the northern base of Mt. Hood, waiting for one of those clues. They're a specialized team that can go up into this dangerous area and maybe probe and take a closer look for these climbers. But without those clues, that hasn't been the case.

Some clues that came down yesterday with the body of Mr. James. His shoulder was injured, which kind of jived with what rescuers were thinking, and also that camera had some pictures. It did one of several things. First of all, it told them, yes, they did climb up that Elliot glacier. They went up the dangerous gullies. They did summit, and then ran into trouble after that.

It also showed what kind of equipment they had with them, and it was what they thought, which is pretty much enough to get up and down the hill fairly quickly, not necessarily enough supplies to get them through the mountain seven, 10, 14 days.

So hopes are fading, Kitty, just a little bit. But family members have been up with the sheriff to fly around the mountain today to get a look, to take some pictures, because visibility beginning tomorrow is going to go downhill, as well winds will begin to increase. So weather is going to be a factor again, after about three nice, solid days of good visibility. Next storm scheduled to arrive tomorrow afternoon -- Kitty.

PILGRIM: All right. Thanks very much, Rob Marciano.

A doctor in western Washington says the region is experiencing an epidemic of carbon monoxide poisoning. It was caused by last week's deadly windstorm. Now, some 200,000 customers still in the dark for electricity. The death toll rose to 14 after four family members were found dead in their home of apparent carbon monoxide poisoning. Without power, they had been running a generator to keep warm.

At least 100 other people show signs of carbon monoxide poisoning. The governor of Washington has declared a statewide disaster.

A high-level panel says the lack of security at our nation's sea ports is putting the U.S. at serious risk. The panel of government and business leaders wants new federal laws to make sure all cargo is inspected. Currently, less than 5 percent of the cargo is inspected at this point. Now, the fear is that any of the millions of containers arriving in U.S. ports could conceal a nuclear bomb. The port panel was set up in March and made an uproar over U.S. ports operations being sold off to the Arab-owned Dubai Ports World.

Meanwhile, the U.S. is warning the United Arab Emirates to stop shipping military hardware through Dubai to Iran and Syria. A congressional report alleges Dubai was even sending sensitive nuclear technology to Iran. Concerns about this led to the sale last week of DP World to American-owned AIG. Now, U.S. officials say there could be repercussions if they don't see some changes in these activities.

Federal health officials want stronger warning labels on over- the-counter pain relievers. Now, officials want to caution people about potential serious side effects. Overdoses of acetaminophen can cause liver damage or death. Even regular doses of aspirin, Ibuprofen, can cause gastrointestinal bleeding and kidney damage.

The drugs are found in hundreds of products, which may cause people to overdose without realizing it.

With presidential exploration committees springing up and more likely to be formed after the holidays, the race for 2008 is gaining momentum. Now, was 2006 an omen for 2008? Democrats certainly hope so, and Bill Schneider reports.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Ask people right now whether they'd vote for the Democrat or the Republican for president, and it looks good for the Democrats: A 20- point lead. Landslide. What happens if you ask Americans to choose between two real people, Democrat Hillary Clinton and Republican John McCain? Not exactly a landslide. More like a dead heat.

Could the problem be Senator Clinton? Let's see what happens if we substitute Al Gore for Hillary Clinton. Nothing. Still very close. Both Democrats are closely identified with the Bill Clinton administration.

Could the advantage be unique to McCain? Let's see what happens if we substitute Rudy Giuliani for John McCain. Nothing. Still neck and neck. Neither Giuliani nor McCain is closely identified with the Bush administration.

OK, Democrats are thinking. Maybe we can get the Democratic lead back if we nominate somebody who's got a fresh, clean image, someone who captures the spirit of '06.

SEN. BARACK OBAMA (D), ILLINOIS: To some degree, I've become a shorthand or a symbol or a stand-in for now of a spirit that the last election in New Hampshire represented. And it's a spirit that says, we are looking for something different.

SCHNEIDER: Let's see what happens if we substitute Barack Obama for Hillary Clinton. McCain stays the same, but Obama doesn't do quite as well as Clinton. More people are undecided. They don't know much about Obama.

You can't say Obama is more electable than Clinton because he does better in the polls. He doesn't. What you can say is that people's opinions about the freshman Illinois senator are not as strong.

(END VIDEOTAPE)

SCHNEIDER: McCain and Giuliani do much better in the polls than a generic Republican does. Message to Republicans: Best to nominate a candidate not closely identified with the Bush administration -- Kitty.

PILGRIM: Thanks very much, Bill Schneider.

Well, still to come, it's the federal government's responsibility, but once again, locals are doing the job. A new study on the burdens of illegal aliens on local communities.

And debate over the fairness of paperless e-voting machines has the House composition in jeopardy. Who takes the seat may be one of the first decisions Nancy Pelosi has to take as speaker of the House in January.

(COMMERCIAL BREAK)

PILGRIM: Alarm about illegal immigration has prompted another local government to do what the federal government will not do. A county board of supervisors has ordered the study of the financial impact of illegal immigration on its budget.

Civic groups say such a study would be unique, but it's happening in Prince William County, Virginia, just outside Washington, D.C. Now the study is the brainchild of supervisor Wally Covington who joins us here tonight.

Thanks for being with us. WALLY COVINGTON, PRINCE WILLIAM COUNTY: Thank you, it's good to be here.

PILGRIM: Why did you do this study? Why did you think it was important?

COVINGTON: It's important to go after what the cost is to local government. We're in a budget-tightening period right now and we only receive a certain amount of funds from certain forms of taxes. So whereas illegal immigration sends a fair amount of money to the feds and the state government, local government really gets stuck with a lot of the services.

PILGRIM: You know, according to the census bureau, the population of Prince William County has increased by 67,000 people in just five years. How many do you estimate are illegal aliens?

COVINGTON: They haven't been able to give me those numbers yet. I'm not sure exactly what our total number of illegal immigrants are. But we do know that in our jail system, that we have 88 inmates out of 719 that are illegal aliens.

So if we were to extrapolate those numbers, we can clearly see that we have a fairly large population of illegal immigrants and many of my constituents are asking me to step forward and talk about it more and try to get some more of these numbers.

PILGRIM: Do you believe that the millions in cost will eventually be reimbursed?

COVINGTON: You never know what the federal government is willing to do. But if we're able to put a focus on this and a face on it that local government is bearing most of this burden, then the federal government should act in some form or another to bring us some relief.

PILGRIM: Was this born of frustration and just seeing budgets out of control?

COVINGTON: It does. It has a heavy impact on our education. We have children in trailers, we have a justice system that's being plagued with a fair amount of crime and we're just looking to get a handle on this portion of it as a growing community.

PILGRIM: Let me run this by you. Now the controller of the state of Texas just released a report showing illegal immigrants contribute $17 billion to the state economy. But the report did not examine the cost to education. How do you react to that kind of a report?

COVINGTON: Well, I think that report, if you really looked at the details, talked about the state government receiving most of those funds and local governments bearing most of the burden, that there were shortages at the local level.

So it bears out a lot of what I'm talking about that the local government here in Prince William County is being forced to pick up a lot of the costs associated with illegal immigrants.

PILGRIM: And let me just give you some feedback from the Hispanic civil rights group, the National Council of La Raza. And they sent us a statement which I'd like to read to you. It says, "We welcome the study on the costs and benefits of immigrants at the local level.

And while we know that immigrants do pay taxes, there is much to be learned about the distribution of those tax revenues. Of course, such a study must be based on strong, unbiased methodology to ensure that both the costs and the contributions are accounted for."

This seems like a very open statement. How do you assess it?

COVINGTON: You know, I would agree with that. As much as we can just put the raw numbers down that it's costing us to educate children, to provide law enforcement and human services, the best we can come up those numbers, the more we'll be able to offer solutions at the local level.

The reality is the federal government's got to be the one that steps in. They're the ones that control our borders. They're the ones that regulate interstate commerce and it really comes into those clauses of the constitution that the federal government should be doing these things and local government just can't do it all.

PILGRIM: Mr. Covington, you're up for re-election next year. This is an enormous political issue and some of your detractors suggest that you're doing this for the publicity of it. What do you say to them?

COVINGTON: Well, first, I never thought there would be so much publicity on it. It was merely a budget request that I asked for, how do we get a handle on these numbers?

We're looking at a budget shortfall in Prince William County of $18 million this year alone and we're looking at budget shortfalls in the coming years ahead. We had to start asking some serious questions about our fiscal responsibilities to our taxpayers.

And one of those areas seems to me to be illegal immigration. We have a problem and we ought to start talking about it and trying to figure out a way to prod the federal government to give us some help.

PILGRIM: Thanks very much for explaining it all to us, Wally Covington, supervisor of Prince William County, thank you.

COVINGTON: Thank you.

PILGRIM: A reminder to vote in tonight's poll. Do you believe that Swift and companies like it conspire to keep wages down for American workers by hiring illegal aliens? Yes or no. Cast your vote at LouDobbs.com. We'll bring you the results in just a few minutes.

The Bush administration seems to be softening its stance on the possibility that China is manipulating its currency. Now the move comes just four days after a U.S. trade delegation returned from talks in China. The talks aimed at easing America's huge and growing trade deficit with China.

In its last report, the administration hinted it might accuse China of devaluing its currency to gain unfair trade advantages. But a new report says China does not meet the technical requirements of a country manipulating its currency.

Coming up, there's one congressional seat that's still being contested. Democrat Christine Jennings blames e-voting machines for her loss to Republican Vern Buchanan in Florida's 13th district. And now she's trying to put those machines on trial. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Coming up shortly here on CNN, it's "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, CNN ANCHOR: Thanks very much, Kitty.

The fight over the war. Congressman John Murtha joins us to explain why he thinks President Bush is dead wrong on Iraq.

Also, Laura Bush's skin cancer, a closer look at her condition and why it took so long for the White House to announce it.

Dick Cheney called to court. Find out why he's being asked to take the stand in a criminal case. And not fired, Donald Trump sends Miss USA to rehab. All that, Kitty, coming up right at the top of the hour in "THE SITUATION ROOM."

PILGRIM: Thanks, Wolf. Opponents of paperless voting machines are hoping to have their day in court. Now a Democrat who is contesting her loss in a Florida congressional district is doing her part to have that day in court.

Christine Jennings says the number of undervotes that indicates that things went terribly wrong with e-voting machines in her district and her attorney, Kendall Coffey, began presenting her case at a hearing before a Florida judge today. We welcome them both to the program. Thanks for being with us.

CHRISTINE JENNINGS, FLORIDA CONGRESSIONAL CANDIDATE: Thank you.

PILGRIM: You had a court session. Tell us -- just bring us up to speed on where you stand with your legal challenge?

JENNINGS: Well, I'm going to let my attorney...

PILGRIM: ... All right, Kendall, go ahead.

Yes, the experts are before Judge Garrett (ph) right now, Kitty, presenting evidence on whether or not we're going to get access to the electronic machines and the electronic software. And strikingly, both experts agree there was 14,000 suppressed votes, 14,000 votes that got diverted that if they had been counted and if they had been validated, Chris would have won by 3,000 votes.

The only controversy is what went wrong and our testimony shows very significant likelihood of machine failure. That's what we're in court examining right now.

PILGRIM: You know, Ms. Jennings, according to the official count, your opponent, Republican Vern Buchanan, won the seat by only 369 votes, yet there are 14,000 votes that just didn't turn up. And the -- I guess the theory is that people just didn't vote in that category. You say that's not exactly right. The e-voting machines had raised a lot of questions even before the contest. How much of this is "I told you so".

CHRISTINE JENNINGS (D), FLORIDA CONG. CANDIDATE: Well, let me just say it was 18,000 votes that were the under votes. And what happened is from day one, day two of early election, two weeks prior to election day, we started getting calls from people saying that they had a problem getting their vote to take. And it was either when they tried to vote for me or it was on the review screen. So we were alarmed -- getting alarmed as time got closer and held a press conference on election day we were so concerned about this.

PILGRIM: Yes, I remember that clearly. Why do you think that election officials did not take that situation seriously?

JENNINGS: I have no idea and I don't understand it myself because I do know that people called the "Sarasota Herald-Tribune". I do know that people called the supervisor of elections. But that is one of the things I want to find out is what happened to 18,000 votes that were not counted for this election.

PILGRIM: Let me ask you a bit about the case. Your campaign is suing the ES&S Company (ph), which actually ran the machines, manufactured the voting machines. And the company is opposed to your request to obtain the source code. Most voting machine companies say this is proprietary information. Are you suing to have this open? Or what is the exact direction of your case?

Let me ask Kendall, first.

COFFEY: I'm going to jump in here, Kitty, because what is so critical about this case is where 35 percent of Floridians, 40 percent of Americans and of course the people of Sarasota use these machines. The manufacturers don't want anybody to be looking inside the software at the source code. So we have machines without a paper trail, and yet the manufacturers don't want they to be any outside experts to come in and verify these unverifiable machines. So if Chris weren't bringing this challenge, there would be no opportunity to get these things tested and examined before the 2008 presidential election.

So this is very important, not just for Chris and District 13. There is a crisis of confidence among millions of people around the country on whether their votes are counting and this is the key test case.

PILGRIM: Let me read a statement from your office so the viewers have the benefit of it.

"There's a real crisis in confidence among voters, not just in Florida but throughout the country. The voters of District 13 deserve answers, but this case has much wider implications beyond Florida. This is a test case for the entire nation."

Now, this, of course, is very personal to you. It really hinges on whether you stay in Congress or not. But why do you think that it's important that all of America take notice of this particular situation?

JENNINGS: Because people from California to New York have sent me e-mails, have sent me letters and encouraged me to keep this fight up. People want to know that their vote counts. And I'm going to do that. This is not about me. This is not about my opponent. This is about the confidence that the voters of this country have in their voting system.

PILGRIM: Now, some are putting -- I'm sure you're under a lot of pressure to give up this fight and also to give up your claim to the seat in Congress. How are you responding to that?

JENNINGS: I'm really not under pressure for doing that at all. In fact, just the opposite. The support that I have received from people in this country and in my district, it is incredible. And I will tell you, I thought I always knew how important a vote was to each person. But I have been amazed at how much people in this country really do value their vote and their role and participation in their government.

PILGRIM: A fellow Democrat has to support you and that's Nancy Pelosi. Do you think it will come down to a decision that she'll have to make?

JENNINGS: I am really hoping that this will be satisfied in the court of Florida. That's where it should be. I will be filing papers tomorrow because I want that protection, that it may go to the House. But I am hoping that the court that's now hearing this case will make a decision so that we can have a revote. That's where it should be done.

PILGRIM: Kendall, any estimates on how fast it could get through the court system? After all, we're running out of time here.

COFFEY: Well, the court's going to move it as quickly as possible. Realistically, we're not going to have this whole case finished by January. But we're determined to keep going until we get the answers to the questions that not just the people in Sarasota and Chris want answered, but the entire country wants answered.

PILGRIM: All right.

Well, thank you for bringing it to our attention and making the effort to present it for our audience. It's an issue that's very dear to this program. E-voting was one of the big topics during the campaigns. Thank you very much, Christine Jennings and Kendall Coffey.

Still ahead, more of your thoughts, the results of tonight's poll.

Stay with us.

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PILGRIM: Now the results of tonight's poll. Ninety-eight percent of you say that Swift and companies like it conspire to keep wages down for American workers by hiring illegal aliens.

Time now for more of your thoughts.

Gerald in Texas wrote to us: "The ex-employees of Swift & Co. who are filing lawsuits should also sue their union for protecting those same illegals instead of their American, legal members. Looks like the labor union is also Big Business and only interested in how much dues bring in."

And Dan in Missouri wrote to us: "Teachers and schools are held accountable for their students' progress, businesses are held accountable for not selling alcohol and cigarettes to minors, so why shouldn't employers be held accountable for hiring illegal immigrants?"

Jim on North Carolina: "Prosecuting the employers of illegal aliens as well as landlords who rent to them is the fastest, cheapest way to cut off and reverse the flow across our southern border. Perhaps then we will see jobs with livable wages going to Americans."

Danny in Oklahoma: "Since the Catholic Church no longer respects the separation between church and state, maybe they should give up their non-profit, tax-exempt status."

And Bob in Illinois: "As a lifelong Catholic, I'm offended by the Church's total disregard for the law on illegal immigration and will reflect that in the collection basket. The bishops must honor our constitution by honoring the separation of church and state."

Thanks for being with us tonight.

For all of us here, good night from New York.

And the "SITUATION ROOM" starts right now with Wolf Blitzer -- Wolf.

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