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LOU DOBBS TONIGHT

New Standards For Chinese Imports?; Senate Tries to Block Mexican Trucking Program

Aired September 11, 2007 - 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: Tonight: Another one of our big cities says don't ask, don't tell, wants to give sanctuary to illegal aliens, in complete disregard of our immigration laws.
Also, buyer beware. The United States and communist China reach agreement on new safety standards for Chinese imports, but will China pay attention?

And senators try to block a deal to give Mexican trucks unlimited access to this country. Those senators say American jobs, national security, and consumer safety are at risk.

And among my guests, Fouad Ajami, one of the world's leading authorities on Iraq and the Middle East. And he will give us his assessment of the testimony by General Petraeus and Ambassador Crocker.

All of that, much more, straight ahead tonight.

ANNOUNCER: This is LOU DOBBS TONIGHT: news, debate, and opinion for Tuesday, September 11.

Live from New York, sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening, everybody.

Republican and Democratic senators today expressed deep skepticism about the progress of the war in Iraq. Those senators cast doubt and scorn on optimistic assessments of the progress of the war from General Petraeus and Ambassador Crocker. Ambassador Crocker today declared the stakes are too high for the United States to fail in Iraq.

He said an all-out civil war in Iraq would lead to massive human suffering.

We begin our coverage with Jessica Yellin on Capitol Hill -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Kitty, today's, the president's top men in Iraq today faced stinging questions about the future of the war and when U.S. troops can finally come home.

(BEGIN VIDEOTAPE)

YELLIN (voice-over): This time, the biting questions came not only from Democrats, but also from Republicans deeply skeptical of the strategy in Iraq.

SEN. CHUCK HAGEL (R), NEBRASKA: Are we going to continue to invest American blood and treasure at the same rate we are doing now, for what?

SEN. RICHARD LUGAR (R), INDIANA: The surge must not be an excuse for failure to prepare for the next phase of our involvement, whether that is a partial withdraw, a gradual redeployment or some other option.

SEN. NORM COLEMAN (R), MINNESOTA: Americans want to see light at the end of the tunnel. Can we get a longer term vision? Can we get a longer term plan? Can we say that, yes, we can be down to half our troops in three years?

YELLIN: The day's questioning prompted several frank admissions from Ambassador Crocker.

RYAN CROCKER, UNITED STATES AMBASSADOR TO IRAQ: It is no exaggeration to say that Iraq is and will remain for some time to come, a traumatized society.

There is an enormous amount of dysfunctionality in Iraq. That is beyond question. The government, in many respects, is dysfunctional, and members of the government know it.

YELLIN: Democrats, including several presidential candidates, piled on the pressure.

SEN. JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE: It's long past time we level with the American people.

SEN. BARBARA BOXER (D), CALIFORNIA: I ask you to take off your rosy glasses.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: There are no good options. There are bad options and worse options.

YELLIN: But General Petraeus held his ground. He refused to estimate when all combat troops would leave Iraq, even when asked what he would tell the president.

SEN. ROBERT MENENDEZ (D), NEW JERSEY: And, if he pressed you, clearly, you would be able to give him some timeline, like two years, five years?

PETRAEUS: Sir, I would be doing a disservice to our soldiers if I tried to lay out a specific timeline.

YELLIN: For the first time, the general showed signs that testifying for two days was taking its toll.

PETRAEUS: And, obviously, we all want -- you know, I'm as frustrated with the situation as anybody else. This is going on three years for me, on top of a year deployment to Bosnia as well. So my family also knows something about sacrifice. MENENDEZ: And I appreciate that sacrifice.

YELLIN: Through it all, General Petraeus and Ambassador Crocker stuck to their message that a rapid withdrawal would have disastrous results.

(END VIDEOTAPE)

YELLIN: And, today, the buzz on Capitol Hill has been all about compromise. Democrats and moderate Republicans have been in intensive talks to see if they can agree on any plan that would force a change of strategy in Iraq, short of forcing a timeline for withdrawal -- Kitty.

PILGRIM: Thanks very much, Jessica Yellin.

Well, the Bush administration officials tonight said President Bush is expected to announce plans to withdraw some of our troops from Iraq by next July. Now, the president is likely to make a prime-time speech later this week.

Ed Henry reports from the White House -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Kitty, senior officials say the president appears ready to announce a plan where he will pull out a large number of the surge troops, but it's important to stress that Army officials have already suggested they need to bring a lot of those surge troops home because the military is stretched right now, and this would only bring the U.S. footprint down to where it was in December of 2006, about 130,000 U.S. troops.

White House spokesman Tony Snow today saying he believes General Petraeus' testimony shows there has been progress and the president's strategy needs more time.

(BEGIN VIDEOTAPE)

TONY SNOW, WHITE HOUSE PRESS SECRETARY: We have what appears to be trend lines that are pointing to success. Now, it seems to me, if you have got something that is succeeding, you want more of it.

HENRY (voice-over): So, after months of promising this progress report would be a critical moment in the debate...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iraqi government needs to show real progress in return for America's continued support and sacrifice.

HENRY: ... the president is essentially buying another six months for the current policy, even though Iraqi leaders have not stepped up.

DANIEL BENJAMIN, BROOKINGS INSTITUTION: We always knew that, if you put more people on the ground, you can control more territory. But the question is, control territory for what? If all those people still want to fight, then are we going to keep those troops there forever?

HENRY: The president did tell author Robert Draper in long, candid conversations that his goal is to get Iraq stable enough that his successor will keep troops there longer.

ROBERT DRAPER, AUTHOR, "DEAD CERTAIN": What the president was hoping is that the surge would work, that its success would be more or less undisputed, to the degree than that not only the average citizen, but perhaps in particular presidential candidates, would feel comfortable talking about a sustained troop presence.

HENRY: Snow is ducking all questions about troop levels until the president addresses the nation later this week.

SNOW: What you're trying to do is to get me to sort of wink, nod and show a little -- it was valiant and it was very clever.

(END VIDEOTAPE)

HENRY: Now, just in the last couple of moments, the White House has officially asked for time for the president's speech this week. It will be Thursday night at 9:00 p.m. We're told the president will speak for about 15 to 20 minutes. He will speak from the White House -- Kitty.

PILGRIM: All right, thanks very much for that update, Ed Henry.

Well, Iraq today declared it expects U.S. troops to be involved in fewer direct combat operations in the near future. Iraq's national security adviser says the Iraqi government wants to end its reliance on coalition military forces. He said Iraq has nearly 500,000 trained soldiers and police.

Aneesh Raman reports from Baghdad -- Aneesh.

(BEGIN VIDEOTAPE)

ANEESH RAMAN, CNN CORRESPONDENT: Kitty, good evening.

Literally hours after General Petraeus and Ambassador Crocker had finished their first round of testimony on Capitol Hill, Iraq's national security adviser today in Baghdad was in front of the cameras, putting the best Iraqi face on the military progress outlined by General Petraeus.

Mowaffak al-Rubaie stressed that the Iraqi government needs U.S. troops here for more time, but did say that, in the near term, the relaxation of the requirement for coalition forces in direct combat operations could be possible.

Now, we have heard this from him before, many times before. Very few people will put stock in what he has said. But what all eyes will be on is Basra. That is where the British are essentially doing what the national security adviser says here, pulling out in a support role. If that fails, people will say, there is no way the U.S. can pull back yet. If it succeeds, there might be increased calls for that to happen. No mention, though, of any political progress or political reconciliation, which is the crux of the criticism against Iraq's government -- Kitty.

(END VIDEOTAPE)

PILGRIM: Aneesh Raman reporting from Baghdad.

Now, General Petraeus has said, Iran is increasing the flow of weapons into Iraq. He said the number of insurgent attacks with Iranian weapons is increasing.

Meanwhile, Israeli officials are very concerned about Iranian weapons shipments to Hezbollah terrorists in Lebanon. Israel now appears to be taking military action to stop those shipments.

Barbara Starr reports from the Pentagon.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): CNN has learned that, when Israeli aircraft last week flew into northern Syria, they targeted and bombed a remote weapons site.

U.S. government sources tell CNN that the U.S. had direct intelligence about the highly classified mission as it unfolded. And officials say they are confirming those details for one reason, Iran. They want Tehran to get the message, U.S. or Israeli warplanes could be sent against their bunkers.

JOHN PIKE, GLOBALSECURITY.ORG: There has been a big escalation of rhetoric between the United States and Iran over the last week or two. I think that an Israeli strike against Syria is significant because it suggests the possibility of an American strike against Iran.

STARR: That escalation comes as the U.S. has seen an expansion of Iranian influence on other fronts.

CNN has learned Iran is stepping up a secret smuggling campaign into Afghanistan, all aimed at killing U.S. and coalition troops. Military officials tell CNN, Iran is regularly smuggling weapons and fighters across the Afghanistan border to supply insurgents involved in heavy fighting in southern Afghanistan's Helmand Province.

U.S. officials had previously acknowledged a handful of Iranian weapons inside Afghanistan. In June, Defense Secretary Robert Gates said he wasn't sure what was going on.

ROBERT GATES, SECRETARY OF DEFENSE: But there clearly is evidence that some weapons are coming into Afghanistan, destined for the Taliban, but perhaps also for criminal elements involved in the drug trafficking coming from Iran. STARR: But, now, military sources say a classified assessment concludes Iranian weapons are regularly being handed off to Taliban fighter. The U.S. believes it's all being coordinated by a highly organized network of insurgents across Afghanistan backed by Iranian operatives.

(END VIDEOTAPE)

STARR: And, Kitty, in Iraq, where those Iranian-backed attacks continue, largely unchecked, U.S. military analysts say nobody should be surprised at Iran's troublemaking across the region -- Kitty.

PILGRIM: Barbara, you have been reporting U.S. military officials have been making comments about Iranian weapons for quite some time. Is it your perception there is a change in tone at this point?

STARR: Well, it does appear that there is more of a willingness to speak very openly about it, not necessarily to spin it, if you will in Washington, not to talk up the Iranian threat, but to make very clear that they believe, in places like Afghanistan, in Lebanon, in Iraq, that there is an organized effort emanating from Iran, and they want it stopped -- Kitty.

PILGRIM: Thanks very much, Barbara Starr.

The United States tonight is urging Israel to show restraint after a terrorist rocket attack wounded dozen of Israeli soldiers. The rocket fired from Gaza hit an military base in Zikim in the Negev desert. Nearly 70 Israeli soldiers were wounded. Many Israeli politicians are demanding a strong military response from the Israeli government.

Still to come: fury on Capitol Hill over plans to give Mexican trucks unlimited access to American roads.

Lisa Sylvester will have the report -- Lisa.

LISA SYLVESTER, CNN CORRESPONDENT: Kitty, the Senate is taking a crucial vote that could stop the Bush administration's Mexican trucking program in its tracks. We're expecting the vote at any time. We will have all of the details coming up after the break.

PILGRIM: Thanks, Lisa.

Also ahead: Mexico has an astonishing new term for illegal immigration and accuses this country of xenophobia.

And, buyers, beware. The United States and communist China reach an agreement on toy safety, but will that agreement protect our children? We will have a special report.

(COMMERCIAL BREAK)

PILGRIM: Two key senators today are trying to stop a plan that's allowing Mexican trucks unrestricted access to U.S. roads. Now, the lawmakers want to cut off funding for the program.

And, as Lisa Sylvester reports, they're saying not enough has been done to make sure that those trucks are safe.

(BEGIN VIDEOTAPE)

SYLVESTER (voice-over): Long before the first Mexican trucks were given the green light to fan across the United States, opponents, including labor unions, environmentalists and public watchdog groups, voiced concerns, saying it will cost American jobs, security, and safety.

JAMES HOFFA, PRESIDENT, TEAMSTERS UNION: The Bush administration, under pressure, and a lame-duck president wants to open the border because his time is running out, so these people can run all over the United States all the way into Canada, and this is a danger, and no one thinks it's a good idea, except George Bush.

SYLVESTER: In May, lawmakers weighed in. The House voted 411-3 on the Safe American Roads act to slow the program down. Late July, the House came back again with bipartisan support voting to cut off funding altogether.

Now the Senate has considered a similar amendment introduced by Senator Byron Dorgan.

SEN. BYRON DORGAN (D), NORTH DAKOTA: It' unbelievable to me that they are speeding here towards allowing long-haul trucks to come in from Mexico, when they don't have the basic information with which to decide whether it's safe or not.

SYLVESTER: The North Dakota senator points to a Department of Transportation inspector general report released last week that states the Federal Motor Carrier Safety Administration has not developed and implemented complete coordinated plans for checking trucks and drivers.

And the report says, state enforcement officers lack proper training. Business groups argue, the Mexican truck program will ease the flow of commerce and fulfills an obligation under the North American Free Trade Agreement.

UNIDENTIFIED MALE: The senator from Missouri.

SYLVESTER: Points echoed by Senator Kit Bond, who spoke against the Dorgan amendment.

SEN. CHRISTOPHER BOND (R), MISSOURI: This action is unwarranted. It would signal to the world the United States is willing unilaterally to renegotiate terms of existing trade agreements.

SYLVESTER: The Department of Transportation declined an interview request, but has said -- quote -- "This long-awaited project will protect public safety on American highways, as we work to both save consumers money and help our economy."

(END VIDEOTAPE)

SYLVESTER: We are expecting a vote on the Dorgan amendment, which they are debating at this hour. That vote could come around 7:00. Then the Senate later this evening is expected to vote on the entire appropriations bill -- Kitty.

PILGRIM: Lisa, we know you will be watching that with great interest. Thanks very much, Lisa Sylvester.

Well, Mexico is apparently not satisfied the United States is allowing Mexican trucks on our roads. Now, high-level Mexican officials are openly criticizing this country over illegal immigration.

Just days ago, Mexico's president said the U.S. is persecuting Mexicans working here illegally.

And, as Casey Wian reports, Mexico's ambassador to the United States is blasting what he calls the rise of xenophobia in the United States.

(BEGIN VIDEOTAPE)

ARTURO SARUKHAN, MEXICAN AMBASSADOR TO THE UNITED STATES: This is the group that, today, has used immigration as a foil to push back on the concept of a synergistic relationship between Mexico and the United States.

CASEY WIAN, CNN CORRESPONDENT (voice-over): Mexico's ambassador to the United States speaks better English than many Americans. Educated in Britain and Washington, Arturo Sarukhan's linguistic skills took center stage at San Francisco's Commonwealth Club.

He traced the problem of illegal immigration to NAFTA and its failure to improve what he called labor mobility, the ability of workers to move back and forth across borders.

SARUKHAN: We put labor mobility off the table back in 1993, because we knew that, if we put it into the mix, the U.S. Congress, the Mexican Congress, and the Canadian parliament would certainly not have approved NAFTA.

WIAN: Now he is pressing the Mexican government's demand for illegal alien amnesty.

SARUKHAN: Undocumented migrants are not a threat to the security of the United States. And, in many ways, they are a powerful reminder of the potential synergies between Mexico and the United States.

GEORGE GRAYSON, COLLEGE OF WILLIAM AND MARY: The Mexicans have reconciled themselves to the fact that there's not going to be an immigration reform before the 2008 presidential election.

I think that most Mexican leaders have their fingers crossed, hoping that a liberal Democrat will emerge on top, and that that new chief executive will move toward the whole enchilada in terms of more guest workers, more visas, and the legalization of unlawful aliens.

WIAN: The ambassador concedes, Mexico must improve its economy to prevent its citizens from fleeing north of the border. But he warns U.S. lawmakers who successfully blocked amnesty that demographic changes in Mexico will soon reduce that supply of cheap labor.

SARUKHAN: All I would say to certain ladies and gentlemen on the Hill today is, in an Oscar Wilde sense, be careful what you wish for. When the Gods wish to punish you, they will listen to your prayers.

WIAN: The ambassador's comments came barely a week after President Felipe Calderon declared that Mexico does not end at its borders, and, wherever there is a Mexican, there is Mexico.

(END VIDEOTAPE)

WIAN: The ambassador also pushed for closer ties between Mexico, the United States, and Canada. Though he stopped short of calling for a European-style North American union, he did align himself with those who favor more integration between the North American neighbors -- Kitty.

PILGRIM: Casey, it seems like a high contradiction, after those harsh words, in calling on the Gods to punish, to ask for a closer relationship. What irony.

WIAN: Absolutely. And the interesting thing, too, is, he didn't mention the drug cartels that operate with impunity along the northern border of Mexico. It's interesting, because he was a former Mexican drug enforcement official. And that is certainly coloring the relationship between the two countries right now.

PILGRIM: A significant omission.

Thanks very much, Casey Wian.

Still ahead, we will tell you which major cities are trying to expand their don't ask, don't tell sanctuary policies for illegal aliens.

Also, Republican presidential candidates Rudy Giuliani and Fred Thompson battle it out in the polls. We will have the very latest on that.

Also, communist China says it will make its toy imports safer. Can we believe them?

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: The number of imports from communist China continues to grow. That's despite a record number of recalls this year.

Chinese and American officials met today, one month after millions of contaminated toys were pulled off store shelves. Chinese officials agreed to new standards in toy production.

But, as Christine Romans reports, the Chinese are still trying to shift the blame and responsibility.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): At a product safety summit in Washington, promises from American and Chinese officials to protect consumers.

WEI CHUANZHONG, GENERAL ADMINISTRATION OF QUALITY SUPERVISION, INSPECTION AND QUARANTINE (through translator): The Chinese government attaches great importance to improve the quality of exported toys.

ROMANS: The Consumer Product Safety Commission and China's General Administration of Quality Supervision, Inspection and Quarantine signed a joint statement, in which Chinese officials promised to immediately stop using lead paint in toys.

Acting CPSC chairwoman Nancy Nord hailed -- quote -- "significant forward progress" in bringing Chinese products in line with U.S. standards.

Besides lead paint on toys, the two agreed to improve the safety of Chinese-made fireworks, toys, lighters and electrical products. At the same time, though, China's safety official said, overall, China's exported toys are of -- quote -- "high quality." He said design flaws from American firms were responsible for most of the dangerous products recalled this year.

And Nord had a warning for toymakers.

NANCY NORD, ACTING CHAIRWOMAN, CONSUMER PRODUCT SAFETY COMMISSION: No longer can industry tolerate an ask-no-questions mentality when making, ordering, and purchasing products.

ROMANS: The Chinese promised more testing of toys bound for the United States, and cooperation when there is a recall, helping American authorities trace hazardous shipments to the source.

JANELL DUNCAN, CONSUMERS UNION: It's a long overdue, good start. And the devil will be in the details and the timing. When will these new measures be put into place? What will be the enforcement mechanisms to ensure that the promises are kept?

ROMANS: A good start, consumer advocates say, 20 years after toymakers began moving production to China.

(END VIDEOTAPE)

ROMANS: Today, 80 percent of toys on American shelves are made there. Some of the best-known American toys and brands have been recalled, Barbie, Fisher-Price, Thomas the Tank Engine, the design and manufacturing flaws prompting the recall this year alone of hundreds of millions of dollars worth of toys -- Kitty. PILGRIM: It seems like a fairly self-congratulatory meeting, given what the consumers have been put through in recent months.

ROMANS: That's absolutely right.

And don't forget that we're going to have the holiday shopping season coming up, so a lot of consumer advocates are hoping this is more than just trying to give consumers some confidence, and there will be some real changes in oversight.

PILGRIM: A lot of words. Action is needed.

Thanks very much, Christine Romans.

That brings us to the subject of tonight's poll: Do you think it's outrageous that, after 20 years after American toy companies began using Chinese factories, China is just now promising not to use lead paint on toys, yes or no? Cast your vote at loudobbs.com. We will bring you the results a little bit later in the broadcast.

Coming up: President Bush will address the nation Thursday on his Iraq policy. When can we withdraw all our troops from Iraq? Well, one of the world's leading authorities on Iraq and the Middle East will join us.

Also, Rudy Giuliani, Fred Thompson battle to win support of Republican voters. We will have the results of a dramatic new CNN/Opinion poll.

And don't ask, don't tell -- rising anger over the increasing number of so-called sanctuary cities for illegal aliens.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: New Haven, Connecticut's I.D. card program for illegal aliens is growing at a much faster rate than officials there expected.

In just over a month, the city has issued more than 3,000 cards. And now, other major sanctuary cities are moving ahead with plans to give illegal aliens I.D. cards.

As Bill Tucker reports, San Francisco may be the next major city to attempt to legitimize illegal aliens in an apparent violation of federal law.

(BEGIN VIDEO TAPE)

BILL TUCKER, CNN CORRESPONDENT (voice-over): ...to issue identification to illegal aliens. Then officials in New York City quickly voiced their card envy.

HIRAM MONSERRATE, NEW YORK CITY COUNCIL: If New Haven, Connecticut can do this, then the City of New York can definitely do this. TUCKER: San Francisco, not to be outdone, jumped on the bandwagon, as well, and hopes to issue the cards by early next year. The proposal is strongly supported by the mayor, who replied, when asked about the plan: "This city takes care of all its residents, regardless of their immigration status."

The justification is the same on the East Coast as on the West Coast.

MAYOR JOHN DESTEFANO, NEW HAVEN, CONNECTICUT: We're dealing with a problem created by the federal government. The federal government has failed to secure our borders. They've failed to adopt reasonable immigration policies. Places like New Haven are left with thousands and thousands of undocumented residents who are a part of our workforce.

TUCKER: Issuing I.D. cards to illegal aliens has some fierce opponents, who say the sanctuary policies -- policies where the police in a community are instructed not to ask immigration status or tell federal authorities -- are against federal law. And in the case of the I.D. cards, they say the cards encourage illegal aliens, and that is a violation of federal law, which says it's a crime if someone "encourages or induces an alien to come to, enter or reside in the United States."

In the view of one group dedicated to controlling illegal immigration...

KRIS KOBACH, IMMIGRATION LAW REFORM INSTITUTE: It's pretty clear that when a city gives an illegal alien an identification card so that the illegal alien can more easily live in that city, it looks like the city is encouraging the person to remain in the country illegally. And that's a crime.

TUCKER: While there appears to be a strong case against sanctuary policies, no one within the federal government is taking steps to end those policies.

(END VIDEO TAPE)

TUCKER: Now, Homeland Security Secretary Michael Chertoff told Congress last week that he doesn't believe he has the authority to deny funds to cities with sanctuary policies. And, likewise, the Department of Justice, you know, Kitty, has never once threatened to sue a city that has these policies, despite the apparent violation of federal law.

PILGRIM: Bill, a quick question -- are illegal aliens likely to sign up for these cards?

Are there benefits associated with doing this?

TUCKER: Well, look at the case in New Haven, where they've got more signing up for them than they thought. And in San Francisco, they have an even greater incentive, because if they have the card, it proves they're a resident. And if they're a resident, they get to participate in the universal health care program there. What the impact is going to be on that and for the taxpayers, no one knows.

PILGRIM: And they'll soon find out, I'm sure.

TUCKER: Yes.

PILGRIM: Thanks very much.

Bill Tucker.

Well, former Senator Fred Thompson has officially been in the presidential race for only about a week, but he's making his presence known in a very big way.

As Bill Schneider now reports, GOP frontrunner Rudy Giuliani now finds himself going head-to-head with Thompson for the race for the Republican nomination.

(BEGIN VIDEO TAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice-over): The Republican race now has two frontrunners. Last month, Rudy Giuliani was still ahead among Republicans nationally, with the still undeclared Fred Thompson running second.

FRED THOMPSON (R), FORMER U.S. SENATOR: Hello.

SCHNEIDER: Now Thompson is in.

THOMPSON: I was thinking about this race and I saw an opportunity.

SCHNEIDER: So what's happened?

Thompson has just about caught up with Giuliani -- a neck-and- neck race nationally.

Is Giuliani worried?

(BEGIN VIDEO CLIP, COURTESY FOX NEWS)

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: I think Fred is a really, really good man. I think he's done a pretty good job of playing my part on "Law & Order".

SCHNEIDER: The poll shows Thompson leading among men, Giuliani among women. Thompson is ahead among Republicans over 50, Giuliani among those under 50. Thompson is on top with conservatives, Giuliani with moderates. Thompson also has the edge among Evangelical Republicans, and especially among his fellow Southerners. That's where Thompson has made the biggest gains and where he's getting the most enthusiastic reception. Men, older voters, conservatives, Evangelicals, Southerners -- it sounds like the Republican base is tilting toward Thompson.

THOMPSON: My record as eight years in the Senate was a 100 percent record against abortion or anything related to it. SCHNEIDER: What does Giuliani have to compete with that?

9/11.

SAM PULIA, LOST COUSIN ON 9/11: I particularly like Rudy Giuliani. I think did he a hell of a job that day under enormous stress.

SCHNEIDER: But Thompson is not going to concede the terror issue...

THOMPSON: The whole world watches and waits as the determination of the American people is tested.

(END VIDEO TAPE)

SCHNEIDER: Giuliani has another argument -- electability. "I know my opponents won't say this," he told an audience of Florida Republicans, "but here's the truth -- if they get nominated, there will be no campaign in New York. If they get nominated, there will be no campaign in Florida. If we lose Ohio, Hillary Clinton becomes president."

Now our poll shows Clinton leading both Giuliani and Thompson, but Giuliani running stronger, mostly because he's much better known -- Kitty.

PILGRIM: Bill, there was quite a bit of buzz going up to the -- Fred Thompson entering the race. Now he's come out on a few issues.

But his platform is going to be very key, isn't it?

SCHNEIDER: Yes, it is. And the conservatives are looking at him as one of them, but they're waiting to hear a lot more about what he says and what he really believes. So on some of those issues, his positions aren't 100 percent clear. As you heard him say on abortion, he's trying to take definitive stands now and reaching to the right.

PILGRIM: Thanks very much.

Bill Schneider.

Thanks, Bill.

Well, some of the Democratic presidential candidates in the Senate had to share the spotlight today as they questioned General David Petraeus and Ambassador Ryan Crocker.

As Candy Crowley now reports, the candidates took a different tone than what's normally heard on the campaign trail.

(BEGIN VIDEO TAPE)

CANDY CROWLEY, CNN CORRESPONDENT (voice-over): The campaign trail moved indoors Tuesday, with five of the '08 presidential candidates in the spotlight of the Petraeus hearings. SEN. HILLARY RODHAM CLINTON (D), NEW YORK: I think that the reports that you provide to us really require the willing suspension of disbelief.

SEN. CHRIS DODD (D), CONNECTICUT: I don't seem to get an indication -- I don't get a feeling here that there's any real opportunity or optimism that this is going to get better.

CROWLEY: It was Campaign Lite -- similar substance without the fierce rhetoric sometimes heard in town hall meetings across Iowa and New Hampshire. Talking to a crowd of anti-war Democrats is different than talking to a diplomat with a portfolio under his arm and a general with ribbons on his chest.

SEN. BARACK OBAMA (D), ILLINOIS: This is a criticism of the either of you gentlemen, this is a criticism of this president and the administration, which has set a mission for the military and for our diplomatic forces that is extraordinarily difficult now to achieve.

(VIDEO OF PROTESTERS DISRUPTING HEARINGS)

CROWLEY: With more than 60 percent of Americans opposed to the war, the hearing was not expected to, nor did it, change the ever hardening positions of the '08 Democrats.

SEN. JOSEPH BIDEN (D-DE), PRESIDENTIAL CANDIDATE: I don't see any plan, in terms of leveling with the American people where you're going to -- we're going to be able to tell them their kids are coming home.

CROWLEY: While Democrats used the Petraeus hearings to air their opposition to the war, Republican Senator John McCain found reinforcement -- the kind he rarely gets along the campaign trail.

SEN. JOHN MCCAIN (R), ARIZONA: I believe we cannot choose to lose in Iraq and I will do everything in my power to see that our commanders in Iraq have the time and support they request to win this war.

(END VIDEO TAPE)

CROWLEY: The Petraeus report offered 2008 candidates a high profile venue to underscore their rhetoric. But next week, it's reality time. The Senate takes up the Defense Authorization Bill and the Democratic leadership expects several Iraq-related amendments to be offered, including one to stop funding the war -- Kitty.

PILGRIM: That will be the testing ground.

Thanks very much, Candy Crowley.

Coming up, leading Middle East authority Fouad Ajami, just back from Iraq, will be here with his perspective on the Petraeus/Crocker hearings.

Also, presidential candidate Hillary Clinton returns almost $1 million to a fundraiser who is under investigation by federal authorities. We'll have reaction from three of the nation's leading radio show hosts, so stay with us.

(COMMERCIAL BREAK)

PILGRIM: Joining me for his assessment of the Petraeus/Crocker testimony is Fouad Ajami, one of the world's leading authorities on Iraq and the Middle East.

And Fouad Ajami is professor of Middle East Studies at Johns Hopkins University. He's also the author of "The Foreigner's Gift" and he has just returned from Iraq.

Thank you for being here.

FOUAD AJAMI, AUTHOR, "THE FOREIGNER'S GIFT": Thank you, Kitty, for having me.

PILGRIM: You know, you have a special insight when you watch hearings like this, because you not only hear what they say, you had access to these people, and many others, in Iraq just recently.

You've just come back this month, correct?

AJAMI: Well, amazing. I mean these two men, they are now the face of this war. And we were looking to a face to put on this war. And much as Harry Reid would say this is Bush's war, this is now Petraeus' war and this is Crocker's war. And here you have this very verbal, very expressive general and this very taciturn, very quiet Arabist who is an amazing, amazing ambassador. And I think the people who oppose this war had a reckoning with these two remarkable men. I mean these are two remarkable public servants.

PILGRIM: What's your assessment of how the war is going?

We've had several reports that have pointed to perhaps not as much progress as Ambassador Crocker and General Petraeus are saying there is.

Where do you come down on this?

You have -- you're on your ninth trip back from Iraq.

AJAMI: Yes. Well, I think I would like to quote something to you, Kitty, which Ambassador Crocker said. He said: "Success is not guaranteed, but it's attainable."

I mean, this is, in fact, the most realistic assessment we have of this war. And I don't think that the landscape in America has changed fundamentally. As I said, we now have these two defenders of the war presenting the case for the war. And I think, by and large, the progress in Iraq itself is remarkable. I mean, the fact of the matter is that the Sunnis have turned away from the insurgency and the Shia have begun to walk away from Muqtada al-Sadr. These are big changes, remarkable changes. And for people to say oh, you've turned the Anbar around but that's not enough, that's only 5 percent of the people of Iraq, it's completely unpersuasive.

PILGRIM: Not to oversimplify it, Professor Ajami, but you really have two different equations. You have the military...

AJAMI: Yes.

PILGRIM: ...and then you have the political equation with the Iraqis.

AJAMI: Right.

PILGRIM: The military equation we can debate in a moment...

AJAMI: Yes.

PILGRIM: ...and troop reductions are a big issue for the American people. But the political equation among the Iraqis is a lot more hard -- harder to assess by Americans.

Where do we stand on this?

It looks like utter chaos.

AJAMI: It's hard to assess. But, actually, I think if I were Prime Minister Maliki -- I did check today with his office because, as you know, I wrote -- I had extensive access to Prime Minister Maliki when I was there.

PILGRIM: Yes.

AJAMI: I did check with his office today. The Maliki people are very excited because, in fact, they've been given -- they've been given a good seal of approval. All of the speculations about the fact that Maliki may be removed, that America may push him out, all this is no longer in play.

The fact of the matter is that Maliki himself said he went to Najaf. He met with Grand Ayatollah Sistani and he is talking about a government of technocrats. There is a measure of reconciliation in the country. There is really a political center in the country. And you have Maliki. You have the people who run the Supreme Council. You have the two Kurdish leaders. And then you have a Sunni vice president of tremendous authority, Tariq Hashemi. They are trying to bring him into the field. There has been reconciliation in Iraq.

PILGRIM: Do you get a sense that they understand that the time is getting short?

AJAMI: No. That's really -- it's very interesting. That's a very interesting question. You don't get a sense from the Iraqis of the pressure under which General Petraeus is operating, the pressure under which President Bush is operating. They feel they have an enormous amount of time, an enormous amount of leeway, and they don't.

PILGRIM: That kind of communication is pretty critical.

AJAMI: Yes.

PILGRIM: Let's look at what -- you know, members of Congress have been extremely critical of the administration's war policy.

AJAMI: Yes.

PILGRIM: They took the occasion to voice this.

Let's listen to what Senator Chuck Hagel had to say.

(BEGIN VIDEO CLIP)

SEN. CHUCK HAGEL (R-NE), FOREIGN RELATIONS COMMITTEE: Are we going to continue to invest American blood and treasure at the same rate we are doing now?

For what?

The president said let's buy time.

Buy time for what?

Every report I've seen -- and I assume both of you agree with this -- there has been really very little, if any, political process that is the ultimate core issue -- political reconciliation in Iraq.

(END VIDEO CLIP)

PILGRIM: Now, Prime Minister Nouri Al-Maliki has said please keep to the troops in place.

AJAMI: Yes.

PILGRIM: He's asked for continued support -- military support.

AJAMI: Right.

PILGRIM: and yet we see very clearly demonstrated the lack of patience over the political progress in Iraq. This kind of disconnect.

AJAMI: There is...

PILGRIM: Where do you see that going?

AJAMI: Well, there is a great disconnect. But one thing is clear -- we are in Iraq to stay. And the fact of the matter is we have now just begun to build a base, an American base, on Iran/Iraq border. And, in fact, the consequences of failure have been the theme of both Ambassador Crocker and General Petraeus. And the message there is no withdrawal. We will go to the pre-surge levels next summer, but we're also in Iraq for the long haul, and we have to face that fact.

PILGRIM: Ambassador Crocker had something to say about the future of Iraq.

Let's just listen to that and I would like to tie it in.

(BEGIN VIDEO CLIP) RYAN CROCKER, U.S. AMBASSADOR TO IRAQ: Whether Iraq reaches its potential is, of course, ultimately the product of Iraqi actions. But the changes in our strategy last January, the surge, have helped change the dynamics in Iraq for the better.

(END VIDEO CLIP)

PILGRIM: Do you believe that?

AJAMI: Absolutely. This is an honorable man. This is a decent man. And he knows exactly what the Iraqi landscape is about. No one is saying -- neither man came forth and said Iraq is easy. What they've said is that there are real consequences for an American failure in Iraq and let's give the Iraqis and let's give this government a chance.

PILGRIM: When President Bush comes out on Thursday night and makes an announcement, if troop levels are brought down to pre-surge levels, where does that leave the United States?

AJAMI: It leaves us in the Bush presidency (INAUDIBLE) in Iraq. I think all of this is for a post-Bush presidency, what happens in January 2009. But I believe that we are in Iraq to stay. And I think this is the hard truth that the American public is going to come to a reckoning with.

PILGRIM: It's a tough fact for Americans to come to a reckoning with.

AJAMI: Yes.

PILGRIM: Do you believe that if we go to pre-surge levels, that we'll be able to maintain the military progress that General Petraeus and Ambassador Crocker maintain?

AJAMI: I really don't know. I'm not a military expert.

PILGRIM: Correct.

AJAMI: But I think it looks good because I think the Iraqis have put more soldiers in the field. And I think there has really been more political reconciliation than many members of Congress seem to assume. I've talked to all the Iraqi leaders, practically all of them on this time, and there is much more of a political process at work. There is a political center in the country. The governors in the provinces are now executing more projects. They want more money. There is more revenue sharing of the oil. So I think things in Iraq are not as desperate as the opponents of the war would have you believe.

PILGRIM: Well, we're certainly heartened by your words and we hope for success in Iraq for the benefit of both the American people and the Iraqis.

Thanks for joining us this evening.

Fouad Ajami. AJAMI: Thank you.

PILGRIM: And coming up at the top of the hour, "THE SITUATION ROOM" with Wolf Blitzer -- Wolf.

WOLF BLITZER, HOST, "THE SITUATION ROOM": Thanks, Kitty.

A 9/11 anniversary message from Osama bin Laden.

Is he just taunting Americans or does he have something more ominous in mind?

The president's homeland security adviser has called the Al Qaeda leader impotent. I'll ask Fran Townsend exactly what she means by that.

Plus, searchers are now turning up no sign of missing aviator, Steve Fossett, but you won't believe what they are finding in the rugged Nevada wilderness.

And strange new details about that fugitive Democratic Party fundraiser now back in custody, as Hillary Rodham Clinton's campaign feels the fallout.

All that, Kitty, coming up right here in "THE SITUATION ROOM."

PILGRIM: Thanks, Wolf.

Still ahead, president candidate Senator Hillary Clinton says some broadcasters Bash immigrants.

Could she be talking about Lou Dobbs?

We'll ask our panel of radio talk show hosts next.

(COMMERCIAL BREAK)

PILGRIM: Joining me now are three of the best radio talk show hosts in the country.

Here in New York, we have Laura Flanders of Air America.

In Denver, Peter Boyles of KHOW.

And in Washington, Wilmer Leon of X.M. Radio.

And thank you all for being here.

WILMER LEON, X.M. RADIO: Thank you.

PILGRIM: You know, we really have to start with something that is quite near and dear to our hearts, which is the immigration issue. And we reported yesterday the Spanish language network, Univision, hosted a television Democratic presidential debate on Hispanic issues.

And so let's listen to an exchange between Senator Clinton and the moderator about immigration.

Let's listen in.

(BEGIN VIDEO CLIP, COURTESY NOTICIAS UNIVISION)

MARIA ELENA SALINAS, UNIVISION: Senator Clinton, the negative tone of the immigration debate has left the country polarized and created has certain racist and discriminatory attitudes toward Hispanics.

CLINTON: Well, I think this is a very serious problem. And, as I said earlier, there are many in the political and, frankly, in the broadcast world today, who take a particular aim at our Latino population. And I think it's very destructive.

(END VIDEO CLIP)

PILGRIM: All right, now, the "New York Times" later asked the Clinton campaign to clarify what the senator meant by those comments, and this is what the response was. A spokesman for Mrs. Clinton said the debate, that she was referring to "the CNN anchor, Lou Dobbs, among others."

So let's start with you, Peter.

You're often considered among the others.

PETER BOYLES, KHOW IN DENVER: Yes.

PILGRIM: What do you think is going on?

What do you make of this whole discussion?

BOYLES: Well, it's the race card played by Mrs. Clinton and played by Univision. The operative word -- and it's always missing -- is illegal. It has nothing to do with Latino communities. It has nothing to do with anything but illegal. Mrs. Clinton pandered. I watched the debate. I suspect many people did.

And the other part of it is, what was it, a couple of weeks ago it was George Bush who was hammering on Lou Dobbs. When you're making everybody mad, you're doing something right.

PILGRIM: Yes, well, we -- we don't get terribly disturbed by the discussion.

LEON: No.

PILGRIM: In fact, we enjoy generating the debate.

BOYLES: Absolutely.

PILGRIM: Wilmer...

BOYLES: You're -- you are -- you are known by your enemies.

PILGRIM: Wilmer...

LEON: Yes?

PILGRIM: What are your opinions about this debate?

And do you think it's being unnecessarily polarized into extreme positions?

LEON: I think it is being unnecessarily polarized into extreme positions. I think Peter was absolutely right. The question was a bit loaded because, again, it's not an issue of immigration, it's an issue of illegal immigration.

In a broader perspective, what I think is also interesting is, is how now identity politics is -- is becoming -- is becoming a much, much bigger issue within our political landscape. As the -- as our electorate becomes more diverse, then varying groups are getting more and more power and engaging in broader and broader conversations.

And so the fact that Univision could have, as a -- could have a debate focusing specifically on Latino issues, I think is incredibly, incredibly enlightening and very interesting, and, again, in this modern political landscape.

LAURA FLANDERS, AIR AMERICA: Yes, but let's talk about the politicization question. I mean I really wish that Lou was here, because he knows where I stand on this. And I agree with Hillary. I mean I think that we do have a climate of vigilantism and violence rising against...

BOYLES: Please.

FLANDERS: ...the vast majority of whom are legal.

UNIDENTIFIED MALE: Oh, my God.

FLANDERS: And Lou's inflammatory talk -- talk about polarizing -- linking immigrants to disease, to crime...

PILGRIM: Oh, no, no, no.

FLANDERS: ...to terrorism doesn't help.

(CROSSTALK)

LEON: That's right.

FLANDERS: And he would agree...

PILGRIM: I must defend...

FLANDERS: ...he knows exactly where I stand.

PILGRIM: The position of this broadcast has never linked these things.

(CROSSTALK)

FLANDERS: Numbers on disease?

PILGRIM: The fact is that illegal immigration is always the focus of the discussion.

FLANDERS: There's an element of racism...

PILGRIM: And legitimate immigration...

FLANDERS: ...in the discussion. She's utterly right.

PILGRIM: We have to take issue with you.

Anyone else like to jump in here?

BOYLES: Well, no, it's a ridiculous thing we just heard from our colleague. She says nothing, but just throws charges of vigilantism. That's nonsense.

FLANDERS: We have -- the policy of this country...

BOYLES: Take that to Air America, where it belongs.

FLANDERS: ...has green-lighted the vigilantes of the Minutemen, you name it.

BOYLES: What vigilantes?

FLANDERS: And the language that you hear on this program...

BOYLES: Wait a minute...

FLANDERS: ...and others. Hillary is not wrong.

BOYLES: What?

FLANDERS: It is inflaming the situation...

BOYLES: What have the Minutemen done?

(CROSSTALK)

LEON: Hillary is...

(CROSSTALK)

BOYLES: What have the Minutemen done?

(CROSSTALK)

FLANDERS: ...live in fear.

PILGRIM: Wilmer, go ahead.

LEON: Hillary -- on this issue, Hillary is pandering again. The question...

BOYLES: Of course.

LEON: ...the premise of the question was flawed. The issue on this show, as many times as I have been on it, has never been anti- immigrant.

BOYLES: No.

LEON: It has been illegal immigration. So for Hillary to go along that line of reasoning was just flat out wrong.

FLANDERS: She's talking about a climate that's affecting all immigrants, the vast majority of whom in this country are legal.

PILGRIM: All right, let's...

BOYLES: No, they're not. The vast majority are illegal.

FLANDERS: That's not at all true.

BOYLES: Look at the numbers.

FLANDERS: No. I am looking at the numbers.

BOYLES: my God.

FLANDERS: That's utterly untrue.

BOYLES: I am, too.

PILGRIM: All right, I don't think we're going to come to agreement on this...

BOYLES: And I don't think you know them.

PILGRIM: Let's move on to Iraq...

BOYLES: It's not agreement, it's just the truth.

PILGRIM: I applaud the truth.

BOYLES: The truth is this woman doesn't know what she's talking about.

FLANDERS: My numbers will beat your numbers any minute.

PILGRIM: I have told the truth and I support the fact that we constantly draw the difference between legal and illegal, Laura, and I make that point again, at your expense, because I get the last word.

(LAUGHTER).

PILGRIM: Let me move on to Iraq. And, you know, this is, of course, one of the great issues that this nation is struggling with. A second day of testimony by General Petraeus and Ambassador Crocker. Let me turn to you, Laura, first.

What is your view of what's coming out in these hearings?

Is this a surprise?

Is this not a surprise?

And do you think that this clarifies?

This is supposed to be the moment of truth.

FLANDERS: Well, you can see from my t-shirt that I'm with the protesters on this and I commend them for inserting a bit of urgency into this discussion. I mean I live down by Ground Zero. Six years after 9/11, we've added to the tragic deaths of that day hundreds of thousands of more deaths. And I don't see anything coming from these hearings except, perhaps, yet more deaths, because it was interesting, Petraeus never talked about the global war on terror, so-called. He did talk about Iran.

And as I listened, it began to seem less like an accounting of the past and more like a setting of the stage for the future, the next U.S. war. And that's what I'm frightened about. And that's what we've got to be talking about.

PILGRIM: Yes, I don't -- I probably don't agree with you that it is an accounting of the past in that the future policy is to be determined from this discussion.

Wilmer, go ahead.

LEON: Well, this was really, I think, set up by the White House to give George Bush an out. It's not a coincidence that Petraeus talks about removing troops, about 30,000 troops, and then and the president is going to come on and say, oh, that's a great idea.

I mean I trust Chinese toy manufacturers than I trust the president, at this point.

PILGRIM: All right, Peter, you have 10 seconds. I'm sorry.

BOYLES: I can't say anything better than what Wilmer just said. I trust George Bush as far as I can throw him. It's just -- I don't know what. I hope the general is telling the truth. I hope everything is peaches and cream. But everything that I sense and feel...

FLANDERS: We know it's not, though.

BOYLES: Well, I...

FLANDERS: The data are lying (INAUDIBLE).

BOYLES: The future is very dim there, I'm sorry.

I'm sorry (INAUDIBLE). PILGRIM: All right, I'm sorry to cut it off.

FLANDERS: That's OK.

PILGRIM: We are having way too good a discussion.

Laura Flanders, Wilmer Leon, Peter Boyles, thanks very much.

LEON: Thank you.

PILGRIM: Thank you.

PILGRIM: Still ahead, the results of tonight's poll.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Ninety-nine to on in our poll.

And here's Wolf Blitzer -- Wolf.

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