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Lou Dobbs Tonight

NASA Loses Spirit on Mars; John Kerry Takes Lead in New Hampshire;

Aired January 22, 2004 - 18:00   ET

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

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


(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN ANCHOR (voice-over): Tonight, a dramatic setback for NASA and its plans to look for signs of life on Mars. Scientists have lost contact with the Spirit rover.

PETE THEISINGER, MARS ROVER PROJECT MANAGER: We now know that we have had a very serious anomaly on the vehicle.

PILGRIM: John Kerry takes the lead in New Hampshire and picks up a key endorsement. Tonight, the candidates face off in the only debate before the primary.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I have no expectations about tonight, except that I'm going to continue to put a positive vision out to the country.

PILGRIM: And tonight, in "Overwhelmed America," American workers say they are burned out, overworked and underappreciated. We will have a special report.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, January 2. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening.

Tonight, NASA has lost contact with the Spirit rover on Mars. NASA managers call the breakdown in communications -- quote -- "extremely serious." So far, scientists have been unable to determine what caused the problem.

Our space correspondent, Miles O'Brien, reports from NASA's Jet Propulsion Laboratory in California.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN ANCHOR: After 17 days of near flawless, sometimes stunning operation on the surface of Mars, NASA's Spirit rover has ceased meaningful conversation with its ground controllers here at Pasadena's Jet Propulsion Laboratory. Instead of getting pictures and scientific data, as they had hoped, they are receiving tones, simple beeps from Spirit, which indicates there is a serious problem on the rover. The question is, what is the problem? Is there a software meltdown? Did something overheat? Was there was a power outage of some kind? The team isn't sure because they're not getting any useful communication at all in the first place. Lets listen to one of the problem leaders, Pete Theisinger.

THEISINGER: We have had a very serious anomaly on the vehicle. And our ability to determine exactly what has happened has been limited by our inability to receive telemetry from the vehicle.

O'BRIEN: The Spirit engineering team will rest, along with the Spirit rover, during the Martian night. And it is hoped that, in the middle of that Martian night, Spirit with wake up and try to communicate with one of NASA's satellites orbiting the planet Mars and perhaps send back something more than a tone.

If they can establish some kind of two-way communication, then they can go about the business of trying to troubleshoot this problem. All of this comes just a couple of days before Spirit's twin, Opportunity, is set to land on the other side of Mars. The team here at the Jet Propulsion Laboratory is stretched, to say the least.

Miles O'Brien, CNN, Pasadena, California.

(END VIDEOTAPE)

PILGRIM: Later in the show, I will talk about the loss of communications with Spirit. Dr. Charles Elachi, the director of the Jet Propulsion Laboratory, will join us.

Turning to a drama of a very different kind, the political battle in New Hampshire among the Democratic presidential candidates. And the latest opinion polls say John Kerry is in the lead. His lead over Howard Dean is as much as 10 percentage points. Today, Kerry picked up an endorsement from the Senate colleague Fritz Hollings of South Carolina. The next major contest for the Democratic candidates is in South Carolina on February 3.

The Democratic presidential hopefuls are preparing for tonight's debate in New Hampshire. It will be the only face-off among the candidates before that primary. Howard Dean faces the biggest challenge. His performance in the debate could determine whether he can regain the momentum from John Kerry.

Bob Franken reports from Exeter, New Hampshire.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): Given how fickle Democratic voters are proving to be, tonight's debate has a make-or-break quality to it, or in the case of Howard Dean, an unbreak quality.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I'm a little hoarse. It's not because of the Iowa screech. I actually have a cold.

DEAN: And Michigan! And then we're going to Washington, D.C., to take back the White House. Yes!

FRANKEN: Just about everyone better agrees he better recover his voice and, more importantly, recover the confidence of Democrats, who appear to be abandoning him in droves.

DEAN: Now, I'm not a perfect of person. I got plenty of warts. I say what I think. I lead with my heart.

FRANKEN: That will be a definite no-no for Dean tonight.

But no longer leading may not be all bad.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: How you all doing?

FRANKEN: At least doesn't have to deal with John Kerry's expectations. It's lonely at the top.

KERRY: Really prepared for anything, but I'm looking forward to a good discussion about the future of the country.

FRANKEN: This debate is teeming with drama. Wesley Clark skipped Iowa, so he must make an impression here, ditto Joe Lieberman, who also decided to make New Hampshire his first outing.

As for John Edwards, he needs to avoid the impression his strong Iowa finish was a fluke.

(on camera): There have been a lot of debates, but this time the term do or die may not be a cliche.

Bob Franken, CNN, Exeter, New Hampshire.

(END VIDEOTAPE)

PILGRIM: Howard Dean and his advisers are making a concerted effort to make a better impression on voters. Tonight, Dean and his wife, Judy, will give their first joint television interview since the campaign began.

CNN political analyst Bill Schneider reports now on some campaign rescue attempts of the past.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Right now, Howard Dean is hemorrhaging support in New Hampshire. There are two models for what could happen to him, one good, one bad. The bad one is Edmund Muskie. The good one is Bill Clinton.

In 1972, Democratic front-runner Edmund Muskie held a fateful press conference on the steps of "The Manchester Union Leader." He accused the publisher of the newspaper of maligning his wife's reputation and, at one point, appeared to break into tears.

A man crying? How unpresidential. That's the way people saw it in those days. Muskie lost New Hampshire and was finished. On Monday night, voters saw Howard Dean break into a tirade. For many voters around the country, this was their first impression of Dean. Very unpresidential.

Was this his Edmund Muskie moment?

DEAN: And then we're going to Washington, D.C., to take back the White House. Yes!

SCHNEIDER: Time for damage control. Meet the all-time champion of damage control, Bill Clinton. The first impression voters got of Clinton in 1992 came from Gennifer Flowers.

GENNIFER FLOWERS, PERFORMER: Yes, I was Bill Clinton's lover for 12 years.

SCHNEIDER: So Bill and Hillary Clinton went on CBS' "60 Minutes" following the Super Bowl broadcast to defend their relationship. If it didn't bother her, why should it bother anybody else? Bill Clinton ended up coming in second in the New Hampshire primary and proclaimed himself:

WILLIAM J. CLINTON (D), PRESIDENTIAL CANDIDATE: The comeback kid.

SCHNEIDER: An interview with Howard Dean and his wife will air tonight, following the New Hampshire Democratic debate on ABC "Primetime." Dean's wife has not been seen much in this campaign.

JUDITH STEINBERG DEAN, WIFE OF HOWARD DEAN: For those who might be wondering, my name is Judy Dean.

SCHNEIDER: Tonight, she can tell the world that the Howard Dean they saw on Monday night was not the Howard Dean she has been married to for 22 years.

(END VIDEOTAPE)

SCHNEIDER: Will it work? There's one big difference. This time, the voters saw the candidate's behavior with their own eyes and ears -- Kitty.

PILGRIM: All right, Bill, if Kerry wins in New Hampshire, that would make it two states in a row. What's the next big test?

SCHNEIDER: Yes.

Well, New Hampshire I think is necessary, but not quite sufficient for him. He's got to prove he can win in places like the South, the Southwest. Those crucial February 3 primaries are a big test for him, South Carolina, Arizona, Oklahoma, Missouri. If he wins the in one of those states, particularly South Carolina, then he will show Democrats he can win all over the country, not just northern states, his own home, backyard, in New Hampshire and Iowa, but in all parts of the country. And he has a secret weapon for doing it, veterans. Veterans are flocking to the John Kerry campaign. They admire him. They support him. Veterans, and, I should add, firefighters, because he has been a strong advocate for firefighters. Veterans and firefighters are nationwide.

PILGRIM: That's exactly right. Well, Bill, we know you'll be watching. Thanks a lot, Bill Schneider.

SCHNEIDER: You're welcome.

PILGRIM: President Bush spent much of the day in New Mexico, reinforcing several themes from his State of the Union speech. And one of those themes is the global war on terror.

Today, the president announced the government plans to increase spending on homeland security by nearly 10 percent in 2005.

Kathleen Koch reports from the White House -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Kitty, this is not an unexpected move from a man who has made the war on terror the virtual centerpiece of his administration.

President Bush made the announcement, as you said, in Roswell, New Mexico, to a strategically selected audience of emergency workers, law enforcement officials, military cadets.

The 9.7 percent boost is an increase of more than $2 billion over spending on homeland defense this year. The biggest chunk will go to the Justice Department's counterterrorism work, Mr. Bush calling again on Congress to renew the Patriot Act.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Many of the tools in the Patriot Act have been used by law enforcement to chase down embezzlers and criminals. It is essential that those same tools be used in fighting against terrorists. We're in a different era. The Patriot Act is going to expire. The Congress needs to renew it for the sake of fighting the war on terror.

(END VIDEO CLIP)

KOCH: However, the increased spending on fighting terrorism will take a toll. Aides say, with the exception of a few election-year priorities, Mr. Bush, in his new budget, will propose, effectively, a freeze on all government spending not connected to defense or homeland security.

This would be the tightest budget proposed by Mr. Bush since he took office. And the president is facing virtual all-out rebellion from fiscal conservatives up on Capitol Hill. They were dismayed to see in 2004 the president's proposed federal budget increase of just 4 percent balloon to 9 percent, that, of course, having to do with a lot with the federal deficit hitting some $500 billion this year alone. And, Kitty, they don't want a repeat of that in 2005.

PILGRIM: I would guess so. Thanks very much, Kathleen Koch, reporting from the White House.

Still to come, two American soldiers were killed in Iraq today, but a top U.S. commander says the insurgents have been -- quote -- "brought to their knees." General David Grange will be my guest.

In "Overwhelmed America" tonight, millions of Americans are working harder than ever to prevent their jobs from being shipped overseas.

And after NASA loses contact with the Spirit rover, I will talk with the director of NASA's Jet Propulsion Laboratory, Charles Elachi.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: A new wave of violence in Iraq's Sunni Triangle has killed nine people. Two American soldiers and three Iraqi police officers were among those killed in three attacks.

Despite the violence, the commander of the Army's 4th Infantry Division today said U.S. forces have brought insurgents -- quote -- "to their knees."

Senior Pentagon correspondent Jamie McIntyre is live at the Pentagon with the very latest on that -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Kitty, in Iraq, it has been another 24 hours marked by what have become common events, more deadly attacks on Americans and the Iraqis who support them, followed by more upbeat assessments from U.S. military commanders, who, despite the killings, insist that things are getting better.

While the number of attacks on Americans is down, the insurgents are increasingly targeting Iraqis in an apparent effort to frighten them into ending their cooperation with U.S. authorities. The U.S. portrays that as a sign of desperation.

(BEGIN VIDEO CLIP)

DANIEL SENOR, SENIOR ADVISER, COALITION PROVISIONAL AUTHORITY: And the message is clear. There are elements within this country that want to turn the clock back on Iraq. They want to turn it back on the era of mass graves and chemical attacks and torture chambers and rape rooms. And they will target Iraqis and Iraqi leaders who want to change that course and move Iraq forward.

(END VIDEO CLIP)

MCINTYRE: Yesterday, three Iraqi women, all Christians, were killed when mass gunmen sprayed their minibus with automatic gunfire as it was taking them to jobs at a U.S. military base. One victim was said to have been planning to quit because of fear of an attack.

A mortar attack later that night claimed the lives of two more American soldiers near Baquba, bringing the U.S. military death toll in Iraq to about 505. And today, three Iraqi policemen were killed when insurgents fired on a police checkpoint west of Baghdad. Nevertheless, the commander of U.S. forces in Tikrit, right in the center of the stiffest opposition to the U.S., insisted today that former regime elements he's fighting have -- quote -- "been brought to their knees," even while acknowledging that the mounting death toll is tough to accept.

(BEGIN VIDEO CLIP)

MAJ. GEN. RAYMOND ODIERNO, 4TH INFANTRY DIVISION COMMANDER: Believe me, it's extremely frustrating to me, because I know these soldiers that are -- that are giving their lives for this. And so it's frustrating to me. And it's important that we do honor them and we do report when soldiers have been killed, because they are over here for a very honorable cause. And it's important we do that.

However, it is so clear here, on a day-to-day basis, the difference, the difference from 30 days ago, the difference from two weeks ago.

(END VIDEO CLIP)

MCINTYRE: Odierno says he believes the insurgents are now only a fractured, sporadic threat, whose leadership has been destabilized and finances disrupted. Odierno went out on a limb somewhat today, offering a personal prediction that it will take about six more months to bring a semblance of normalcy to his part of Iraq -- Kitty.

PILGRIM: All right, thanks very much, Jamie McIntyre, reporting from the Pentagon.

The tremendous strain on the Army Reserves and National Guard in Iraq is the focus of tonight's "Grange on Point." We reported last night that the head of the Reserve says the military could face a mass exodus of reservists after they return from Iraq.

For more, I am joined by General David Grange, who is in Chicago.

And, General Grange, the reservists are being used in a way they have never been used before in recent memory, aren't they?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, Kitty, it's constant call-up of reservists, some multiple times. Some haven't been called up yet at all, depending on their specialty.

But it's not like being called up in a massive mobilization to go to a war that you'll win by defeating a known enemy and then return all at once. It's a constant grind of mobilization and deployment all over the world.

PILGRIM: There has been the suggestion that we need a culture change in the reserves. How do you interpret that remark? GRANGE: Well, it's the way that reservists -- that's both reserves and National Guard -- are called up to active duty, the amount of time they are given from alert to when they have to report.

They are training ahead of time, because they don't receive the same amount of training, obviously, that active service members receive, because they have civilian jobs day to day. So they get some training on a weekend per month or maybe a period of two weeks at one time. And so they have to change the means to prepare these citizen soldiers, if they are going to be used like active duty soldiers.

PILGRIM: All right, so training is one thing. But perhaps we just need more people to be signed up. Is that a good answer?

GRANGE: Well, there's a lot of debate, as you know, going on, on this particular issue.

The Department of Defense is looking at efficiencies that they can squeeze out of the existing force to meet some of those demands. And they will find some. They will find some more. But there's only so much that you can actually squeeze out or specialties that you can change to fill another role where you may have numbers that are too low.

And I think, for the long term, with the war on terrorism and if conflicts continue like this around the world or something big happens, there's probably going to be an issue on the numbers in the force. And you can't replace boots on the ground with technology when you get down to the final aspects of any operation. And I think that's where you're going to need more people for the long run.

PILGRIM: We have seen some resistance to increasing the number of people. Is this a cost issue, do you think?

GRANGE: I think part of it is a cost issue.

As an example, if you go ahead and add 10,000 soldiers to the United States Army, that costs approximately $1.2 billion per year. And I think the Department of Defense is concerned that, OK, if we have to raise the numbers, let's say 40,000 in the Army as an example, without giving the resources, in other words, additional money in the budget to do that, to pay for that, then that will come from somewhere else, like modernization.

And that would hurt the already overused equipment the services are using. So there's some tradeoffs there. and that's a big concern.

PILGRIM: Tough choices. Thanks for helping us sort them out. General David Grange, thank you.

GRANGE: My pleasure.

PILGRIM: That brings us to the topic of tonight's poll. Do you believe reservists and members of the National Guard are treated fairly by the Army, yes or no? Cast your vote at CNN.com/Lou. And we will bring you the results later in the show.

Coming up next, "Overwhelmed America." Americans are working harder than ever, but it doesn't seem to be helping their pay or their job security. We'll have a special report.

Plus, "Broken Borders" tonight, the growing debate over whether local police should enforce this country's immigration laws. Heather Mac Donald of the Manhattan Institute and Brent Wilkes of the League of the United Latin American Citizens will join us.

That and much more ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Tonight, the overwhelmed American worker.

Wages are stagnant, productivity is soaring, which means many Americans are effectively working more for less. And making matters even worse, millions of American workers now find themselves competing with cheaper foreign labor just to hold on to their jobs.

Peter Viles has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): This is the California grocery strike, but it might as well be from a time capsule, because the strike, the ultimate workers' weapon, is almost extinct in America.

In the 1950s, there were 352 major strikes per year, so far this decade, 25 per year. Unions have lost membership and lost clout. Real wages have been stagnant for three decades. One labor scholar describes workers right now as frightened, overwhelmed and exhausted.

KATE BRONFENBRENNER, PROFESSOR, CORNELL UNIVERSITY: They are frightened because they wake up each morning and they don't know whether their job is going to be outsourced, downsized, contracted out or eliminated. They are overwhelmed because they feel like forces way beyond their control are making the decisions that affect their lives. And they are exhausted because they are working harder and longer and faster just to stand still.

VILES: So why are workers not pushing back, demanding wage increases or better benefits? Experts say workers just don't have the leverage and are also growing discouraged about the future.

LARRY MISHEL, ECONOMIC POLICY INSTITUTE: Individual workers are scared for their jobs. They think that any job they have is going to be better than the job they are going to get next. That keeps them from pushing back on employers.

VILES: In growing numbers, workers are feeling overworked, underappreciated and burned out. That's according to a recent study of 1,100 workers that concluded -- quote -- "Emotion about the current work experience is extremely negative." DONALD LOWMAN, MANAGING DIRECTOR, TOWERS PERRIN: I don't think workers are apathetic. I think they are very negative right now. There is a big group that's quite negative right now. They fear intensely, though, about their job. They would really like to see things change. They have not withdrawn. They are not indifferent.

VILES: There are signs that workplace anxiety is shaping up as a major campaign issue. In Iowa, the two most important issues to caucus-goers, not terrorism or Iraq, but the economy and health care.

(END VIDEOTAPE)

VILES: The workplace anxieties fueled by what some economists are now calling the worst hiring slump since the Great Depression in America, a jobless recovery that continues to surprise and disappoint economists, but also continues to give employers the upper hand in the labor market -- Kitty.

PILGRIM: Pete, what would it take to give the employees some leverage? It seems like an impossible situation.

VILES: It would take a lot more hiring. Until the millions of people who are unemployed and the millions working part-time who want full-time work get into the job market, employers have the leverage. Employers don't give raises because they think they should. They give raises because they have to. And right now, they don't have to.

PILGRIM: Yes. Thanks very much, Pete Viles.

VILES: Sure.

PILGRIM: Coming up, lost contact. NASA's Spirit rover goes silent on Mars. We'll talk with the director of NASA's Jet Propulsion Laboratory, Charles Elachi, about what NASA is doing to regain contact.

Plus, "Broken Borders," controversy over a law that prevents police officers from enforcing immigration. Heather Mac Donald of the Manhattan Institute and Brent Wilkes of the League of the United Latin American Citizens will join us to debate the issue.

And a new arrest tonight in the Enron scandal. We'll have that story and much more ahead.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Returning to our top story tonight, the Spirit rover on Mars has mysteriously stopped transmitting data to Earth. NASA says there are signs the rover is still intact. But it calls the development a serious problem.

And joining me now is the director of NASA's Jet Propulsion Laboratory, Charles Elachi.

Thanks for joining us.

When did you first know that there was a problem? How did you know that?

CHARLES ELACHI, DIRECTOR, JET PROPULSION LABORATORY: Yes.

About 36 hours ago, we started seeing some anomalous behavior on the different communication channels. Sometimes, we were not getting responses. Sometimes, we were getting responses. And also, at certain times, when we were expecting data to be transmitted, we did not see it. So that when we realized there is some anomalous behavior. And we are in the process of trying to understand how to correct those anomalous behavior.

PILGRIM: After you went through the oh-no phase, what next? How do you fix this? I understand you can do some things from where you are, but a lot is out of your control.

ELACHI: Yes, we can do a fair amount of thing.

As a matter of fact, the last time we communicated with it, which was about six hours ago, we attempt to communicate on a specific channel. We got a very -- the normal response. We got the response we expected, which tells us that the spacecraft is fine. But that gives us an indication most likely is in safe mode. The means an anomaly that happened and got the spacecraft into a safe mode.

So the next step is what we're doing tonight, is to plan a series of commands that we'll send tomorrow morning around 3:00 to 4:00 in the morning, get some of the engineering data back to us. And we'll do a diagnostic, like you do a diagnostic with your car or whatever devices you have, except this is 100 million miles away that we're doing a diagnostic.

PILGRIM: Let me be clear about this safe made. Does that mean it's fixed or not?

ELACHI: No, it's not.

What we know is that we know now that it went into what we call a safe mode. That means a well-defined mode, which occur when something wrong goes on the spacecraft. So now we need to find out, what is that problem which went on? And then we will see how we can correct it. And it could be that it's in the software and the correction

A well defined mode which occur when something wrong goes on the spacecraft. So now we need to find out what is that problem that went on and then we see how we can correct it and it could be that it's in the software and the correction could be done fairly easy by transmitting some changes of commands.

PILGRIM: If it's really broken is there a way to get it back to Earth or is this, what, half of an $800 million loss? I hate to bring it up.

ELACHI: No, we don't bring it to Earth because, again, it's 100 million miles away. I want to say already, you know, we were amazingly surprised of the interest the public and the excitement the public have had. We're already at 3 billion hits so far. We already have produced a lot of scientific results from this mission. And we are reasonably confident that if we communicate with it tomorrow morning and we get the diagnostic we will find a solution. This is not unusual. We have similar kind of situation on other spacecraft. These are very sophisticated machines flying hundreds of millions of miles from us.

PILGRIM: We have another one coming, the Opportunity, so there's double the chance things will work. If things do not work out by tomorrow, is this our second chance, the Opportunity?

ELACHI: Well, we plan from the beginning to have two spacecraft because we knew this was a very challenging job to do. Most likely what we will do is we will keep the Spirit, you know, kind of in a static mode or if you want, in a mode where we can come back to it a few days later. Then we will focus on the Opportunity landing. We have everything ready for the Opportunity landing. We are making sure it is fresh and ready for the very challenging event.

PILGRIM: We are certainly hoping for the best along with you, I'm sure. Best of luck with it. Charles Elachi, thank you.

Soon, President Bush is expected to sign a massive and controversial spending bill. Now the Senate passed the nearly $400 bill today. A month after it passed the House. Democrats had tried to delay the boat, opposing certain provisions including one that delays mandatory country of origin labeling on food. The bill also includes the first federally funded school voucher program. The bill also includes the first federally funded school voucher program. It will allow about 2,000 public school children in the nation's capital to attend private school.

Elsewhere in Washington today, U.S. and Saudi officials ask for international help to stop the flow of money to a Saudi charity they say is helping terrorists. Now the plea for assistance comes amid recent criticism that the United States is not doing enough to freeze terrorist funding. Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT: Two months after the 9/11 attacks, the U.S. government shut down the New Jersey offices of the Holy Land Foundation. It's one of more than ten charities whose assets have been frozen by the U.S. government because of its alleged links to al Qaeda.

Today, the Treasury department added another to the list, the al- Haramain Islamic Foundation.

JOHN SNOW, TREASURY SECRETARY: We're waging the war against the blood money of terrorism.

SYLVESTER: The Treasury department's office of foreign asset control has frozen $139 million in terrorist-related funds in the last 16 months. But the effort may not be enough. Chairman of the Senate finance committee Charles Grassley send a nine-page letter to the Treasury's office criticizing investigators for failing to stop the flow of dollars to terrorist groups.

SEN CHUCK GRASSLEY (R), FINANCE COMMITTEE CHAIRMAN: We're finding terrorist organizations having more information technology and up to date technology that they use against us than we use in keeping them under control.

SYLVESTER: A United Nations survey last month found 272 international financiers with suspected ties to terrorism have managed to elude authorities.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: One of them put in for a new passport and was given a new passport in his own name despite a travel ban, conduct businesses, not quite businesses, you know, in a little corner, luxury hotels, major industry. And that's a major problem.

SYLVESTER: Even though al Qaeda has been adept at raising money through the diamond trade and drug trafficking, a recent general accounting office report found U.S. law enforcement agencies do not systematically collect and analyze data on these alternative financing means. The Treasury department defended its actions.

JUAN ZARATE, DEPUTY TREASURY SECRETARY: We're on top of it and we've been on top of it since the early days of this campaign. As I said before, we can and always will be looking to improve.

SYLVESTER: It is hard to chase a moving target. Investigators may shut down one operation only for another to open, same mission, different name.

(END VIDEOTAPE)

SYLVESTER: The Senate finance committee as part of a wider investigation into terrorism financing has asked the Internal Revenue Service to turn over bank and tax records on 25 Muslim charities and foundations. The IRS is cooperating and intends to hand over the confidential documents by the February 20 deadline -- Kitty.

PILGRIM: All right. Thanks very much. Lisa Sylvester. Let's take a look at some of your thoughts now on "Broken Borders."

Scott of Venice, California writes, "how is it possible to forward immigration laws when we don't even have secure borders? Logic dictates that you need to have secure, vigorously guarded borders before you can make any productive change."

Also many of you wrote about "Exporting America" and the president's plans to help unemployed Americans and Roberta Ecklund of Oregon wrote, "Tell me how we should retrain to be the best competitive labor force when Ph.D.-level positions are being shipped overseas.

And Richard Mannix of Gales Ferry, Connecticut says, "I've considered myself a President Bush supporter so far but I fail to understand how his plan for grants to community colleges for job training can be of any help to this country. Any job that requires technical skills is being sent offshore."

Michelle Fields of Georgia defended the president. She says, "I am a registered Democrat but I like President Bush and I think there are a lot of other people out there who feel the same way. I challenge those who are so quick to be critical of him to not only come up with their criticisms but also some solutions."

We absolutely love hearing from you. E-mail us at loudobbs@CNN.com.

Coming up next, a proposal to legalize millions of illegal aliens in this country. Is the overwhelming number of immigrants driving the national immigration policy? Now two passionately opposing views on this topic next.

(COMMERCIAL BREAK)

PILGRIM: In "Broken Borders" tonight, a controversial policy that bans local police from enforcing immigration policies in major cities across the country. Heather MacDonald is the senior fellow at the Manhattan Institute and she says the rules are evidence of the sheer number of immigrants coming into the country is driving the nation's policies on immigration.

Brent Wilkes is the executive director of the League of United Latin American Citizens and he says the rules protect immigrants from racial profiling. Thank you both for joining us. Brent, let me start with you. The police force not allowed to question anyone they stop about immigrant status. You think that is a good idea, why?

BRENT WILKES, EXECUTIVE DIRECTOR, LULAC: Yes, in fact, the police departments are the ones who are putting these rules in place because they know very clearly that good community policing means they have to have the confidence and the trust of the communities they serve in order for those communities to report crimes and to make sure that if they are victims of crimes they come forward and identify themselves.

They know if they were to start enforcing immigration laws the word would get out to those communities they would no longer come to the police. They wouldn't report crimes or be witnesses. If they were victims they wouldn't come forward. We would be hurting our community safety and public safety if we were to allow the police to become involved in immigration enforcement as well as doing the jobs they should be doing which is protecting us from criminals.

PILGRIM: Brent, you're saying not only do you like this, the police are actually pushing for this. Let's turn to Heather and get sort of contrasting viewpoint.

HEATHER MACDONALD, MANHATTAN INSTITUTE: Kitty, I think that sanctuary policies are anti-immigrant. Let me tell you what is happening in Los Angeles. You have previously deported gang members from the Mara Salva Tucha (ph), El Salvadorean prison gang.

These are violent people, who have been deported under the condition that they are not ever allowed back in the country. They are back on the streets in L.A.. Local police captains and officers know who they are. They know their mere presence in the country after deportation is a federal felony...

PILGRIM: So you're saying they can't even stop them and they know who they are.

MACDONALD: They can't arrest them. They know who they are. These are people committing a federal felony punishable by 20 years in jail and they should be taken off the streets right now.

You know what? They are terrorizing immigrants in Rampart, in Hollywood who are trying to climb up the economic ladder. And gang crime is keeping these people down. If there's a reason to get them off the street immediately the police should have that option.

PILGRIM: You can certainly see that this splits out into a certain select few and then the bulk of the immigrant population. How do you see this reconciled, Brent? Let me turn to Brent for a response. He really is trying to get in there.

WILKES: Well, Heather, I think this thing is the immigrant communities are very much in favor of the sanctuary laws, because they know that you are right about one thing, the immigrants are being abused by criminal elements, and those are the criminal elements who know they can take advantage of them, because they are afraid to go to the police. It we take away sanctuary in these cities, it'll get even worse, not better.

So the immigrant communities are overwhelmingly in favor of the sanctuary laws. And I don't think the Manhattan Institute is the right voice to speak for our communities at all. This is something across the board that immigrant communities are supporting sanctuary policies who are against the local and state police getting involved in immigration law enforcement.

MACDONALD: The police are completely capable of making distinction between crime victims. They should not, obviously, be deported if the law should be enforced against them. And known criminals, known gang members, are who are violating every law in the book by being back.

And yes, the police chiefs who are very political and feel the heat from immigrant advocates support these policies, but if you talk to officers who are actually working in gang terrorized neighborhoods they know that people want these people off the street as soon as possible. And this immigration violation, which, again, it's a serious felony gives the police a tool to get them off the streets now.

The notion that the local officer should wait for the feds to show up and deport these gang members is absurd. Because the INS now is stretched very thin. There's not adequate federal resources to do it.

PILGRIM: Let's take the issue of gangs off of the table for a minute and just talk in the broader scope. If a police officer stops an immigrant, they are not allowed to ask, is it not -- that they should uphold the laws of the country. If a citizen is breaking a law in this country, such as the immigration laws, should they not have the right to ask that person, are you breaking a law?

MACDONALD: Well, I don't want to go there yet. I would -- I think we should take this one step at a time. And if the immigrant advocates are not even willing to allow the police to enforce immigration laws against known felons and murders and drug dealers, let's take that one on first.

I think, yes, there should be connection of databases. We know after 9/11 that all law enforcement should be connected. The local police should have access to federal databases. But my argument initially is, for heaven's sakes, let's get the bad guys off the street first. And then we can expand forward.

But it's just an indication, Kitty, of how problematic our immigration policy is, if you can't even get criminals off the streets.

PILGRIM: One last sentence. Just one quick sentence, Brent.

WILKES: Well, listen, criminals, we want to get them off the street just as bad as anyone else. But they shouldn't be linked with immigration status, their 2 different things. And the worst part about it, if we allow this type of interaction, what you're going to end up having is a racial profiling on a scale that we have never seen before in this country, where every immigrant, or somebody that looks like an immigrant, is going to be liable to be stopped by the police, asked fore their papers. And that's a police state, it's against community policing. And we are definitely against this policy.

PILGRIM: If you are a deported felon, you should be deported right now.

MACDONALD: All right.

PILGRIM: If you're a felon you should pay for your crime.

PILGRIM: Very heated discussion. We will not solve it here, but thank you very much for at least opening the discussion, Brent Wilkes and Heather MacDonald. Thank you very much.

A reminder now to vote in tonight's poll. And the poll is, "do you believe reservists and members of the National Guard are treated fairly by the Army? yes or no." You can cast your vote at CNN CNN.com/lou. And we will bring you the results a little later in the show.

Coming up, a former Enron accountant turns himself in and is promptly marched off to court in handcuffs.

And new technology helps people with credit problems stay in the driver's seat. We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: The head of the International Atomic Energy Agency, Mohammed al-Baradei, today said North Korea's nuclear weapons program is one of the most dangerous problems facing the world. An unofficial U.S. delegation has just returned from a visit to North Korea. A member of that delegation, Jack Pritchard said U.S. policy toward North Korea is, quote, amateurish.

Jack Pritchard is a former U.S. special envoy for negotiations with North Korea. He is now a visiting fellow at the Brookings Institution. He joins us now. And thanks very much for joining us.

A unique opportunity to see Yongbyong, what was the most significant thing you saw when you were there?

JACK PRITCHARD, BROOKINGS INSTITUTE: Well, there were several things. I think the most significant was the fact that the 8,000 spent fuel rods that had previously been under seal in monitoring by the IAEA for which the United States believed was still in the spent fuel storage pond, we discovered that they were gone. The North Koreans said they had reprocessed them and it appears that they have. All we can confirm they are not in the building any longer.

PILGRIM: So the spent fuel rods are gone. Does that prove that they are working on nuclear weapons. That they improved their capacity, their nuclear capacity?

PRITCHARD: It doesn't prove that. But the North Koreans for the past year have been telling us officially and publicly in advance every step of the way what they were intending to do from the start of their reactor, to the movement of the spent fuel rods, to the reprocessing to the extraction of the plutonium for the express purpose of building nuclear weapons.

PILGRIM: The fact that they showed you this may be an attempt to ratchet up the pressure on negotiations. What about that argument?

PITCHARD: Well, it's a legitimate argument. I don't have any qualms with that. But I think from a North Korean's perspective what they were trying to do is find a willing set of eyes that would help them with a claim they have been making in which they like the United States to believe they had a nuclear deterrent.

The U.S. response over the last year has been one of disbelief. So with Dr. Hecker, the former director of the Los Alamos National Lab and some few of us, as well, being able to see at least that the North Koreans claim that the rods had been removed, proves significant in our mind.

PILGRIM: The United States has been trying to work with other countries in six-way talks to resolve this multilaterally. What does this fact do to those talks? The talks have not had a good deal of success so far. PRITCHARD: The talks have not been successful. They have been conducted every six months at a preliminary level. Certainly not designed to get to the root of the problem. To find a solution.

The fact of what we have discovered probably doesn't have very much impact on the talks themselves. I would hope it would have an impact on the approach that the United States will be taking. In how it will be working with friends and allies to try to resolve this and now a much more real problem.

PILGRIM: The United States has taken somewhat carrot and stick approach in that we say we will not be blackmailed. We will not succumb to nuclear blackmail and yet we continue to supply food aid to North Korea.

PRITCHARD: Well, the food aid -- I applaud the Bush administration for separating it out. However meager their contributions have been. The food aid goes, for the most part, as the WFP would attest to, to those that need it the most. And I think it should go on. It is not directly linked to the nuclear problem at hand.

PILGRIM: Not linked but certainly significant. Thank you very much for helping us sort through this very complicated and important issue. Jack Pritchard.

Tonight's thought is on foreign policy, and the quote is, "the purpose of foreign policy is not to provide an outlet for our own sentiments of hope or indignation, it is to shape real events in the real world." And those words are from John F. Kennedy.

Now a look at news in brief. A Montreal children's hospital will test more than 2,600 former patients for HIV after finding out a doctor has the virus. St-Justine hospital says the doctor told his boss about being HIV positive in 1991. The top hospital officials found out just two weeks ago.

U.S. health officials say the flu outbreak has peaked across most of the country, but people who haven't gotten a flu shot should still get one, the flu is blamed for about 36,000 deaths every year.

And a South Dakota judge today sentenced former Congressman Bill Janklow to 100 days in jail for a deadly car accident last summer. He was convicted last month for running a stop sign and colliding with a man on a motorcycle who was killed instantly. Janklow's sentence begins February 7.

On Wall Street, the major stock indexes fell slightly on the day. The Dow lost less than a point. The Nasdaq fell 23 and the S&P 500 dropped almost four.

And news tonight from the jobs front and the war on corporate crime, Christine Romans has all of that as she joins us now -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well, it didn't look like the Dow moved very much, but if it hadn't been for Kodak the Dow would have suffered much more, Kitty. In that twisted way Wall Street works, investors cheered news of massive job cuts at Kodak. Kodak's about face from film to digital photography will cost 15,000 people their jobs, that's a fifth of Kodak's work force. And the unemployment line only shrank by a thousand this week, so that jobless recovery continues.

And so does the corporate crime watch. Today, Enron's former chief accountant surrendered to authorities in Houston. He pleaded not guilty to charges stemming from Enron's sham accounting and collapse. He's the first Enron indictment since former CFO Andrew Fastow pleaded guilty last week.

A former Computer Associates executive pleaded guilty in a Brooklyn court today to obstruction of justice in a probe of accounting abuses there.

And the founder of Marketwatch.com resigned today. He's also the lead commentator for CBS "Market Watch." The SEC is investigating his trading activities, going back to October, 2002, Kitty.

PILGRIM: All right. Thanks very much, Christine Romans.

Coming up, car dealers and the new robotic repo man.

But first the update on the list of companies our staff has confirmed to be exporting America. And these are U.S. companies sending American jobs overseas, choosing to employ cheap foreign labor instead of American workers.

And tonight's additions include: Analog Devices, Ohio Art and Toys R Us. Do keep sending us the names of companies you know to be exporting America. And for the complete list log on to CNN.com/lou.

We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll question. 12 percent of you said reservists and members of the National Guard are treated fairly by the Army. 88 percent said they are not.

Finally tonight, good news for consumers with shaky credit who want to buy a car and for dealers hoping to sell it to them. New technology installed in more than 100,000 vehicles offers drivers a friendly reminder when the car payments are due. Friendly that is until you miss a payment.

Julie Vallese reports from Baltimore, Maryland.

(BEGIN VIDEOTAPE)

JULIE VALLESE, CNN CORRESPONDENT (voice-over): When Tameshia Waring wanted to buy a car, she wasn't sure if there was a dealer willing to lend her the money, but when she agreed to have a device called "on time" connected to the car, it sealed the deal. TAMESHIA WARING, ON TIME USER: With me being a young person trying to start out, it was a good way to helping me -- remind me to pay my bills.

VALLESE: Consumers with little or no credit, like Tameshia, are benefiting from this small computerized device.

ASHLEY HERNDON, V.P. SALES & MARKETING ON TIME: It helps people to get vehicles. It helps people maintain vehicles. It helps the dealers and the finance companies to maintain consistent payments. So that they can stay in business.

VALLESE: The On Time device uses blinking lights and sounds to remind customers when their car payment is due. Make a payment, input a code that changes every pay cycle and customers are good to go. The closer it gets to a payment date, lights flash and On Time beeps. Miss a payment and the car won't start.

On Time won't turn a car off, instead it keeps it from starting.

(on camera): Approximately a 100,000 vehicles are fitted with the On Time device and the dealerships using it report repossessions have gone down from about 40 percent to less than 5.

RICHARD SHOFER, OWNER CROWN MOTORS: We know is 24 hours, or 48 hours that their transportation isn't working.

VALLESE (voice-over): On Time was designed to help consumers keep payment schedules, and if they don't, it won't replace the repo man, just make it harder to run from him. Julie Vallese, CNN, Baltimore, Maryland.

(END VIDEOTAPE)

PILGRIM: That's our show for tonight. Thanks for being with us. Tomorrow, Congressman Dana Rohrbacher joins us to talk about his plans to stop illegal aliens from taxing America's healthcare system. And we'll be joined by the Nation's top business editors for "News Makers".

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

END

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Aired January 22, 2004 - 18:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN ANCHOR (voice-over): Tonight, a dramatic setback for NASA and its plans to look for signs of life on Mars. Scientists have lost contact with the Spirit rover.

PETE THEISINGER, MARS ROVER PROJECT MANAGER: We now know that we have had a very serious anomaly on the vehicle.

PILGRIM: John Kerry takes the lead in New Hampshire and picks up a key endorsement. Tonight, the candidates face off in the only debate before the primary.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: I have no expectations about tonight, except that I'm going to continue to put a positive vision out to the country.

PILGRIM: And tonight, in "Overwhelmed America," American workers say they are burned out, overworked and underappreciated. We will have a special report.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, January 2. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Good evening.

Tonight, NASA has lost contact with the Spirit rover on Mars. NASA managers call the breakdown in communications -- quote -- "extremely serious." So far, scientists have been unable to determine what caused the problem.

Our space correspondent, Miles O'Brien, reports from NASA's Jet Propulsion Laboratory in California.

(BEGIN VIDEOTAPE)

MILES O'BRIEN, CNN ANCHOR: After 17 days of near flawless, sometimes stunning operation on the surface of Mars, NASA's Spirit rover has ceased meaningful conversation with its ground controllers here at Pasadena's Jet Propulsion Laboratory. Instead of getting pictures and scientific data, as they had hoped, they are receiving tones, simple beeps from Spirit, which indicates there is a serious problem on the rover. The question is, what is the problem? Is there a software meltdown? Did something overheat? Was there was a power outage of some kind? The team isn't sure because they're not getting any useful communication at all in the first place. Lets listen to one of the problem leaders, Pete Theisinger.

THEISINGER: We have had a very serious anomaly on the vehicle. And our ability to determine exactly what has happened has been limited by our inability to receive telemetry from the vehicle.

O'BRIEN: The Spirit engineering team will rest, along with the Spirit rover, during the Martian night. And it is hoped that, in the middle of that Martian night, Spirit with wake up and try to communicate with one of NASA's satellites orbiting the planet Mars and perhaps send back something more than a tone.

If they can establish some kind of two-way communication, then they can go about the business of trying to troubleshoot this problem. All of this comes just a couple of days before Spirit's twin, Opportunity, is set to land on the other side of Mars. The team here at the Jet Propulsion Laboratory is stretched, to say the least.

Miles O'Brien, CNN, Pasadena, California.

(END VIDEOTAPE)

PILGRIM: Later in the show, I will talk about the loss of communications with Spirit. Dr. Charles Elachi, the director of the Jet Propulsion Laboratory, will join us.

Turning to a drama of a very different kind, the political battle in New Hampshire among the Democratic presidential candidates. And the latest opinion polls say John Kerry is in the lead. His lead over Howard Dean is as much as 10 percentage points. Today, Kerry picked up an endorsement from the Senate colleague Fritz Hollings of South Carolina. The next major contest for the Democratic candidates is in South Carolina on February 3.

The Democratic presidential hopefuls are preparing for tonight's debate in New Hampshire. It will be the only face-off among the candidates before that primary. Howard Dean faces the biggest challenge. His performance in the debate could determine whether he can regain the momentum from John Kerry.

Bob Franken reports from Exeter, New Hampshire.

(BEGIN VIDEOTAPE)

BOB FRANKEN, CNN NATIONAL CORRESPONDENT (voice-over): Given how fickle Democratic voters are proving to be, tonight's debate has a make-or-break quality to it, or in the case of Howard Dean, an unbreak quality.

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I'm a little hoarse. It's not because of the Iowa screech. I actually have a cold.

DEAN: And Michigan! And then we're going to Washington, D.C., to take back the White House. Yes!

FRANKEN: Just about everyone better agrees he better recover his voice and, more importantly, recover the confidence of Democrats, who appear to be abandoning him in droves.

DEAN: Now, I'm not a perfect of person. I got plenty of warts. I say what I think. I lead with my heart.

FRANKEN: That will be a definite no-no for Dean tonight.

But no longer leading may not be all bad.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: How you all doing?

FRANKEN: At least doesn't have to deal with John Kerry's expectations. It's lonely at the top.

KERRY: Really prepared for anything, but I'm looking forward to a good discussion about the future of the country.

FRANKEN: This debate is teeming with drama. Wesley Clark skipped Iowa, so he must make an impression here, ditto Joe Lieberman, who also decided to make New Hampshire his first outing.

As for John Edwards, he needs to avoid the impression his strong Iowa finish was a fluke.

(on camera): There have been a lot of debates, but this time the term do or die may not be a cliche.

Bob Franken, CNN, Exeter, New Hampshire.

(END VIDEOTAPE)

PILGRIM: Howard Dean and his advisers are making a concerted effort to make a better impression on voters. Tonight, Dean and his wife, Judy, will give their first joint television interview since the campaign began.

CNN political analyst Bill Schneider reports now on some campaign rescue attempts of the past.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): Right now, Howard Dean is hemorrhaging support in New Hampshire. There are two models for what could happen to him, one good, one bad. The bad one is Edmund Muskie. The good one is Bill Clinton.

In 1972, Democratic front-runner Edmund Muskie held a fateful press conference on the steps of "The Manchester Union Leader." He accused the publisher of the newspaper of maligning his wife's reputation and, at one point, appeared to break into tears.

A man crying? How unpresidential. That's the way people saw it in those days. Muskie lost New Hampshire and was finished. On Monday night, voters saw Howard Dean break into a tirade. For many voters around the country, this was their first impression of Dean. Very unpresidential.

Was this his Edmund Muskie moment?

DEAN: And then we're going to Washington, D.C., to take back the White House. Yes!

SCHNEIDER: Time for damage control. Meet the all-time champion of damage control, Bill Clinton. The first impression voters got of Clinton in 1992 came from Gennifer Flowers.

GENNIFER FLOWERS, PERFORMER: Yes, I was Bill Clinton's lover for 12 years.

SCHNEIDER: So Bill and Hillary Clinton went on CBS' "60 Minutes" following the Super Bowl broadcast to defend their relationship. If it didn't bother her, why should it bother anybody else? Bill Clinton ended up coming in second in the New Hampshire primary and proclaimed himself:

WILLIAM J. CLINTON (D), PRESIDENTIAL CANDIDATE: The comeback kid.

SCHNEIDER: An interview with Howard Dean and his wife will air tonight, following the New Hampshire Democratic debate on ABC "Primetime." Dean's wife has not been seen much in this campaign.

JUDITH STEINBERG DEAN, WIFE OF HOWARD DEAN: For those who might be wondering, my name is Judy Dean.

SCHNEIDER: Tonight, she can tell the world that the Howard Dean they saw on Monday night was not the Howard Dean she has been married to for 22 years.

(END VIDEOTAPE)

SCHNEIDER: Will it work? There's one big difference. This time, the voters saw the candidate's behavior with their own eyes and ears -- Kitty.

PILGRIM: All right, Bill, if Kerry wins in New Hampshire, that would make it two states in a row. What's the next big test?

SCHNEIDER: Yes.

Well, New Hampshire I think is necessary, but not quite sufficient for him. He's got to prove he can win in places like the South, the Southwest. Those crucial February 3 primaries are a big test for him, South Carolina, Arizona, Oklahoma, Missouri. If he wins the in one of those states, particularly South Carolina, then he will show Democrats he can win all over the country, not just northern states, his own home, backyard, in New Hampshire and Iowa, but in all parts of the country. And he has a secret weapon for doing it, veterans. Veterans are flocking to the John Kerry campaign. They admire him. They support him. Veterans, and, I should add, firefighters, because he has been a strong advocate for firefighters. Veterans and firefighters are nationwide.

PILGRIM: That's exactly right. Well, Bill, we know you'll be watching. Thanks a lot, Bill Schneider.

SCHNEIDER: You're welcome.

PILGRIM: President Bush spent much of the day in New Mexico, reinforcing several themes from his State of the Union speech. And one of those themes is the global war on terror.

Today, the president announced the government plans to increase spending on homeland security by nearly 10 percent in 2005.

Kathleen Koch reports from the White House -- Kathleen.

KATHLEEN KOCH, CNN CORRESPONDENT: Kitty, this is not an unexpected move from a man who has made the war on terror the virtual centerpiece of his administration.

President Bush made the announcement, as you said, in Roswell, New Mexico, to a strategically selected audience of emergency workers, law enforcement officials, military cadets.

The 9.7 percent boost is an increase of more than $2 billion over spending on homeland defense this year. The biggest chunk will go to the Justice Department's counterterrorism work, Mr. Bush calling again on Congress to renew the Patriot Act.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Many of the tools in the Patriot Act have been used by law enforcement to chase down embezzlers and criminals. It is essential that those same tools be used in fighting against terrorists. We're in a different era. The Patriot Act is going to expire. The Congress needs to renew it for the sake of fighting the war on terror.

(END VIDEO CLIP)

KOCH: However, the increased spending on fighting terrorism will take a toll. Aides say, with the exception of a few election-year priorities, Mr. Bush, in his new budget, will propose, effectively, a freeze on all government spending not connected to defense or homeland security.

This would be the tightest budget proposed by Mr. Bush since he took office. And the president is facing virtual all-out rebellion from fiscal conservatives up on Capitol Hill. They were dismayed to see in 2004 the president's proposed federal budget increase of just 4 percent balloon to 9 percent, that, of course, having to do with a lot with the federal deficit hitting some $500 billion this year alone. And, Kitty, they don't want a repeat of that in 2005.

PILGRIM: I would guess so. Thanks very much, Kathleen Koch, reporting from the White House.

Still to come, two American soldiers were killed in Iraq today, but a top U.S. commander says the insurgents have been -- quote -- "brought to their knees." General David Grange will be my guest.

In "Overwhelmed America" tonight, millions of Americans are working harder than ever to prevent their jobs from being shipped overseas.

And after NASA loses contact with the Spirit rover, I will talk with the director of NASA's Jet Propulsion Laboratory, Charles Elachi.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: A new wave of violence in Iraq's Sunni Triangle has killed nine people. Two American soldiers and three Iraqi police officers were among those killed in three attacks.

Despite the violence, the commander of the Army's 4th Infantry Division today said U.S. forces have brought insurgents -- quote -- "to their knees."

Senior Pentagon correspondent Jamie McIntyre is live at the Pentagon with the very latest on that -- Jamie.

JAMIE MCINTYRE, CNN MILITARY AFFAIRS CORRESPONDENT: Well, Kitty, in Iraq, it has been another 24 hours marked by what have become common events, more deadly attacks on Americans and the Iraqis who support them, followed by more upbeat assessments from U.S. military commanders, who, despite the killings, insist that things are getting better.

While the number of attacks on Americans is down, the insurgents are increasingly targeting Iraqis in an apparent effort to frighten them into ending their cooperation with U.S. authorities. The U.S. portrays that as a sign of desperation.

(BEGIN VIDEO CLIP)

DANIEL SENOR, SENIOR ADVISER, COALITION PROVISIONAL AUTHORITY: And the message is clear. There are elements within this country that want to turn the clock back on Iraq. They want to turn it back on the era of mass graves and chemical attacks and torture chambers and rape rooms. And they will target Iraqis and Iraqi leaders who want to change that course and move Iraq forward.

(END VIDEO CLIP)

MCINTYRE: Yesterday, three Iraqi women, all Christians, were killed when mass gunmen sprayed their minibus with automatic gunfire as it was taking them to jobs at a U.S. military base. One victim was said to have been planning to quit because of fear of an attack.

A mortar attack later that night claimed the lives of two more American soldiers near Baquba, bringing the U.S. military death toll in Iraq to about 505. And today, three Iraqi policemen were killed when insurgents fired on a police checkpoint west of Baghdad. Nevertheless, the commander of U.S. forces in Tikrit, right in the center of the stiffest opposition to the U.S., insisted today that former regime elements he's fighting have -- quote -- "been brought to their knees," even while acknowledging that the mounting death toll is tough to accept.

(BEGIN VIDEO CLIP)

MAJ. GEN. RAYMOND ODIERNO, 4TH INFANTRY DIVISION COMMANDER: Believe me, it's extremely frustrating to me, because I know these soldiers that are -- that are giving their lives for this. And so it's frustrating to me. And it's important that we do honor them and we do report when soldiers have been killed, because they are over here for a very honorable cause. And it's important we do that.

However, it is so clear here, on a day-to-day basis, the difference, the difference from 30 days ago, the difference from two weeks ago.

(END VIDEO CLIP)

MCINTYRE: Odierno says he believes the insurgents are now only a fractured, sporadic threat, whose leadership has been destabilized and finances disrupted. Odierno went out on a limb somewhat today, offering a personal prediction that it will take about six more months to bring a semblance of normalcy to his part of Iraq -- Kitty.

PILGRIM: All right, thanks very much, Jamie McIntyre, reporting from the Pentagon.

The tremendous strain on the Army Reserves and National Guard in Iraq is the focus of tonight's "Grange on Point." We reported last night that the head of the Reserve says the military could face a mass exodus of reservists after they return from Iraq.

For more, I am joined by General David Grange, who is in Chicago.

And, General Grange, the reservists are being used in a way they have never been used before in recent memory, aren't they?

RETIRED BRIG. GEN. DAVID GRANGE, CNN MILITARY ANALYST: Well, Kitty, it's constant call-up of reservists, some multiple times. Some haven't been called up yet at all, depending on their specialty.

But it's not like being called up in a massive mobilization to go to a war that you'll win by defeating a known enemy and then return all at once. It's a constant grind of mobilization and deployment all over the world.

PILGRIM: There has been the suggestion that we need a culture change in the reserves. How do you interpret that remark? GRANGE: Well, it's the way that reservists -- that's both reserves and National Guard -- are called up to active duty, the amount of time they are given from alert to when they have to report.

They are training ahead of time, because they don't receive the same amount of training, obviously, that active service members receive, because they have civilian jobs day to day. So they get some training on a weekend per month or maybe a period of two weeks at one time. And so they have to change the means to prepare these citizen soldiers, if they are going to be used like active duty soldiers.

PILGRIM: All right, so training is one thing. But perhaps we just need more people to be signed up. Is that a good answer?

GRANGE: Well, there's a lot of debate, as you know, going on, on this particular issue.

The Department of Defense is looking at efficiencies that they can squeeze out of the existing force to meet some of those demands. And they will find some. They will find some more. But there's only so much that you can actually squeeze out or specialties that you can change to fill another role where you may have numbers that are too low.

And I think, for the long term, with the war on terrorism and if conflicts continue like this around the world or something big happens, there's probably going to be an issue on the numbers in the force. And you can't replace boots on the ground with technology when you get down to the final aspects of any operation. And I think that's where you're going to need more people for the long run.

PILGRIM: We have seen some resistance to increasing the number of people. Is this a cost issue, do you think?

GRANGE: I think part of it is a cost issue.

As an example, if you go ahead and add 10,000 soldiers to the United States Army, that costs approximately $1.2 billion per year. And I think the Department of Defense is concerned that, OK, if we have to raise the numbers, let's say 40,000 in the Army as an example, without giving the resources, in other words, additional money in the budget to do that, to pay for that, then that will come from somewhere else, like modernization.

And that would hurt the already overused equipment the services are using. So there's some tradeoffs there. and that's a big concern.

PILGRIM: Tough choices. Thanks for helping us sort them out. General David Grange, thank you.

GRANGE: My pleasure.

PILGRIM: That brings us to the topic of tonight's poll. Do you believe reservists and members of the National Guard are treated fairly by the Army, yes or no? Cast your vote at CNN.com/Lou. And we will bring you the results later in the show.

Coming up next, "Overwhelmed America." Americans are working harder than ever, but it doesn't seem to be helping their pay or their job security. We'll have a special report.

Plus, "Broken Borders" tonight, the growing debate over whether local police should enforce this country's immigration laws. Heather Mac Donald of the Manhattan Institute and Brent Wilkes of the League of the United Latin American Citizens will join us.

That and much more ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Tonight, the overwhelmed American worker.

Wages are stagnant, productivity is soaring, which means many Americans are effectively working more for less. And making matters even worse, millions of American workers now find themselves competing with cheaper foreign labor just to hold on to their jobs.

Peter Viles has the report.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): This is the California grocery strike, but it might as well be from a time capsule, because the strike, the ultimate workers' weapon, is almost extinct in America.

In the 1950s, there were 352 major strikes per year, so far this decade, 25 per year. Unions have lost membership and lost clout. Real wages have been stagnant for three decades. One labor scholar describes workers right now as frightened, overwhelmed and exhausted.

KATE BRONFENBRENNER, PROFESSOR, CORNELL UNIVERSITY: They are frightened because they wake up each morning and they don't know whether their job is going to be outsourced, downsized, contracted out or eliminated. They are overwhelmed because they feel like forces way beyond their control are making the decisions that affect their lives. And they are exhausted because they are working harder and longer and faster just to stand still.

VILES: So why are workers not pushing back, demanding wage increases or better benefits? Experts say workers just don't have the leverage and are also growing discouraged about the future.

LARRY MISHEL, ECONOMIC POLICY INSTITUTE: Individual workers are scared for their jobs. They think that any job they have is going to be better than the job they are going to get next. That keeps them from pushing back on employers.

VILES: In growing numbers, workers are feeling overworked, underappreciated and burned out. That's according to a recent study of 1,100 workers that concluded -- quote -- "Emotion about the current work experience is extremely negative." DONALD LOWMAN, MANAGING DIRECTOR, TOWERS PERRIN: I don't think workers are apathetic. I think they are very negative right now. There is a big group that's quite negative right now. They fear intensely, though, about their job. They would really like to see things change. They have not withdrawn. They are not indifferent.

VILES: There are signs that workplace anxiety is shaping up as a major campaign issue. In Iowa, the two most important issues to caucus-goers, not terrorism or Iraq, but the economy and health care.

(END VIDEOTAPE)

VILES: The workplace anxieties fueled by what some economists are now calling the worst hiring slump since the Great Depression in America, a jobless recovery that continues to surprise and disappoint economists, but also continues to give employers the upper hand in the labor market -- Kitty.

PILGRIM: Pete, what would it take to give the employees some leverage? It seems like an impossible situation.

VILES: It would take a lot more hiring. Until the millions of people who are unemployed and the millions working part-time who want full-time work get into the job market, employers have the leverage. Employers don't give raises because they think they should. They give raises because they have to. And right now, they don't have to.

PILGRIM: Yes. Thanks very much, Pete Viles.

VILES: Sure.

PILGRIM: Coming up, lost contact. NASA's Spirit rover goes silent on Mars. We'll talk with the director of NASA's Jet Propulsion Laboratory, Charles Elachi, about what NASA is doing to regain contact.

Plus, "Broken Borders," controversy over a law that prevents police officers from enforcing immigration. Heather Mac Donald of the Manhattan Institute and Brent Wilkes of the League of the United Latin American Citizens will join us to debate the issue.

And a new arrest tonight in the Enron scandal. We'll have that story and much more ahead.

Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Returning to our top story tonight, the Spirit rover on Mars has mysteriously stopped transmitting data to Earth. NASA says there are signs the rover is still intact. But it calls the development a serious problem.

And joining me now is the director of NASA's Jet Propulsion Laboratory, Charles Elachi.

Thanks for joining us.

When did you first know that there was a problem? How did you know that?

CHARLES ELACHI, DIRECTOR, JET PROPULSION LABORATORY: Yes.

About 36 hours ago, we started seeing some anomalous behavior on the different communication channels. Sometimes, we were not getting responses. Sometimes, we were getting responses. And also, at certain times, when we were expecting data to be transmitted, we did not see it. So that when we realized there is some anomalous behavior. And we are in the process of trying to understand how to correct those anomalous behavior.

PILGRIM: After you went through the oh-no phase, what next? How do you fix this? I understand you can do some things from where you are, but a lot is out of your control.

ELACHI: Yes, we can do a fair amount of thing.

As a matter of fact, the last time we communicated with it, which was about six hours ago, we attempt to communicate on a specific channel. We got a very -- the normal response. We got the response we expected, which tells us that the spacecraft is fine. But that gives us an indication most likely is in safe mode. The means an anomaly that happened and got the spacecraft into a safe mode.

So the next step is what we're doing tonight, is to plan a series of commands that we'll send tomorrow morning around 3:00 to 4:00 in the morning, get some of the engineering data back to us. And we'll do a diagnostic, like you do a diagnostic with your car or whatever devices you have, except this is 100 million miles away that we're doing a diagnostic.

PILGRIM: Let me be clear about this safe made. Does that mean it's fixed or not?

ELACHI: No, it's not.

What we know is that we know now that it went into what we call a safe mode. That means a well-defined mode, which occur when something wrong goes on the spacecraft. So now we need to find out, what is that problem which went on? And then we will see how we can correct it. And it could be that it's in the software and the correction

A well defined mode which occur when something wrong goes on the spacecraft. So now we need to find out what is that problem that went on and then we see how we can correct it and it could be that it's in the software and the correction could be done fairly easy by transmitting some changes of commands.

PILGRIM: If it's really broken is there a way to get it back to Earth or is this, what, half of an $800 million loss? I hate to bring it up.

ELACHI: No, we don't bring it to Earth because, again, it's 100 million miles away. I want to say already, you know, we were amazingly surprised of the interest the public and the excitement the public have had. We're already at 3 billion hits so far. We already have produced a lot of scientific results from this mission. And we are reasonably confident that if we communicate with it tomorrow morning and we get the diagnostic we will find a solution. This is not unusual. We have similar kind of situation on other spacecraft. These are very sophisticated machines flying hundreds of millions of miles from us.

PILGRIM: We have another one coming, the Opportunity, so there's double the chance things will work. If things do not work out by tomorrow, is this our second chance, the Opportunity?

ELACHI: Well, we plan from the beginning to have two spacecraft because we knew this was a very challenging job to do. Most likely what we will do is we will keep the Spirit, you know, kind of in a static mode or if you want, in a mode where we can come back to it a few days later. Then we will focus on the Opportunity landing. We have everything ready for the Opportunity landing. We are making sure it is fresh and ready for the very challenging event.

PILGRIM: We are certainly hoping for the best along with you, I'm sure. Best of luck with it. Charles Elachi, thank you.

Soon, President Bush is expected to sign a massive and controversial spending bill. Now the Senate passed the nearly $400 bill today. A month after it passed the House. Democrats had tried to delay the boat, opposing certain provisions including one that delays mandatory country of origin labeling on food. The bill also includes the first federally funded school voucher program. The bill also includes the first federally funded school voucher program. It will allow about 2,000 public school children in the nation's capital to attend private school.

Elsewhere in Washington today, U.S. and Saudi officials ask for international help to stop the flow of money to a Saudi charity they say is helping terrorists. Now the plea for assistance comes amid recent criticism that the United States is not doing enough to freeze terrorist funding. Lisa Sylvester has the report.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT: Two months after the 9/11 attacks, the U.S. government shut down the New Jersey offices of the Holy Land Foundation. It's one of more than ten charities whose assets have been frozen by the U.S. government because of its alleged links to al Qaeda.

Today, the Treasury department added another to the list, the al- Haramain Islamic Foundation.

JOHN SNOW, TREASURY SECRETARY: We're waging the war against the blood money of terrorism.

SYLVESTER: The Treasury department's office of foreign asset control has frozen $139 million in terrorist-related funds in the last 16 months. But the effort may not be enough. Chairman of the Senate finance committee Charles Grassley send a nine-page letter to the Treasury's office criticizing investigators for failing to stop the flow of dollars to terrorist groups.

SEN CHUCK GRASSLEY (R), FINANCE COMMITTEE CHAIRMAN: We're finding terrorist organizations having more information technology and up to date technology that they use against us than we use in keeping them under control.

SYLVESTER: A United Nations survey last month found 272 international financiers with suspected ties to terrorism have managed to elude authorities.

MATTHEW LEVITT, WASHINGTON INSTITUTE FOR NEAR EAST POLICY: One of them put in for a new passport and was given a new passport in his own name despite a travel ban, conduct businesses, not quite businesses, you know, in a little corner, luxury hotels, major industry. And that's a major problem.

SYLVESTER: Even though al Qaeda has been adept at raising money through the diamond trade and drug trafficking, a recent general accounting office report found U.S. law enforcement agencies do not systematically collect and analyze data on these alternative financing means. The Treasury department defended its actions.

JUAN ZARATE, DEPUTY TREASURY SECRETARY: We're on top of it and we've been on top of it since the early days of this campaign. As I said before, we can and always will be looking to improve.

SYLVESTER: It is hard to chase a moving target. Investigators may shut down one operation only for another to open, same mission, different name.

(END VIDEOTAPE)

SYLVESTER: The Senate finance committee as part of a wider investigation into terrorism financing has asked the Internal Revenue Service to turn over bank and tax records on 25 Muslim charities and foundations. The IRS is cooperating and intends to hand over the confidential documents by the February 20 deadline -- Kitty.

PILGRIM: All right. Thanks very much. Lisa Sylvester. Let's take a look at some of your thoughts now on "Broken Borders."

Scott of Venice, California writes, "how is it possible to forward immigration laws when we don't even have secure borders? Logic dictates that you need to have secure, vigorously guarded borders before you can make any productive change."

Also many of you wrote about "Exporting America" and the president's plans to help unemployed Americans and Roberta Ecklund of Oregon wrote, "Tell me how we should retrain to be the best competitive labor force when Ph.D.-level positions are being shipped overseas.

And Richard Mannix of Gales Ferry, Connecticut says, "I've considered myself a President Bush supporter so far but I fail to understand how his plan for grants to community colleges for job training can be of any help to this country. Any job that requires technical skills is being sent offshore."

Michelle Fields of Georgia defended the president. She says, "I am a registered Democrat but I like President Bush and I think there are a lot of other people out there who feel the same way. I challenge those who are so quick to be critical of him to not only come up with their criticisms but also some solutions."

We absolutely love hearing from you. E-mail us at loudobbs@CNN.com.

Coming up next, a proposal to legalize millions of illegal aliens in this country. Is the overwhelming number of immigrants driving the national immigration policy? Now two passionately opposing views on this topic next.

(COMMERCIAL BREAK)

PILGRIM: In "Broken Borders" tonight, a controversial policy that bans local police from enforcing immigration policies in major cities across the country. Heather MacDonald is the senior fellow at the Manhattan Institute and she says the rules are evidence of the sheer number of immigrants coming into the country is driving the nation's policies on immigration.

Brent Wilkes is the executive director of the League of United Latin American Citizens and he says the rules protect immigrants from racial profiling. Thank you both for joining us. Brent, let me start with you. The police force not allowed to question anyone they stop about immigrant status. You think that is a good idea, why?

BRENT WILKES, EXECUTIVE DIRECTOR, LULAC: Yes, in fact, the police departments are the ones who are putting these rules in place because they know very clearly that good community policing means they have to have the confidence and the trust of the communities they serve in order for those communities to report crimes and to make sure that if they are victims of crimes they come forward and identify themselves.

They know if they were to start enforcing immigration laws the word would get out to those communities they would no longer come to the police. They wouldn't report crimes or be witnesses. If they were victims they wouldn't come forward. We would be hurting our community safety and public safety if we were to allow the police to become involved in immigration enforcement as well as doing the jobs they should be doing which is protecting us from criminals.

PILGRIM: Brent, you're saying not only do you like this, the police are actually pushing for this. Let's turn to Heather and get sort of contrasting viewpoint.

HEATHER MACDONALD, MANHATTAN INSTITUTE: Kitty, I think that sanctuary policies are anti-immigrant. Let me tell you what is happening in Los Angeles. You have previously deported gang members from the Mara Salva Tucha (ph), El Salvadorean prison gang.

These are violent people, who have been deported under the condition that they are not ever allowed back in the country. They are back on the streets in L.A.. Local police captains and officers know who they are. They know their mere presence in the country after deportation is a federal felony...

PILGRIM: So you're saying they can't even stop them and they know who they are.

MACDONALD: They can't arrest them. They know who they are. These are people committing a federal felony punishable by 20 years in jail and they should be taken off the streets right now.

You know what? They are terrorizing immigrants in Rampart, in Hollywood who are trying to climb up the economic ladder. And gang crime is keeping these people down. If there's a reason to get them off the street immediately the police should have that option.

PILGRIM: You can certainly see that this splits out into a certain select few and then the bulk of the immigrant population. How do you see this reconciled, Brent? Let me turn to Brent for a response. He really is trying to get in there.

WILKES: Well, Heather, I think this thing is the immigrant communities are very much in favor of the sanctuary laws, because they know that you are right about one thing, the immigrants are being abused by criminal elements, and those are the criminal elements who know they can take advantage of them, because they are afraid to go to the police. It we take away sanctuary in these cities, it'll get even worse, not better.

So the immigrant communities are overwhelmingly in favor of the sanctuary laws. And I don't think the Manhattan Institute is the right voice to speak for our communities at all. This is something across the board that immigrant communities are supporting sanctuary policies who are against the local and state police getting involved in immigration law enforcement.

MACDONALD: The police are completely capable of making distinction between crime victims. They should not, obviously, be deported if the law should be enforced against them. And known criminals, known gang members, are who are violating every law in the book by being back.

And yes, the police chiefs who are very political and feel the heat from immigrant advocates support these policies, but if you talk to officers who are actually working in gang terrorized neighborhoods they know that people want these people off the street as soon as possible. And this immigration violation, which, again, it's a serious felony gives the police a tool to get them off the streets now.

The notion that the local officer should wait for the feds to show up and deport these gang members is absurd. Because the INS now is stretched very thin. There's not adequate federal resources to do it.

PILGRIM: Let's take the issue of gangs off of the table for a minute and just talk in the broader scope. If a police officer stops an immigrant, they are not allowed to ask, is it not -- that they should uphold the laws of the country. If a citizen is breaking a law in this country, such as the immigration laws, should they not have the right to ask that person, are you breaking a law?

MACDONALD: Well, I don't want to go there yet. I would -- I think we should take this one step at a time. And if the immigrant advocates are not even willing to allow the police to enforce immigration laws against known felons and murders and drug dealers, let's take that one on first.

I think, yes, there should be connection of databases. We know after 9/11 that all law enforcement should be connected. The local police should have access to federal databases. But my argument initially is, for heaven's sakes, let's get the bad guys off the street first. And then we can expand forward.

But it's just an indication, Kitty, of how problematic our immigration policy is, if you can't even get criminals off the streets.

PILGRIM: One last sentence. Just one quick sentence, Brent.

WILKES: Well, listen, criminals, we want to get them off the street just as bad as anyone else. But they shouldn't be linked with immigration status, their 2 different things. And the worst part about it, if we allow this type of interaction, what you're going to end up having is a racial profiling on a scale that we have never seen before in this country, where every immigrant, or somebody that looks like an immigrant, is going to be liable to be stopped by the police, asked fore their papers. And that's a police state, it's against community policing. And we are definitely against this policy.

PILGRIM: If you are a deported felon, you should be deported right now.

MACDONALD: All right.

PILGRIM: If you're a felon you should pay for your crime.

PILGRIM: Very heated discussion. We will not solve it here, but thank you very much for at least opening the discussion, Brent Wilkes and Heather MacDonald. Thank you very much.

A reminder now to vote in tonight's poll. And the poll is, "do you believe reservists and members of the National Guard are treated fairly by the Army? yes or no." You can cast your vote at CNN CNN.com/lou. And we will bring you the results a little later in the show.

Coming up, a former Enron accountant turns himself in and is promptly marched off to court in handcuffs.

And new technology helps people with credit problems stay in the driver's seat. We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: The head of the International Atomic Energy Agency, Mohammed al-Baradei, today said North Korea's nuclear weapons program is one of the most dangerous problems facing the world. An unofficial U.S. delegation has just returned from a visit to North Korea. A member of that delegation, Jack Pritchard said U.S. policy toward North Korea is, quote, amateurish.

Jack Pritchard is a former U.S. special envoy for negotiations with North Korea. He is now a visiting fellow at the Brookings Institution. He joins us now. And thanks very much for joining us.

A unique opportunity to see Yongbyong, what was the most significant thing you saw when you were there?

JACK PRITCHARD, BROOKINGS INSTITUTE: Well, there were several things. I think the most significant was the fact that the 8,000 spent fuel rods that had previously been under seal in monitoring by the IAEA for which the United States believed was still in the spent fuel storage pond, we discovered that they were gone. The North Koreans said they had reprocessed them and it appears that they have. All we can confirm they are not in the building any longer.

PILGRIM: So the spent fuel rods are gone. Does that prove that they are working on nuclear weapons. That they improved their capacity, their nuclear capacity?

PRITCHARD: It doesn't prove that. But the North Koreans for the past year have been telling us officially and publicly in advance every step of the way what they were intending to do from the start of their reactor, to the movement of the spent fuel rods, to the reprocessing to the extraction of the plutonium for the express purpose of building nuclear weapons.

PILGRIM: The fact that they showed you this may be an attempt to ratchet up the pressure on negotiations. What about that argument?

PITCHARD: Well, it's a legitimate argument. I don't have any qualms with that. But I think from a North Korean's perspective what they were trying to do is find a willing set of eyes that would help them with a claim they have been making in which they like the United States to believe they had a nuclear deterrent.

The U.S. response over the last year has been one of disbelief. So with Dr. Hecker, the former director of the Los Alamos National Lab and some few of us, as well, being able to see at least that the North Koreans claim that the rods had been removed, proves significant in our mind.

PILGRIM: The United States has been trying to work with other countries in six-way talks to resolve this multilaterally. What does this fact do to those talks? The talks have not had a good deal of success so far. PRITCHARD: The talks have not been successful. They have been conducted every six months at a preliminary level. Certainly not designed to get to the root of the problem. To find a solution.

The fact of what we have discovered probably doesn't have very much impact on the talks themselves. I would hope it would have an impact on the approach that the United States will be taking. In how it will be working with friends and allies to try to resolve this and now a much more real problem.

PILGRIM: The United States has taken somewhat carrot and stick approach in that we say we will not be blackmailed. We will not succumb to nuclear blackmail and yet we continue to supply food aid to North Korea.

PRITCHARD: Well, the food aid -- I applaud the Bush administration for separating it out. However meager their contributions have been. The food aid goes, for the most part, as the WFP would attest to, to those that need it the most. And I think it should go on. It is not directly linked to the nuclear problem at hand.

PILGRIM: Not linked but certainly significant. Thank you very much for helping us sort through this very complicated and important issue. Jack Pritchard.

Tonight's thought is on foreign policy, and the quote is, "the purpose of foreign policy is not to provide an outlet for our own sentiments of hope or indignation, it is to shape real events in the real world." And those words are from John F. Kennedy.

Now a look at news in brief. A Montreal children's hospital will test more than 2,600 former patients for HIV after finding out a doctor has the virus. St-Justine hospital says the doctor told his boss about being HIV positive in 1991. The top hospital officials found out just two weeks ago.

U.S. health officials say the flu outbreak has peaked across most of the country, but people who haven't gotten a flu shot should still get one, the flu is blamed for about 36,000 deaths every year.

And a South Dakota judge today sentenced former Congressman Bill Janklow to 100 days in jail for a deadly car accident last summer. He was convicted last month for running a stop sign and colliding with a man on a motorcycle who was killed instantly. Janklow's sentence begins February 7.

On Wall Street, the major stock indexes fell slightly on the day. The Dow lost less than a point. The Nasdaq fell 23 and the S&P 500 dropped almost four.

And news tonight from the jobs front and the war on corporate crime, Christine Romans has all of that as she joins us now -- Christine.

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well, it didn't look like the Dow moved very much, but if it hadn't been for Kodak the Dow would have suffered much more, Kitty. In that twisted way Wall Street works, investors cheered news of massive job cuts at Kodak. Kodak's about face from film to digital photography will cost 15,000 people their jobs, that's a fifth of Kodak's work force. And the unemployment line only shrank by a thousand this week, so that jobless recovery continues.

And so does the corporate crime watch. Today, Enron's former chief accountant surrendered to authorities in Houston. He pleaded not guilty to charges stemming from Enron's sham accounting and collapse. He's the first Enron indictment since former CFO Andrew Fastow pleaded guilty last week.

A former Computer Associates executive pleaded guilty in a Brooklyn court today to obstruction of justice in a probe of accounting abuses there.

And the founder of Marketwatch.com resigned today. He's also the lead commentator for CBS "Market Watch." The SEC is investigating his trading activities, going back to October, 2002, Kitty.

PILGRIM: All right. Thanks very much, Christine Romans.

Coming up, car dealers and the new robotic repo man.

But first the update on the list of companies our staff has confirmed to be exporting America. And these are U.S. companies sending American jobs overseas, choosing to employ cheap foreign labor instead of American workers.

And tonight's additions include: Analog Devices, Ohio Art and Toys R Us. Do keep sending us the names of companies you know to be exporting America. And for the complete list log on to CNN.com/lou.

We'll be right back.

(COMMERCIAL BREAK)

PILGRIM: Now the results of tonight's poll question. 12 percent of you said reservists and members of the National Guard are treated fairly by the Army. 88 percent said they are not.

Finally tonight, good news for consumers with shaky credit who want to buy a car and for dealers hoping to sell it to them. New technology installed in more than 100,000 vehicles offers drivers a friendly reminder when the car payments are due. Friendly that is until you miss a payment.

Julie Vallese reports from Baltimore, Maryland.

(BEGIN VIDEOTAPE)

JULIE VALLESE, CNN CORRESPONDENT (voice-over): When Tameshia Waring wanted to buy a car, she wasn't sure if there was a dealer willing to lend her the money, but when she agreed to have a device called "on time" connected to the car, it sealed the deal. TAMESHIA WARING, ON TIME USER: With me being a young person trying to start out, it was a good way to helping me -- remind me to pay my bills.

VALLESE: Consumers with little or no credit, like Tameshia, are benefiting from this small computerized device.

ASHLEY HERNDON, V.P. SALES & MARKETING ON TIME: It helps people to get vehicles. It helps people maintain vehicles. It helps the dealers and the finance companies to maintain consistent payments. So that they can stay in business.

VALLESE: The On Time device uses blinking lights and sounds to remind customers when their car payment is due. Make a payment, input a code that changes every pay cycle and customers are good to go. The closer it gets to a payment date, lights flash and On Time beeps. Miss a payment and the car won't start.

On Time won't turn a car off, instead it keeps it from starting.

(on camera): Approximately a 100,000 vehicles are fitted with the On Time device and the dealerships using it report repossessions have gone down from about 40 percent to less than 5.

RICHARD SHOFER, OWNER CROWN MOTORS: We know is 24 hours, or 48 hours that their transportation isn't working.

VALLESE (voice-over): On Time was designed to help consumers keep payment schedules, and if they don't, it won't replace the repo man, just make it harder to run from him. Julie Vallese, CNN, Baltimore, Maryland.

(END VIDEOTAPE)

PILGRIM: That's our show for tonight. Thanks for being with us. Tomorrow, Congressman Dana Rohrbacher joins us to talk about his plans to stop illegal aliens from taxing America's healthcare system. And we'll be joined by the Nation's top business editors for "News Makers".

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

END

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