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LOU DOBBS THIS WEEK

New NIE: Iraq Govt. Precarious; Another Chinese Toy Recall

Aired August 25, 2007 - 18:00   ET

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


LISA SYLVESTER, GUEST HOST: Tonight, another huge recall of contaminated toys from, you guessed it, communist China, a serious new threat to our children. Two of this country's leading toy safety experts will join us.
And one of the Senate's most influential Republicans, Senator John Warner, breaks decisively from President Bush on the issue of Iraq. We'll examine the rising political challenges facing the president over his conduct of the war. All that and much more straight ahead tonight.

ANNOUNCER: This is LOU DOBBS THIS WEEK, news, debate, and opinion for Saturday, August 25th. Here now, sitting in for Lou Dobbs, Lisa Sylvester.

SYLVESTER: Good evening, everybody. A new intelligence report says the Iraqi government is so precarious that it's incapable of taking advantage of recent military gains. The National Intelligence Estimate also said Iraqi security forces are not able to conduct sustained operations without coalition support. The report comes less than a month before a long-awaited assessment of the war by the top U.S. officials in Iraq, General David Petraeus and Ambassador Ryan Crocker.

Senior Pentagon correspondent Jamie McIntyre reports.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SENIOR PENTAGON CORRESPONDENT (voice-over): The brightest spot in the otherwise bleak NIE is its conclusion that there has been measurable but uneven improvement in Iraq's security situation since the last report issued in January before the surge. But it's hardly a pretty picture.

Among the key judgments, violence remains high. Sectarian groups are unreconciled. Al Qaeda is still able to conduct high-profile attacks. Iraq's political leaders are unable to govern effectively. And Iraqi security forces have not improved enough to take over.

But the Bush administration is pointing to another hopeful trend, local sheiks making their own peace and joining the fight against al Qaeda, even as the national government of Nouri al-Maliki founders.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: And there is a bottom-up reconciliation taking place. It's noticeable and tangible and real, where people at the grassroots level are sick and tired of the violence, sick and tired of the radicalism, and they want -- and they want a better life.

MCINTYRE: But the intelligence assessment warms those bottom-up agreements come with a big risk, setting the stage for increased factional violence, such as what has happened in the south where British troops have pulled back.

BRIG. GEN. RICHARD SHERLOCK, JOINT CHIEFS DEPUTY DIRECTOR: The key to that is tying that bottom-up reconciliation to the central government's efforts, so that they don't become splintered again.

MCINTYRE: The report notes another big change, the perception among Iraqis that the U.S. is leaving, and that could push groups to reconcile, but also perhaps to get ready for all-out civil war.

MICHAEL O'HANLON, SENIOR FELLOW IN FOREIGN POLICY STUDIES, BROOKINGS INSTITUTION: To the extent the Iraqis believe we are headed out, they will be more likely to prepare for their struggles with each other and be less likely to work patiently to build the fragile institutions of government.

MCINTYRE: The intelligence community's most controversial opinion, pulling troops back now will make things worse, concluding: "Changing the mission from a counterinsurgency to combat support would erode security gains achieved thus far."

MCINTYRE: Looking to the future, the report predicts violence will continue to rise and that the Iraqi government will continue to struggle in the months ahead. It has concluded for now political reform is virtually stalled.

Jamie McIntyre, CNN, Washington.

(END VIDEOTAPE)

SYLVESTER: Our intelligence agencies are also preparing a new assessment of Iran's rising threat to U.S. interests in Iraq and other parts of the world. A draft version of that assessment says Iran will continue efforts to develop nuclear weapons. Sources say intelligence analysts believe Iran will remain "unhelpful," as they put it. Some independent experts believe Iran could have a nuclear weapon in as little as three years.

President Bush invoked the aftermath of the war in Vietnam to defend his conduct of the war in Iraq. The president said an abrupt withdrawal from Iraq could lead to a repeat of the killing fields in Indochina. The president also declared he supports Iraqi Prime Minister Nouri al-Maliki. Earlier, the president apparently criticized the Iraqi leader for failing to achieve political reconciliation. White House correspondent Ed Henry reports -- Ed.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Lisa, with critics charging that there's no hope for victory in Iraq, the president tried to use historical comparisons to make the case that experts can be wrong. But he got sidetracked a bit by a new controversy. (voice over): Damage control from the commander-in-chief one day after expressing frustration with Iraq's prime minister.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Prime Minister Maliki is a good guy, a good man with a difficult job. And I support him.

HENRY: The clarification came after Maliki lashed out at what he called petty politics from the American administration. And President Bush is clearly sensitive to criticism over U.S. interference in the Iraqi government, which could undermine his claim the war has brought freedom to that nation.

BUSH: And it's not up to the politicians in Washington, D.C., to say whether he will remain in his position. That is up to the Iraqi people, who now live in a democracy and not a dictatorship.

HENRY: The Maliki controversy took the president off message from his effort to tout early success from the surge in advance of a crucial September progress report.

BUSH: And as they take the initiative from the enemy, they have a question. Will their elected leaders in Washington pull the rug out from under them just as they're gaining momentum and changing the dynamic on the ground in Iraq?

HENRY: Before the Veterans of Foreign Wars Convention, the president argued the nation now needs the same perseverance that won World War II and the Korean War.

BUSH: The shadow of terror will never be lifted from our world and the American people. We will never be safe until the people of the Middle East know the freedom that our creator meant for all.

HENRY: After previously running from comparisons between Vietnam and Iraq, the president tried to draw an analogy, claiming a quick pullout from Baghdad could bring a familiar slaughter.

BUSH: One unmistakable legacy of Vietnam is that the price of America's withdrawal was paid by millions of innocent citizens whose agonies would add to our vocabulary new terms like boat people, reeducation camps, and killing fields.

HENRY (on camera): Democrat John Kerry said the real lesson from Vietnam is that the U.S. needs a new strategy, not just new rhetoric. But Mr. Bush gets a chance to frame the debate again next Tuesday when he addresses the American Legion.

Ed Henry, CNN, Kansas City, Missouri.

(END VIDEOTAPE)

SYLVESTER: One of the most influential Republicans on Capitol Hill was not convinced by President Bush's speech. Senator John Warner, a former chairman of the Armed Services Committee, said our troops should start withdrawing from Iraq in the coming months. Senator Warner said that's the only way to convince the Iraqis to introduce political reforms.

Dana Bash reports from Capitol Hill.

(BEGIN VIDEOTAPE)

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): It is a seismic shift in the Iraq political debate. Influential Republican Senator John Warner now wants the president to start bringing troops home by Christmas.

SEN. JOHN WARNER (R), VIRGINIA: We simply cannot as a nation stand and put our troops at continuous risk of loss of life and limb without beginning to take some decisive action, which will get everybody's attention.

BASH: Warner is just back from a four-day trip to Iraq, deeply disillusioned with its fledgling government.

WARNER: The Iraqi government, under the leadership of Prime Minister Maliki, have let our troops down.

BASH: Now, in attempt to convince Iraqis the U.S. will not stay forever, Warner wants the president to announce September 15th that he's going to take the first step in troop withdrawal.

WARNER: Certainly, in 160,000-plus, say 5,000 could begin to redeploy and be home to their families and loved ones no later than Christmas of this year.

BASH: Warner calls this a respectful suggestion to the president, one he first delivered personally to senior White House officials. And, though he was careful to say he does not advocate a deadline for troop withdrawal, pushing for any redeployment puts Warner more in-line with Democrats than most Republicans.

The White House was careful to express respect for the former Senate Armed Services chairman, but said Mr. Bush won't announce any troop withdrawal before the Pentagon makes its recommendations, due September 15th.

GORDON JOHNDROE, NATIONAL SECURITY SPOKESMAN: The most important thing for to us do is wait for General Petraeus and Ambassador Crocker to come back, come back to the United States, report to the president, report to the Congress, about what they see as the way ahead.

BASH: U.S. military commanders have already suggested some troops involved in the surge should start coming home by the spring. So, Warner's call may not be that significant militarily but it certainly is significant politically because it gives cover to Republicans who are hearing from war-weary constituents back home.

Dana Bash, CNN, Capitol Hill

(END VIDEOTAPE)

SYLVESTER: One U.S. commander in Iraq, Major General Rick Lynch, strongly disagreed with Senator Warner's proposal. General Lynch said a quick start to the withdrawal of U.S. troops would be a giant step backwards for Iraq.

(BEGIN VIDEO CLIP)

MAJ. GEN. RICK LYNCH, CMDR. MULTINATIONAL DIV. CENTER: I've got some great Iraqi army units in my battle space and we're working transitions there. But there's still such a detailed, complicated fight going on that it's no time between now and Christmas to move some coalition forces out.

(END VIDEO CLIP)

SYLVESTER: General Lynch said Iraqi troops and police won't be ready to replace U.S. troops in his area any time between now and Christmas.

Still to come, Mexican lawmakers give a deported illegal alien a hero's welcome after she defied our immigration laws. We'll have a special report.

Also, the escalating housing crisis threatens to destroy what's left of our middle class. We'll have that story.

And a new threat to our children from dangerous toys imported from, you guessed it, communist China. Two leading toy safety experts will join us. Stay with us.

(COMMERCIAL BREAK)

SYLVESTER: Elvira Arellano was deported back to Mexico this week. Arellano, who was a fugitive illegal alien, spent a year taking sanctuary in a Chicago church before she was arrested by immigration officials in Los Angeles.

And as Casey Wian now reports, Arellano is blaming the United States government for her situation.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): Former fugitive illegal alien Elvira Arellano blames the United States for failing to secure its border. Three days after being deported, she spoke to Mexican lawmakers.

ELVIRA ARELLANO, DEPORTEE (through translator): The United States is the one who broke the law first by letting people cross over without documents, by letting people pay taxes.

UNIDENTIFIED PROTESTERS: Deportation!

WIAN: Border security activists, rallying in Los Angeles to support Arellano's deportation, say she has a point.

JIM GILCHRIST, FOUNDER, MINUTEMAN PROJECT: I thank Elvira Arellano for making that statement, because she's right. We are a nation that has laws, but has chosen at certain levels of government not to enforce those laws.

WIAN: Arellano was caught crossing the border illegally in 1997, deported, then, according to U.S. authorities, committed a felony punishable by 20 years in prison when she crossed the border again.

After 9/11, Arellano was arrested working at Chicago's O'Hare Airport and convicted of document fraud. She was ordered deported but became a fugitive, claiming sanctuary for a year in a Chicago church.

Immigration and Customs Enforcement arrested and deported Arellano after she traveled to Los Angeles. The next day she was joined in Mexico by her young U.S. citizen son, Saul. Reporters continue to use the 8-year-old boy, now back in the States, to plead his mother's case and to demand illegal alien amnesty.

ANGELICA SALAS, CHIRLA: I want to talk about your laws, your immigration laws. Your immigration laws are inhumane. Your immigration laws are mean-spirited, and they are punitive. How can we continue to support the laws that actually tear families apart, that tear apart a mother from a son?

WIAN: While Arellano received a hero's welcome in Mexico, U.S. border security activists bid her good riddance.

ROBIN HVIDSTON, MINUTEMAN PROJECT: We support ICE and stepping in and doing something, apprehending a criminal and returning her to her home country. She only went home. And we hope she does well there and that she will remain there until she can enter this country legally.

WIAN: ICE says that won't happen without permission from the attorney general or secretary of homeland security.

(END VIDEOTAPE)

WIAN: A Mexican senate committee this week approved a resolution asking that President Felipe Calderon send a diplomatic note to the United States protesting Elvira Arellano's deportation. The committee has also set aside money for a college scholarship for her son -- Lisa.

SYLVESTER: Pretty incredible. Thanks, Casey, for that report.

There's new evidence that the federal government has fallen behind on its latest efforts to secure our southern border. High-tech virtual fencing was to be in use more than two months ago, but the project has run into significant delays.

And as Bill Tucker reports, there are also concerns the system will cost much more than expected.

(BEGIN VIDEOTAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): There are 6,000 miles of border between the United States, Canada and Mexico. The Department of Homeland Security is falling behind on securing it. They are behind in several ways.

Boeing holds the contract for developing the technology known as SBInet, or the virtual fence, which is more than two months past a deadline of June 13th for turning over the technology to the government, and the project is costing more than originally estimated.

REP. DUNCAN HUNTER (R-CA), PRESIDENTIAL CANDIDATE: I told them that the high-tech systems, because it's new ground; they have not done these border systems before, would be overrun, there would be delays, and we would end up with a problem like this.

TUCKER: A spokesman for Customs and Border Protection responds to the news of the delays by saying: "Customs and Border Protection is committed to giving the agent the tools they need. We are working with a sense of urgency to get this technology operating the way it needs to be to help the agents do their job to secure the border."

Critics, though, are highly cynical that the Department of Homeland Security has any intention of securing the border.

PETER GADIEL, 9/11 FAMILIES FOR A SECURE AMERICA: Instead of using reliable low-tech technology, it's using the highest, most complex technology that's available, and nobody should be surprised that it doesn't work, because it's just -- it's not designed to work. And people have to understand that that's the purpose here. It is designed to fail.

TUCKER: And in the process of attempting to develop the technology, the physical fence is being neglected. So far only 17.9 miles of fence out of 854 have been built.

(END VIDEOTAPE)

TUCKER: The government says that by the end of next year, there will be a cumulative 370 miles of fencing constructed. Now if the Department of Homeland Security keeps that commitment, it will still be more than 50 miles short of what is mandated by law under deadline.

And, Lisa, we should point out that we did call Boeing to ask them about these delays. They deferred comment. The Department of Homeland Security had requested they not comment on the status of the project, but that it go to DHS instead.

SYLVESTER: I'm not terribly surprised by that. But we do know one thing, is that these companies have made an awful lot of money -- these private companies on these government contracts.

TUCKER: They're making enormous amounts of money. But I suppose the one good thing under this particular contract with Boeing is it's a $20 million fixed one. So any cost overruns on this part of the project at least come out of Boeing's pocket at the moment.

SYLVESTER: All right. Bill Tucker, thank you very much for that great report.

Coming up, the mortgage market collapse. We'll tell you how it will affect America's already embattled middle class.

Another 300,000 children's products and toys from China recalled. We'll have the latest and we'll tell you how you can protect your family from unsafe products.

And Iraq's experiment in democracy may be on the verge of collapse. We'll have a special report. Stay with us.

(COMMERCIAL BREAK)

SYLVESTER: The housing market is in crisis. Sinking home prices and the subprime mortgage fiasco are battering already hard-pressed American families. The meltdown comes as wages for our middle class have been stagnant for years.

As Christine Romans reports, more and more Americans are worrying about their biggest asset, their home.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): Think the subprime mortgage crisis doesn't matter to you? Think again. Your biggest asset, your home, is harder to sell. Even people with good credit may pay more for a mortgage and may have difficulty refinancing or getting a home equity loan.

At the same time, lenders are shedding Main Street mortgage jobs by the thousands, every day, it seems, a new layoff announcement.

JOHN CHALLENGER, CEO, CHALLENGER GRAY & CHRISTMAS INC.: We are inevitably going to see these job cuts that right now are hitting mortgage financing move into areas like realtors, home construction, home retail, big developers, people who make building products. So, it's going to spread. We are just in the very first two weeks right now, and that could cause job loss for many people.

ROMANS: It all comes at a tough time for the middle class.

JOHN IRONS, ECONOMIC POLICY INSTITUTE: They just haven't seen the wage gains that they have been expecting. They haven't seen income gains that they have been expecting. At the same time they are seeing higher costs for energy. They are seeing higher costs for health care and higher costs potentially now for their mortgage.

ROMANS: Monthly mortgage payments will double for 1.4 million homeowners over the next five years, with 1.1 million foreclosures in the next six years. It has already begun. July foreclosures shot up 93 percent from a year ago, painful for millions, yes, but eventually it means a more rational housing market after years of runaway home prices.

MARK FLEMING, FIRST AMERICAN CORELOGIC: There are many people who have been priced out of the housing market, particularly first homebuyers in recent years, by the great run-up in house price appreciation.

ROMANS: Fleming sees a potential opportunity for them to finally afford a house.

(END VIDEOTAPE)

ROMANS: But the CEO of Countrywide Financial is predicting a recession because of the housing meltdown. And that could hurt everyone. It's another reason why what started as a problem for people who took loans they were never qualified for and a problem for the Wall Street pros that made a fortune from it, it could end up hurting the rest of us.

SYLVESTER: Now the cost of borrowing has gone up not just for houses, but across the board, is that right?

ROMANS: That's exactly right. For cars, any kind of loan you're going to take, credit cards. Tightening up those standards around -- you know, across the board that can be a good thing. It means that people who are taking out too much debt are going to have more trouble doing it.

But it could mean it slows down the consumer a little bit. People can't tap into their homes for equity. They might not be able to spend on a car. Not going to spend as much on their credit cards. That's where it ripples down into the rest of the economy.

SYLVESTER: And it's going to hurt some folks. All right. Christine Romans, thanks for that report.

And still coming up, rising fears about dangerous toy imports from communist China. We'll have a disturbing report on what goes on inside China's toy factories.

Plus, a new intelligence report suggests Iraq is a failing state. Some generals talk to CNN about ways to fix that.

And a prominent Republican senator has broken with President Bush over keeping our troops in Iraq. Three top political analysts will join us.

(COMMERCIAL BREAK)

DREW GRIFFIN, CNN ANCHOR: I'm Drew Griffin with a look at what's happening right "Now in the News." Stormy weather is creating problems right now in the nation's heartland. A tornado reportedly touching down in Columbus, Ohio. It just happened a short time ago.

Much of the Midwest struggling with soggy heartache today. A string of powerful storms devastated the region this week, leaving many homes under water. Thousands there in the Chicago area still without electricity.

A hot air balloon disaster, this happened in British Columbia in Canada. Two people killed, 11 hurt when that balloon caught fire just before taking off. The fire made the balloon lift off and force screaming passengers, 11 of them, to jump out. Nigel Vonas saw the fiery drama unfold in South Surrey, British Columbia.

(BEGIN VIDEO CLIP)

NIGEL VONAS, EYEWITNESS: What it looked like to me was that something or somebody was trying to deal with the flames, it looked like. And of course I looked down right away to get my camera. By the time I looked back up, it was just absolutely engulfed.

UNIDENTIFIED FEMALE: It was very (INAUDIBLE) was quite just engulfed in flames. And it started coming down quickly.

UNIDENTIFIED FEMALE: And you saw someone?

UNIDENTIFIED FEMALE: And then, yes, we saw something either jump off or something being thrown off the plane.

VONAS: One person did jump from a very high altitude, from an unsafe height. It could have been two or three stories.

UNIDENTIFIED FEMALE: And it was heading right for us. And we didn't know whether to start running or what. So we just stood there and stared. But we were prepared to run because it was coming in low over the trees right at the edge of the golf course.

VONAS: In my mind, I was thinking, somebody is dying right now, right this minute, you know, right near me, which is, you know, a rather scary thought. So you have feelings of excitement of seeing something you've never seen before, but you have also morbid feelings that there's death going on right now and you don't know to what magnitude that death is occurring.

(END VIDEO CLIP)

GRIFFIN: Horrific story there. We talked to a spokesman for the balloon company, expressed his regrets of course, and says they're trying to determine what caused what he calls a freak fire.

And an ultimatum today to Florida Democrats from the party apparatus in Washington. The party's rules committee ordered the Florida faithful Democrats to move back their date of the Democratic presidential primary. The order meant as a signal to other state parties planning to leap-frog New Hampshire and Iowa to have a stronger say in the nominating process.

I'm Drew Griffin. Now back to LOU DOBBS THIS WEEK.

SYLVESTER: More than 350,000 children's products and toys all made in communist China were recalled this week. The toys violate the federal ban on lead paint and there are new charges against manufacturers in China that produced toys for U.S. companies. An advocacy group says workers in Chinese toy factories are being abused and forced to work in unsafe conditions.

Mary Snow has our report.

(BEGIN VIDEOTAPE)

MARY SNOW, CNN CORRESPONDENT (voice-over): A startling look behind some of the biggest toy brands sold in the U.S., China Labor Watch describes conditions that often do not meet even rudimentary Chinese safety standards for factory workers.

The U.S. based advocacy group investigated and photographed eight factories inside China where it says it found "brutal labor abuses," including one where 1,000 junior high school students were working.

Some of the factories failing to meet standards supplied toys to companies in Japan, Europe and the U.S., including Disney and Hasbro. One China trade expert not involved with the report says even when buyers hire inspectors, it's not difficult for factory owners to hide shady practices.

TED FISHMAN, AUTHOR, "CHINA, INC.": What happens often in China is that there's a kind of front door factory where these inspections can take place, but there are whole mazes of back door factories where the conditions are quite, quite different.

SNOW: In those so-called back factories, China Labor Watch finds wages are low, benefits are nonexistent, work environments are dangerous and living conditions are humiliating. It says workers often live in squalid dormitories and cites one case where more than 100 workers share one bathroom.

The report also cites many factories verbally or even physically abuse employees. It accuses corporations including Hasbro of turning a blind eye to safety to pursue lower prices. Contacted by CNN, Hasbro said in a statement it "takes the report from China Labor Watch seriously and we will conduct a thorough investigation into the areas of non-compliance cited in the report.

Disney, the other U.S. company cited, says it investigates all reports of infringement and takes immediate actions to remediate. Both companies say they take the safety and well being of their manufacturing workers seriously.

(on camera): This all comes on the heels of Mattel recalling millions of toys for fear they were tainted with lead. A Chinese official was quoted in a state-run newspaper, saying the toy-maker must share the blame with Chinese manufacturers. And he pointed the finger at Mattel for not carrying out quality inspections.

The toy-maker said that safety of children is of utmost importance to the company and it says it's working around the clock to improve its system.

Mary Snow, CNN, New York.

(END VIDEOTAPE)

SYLVESTER: Products imported from China account for about 60 percent of all product recalls this year. Many of these products are toys and children's clothing and jewelry. Joining me now to discuss the problem and what you can do to keep your family safe is Ed Mierzwinski, program director of the U.S. Public Interest Group; and Urvashi Rangan, senior scientist and political analyst at Consumer Reports.

Welcome to you both. But before we begin, we should say that we also invited a representative from the toy industry, but they did not return our calls. Urvashi, let's get started with you. This week alone we've seen more recalls, 250,000 Spongebob Squarepants books and journals, the spinning tops.

It just seems like it's never-ending. What is your reaction to just one -- every single week it seems we have another set of thousands of more products recalled.

URVASHI RANGAN, CONSUMER REPORTS: Yes. I think that American consumers are just seeing one after the other from seafood to tires to toys. It seems to all be coming out of China. I think China is probably in the spotlight right now. And I think the problem goes deeper than that. We've got problems with import inspections here at our own borders. But there's also problems with quality control systems in the manufacturing.

SYLVESTER: Ed, I want to pick up on that point. Who is responsible? Is it the U.S. manufacturers, is it the Chinese suppliers? Who is ultimately supposed to make sure that these products are safe? Is it the federal government?

ED MIERZWINSKI, U.S. PUBLIC INTEREST RESEARCH GROUP It's the U.S. manufacturer. They're supposed to comply with the U.S. law. If the toy has got their name on it, it has got to comply. It can't have lead in it. It can't have little magnets that come out. They can't blame a company in China for tests they should have been doing all along.

And the U.S. retailers, they've got responsibility as well. The problem is the U.S. enforcement agency is so tiny, they're not afraid of it. The manufacturers and the retailers laugh at the Consumer Product Safety Commission. It cannot protect us at our borders.

SYLVESTER: Ed, let me follow up on that then. Does the government need to play a bigger role here? If they don't have the resources, then why don't they get enough of the resources necessary?

MIERZWINSKI: Congress needs to allocate more money and more enforcement power to the CPSC in general. And then particularly at the border, we need independent third party investigations and laboratory testing of all imports. Consumer groups, including Consumer Reports and U.S. PIRG have called for a list of reforms that need to be done. The government has to play a role. When Congress gets back, we're confident that the Consumer Product Safety Commission and the safety of imports will be high on its list.

SYLVESTER: Urvashi Rangan, I want to pick up with you. Consumer Reports, your group's Safety Blog, has some tips for what parents can do, because, really, that's what's at the heart of this. Parents want to know, what can I do to protect my children? What sort of advice do you give to parents?

RANGAN: Well, at this point, parents need to take stock of what they've got in their children's toy chest already. You also want to cross-reference that with some kind of recall site. Recalls.gov is a good place to start. You can also sign yourself up on a Web site and get e-mails sent to you when there are recalls of specific toys.

You want to make sure that the toys that you have in your chest don't have peeling or chipping paint off of them. You want to make sure that all of those types of toys are out of reach, especially for children under the age of 2, who often put these things into their mouths directly.

SYLVESTER: We also want to make sure that people have the Safety Blog so that parents know where they can turn to. It's blogs.consumerreports.org.safety. And you can also go to loudobbs.com -- cnn.com for more information as well.

Now last week, Secretary of Health and Human Services Mike Leavitt and the homeland security chief, Michael Chertoff, they both held a news conference and they were talking about the safety of products imported to our country. And what they were essentially saying is that it's impossible to check every single product.

But this is what else they had to say.

(BEGIN VIDEO CLIP)

MICHAEL LEAVITT, HEALTH & HUMAN SERVICES SECRETARY: We need to say to the rest of the world, if you intend to produce products for American consumers, you need to meet the standards of quality and safety that we expect. Not your standards. Our standards. And then the United States needs to have a process in which we can assure that the quality standards are being met.

(END VIDEO CLIP)

SYLVESTER: Ed, your thoughts on this. How do we make sure those quality standards are being met? Most consumers believe that companies would check, that they have quality assurance departments. How do we make sure those standards are being met?

MIERZWINSKI: Well, first of all, consumer groups, labor unions, and human rights groups have known for years that our trade laws were never written to protect the safety of either workers or consumers. They were written in fact by the multinational corporations that have lobbied to keep the CPSC weak and not given it enough enforcement authority.

Obviously the CPSC has to have a bigger hammer to hit companies with when they break the law. That would be the first step. This president has failed miserably to nominate a consumer safety advocate to run the Consumer Products Safety Commission. It's running in place. They have no leadership. That's where we would start, absolutely.

SYLVESTER: And, Urvashi, and your group has recommendations.

RANGAN: We do. And we take them even a step further. While we agree that there are plenty of problems with the enforcement, there's also problems with the standards themselves. And so there's nothing with a lot of teeth to meet. Right now the CPSC has very crude standards for lead in toys. It's about a total lead content.

We think the standards need to be more specific, especially as it relates to the paint that's used on toys. We want to see the government set a standard of zero. Zero lead for paint used on toys and children's products.

SYLVESTER: That's a good starting point. All right. Thank you very much. Urvashi Rangan, from Consumer Reports. And Ed Mierzwinski from the U.S. Public Interest Group, thank you both very much for your time. We appreciate your being with us today.

And we have provided links to some helpful Web sites with lists of recalled product, and what parents should do, on our Web site, loudobbs.com.

Coming up, is the Iraqi experiment in democracy on the brink of collapse? We'll have a special report on the fragile state of Iraq's government.

And our distinguished panel of political analysts will discuss the escalating political battle over Iraq and much more. Stay with us.

(COMMERCIAL BREAK)

SYLVESTER: U.S. lawmakers back from fact-finding missions in Iraq, American military commanders in Iraq, even the National Intelligence Estimate, all agreement the government of Iraqi Prime Minister Nouri al-Maliki is very weak. Many believe Iraq is now a failing state.

Michael Ware reports from Baghdad that some U.S. generals are even asking whether democracy is the best way forward for Iraq.

(BEGIN VIDEOTAPE)

MICHAEL WARE, CNN CORRESPONDENT (voice-over): Two years after the euphoria of historic elections, America's plan to bring democracy to Iraq is in crisis. For the first time, exasperated front-line U.S. generals talk openly of non-democratic alternatives.

BRIG. GEN. JOHN BEDNAREK, U.S. ARMY: The democratic institutions is not necessarily the way ahead in the long-term future.

WARE: Iraq's institutions are simply not working. It's hard to dispute that Iraq is a failing state; 17 of the 37 Iraqi cabinet ministers either boycott the government or don't attend cabinet meetings. The government is unable to supply regular electricity and at times not even providing running water in the capital.

The health care system is run by one Iranian-backed militia. The police dominated by another. Death squads terrorize Sunni neighborhoods, and sectarian cleansing pushes people into segregated enclaves protected by Shia or U.S.-backed Sunni militias.

And thousands of innocents are dying every month. The government failures are forcing the Bush administration to curb its vision for a democratic model for the region, the cornerstone of its rationale for the war.

U.S. Ambassador Ryan Crocker and commanding General David Petraeus declined to be interviewed, but issued a joint statement to CNN. In it, they reiterate: "Iraq's fundamental democratic framework is in place and development of democratic institutions is being encouraged." But Crocker and Petraeus concede they are "now engaged in pursuing less lofty and ambitious goals than was the case at the outset."

And now in the war's fifth year, democracy no longer features in some U.S. commanders' definition of American victory.

GENERAL BENJAMIN MIXON, U.S. REGION COMMANDER IN IRAQ: I would describe it as leaving an effective government behind that can provide services to its people and security. There needs to be a functioning and effective government that is really a partner with the United States of America and the rest of the world in this fight against these terrorists.

WARE: This two-star general is not perturbed if those goals are reached without democracy.

MIXON: We see that all over the Middle East.

WARE: Democracy, he says, is an option, the Iraqis free to choose it or reject it.

MIXON: But that is -- the $50,000 question is, what will this government look like? Will it be a democracy? Will it not?

WARE: Security, he says, it was the U.S. soldiers are fighting for.

MIXON: Core to my mission is security for Iraq's people, to establish a functioning government, and to enhance their security forces, and to defeat this enemy.

WARE: A functioning government, not necessarily a democratic one. But Iraqi government officials say, the democratic government could work better if it was actually allowed to run things.

"We don't have sovereignty over our troops. We don't have sovereignty over our provinces. We admit it," says the head of the Iraqi parliament's military oversight committee. "We don't say we have full sovereignty."

For example, while the Iraqi government commands these army troops, they cannot even send them into battle without U.S. agreement. And these Iraqi special forces troops do not answer to the Iraqi government at all, only to U.S. officers. And because of the very real prospect of Iranian infiltration, the Iraqi government doesn't fund or control its own intelligence service. Instead, it's paid for and run by the CIA.

"So, is it reasonable for a country given sovereignty by the international community to have a chief of intelligence appointed by another country?", asks the head of Iraq's parliamentary watchdog committee. "We think sovereignty means the ability of a government to be elected and make its own decisions."

He may not be wrong, but a senior U.S. official in Baghdad told CNN, any country with 160,000 foreigners fighting for it sacrifices some sovereignty.

The U.S. has long cautioned a fully-functioning democracy would be slow to emerge. But, with U.S. senators calling for Prime Minister Nouri al-Maliki's ouster, some senior U.S. officers suggest the entire Iraqi government must be removed, by constitutional or non- constitutional means, and they're not sure a democracy need replace it.

Michael Ware, CNN, Baghdad.

(END VIDEOTAPE)

SYLVESTER: Coming up, we'll be discussing the political war over Iraq with three of the brightest political minds, Errol Louis, Hank Sheinkopf, and Diana West. Stay with us.

(COMMERCIAL BREAK)

SYLVESTER: Joining me now with all of the week's political news: Errol Louis with The New York Daily News; Democratic Strategist Hank Sheinkopf; and in Washington, Diana West from The Washington Times. She's also the author of "The Death of the Grown-up," published this week.

Diana, congratulations. And welcome to everyone. Thanks for being here. Let's first start, Senator John Warner. He had essentially broke from the president this week, saying we need to start bringing back these troops, at least to send a symbolic message.

Hank, let me start with you. Were you a little surprised by that?

HANK SHEINKOPF, DEMOCRATIC STRATEGIST: Somewhat surprised, but more importantly, this is less a Republican message to the president than someone who is perceived as an expert on foreign affairs and defense strategy, being told, hey, this isn't working, pay attention. The question is will the president do so? Probably not.

SYLVESTER: Errol, how does this complicate the president's strategy? We've had a number of people who have come out saying, this is not working. And now you essentially have a Republican -- a very prominent Republican saying, start bringing them back home. ERROL LOUIS, THE NEW YORK DAILY NEWS: Sure, well, the political battle these days is in the run-up to the Petraeus report in mid- September that everybody is waiting for, which is going to sort of signal the next turn of the wheel. And both sides are trying to sort of line up their ducks and frame the debate.

And really, Warner fatally undercut the president's position in a way by -- he just made a trip to Baghdad. He had seen it for himself. He's not a wild-eyed liberal. And when he comes back and says, pick a number, any number, you've got to start reducing troops, that's about the coldest, firmest political advice the president can hear from somebody in his own party. And Warner put it right out there.

So by the time Petraeus' report comes out, I think it will be clear that the president has got very little choice but to sort of plan it back down.

SYLVESTER: Diana, I see you nodding, you agree?

DIANA WEST, THE WASHINGTON TIMES: Well, I agree that this is a very important symbol, but I'm afraid that it still remains very limited in terms of advice for the president. I'm still waiting for the massive sea change in thinking that actually comes out and states that what happens in the Iraqi parliament, or indeed, in Iraq as a nation does not affect American national security so long as the threat to our security goes on really unchallenged coming out of Iran, Syria, Hezbollah, even Saudi Arabia, and other countries, because we're in a cycle, a recurring cycle, of jihadist Islam.

No one really wants to connect the dots. And so, so far with Senator Warner and other measures, these are just symbols that are not really taking us any way forward.

SYLVESTER: Hank, as you well know, in that region, one of the big problems is -- or at least some people have identified a big problem is the political situation on the ground there. Prime minister Nouri al-Maliki seems to be losing a lot of support, Senator Levin coming out this week, Senator Clinton also coming out this week, saying, look, this isn't -- he is not the guy for the job.

We also want to see, here's what Senator Warner had to say, because he also had some remarks. He didn't go as far as Senator Levin and Senator Clinton, but he did not have very positive words for al-Maliki.

(BEGIN VIDEO CLIP)

WARNER: Now I really firmly believe the Iraqi government, under the leadership of Prime Minister Maliki, have let our troops down.

(END VIDEO CLIP)

SHEINKOPF: Different story here. He's saying what is obvious militarily. Let's talk about the politics of it, which is what I understand, not being a military strategist. Simple. It ain't working for Republicans. And the deeper they go in and the more they look at the supposed exportation of democracy to that country and to the region, it's not working.

And they've got to cut their losses and get out or they're going to lose the presidency ignominiously in 2008 and suffer more louses in the House and Senate. It's that simple. The president can't carry this out any longer.

SYLVESTER: Errol, the public, you feel that they have essentially said, look, do something, because we are very tired of the situation.

LOUIS: Well, the public certainly is sick of the war and is tired of all of the waffling and the fact that, you know, casualties -- American casualties have now exceeded 3,700 and you still get word about these gigantic attacks in the Anbar province, these massive attacks.

The security situation is deteriorating. The political situation in Baghdad that you refer to, which is connected to the prospects for the American Congress, it really is -- it's not just a stalemate, but it's kind of a quagmire. There are too many parties over there, including the prime minister's faction, that have no interest in moving to any kind of resolution.

Delay works for them in the short-term. No faction wants to give up what's perceived at its advantage. And so as much as they're getting pressure from the State Department, from the White House, from the American public, from the whole world to sort of put some kind of a final solution on the table and either partition the country or work out some power-sharing arrangement, work out the oil revenue question, there are many, many factions there who are saying, no, we'll just wait.

SYLVESTER: Diana, Errol used the word quagmire. We know that this past week General Pace came out and essentially said, hey, maybe we do need to start thinking about reducing troops. He is calling for a troop reduction from the current troop load of 160,000 to fewer than 100,000. Your thoughts there.

WEST: Well, I think that these generals and some of our lawmakers are seeing that there's nothing that the American military can do that will actually bring along the Iraqi political situation because, again, our entire strategy doesn't hinge on what we can accomplish. It hinges on the Iraqis suddenly decided to comport themselves in a way that we'd consider democratic and Western.

And that just isn't going to happen. And so by little by little we're getting these kinds of signals that this realization is actually affecting our policy. But I'm afraid the debate still remains very limited. And we're not hearing these ideas brought out.

SYLVESTER: OK. We're going to take a pause here, Diana. We'll be back. We'll have more with our political roundtable in just a moment. Stay with us.

(COMMERCIAL BREAK) SYLVESTER: We're back with our political roundtable. Errol Louis with The New York Daily News; Democratic Strategist Hank Sheinkopf; and in Washington, Diana West from The Washington Times.

Hank, let me first start with you. We're going to -- a Gallup poll came out in which these rating are just in the toilet. Congress' approval rating is 18 percent. How did it get so low?

SHEINKOPF: Welcome to 1994. The problem is there's no countervailing argument right now. Democrats in control by some margin in the House, not a very good margin in the Senate. The problem here is that people don't like government overall. But they're not about to turn it over unless there's some force we don't know about in the environment that's going to go and do that for them.

LISOVICZ: Errol, when you look behind these numbers, a lot of Democrats are essentially saying, we're not happy with this Democratic Congress either. It's not just Republicans. It's Democrats and independents who are saying we're not happy.

LOUIS: Well, that's right. That's right. The same simmering level of throw the bums out that did throw out the Republicans in the last congressional elections is still there. It's just starting to shift. There are real problems out there and they don't see Congress addressing them.

We all watched the immigration disaster unfold twice now. And then you've got this mortgage meltdown, where you've got an estimated up to 2 million households that are going to go into foreclosure in the next series of months, and there's no talk, there's no solution, there's nothing coming out of Washington.

So I think people have every right to be upset and to be concerned that between the war, the non-construction of New Orleans, the mortgage meltdown, the non-action on immigration, they've got every reason to blame this Congress for not doing its job.

SYLVESTER: Diana, do you think this trend will continue?

WEST: Well, it can't go much lower than 18 percent approval ratings, can it? Yes...

SYLVESTER: That's an historic low, too.

WEST: ... it is an historic low. I think it will continue. And I think it makes for a very volatile situation coming into the election. But so far we're just not hearing -- we're not hearing strategies. We're not hearing any kind of new ideas, to use a hackneyed phrase, coming into the debate. It's just -- it's very frustrating, I think, to Americans. I know it's frustrating to me.

SYLVESTER: Hank, that gets us to the political campaign that's going on right now. The Democratic front-runner, Hillary Clinton, seems that the other candidates -- she essentially has a big bullseye on her. There have been comments made by the Barack Obama camp, also comments made by John Edwards. Your thoughts. SHEINKOPF: When you're the front-runner, when you stand up, they tend to throw tomatoes. They're going to throw a lot of tomatoes between now and February because everything is over in early February.

That being said, as long as Senator Clinton is in the lead, they're going to be coming after her. And the worst news that Barack Obama and John Edwards had was that she was neck-and-neck with them and they were neck-and-neck with her in Iowa. That means it's going to be all -- going to be, really -- they're going to be fighting a lot, fists are going to be flying.

SYLVESTER: Errol, you know that John Edwards, many people have said, for him to stay in this fight, he really needs to win in Iowa. Does he have a shot? I mean, does he have a realistic shot?

LOUIS: Well, he frontloaded his whole strategy around doing very well in Iowa, coming in first or second. He was so well ensconced that he didn't even go to the Iowa State Fair. He was known. He has been through all of the counties. He has got a great, strong organization.

But the Clintons have been able to match him. They have thrown a lot of money into advertising. They're doing very well. I think what Edwards and Obama are realizing is that they are going to have to take some shots, that they can't just sort of sit there and wait because the clock is running out.

When Obama announced that he is not going to participate in every single debate that gets invited to anymore, it's just a realization that they've got to turn these numbers around. You look at it state- by-state, they're doing awfully against Senator Clinton. It really is turning into a steamroller for her.

So they want to break up the momentum. They want to give themselves a chance to sort of shake up the table. They've got, what, four months to do it?

SYLVESTER: All right. Diana, since you have the new book out, you get the last word, and your thoughts.

WEST: Well, I'm very interested in when tomatoes start flying when we start discussing the character issue, when we start really looking into what Senator Clinton's record is that should make us all decide to anoint her as president. So it will be very interesting. There is a lot to come.

SYLVESTER: All right. I know Hank is not happy and he wants to jump right in here. But we're out of time. So thank you for joining us. Please join us tomorrow. For all of us here, thanks for watching. Enjoy your weekend. Good night from New York. "THIS WEEK AT WAR" starts right now.

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