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Lou Dobbs Tonight

Refugees Leaving Smaller Islands; Banda Aceh 'Vaporized,' According to Witnesses; U.S. Embassy Works to Locate Missing Americans

Aired December 30, 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, HOST (voice-over): Tonight, day five of the tsunami disaster across Southeast Asia. The death toll is rising rapidly, and the scope of the destruction is being compared to a nuclear bomb.

MIKE GRIFFITHS, CONSERVATIONIST: It has completely leveled everything just except for a few structures.

PILGRIM: We'll have the latest from Indonesia, Thailand, India and Sri Lanka. And Sri Lanka's ambassador to the United States is our guest.

The State Department says thousands of Americans are still unaccounted for across Southeast Asia. Officials in Sri Lanka have launched a massive search for them. We'll have the latest. And an American woman who can't find her brother will be our guest.

The disaster has created one of the largest relief efforts in history. But relief workers are struggling to reach some of the most remote areas of devastation, and they say time is running out to deliver fresh food and water to those who need it most. Executive director of UNICEF, Carol Bellamy, is our guest.

And tonight, the Pentagon is considering a massive budget cut, up to $60 billion. It would all but eliminate the increased defense spending put into place after September 11.

UNIDENTIFIED MALE: It's probably not affordable over the long term, given the concerns about the deficit.

PILGRIM: We'll have a live report from the Pentagon.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, December 30. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

Tonight, more than 116,000 people are confirmed dead after the tsunami in Southeast Asia. The death toll rose significantly after Indonesia reported nearly twice as many people were killed than first thought.

Indonesia's death toll is now just short of 80,000. Sri Lanka's toll has risen to almost 25,000 people. India reporting at least 10,000 deaths. And Thailand has confirmed more than 1,800 dead.

Making sure the death toll does not rise through disease is the main effort now. Relief workers across Southeast Asia are struggling to reach some of the most remote areas of destruction, including the Andaman and Nicobar islands of Northwest Indonesia.

CNN's Suhasini Haidar accompanied a relief flight to deliver much needed food and water and medicine to hundreds of survivors and has this report.

(BEGIN VIDEOTAPE)

SUHASINI HAIDAR, CNN CORRESPONDENT (voice-over): Tonight, Kana Kavasan (ph) will use what's left of her home as firewood to cook a meal for her family.

She and her husband have to wade through water to take stock of their tsunami-destroyed house and gift shop.

"It will take years to rebuild what we had here," she says.

But many won't stay to rebuild. On this island of Kar Nicobar, part of an archipelago in the Indian Ocean that bore the brunt of the killer waves, hundreds of men and women say there is nothing left to live on.

UNIDENTIFIED FEMALE (through translator): We stayed in the forest for two nights without food. The children just cried and cried.

HAIDAR: The tsunami took her home and her uncle. Nina Walter (ph) is exhausted but says she and her children won't rest until they're safely taken somewhere else.

At least one in four people on this island has been killed, injured or has lost a loved one. With so much suffering and trauma, government officials say it would be inhuman to force them to stay here.

The Indian military is now coordinating a dual operation.

(on camera) Their pilots are working around the clock, each plane bringing in with it food, water and medicine and taking out as many survivors as they can.

(voice-over) So many people are desperate to leave, there aren't even enough to help unload relief supplies. And officials make the evacuees do the work before they can board.

Nina Walter (ph) and her family are lucky to get on the plane today. It will be hard to find a job and a home on the main Andaman Islands where they're going, she says. But not as hard as staying here, where the tsunami swallowed her world.

(END VIDEOTAPE)

HAIDAR: The devastation is so complete, Kitty, that none of those evacuees actually carried anything. They just take with them their memories. But they say that's fine. They have nothing to go back to. And on these islands, they just want to get off -- Kitty.

PILGRIM: Suhasini, getting off the smaller islands onto the mainland isn't necessarily a solution, is it? What are conditions like on the main islands?

HAIDAR: Well, this is the next big one officials here are bracing for, because had they get off the plane, they come to the main island here. Officials are, in any case, up to their ears in just relief work and rescue work.

And they've been able to provide a sort of temporary accommodation for all these people. But there's sleeping, cooking, eating, some of them out under the sky. A lot of them very traumatized by what they've seen, getting the basic medical care here.

But officials are concerned that as their numbers rise, and there are thousands of them now coming on to the main island, that they are looking at another crisis. With so many people here already, the island is undergoing a fairly scarce water shortage -- Kitty.

PILGRIM: All right. Thanks very much, Suhasini Haidar. Thank you, Suhasini.

Tonight, officials in Indonesia have a new look at one of the most devastated areas there. Witnesses are describing Banda Aceh as appearing, quote, "vaporized," or as if it were the center of a nuclear blast.

Lindsay Taylor of ITN has the report, which we should warn you, contains disturbing images.

(BEGIN VIDEOTAPE)

LINDSAY TAYLOR, ITN CORRESPONDENT (voice-over): At first glance, it looks just like an open expanse of mud. But then, the telltale squares that indicate that there were once properties and people here.

This is what's become of Meulaboh, which was near the epicenter of the undersea quake. The time was home to 120,000 people. It's feared 40,000 of them are dead.

It's a shocking prospect, but given the force of what passed through here, it's a wonder that so many survived.

Here, the village of Chalang, gone.

On the ground, the receding waters have left Muelaboh in ruins and paralysis, frozen in 30-degree heat. Boats, cars, bodies.

Virtually no help has reached here, and people are largely having to fend for themselves. It's simply overwhelming.

In a temporary shelter, they wait, hoping help might come in time.

In the provincial capital of Banda Aceh, the stench of death is also everywhere. Home now for some is the middle of the road.

"Please, I plead for anyone out there to give us food," she says. "We're all hungry."

Food, water and medicine is urgently awaited, and then there's the pain that can't be treated.

The loss of life is unimaginable, requiring an unprecedented response. In just 24 hours, 250,000 bodies buried. It's not dignified, but it is necessary, a dreadful consequence of the force that unleashed itself here.

Instinctively, they take to the road, hoping to leave the carnage behind, clutching everything of value. But whatever direction they take, they will find the same.

(END VIDEOTAPE)

PILGRIM: That was ITN's Lindsay Taylor.

Well, the latest number of Americans confirmed dead in the tsunami is 14. The State Department says thousands more are unaccounted for. A massive search is under way in Sri Lanka, where at least 100 Americans are believed missing.

Hugh Riminton reports.

(BEGIN VIDEOTAPE)

HUGH RIMINTON, CNN CORRESPONDENT (voice-over): At the U.S. embassy in Colombo, Marc Williams leads the hunt for lost Americans.

MARC WILLIAMS, U.S. EMBASSY IN COLOMBO: We're planning kind of a land foray down to the south to look for areas where there's concentrations of Americans who are reported missing.

RIMINTON: Sometimes there's good news.

UNIDENTIFIED MALE: Missing. Supposed to be there.

UNIDENTIFIED FEMALE: She's found.

UNIDENTIFIED FEMALE: She called her next of kin. She's OK.

RIMINTON: But on the latest count, more than 100 U.S. citizens remain unaccounted for.

WILLIAMS: Here you see people going through master lists of the -- of the missing. It's an ongoing process. Sometimes we think we're doing better because the number of found keeps going up, and then all of a sudden we'll get a bunch of calls and e-mails saying that we need to look for more people.

RIMINTON: A fresh tsunami alert is immediately relayed to those in the field.

UNIDENTIFIED FEMALE: They should just try to keep off the coast.

RIMINTON: As well as searching for the missing and the dead, the embassy welcomes the simply bewildered and exhausted.

(on camera) For traumatized survivors in Sri Lanka and across the region, home can suddenly seem like it's a long way away. The embassy here uses simple psychological tricks to try to ease the pain of that sense of dislocation.

WILLIAMS: They see the Marine guard. We try to give them a Coke or a Mountain Dew and kind of reassure them that they're -- that they're in safety and, you know, this is just the first step in a long process on the way home. They're truly, in some ways, walking wounded.

RIMINTON: One of those is Matthew O'Connor.

MATTHEW O'CONNOR, TSUNAMI SURVIVOR: By the time I had already gotten a hold of the embassy, somehow they had already gotten a hold of my family back in America. And I hadn't even contacted them here. Someone I think had taken my name in the hospital.

RIMINTON: The truth is, some Americans are beyond rescue. In a quiet moment, the consul signs the death papers.

WILLIAMS: I think I'd say it's the worst part of my job. It's really the worst part of my job. The only thing that might be worse is when you have to call the families and tell them.

RIMINTON: He has no illusions. It's a task he expects to repeat in the days ahead.

Hugh Riminton, CNN, Colombo, Sri Lanka.

(END VIDEOTAPE)

PILGRIM: Secretary of State Powell will lead a delegation from the United States to southern Asia on Sunday. Now, according to the White House, the delegation, which will also include Florida Governor Jeb Bush, will assess humanitarian needs throughout the region.

Well, still to come tonight, the personal story of one of the Americans still missing somewhere in Thailand. Barbara Pecarich will join us to talk about the search for her brother, Pat.

Also tonight, an unprecedented relief effort, and Carol Bellamy, executive director of UNICEF, will join us to talk about the tremendous challenges to the recovery effort.

And the devastation in Sri Lanka. The Sri Lankan ambassador to the United States will be our guest. (COMMERCIAL BREAK)

PILGRIM: The death toll from the tsunami disaster is now more than 116,000 people. That's a number almost beyond comprehension. But now officials warn that people in south Asia face a great risk from illness and disease.

And Carol Bellamy is the executive director of UNICEF, and she says that hundreds of thousands of children are in desperate need of clean water. She joins us now.

And thanks very much for being with us.

CAROL BELLAMY, EXECUTIVE DIRECTOR, UNICEF: Thank you.

PILGRIM: You're heading out very soon -- tomorrow -- to...

BELLAMY: Tomorrow.

PILGRIM: ... Sri Lanka and where else?

BELLAMY: And then Indonesia.

PILGRIM: All right. And what are you hearing about the conditions there at this point?

BELLAMY: Well, the -- people have seen the conditions are horrific, of a scale that one has -- barely can imagine. I want to see what's happening now in terms of are we getting the stuff that we're bringing in to people? Is it reaching people and is it making any difference?

PILGRIM: Are you hearing that things are getting through, or is it -- are you going to sort of just control it from the ground there? Is that why you're headed out?

BELLAMY: Well, partly. I mean, the reality is there's been an enormous outpouring of interest and resources. All of the U.N. agencies and NGOs were bringing things in for UNICEF, were bringing in blankets, water purification, other things, biscuits for the kids, things -- medicines for health.

But it -- there's a big difference between getting them into Colombo and then getting them out, you know, getting them to Jakarta and getting them out. I want to make sure we're doing that and, if there are problems that UNICEF or other U.N. agencies are having, maybe I can come back and help.

PILGRIM: Carol, you've been with UNICEF for 10 years. You have seen disasters before. How do you rate this on the scale, and is this probably the biggest challenge you've seen?

BELLAMY: It is. I always hate saying this is the worst, but the scale of this -- so many countries, 11 countries, some more than others, but extraordinary. Loss of life. People whose lives are still in danger. I mean, the loss of life is going to go up even on those people who survived because of the potential outbreak of disease. The destruction of the economy of some of these countries, the long-term consequences. This is a scale almost unimaginable.

PILGRIM: Well, you know, I was reading about how children are particularly vulnerable, and about 30 to 40 percent of the population is children in this area. Why are they particularly more vulnerable than adults in these kind of conditions?

BELLAMY: First of all, these are poor countries, and, as you said, there's a very high young population, 30 percent to 50 percent in some cases, children or young people under the age of 18.

Why are they vulnerable? First of all, they're weaker. They may have been held by their parents and may have then been ripped away from their parents. They may have lost their parents. They're more subject to the effects of diarrhea. We adults can get diarrhea. But, for kids, they become dehydrated. They could die.

Disease outbreak. They may not have been immunized. They've been so traumatized. The adults as well, but the kids don't know. They've lost other very important actors in their lives like teachers, and they're just -- they don't understand. So you just add one after another after another. It has an enormous impact on kids.

PILGRIM: Part of your efforts are going to be to reunite children, is that not right?

BELLAMY: Yes, we are. I mean, again, unfortunately, we have experience in this area, working with partners like Save the Children and Oxfam and the Red Cross, for example.

We've had to do this more, is to try and identify are there still living parents or extended family members using something, quite frankly, as simple as a small picture from a little camera that you just -- a throwaway camera.

You can post pictures, and the parents can look for their kids, the kids can look for their parents.

PILGRIM: In terms of transportation, we're looking at these incredibly devastated areas, and some can't even be reached by land. Are you going to do airlifts? Are you going to do it by boat? Do you even know?

BELLAMY: We're going to have to do all of these. It's interesting. We are now working, actually, with some of the various countries who are going to bring in more aircraft, certainly our partners, the World Food Program. They run the joint logistics unit, and then they'll be running the aircraft.

There may even be some military in this case. I always worry about being too aligned when you're doing humanitarian work with the military, but, in a natural disaster, you can do that because it's not that the people are fighting with each other. But we're going to need everything -- boats, helicopters, planes, trucks. Everything we can use.

PILGRIM: A big financial burden on UNICEF. Isn't this going to take down your funds quite a bit?

BELLAMY: Well, we were already there, I should say, and we had programs in every one of the countries effected. So we reallocated immediately, but, yes, of course, for UNICEF and for everyone else.

So we're out raising money. We're part of the U.N. effort to raise money, and I know the secretary general announced today that at least spend a half a billion dollars with the $250 million from the World Bank.

PILGRIM: How do people watching this give money to UNICEF? I know many people really do want to help.

BELLAMY: Well, we -- we would welcome that. We would hope they would. They can go to our Web site, unicefusa, if they're in this country, dot org. And they can make a contribution from a dollar -- remember trick or treat? You can even put quarters. But from $1 to more.

Or give to whatever charity they want to give to. Make it legitimate, the Red Cross, a good charity. Help out. We hope it might be UNICEF, but, if it isn't, help someone.

PILGRIM: All right. I'm sure everyone's listening. Thank you so much for being here and good luck on your trip.

BELLAMY: Thank you.

PILGRIM: Carol Bellamy.

Coming up, the long road to recovery. The United States preparing for a massive aid package on tsunami relief. We'll have more on that.

Also, in the United States, wild weather. Dangerous floods hit the western United States.

We'll have that story and much more all ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: The United Nations Secretary General Kofi Annan today said he was satisfied with the response of world governments to the tsunami disaster. Now, so far, governments have pledged half a billion dollars. The United States is preparing an aide package to be introduced in Congress early next year.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE) LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Jackson Heights, New York, has the second largest south Asian population in the United States. Congressman Joe Crowley represents the district. He has pledged to fight for a $100 million supplemental aid package for the tsunami victims when Congress returns next week.

REP. JOE CROWLEY (R), NEW YORK: We need to not only express our condolences to the people of southeast Asia, south Asia and east Asia, but actually put our money where our mouths are as well, get that help and assistance to them.

SYLVESTER: Crowley sent a letter to Secretary Colin Powell signed by 22 other lawmakers urging the United States to take the lead in the relief and reconstruction efforts. The Office of Management and Budget advanced the U.S. Agency for International Development $35 million. U.S. officials insist this is only a first installment.

ANDREW NATSIOS, ADMINISTRATOR, USAID: OMB has given us an initial $35 million, exactly what we asked for. We've allocated it to the DART team. They're spending the money. OMB said, you need more money, call us up and we'll give you an advance on your budget.

SYLVESTER: Sources say that as the assessments on the ground come in, the United States will likely have to commit well beyond the $35 million. But how much Congress is willing or able to give may be limited by a record budget deficit.

But there is one thing that disaster experts say the United States should absolutely do: to help develop an early warning system for the Indian Ocean.

STEPHEN COHEN, THE BROOKINGS INSTITUTION: We operate the only tsunami center in the world that I know of, and that is in Hawaii, and I think that certainly immediately should be and can be extended to cover other countries.

(END VIDEOTAPE)

SYLVESTER: Chairman of the House International Relations Committee Henry Hyde says he will introduce legislation to help the victims next week.

And Senator Majority Leader Bill Frist, who is a doctor, intends to go to India next week to try to help out there. Another congressional delegation led by Representative Jim Leach will head to Thailand and Sri Lanka -- Kitty.

PILGRIM: All right. Thanks very much.

Lisa Sylvester.

Well, some bad weather is battering parts of this country tonight with everything from heavy winds to flooding, and the worst part is more is expected.

Rusty Dornin reports from San Francisco. (BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): The rains came, and the snow fell and keeps on falling. A series of slow-rolling storms is hammering the western state. Near Sedona, Arizona, hundreds were evacuated as a creek flooded resorts, an RV park and a dozen neighborhoods.

UNIDENTIFIED FEMALE: I think it's kind of frightening.

UNIDENTIFIED MALE: It's Mother Nature gone insane.

DORNIN: In the Sierra Nevada, blizzard-like conditions at one point closed every pass through California's main mountain range. Travelers to Lake Tahoe and Reno were told to head back where they came, creating massive gridlock on Interstate 80.

UNIDENTIFIED FEMALE: And, unfortunately, the weather has continued to go from worse to miserable, and so we had to close it again.

DORNIN: As winds topping more than 130 miles per hour whipped the mountaintop, many ski resorts were forced to close lifts. Four to seven feet of snow is expected through the new year's weekend.

To the south, pounding rain and high winds hit Los Angeles and San Diego counties, causing widespread power outages and snapping off 170 feet of a radio tower. Bits and pieces of that tower hit several cars below.

There was flash flooding in some areas in San Diego County, motorists had to be rescued from raging waters that swamped his van, all making western residents fret about just what the new year may bring.

Rusty Dornin, CNN, San Francisco.

(END VIDEOTAPE)

PILGRIM: Still to come, the search for the missing in Asia. And we'll talk to one American whose brother is missing somewhere in Thailand.

And devastation I'm Indonesia. That's the hardest hit country of all, and we'll have a live report from CNN's Mike Chinoy next.

Also, on the small island nation of Sri Lanka, tens of thousands are dead, thousands more missing. The Sri Lankan ambassador to the United States joins us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Now, in a moment, I'll talk with Barbara Pecarich, who is still searching for her brother after the tsunami disaster.

But, first, a look at some of the top stories tonight.

Nearly two months after Election Day, political wrangling continues in Washington State. After counting the votes for governor three times, the state has declared Democrat Christine Gregoire the winner. But a Republican rival will not concede and is demanding a new election.

U.S. cattle imports from Canada could resume as early as March. Now the imports were banned in May 2003 because of mad cow disease. The Bush administration made the announcement today, expressing its confidence in the safety of Canadian beef. And that's despite today's disclosure of a possible new case of mad cow disease in Canada.

And Secretary of State Colin Powell today saying the United States is determined to help those nations hit by the devastating tsunamis. Powell is visiting the embassies to formally extend condolences.

As we reported, the death toll of the tsunami has risen to more than 116,000. One of the most devastated areas is Banda Aceh in Indonesia, and Mike Chinoy joins us live by a videophone from there with the latest.

Mike, thanks for being with us. I know you've been over some of the roughest turf possible. Tell us what you saw.

MIKE CHINOY, CNN CORRESPONDENT: Well, here in Banda Aceh, it looks like much of the city was just leveled by an air raid. There are huge chunks of the city that have just been completely flattened. There are tens of thousands of people living homeless in the streets. There's still a lot of corpses that haven't been collected.

But what has become clear in the last day or so is that as bad as it is here, it's much worse on the western coast of the Island of Sumatra. We got some remarkable pictures that were taken by a British conservationist who's worked in that part of Indonesia for 25 years who chartered a plane and flew up along the coast.

And the pictures that he took show a scene of really unimaginable devastation, town after town, not just damage, but, in many cases, quite literally, wiped off the face of the earth. In some cases, all you could see were foundations of buildings to make out that any humans had ever lived there.

There were some towns where he had to point out that that's where a town had been because there just wasn't anything there. And these are not little villages. These are towns of 10,000, 15,000 people. The largest town along the coast, a town of about 50,000 people, about 80 percent of the buildings are gone, and estimates are that perhaps two-thirds of the people died as well.

And in addition, these coastal areas were homes to lots of farmers and fishermen who lived in thatched huts or stilts -- or houses and small dwellings on stilts. Those are all completely gone, and that, I think, accounts for the dramatic spike in the estimates of casualties here in Indonesia. And those numbers are certain to go up -- Kitty.

PILGRIM: Aceh's extremely remote. Some of the areas you're showing us were just a flyover. When will they be able to actually get people into all the areas they believe are affected? Will that be days or weeks?

CHINOY: Well, it's really not clear. The Indonesian military did get some teams into this one town, Abulo (ph), that was largely wiped out, but clearly there are still survivors there. And the air strip there, although very badly damaged, can accommodate some small fixed wing aircraft.

But some of these other areas are just completely inaccessible by land. The Indonesian navy has positioned a ship in the sea off Sumatra, and that may be one of the areas where international help becomes important, because if Australian or American navies can move ships into position offshore, then they might be able to access these areas by helicopter.

But I have to say, based on the pictures, it's an open question whether they're going to find anybody alive in a lot of these areas -- Kitty.

PILGRIM: Mike, this is a difficult area, in that there was an insurgency, and the military didn't really go very deeply into some of these areas for other reasons. What is the thinking on going in at this point?

CHINOY: Well, you're right. There's been an insurgency for 15 years. Separatist rebels here in Aceh have been fighting for independence from Indonesia. The Indonesian military has a very large presence. It's been a very bitter and bloody war. There's not a lot of goodwill between the local folks in Aceh and the Indonesian armed forces.

Shortly after the disaster, both the guerrillas and the military announced separately that they would honor a cease-fire in the hope that the suffering of the people could be alleviated. But one of the big question marks is how quickly aid gets to people here, and whether people feel the Indonesian military is playing a positive role in bringing that aid to people. We've certainly had a lot of grumbling here in Banda Aceh that the pace of relief has been slower than people would have liked. And so there may well be some political fallout, unless the aid begins to get to more people more quickly. It's possible some of the locals will blame the authorities, and that will increase the political alienation and tension among many people here -- Kitty.

PILGRIM: All right. Thanks very much, Mike Chinoy. Thank you, Mike.

Well, it has been four days since the disaster in South Asia. And still thousands of Americans are not accounted for, and one of the missing is Pat Pecarich. He was traveling in Thailand when the tsunamis hit. And Barbara Pecarich is Pat's sister, and she joins me now. And thank you very much for being here, Barbara. I know this is extremely difficult for you.

Where was Pat traveling, and what do you know so far?

BARBARA PECARICH, BROTHER MISSING IN THAILAND: He had been up in northern Thailand, near Chang Mai, and had called from there a few months ago. He was going to be leaving there and going south for Christmas. I know that -- he spent every year, for the last 10 years or so, in southern Thailand in the wintertime. And so...

PILGRIM: So he knows the area very, very well, right?

PECARICH: Yes. He has many friends there. You know, it's a real interwoven community of people in Phuket who come there year after year with their children and their families. And so he knows a lot of Thai people. He knows a lot of international people from all over the world. We don't know if he was on Parin (ph) beach -- that would be the area that he would probably have been in.

PILGRIM: That's where he normally used to go, yeah.

PECARICH: Parin (ph) beach.

PILGRIM: And how was that area affected?

PECARICH: Parin (ph) beach was heavily hit. I mean, the whole area was heavily hit, you know. There's no way to even begin to understand that, to try and think that way when you know that one person was walking on the street and the person next to them was swept away. I mean, I don't know. All I am asking is that if anybody who saw Pat or was with Pat around Christmas and knew if he was near the Rammtap (ph) inn on Parin (ph) beach, or sometimes he would stay three or four blocks away from there. There's so many people who are part of that community, and many of them, I imagine, have probably gone back to where they -- where their homes are, in Europe or wherever. If you've gone back and you know, if you have anything to say about having been with Pat or seen Pat, it would have been, you know, Christmas Day on the beach.

PILGRIM: Communications are difficult. Have you been able to call into Thailand? Have you received calls from anyone from there?

PECARICH: We've received calls, but mostly it's the e-mail communications. And there are communications of networking going on very strongly. But there's lists from hospitals. I don't know -- you know, you don't know what area the person was in. There's people trying to put pictures up to identify different people. There's different ways of -- but we have -- we don't know anything. He would usually be there at Christmastime, and his little girl, his daughter, is in New Mexico. She has been there with him a number of times before.

PILGRIM: But she was not with him this time?

PECARICH: No, she wasn't with him this Christmas. PILGRIM: Barbara, we really wish you the best. And we'll keep Pat in our thoughts. Thank you very much for ...

PECARICH: So is the e-mail address up?

PILGRIM: I believe we have it.

PECARICH: Is it on the screen?

PILGRIM: They just put it up for us.

PECARICH: If anybody knows anything or had seen him, or including the Thai community there, he has so many people that love him so much there. And he was there because of how much he loved Thailand. And I really -- I really have to say that our heart goes out to everybody who's dealing with this all over. But when you know the people, and you've been walking with them on those beaches...

PILGRIM: We hope for the best. Thank you very much for being here. Difficult time, I know, for you. Thank you very much. Barbara Pecarich.

And to update you on a story we brought you last night, and this is a good story. Our guests, Warren and Julie Lavender, who survived the tsunami, told us about their friends, Mark and Sue Edwards and their children who were missing. Well, the Lavenders contacted us today to tell us that the Edwards family is safe and in Thailand, and we wish them all the very best.

In Sri Lanka, more than 24,000 people lost their lives in the deadly tsunami, and that number is expected to rise. Now, parts of northeast Sri Lanka still inaccessible. More than a million people have been forced from their homes. And joining me now for more on the situation is Sri Lanka's ambassador to the U.S., Devinda Subasinghe. And the ambassador joins me now from Washington. And thank you very much for joining us, Ambassador.

DEVINDA SUBASINGHE, SRI LANKAN AMBASSADOR TO U.S.: Thank you for having me, Kitty.

PILGRIM: What is the most immediate need for your country right now?

SUBASINGHE: It's a whole series of recovery efforts and assessment of the extent of the disaster. That would then define the nature of the response that needs to be put in.

PILGRIM: You know, many of the relief agencies that we're talking to these days say when the countries tell us, we will be happy to get everything that they need quickly, and that priorities are important. Have you set up your priorities, and do you know exactly what you want and how fast you need it?

SUBASINGHE: We've never faced a disaster of this nature or order of magnitude, but yes, I think we're beginning to understand what we need. It's essentially been the need for prevention of water-borne diseases. In that regard, organizations like AmeriCare have been already airlifting water purification tablets, for example, and the medical assistance that was required has already been acquired on the ground, and the rapid assessment teams are at work as well.

PILGRIM: They tell us that the water situation is the absolute top priority, that it's critical to prevent diseases. Are you convinced that that's being handled well?

SUBASINGHE: We are just beginning to address that, yes. We will deploy whatever resources we have, and the global supplementation that has occurred to our own resources.

PILGRIM: What's transportation like out of Sri Lanka? I know many people are trying to get back home. And what are communications like, Ambassador?

SUBASINGHE: The communications system is on overload, but it's operative. The airport is open, and flights are moving in and out of the Bandaranaike International Airport outside Colombo.

PILGRIM: Were they shut down for a period of time?

SUBASINGHE: No.

PILGRIM: So you've been up and functioning.

One of the things that is being asked is why there was no warning system in place. It is a little bit of soul searching going on about this. How fast did you know about this, and do you think that perhaps a warning system would be advised in the future?

SUBASINGHE: I think, on the latter part, Kitty, many scientists, geophysicists and oceanographers, are going to be addressing that question. The -- based on the past history of tsunamis, as someone mentioned to me, this was not supposed to occur in this ocean. And I guess that's a question one needs to answer. In terms of any advanced warning, there was none. There was...

PILGRIM: Oh -- go ahead.

SUBASINGHE: Please, go ahead.

PILGRIM: Well, I was about to ask you if Sri Lanka had ever experienced any sort of tsunami effect before?

SUBASINGHE: No, not a tsunami. In fact, maybe high tides and occasional tidal wave, but not of this order of magnitude, that has covered 70 percent of the island's coastline.

PILGRIM: There's some discussion of governments being, in the area, linking up and being much more accessible to one another in the event of a disaster like this. What exact preparations are being discussed at this point? Do you know?

SUBASINGHE: I think in terms of an immediate response, the government of India responded almost instantaneously, as did the United States in terms of our requirements. Looking to the future, the president of Sri Lanka, President Kumaratunga, has had conversations with Prime Minister Manmohan Singh, as well as President Bush yesterday, with regard to collaborating on specifications for a warning system going forward.

PILGRIM: Secretary-general of the United Nations, Kofi Annan, today said he was convinced that there was enough aid coming in. Are you satisfied with the amount of aid that you're getting from countries?

SUBASINGHE: What we've asked, we've gotten. And I'm assuming that as we go forward and assess the needs, which are changing on a day-to-day basis, that we would be getting the necessary assistance in country.

PILGRIM: Ambassador Subasinghe, thank you for being with us, and our condolences to your country. Thank you.

SUBASINGHE: Thank you, and thank you for the opportunity.

PILGRIM: Coming up, how the U.S. military is mobilizing to help in the massive relief efforts. General David Grange will join us.

Also, major cutbacks at the Pentagon. How the military is hoping to save tens of billions of dollars in the coming year. That and more still ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Defense officials tell CNN the Pentagon is considering some $60 billion in cuts spread over the next six years. But officials insist that the cuts are not a result of the rising cost of the war in Iraq, and that the Pentagon budget will still be bigger next year. CNN senior Pentagon correspondent Jamie McIntyre has that story.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): With a sticker price that has soared from $35 million to a whopping $260 million a plane, the F-22 Raptor is now in the crosshairs of Pentagon budget cutters. Even as the Air Force insists the most expensive fighter plane ever is a must-have.

GEN. JOHN JUMPER, AIR FORCE CHIEF OF STAFF: We're going to have to make sure that the surface-to-air missiles and the fighters that are, again, being delivered today, are swept clean so that our troops can operate. This is the airplane to do that.

MCINTYRE: Sources say the Pentagon is under the gun to trim $10 billion from next year's budget, and as much as $60 billion in defense spending over the next six years. One option being considered, cutting back the planned buy of 277 F-22s by about 100 planes, to save roughly $15 billion.

Even with the cuts, defense officials say the Pentagon budget would still grow next year, although the planned reductions would effectively end the three-year defense buildup that followed the September 11th attacks. Sources say the White House is pushing for deep cuts to rein in rising federal deficits, which are fueled, in part, by the combined $5 billion a month cost of the wars in Iraq and Afghanistan.

STEVEN KOSIAK, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS: It's probably necessary that they make some cuts. The Pentagon has a very ambitious modernization plan, a very ambitious force structure plan. It's probably not affordable over the long term, given the concerns about the deficit.

MCINTYRE: Among the proposed cuts, retiring and not replacing the fossil-fueled aircraft carrier John F. Kennedy. That would reduce the aircraft carrier fleet from 12 to 11. Building fewer of the Navy's next generation DDX destroyers, and delaying development of the Army's high-tech future combat system.

(on camera): Pentagon officials say the budget cuts are not final and part of a long-term strategy to jettison Cold War concepts. But Congress may have the last word. And critics, including some members of the president's own party, fear the Pentagon may be mortgaging its future, simply to pay the mounting bill for the war in Iraq.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

PILGRIM: Well, the Pentagon is also contributing to relief efforts in Asia, sending more than a dozen warships, planes and several hundred troops to the region. Now, there are already U.S. disaster relief headquarters being set up in Thailand's Utapao naval air base, and American assessment teams are on the ground in Sri Lanka and Indonesia. Joining me now to talk about the military relief effort tonight, in "Grange on Point," is General David Grange. Thanks for being with us, sir.

GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Thank you.

PILGRIM: Let's talk about the military efforts in Asia. How big a scale are they, and do you think that they'll be effective and sufficient?

GRANGE: Well, they'll definitely be effective. There's stuff in place now, as you just indicated, JTF headquarters is deploying, assessment teams are on site to determine what type of support is needed in different areas. And you'll see a buildup all the way through probably mid-January.

What's critical is some emergency relief supplies, whether it be water and medical supplies, reconnaissance to determine the extent of damage. Those type of things up front, and then there will be some long-term requirement.

What's not talked about much, you hear a lot about a $35 million pledge on -- on support to the disaster. But these military bills, this support from the military commitment is going to be very high.

PILGRIM: It will be expensive. Will it detract from any efforts anywhere else?

GRANGE: Well, it won't detract from priority efforts. But it will detract overall, because this is just another mission added on to a very full plate for the Department of Defense. But, again, that's why you do prioritization, and you may have to pull from one area to provide immediate support to another.

PILGRIM: Let's turn to Iraq a bit. We've had a really difficult runup to the election. We're still a little bit short of a month away from the Iraqi elections. How do you assess the way things are going there, and the U.S. military's role? They've beefed up a good bit in Mosul, I understand.

GRANGE: Well, on a military side, again, you know, you have a couple of steps forward, maybe one back, and it goes back and forth that way. But a lot has been accomplished. Taking the safe havens away, and earlier in Najaf and then later in Fallujah. The trust and confidence established between the coalition forces and Iraqi military, protecting infrastructure. Doesn't mean it can never be attacked, but in most cases, it is protected. And if you don't have the infrastructure, you don't have the economy.

Those things are turning around very well. And especially getting ready for the elections. They're going to happen, I think. And partly due because most of the areas are going to be secure.

PILGRIM: We're seeing still some worry about Syria and some of the border areas and insurgents coming across. Where do we stand in terms of Syria cracking down on this? Are they helping the way they should?

GRANGE: Well, I don't think they're helping the way they should. They had an agreement with our country and Iraq, I believe, on sealing the borders, and not supporting -- though a lot of support comes out of Syria, mainly old buddies of Saddam. And so you have insurgents coming across. You have money. You have arms and munitions. And that is an advantage that the insurgents still have, because that's not solved.

PILGRIM: All right. Well, thank you very much for helping us analyze it tonight, General David Grange. Thank you.

GRANGE: Thank you.

PILGRIM: Still ahead, why the FBI is investigating the potentially dangerous use of laser beams in our skies. We'll have a special report on that.

And "Made in America," how one American company is struggling to fight the outsourcing trend. Stay with us.

(COMMERCIAL BREAK) PILGRIM: Tonight, the FBI is investigating why laser beams were directed at the cockpits of at least seven planes over the last five days. Now, these incidents have sparked fears that terrorists could use those lasers as weapons. Homeland security correspondent Jeanne Meserve reports.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Monday night, the cockpit of a Continental Airlines flight approaching Cleveland's airport was illuminated by a laser beam.

ROGERT HAWK, FBI SPECIAL AGENT: This plane was targeted. It just didn't flash for a moment inside the cockpit. The plane was traveling at about 300 miles an hour at about 8,500 to 10,000 feet. And it followed the plane inside the cockpit for two to four seconds.

MESERVE: The same night, green lights, possibly lasers, hit the cockpits of two flights landing at the Colorado Springs Airport. Pilots have also reported seeing what could have been lasers in Washington, D.C., and Teterboro, New Jersey, a total of at least seven incidents in five days, according to officials.

All the flights landed safely.

But a recent FAA report concluded the potential for an aviation accident definitely exists, because lasers could impair vision or distract a pilot, making landing difficult at best.

The report also notes that a laser could be quickly deployed and withdrawn, leaving no obvious collateral damage or projectile residue, and would be difficult to detect and defend against.

Since the advent of big laser light shows in the 1980s, pilots have been concerned, and over the years, there have been hundreds of incidents involving airplanes and lasers. Commercial lasers strong enough to reach low-level aircraft are not hard to get. Though the industry says it is working with government to regulate the strongest ones.

Experts say directing a beam into the eyes of a pilot in a moving plane hardly seems feasible.

RAFI RON, AVIATION SECURITY EXPERT: I don't think, though, at this point that we should consider this a major risk to our flights. And in terms of our priorities, I think that this should not be on the top of our priorities.

MESERVE: In a bulletin last month, the Department of Homeland Security and FBI said the U.S. intelligence community has no specific or credible evidence that terrorists intend to use lasers. Although they have expressed interest in them.

(on camera): An administration official says the recent incidents have not heightened the government's concerns. But the FBI is investigating to determine if they were pranks, accidents, or something malicious.

Jeanne Meserve, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: When we return, a look at one American company that's proud to say its products are made in the USA. Please stay with us.

(COMMERCIAL BREAK)

PILGRIM: Now "Made in America." And tonight, the story of one American company fighting a flood of cheap foreign imports. Tough Traveler has been making baby carriers and luggage and backpacks in upstate New York for more than 35 years.

(BEGIN VIDEOTAPE)

NANCY GOLD, TOUGH TRAVELER: A lot of bags. In the beginning were actually made from the -- I needed something to drag something around.

PILGRIM (voice-over): When Nancy Gold and her late husband started making their Tough Traveler backpacks, the products fit right in with the local Schenectady clientele. In the beginning, specialty retailers helped spread the Tough Traveler bags around the world. Even the local mayor has dragged one around.

MAYOR BRIAN STRATTON, SCHENECTADY, NY: I've probably had it for about 25 years. It's been to the beach, it's been on top of some of the 46 peaks in the Adirondacks. It's been on the plane, it's been to Florida.

PILGRIM: For a city that's lost many manufacturing jobs to outsourcing, attracting and retaining small business is key. Despite pressure from other companies wanting to take over their production and move it overseas, Tough Traveler has resisted the trend to outsource.

GOLD: I mean, there's no question, I could have sold my business, our business, but I did not. I just -- I don't know. Something in me just said, hmm, these people need jobs.

PILGRIM: But it has not been easy. The retailers that used to sell their products have all but dried up. Now they reach consumers via the Internet, and take custom orders from companies and government agencies.

GOLD: To be a brand in this business, which is almost totally imports is -- actually, it's amazing. That's the first thing. So do we have a challenge? Oh, do we.

PILGRIM: A challenge helped by numerous thank-you letters from customers all over the globe.

(END VIDEOTAPE) PILGRIM: Thanks for being with us tonight. Please join us tomorrow and we'll talk about the year's most intriguing stories and what to expect in 2005 with John Dickerson. He's the White House correspondent for "Time" magazine.

For all of us here, good night from New York. A special two-hour "ANDERSON COOPER 360" is next.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired December 30, 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, HOST (voice-over): Tonight, day five of the tsunami disaster across Southeast Asia. The death toll is rising rapidly, and the scope of the destruction is being compared to a nuclear bomb.

MIKE GRIFFITHS, CONSERVATIONIST: It has completely leveled everything just except for a few structures.

PILGRIM: We'll have the latest from Indonesia, Thailand, India and Sri Lanka. And Sri Lanka's ambassador to the United States is our guest.

The State Department says thousands of Americans are still unaccounted for across Southeast Asia. Officials in Sri Lanka have launched a massive search for them. We'll have the latest. And an American woman who can't find her brother will be our guest.

The disaster has created one of the largest relief efforts in history. But relief workers are struggling to reach some of the most remote areas of devastation, and they say time is running out to deliver fresh food and water to those who need it most. Executive director of UNICEF, Carol Bellamy, is our guest.

And tonight, the Pentagon is considering a massive budget cut, up to $60 billion. It would all but eliminate the increased defense spending put into place after September 11.

UNIDENTIFIED MALE: It's probably not affordable over the long term, given the concerns about the deficit.

PILGRIM: We'll have a live report from the Pentagon.

(END VIDEOTAPE)

ANNOUNCER: This is LOU DOBBS TONIGHT for Thursday, December 30. Here now for an hour of news, debate and opinion, sitting in for Lou Dobbs, who is on vacation, Kitty Pilgrim.

PILGRIM: Good evening.

Tonight, more than 116,000 people are confirmed dead after the tsunami in Southeast Asia. The death toll rose significantly after Indonesia reported nearly twice as many people were killed than first thought.

Indonesia's death toll is now just short of 80,000. Sri Lanka's toll has risen to almost 25,000 people. India reporting at least 10,000 deaths. And Thailand has confirmed more than 1,800 dead.

Making sure the death toll does not rise through disease is the main effort now. Relief workers across Southeast Asia are struggling to reach some of the most remote areas of destruction, including the Andaman and Nicobar islands of Northwest Indonesia.

CNN's Suhasini Haidar accompanied a relief flight to deliver much needed food and water and medicine to hundreds of survivors and has this report.

(BEGIN VIDEOTAPE)

SUHASINI HAIDAR, CNN CORRESPONDENT (voice-over): Tonight, Kana Kavasan (ph) will use what's left of her home as firewood to cook a meal for her family.

She and her husband have to wade through water to take stock of their tsunami-destroyed house and gift shop.

"It will take years to rebuild what we had here," she says.

But many won't stay to rebuild. On this island of Kar Nicobar, part of an archipelago in the Indian Ocean that bore the brunt of the killer waves, hundreds of men and women say there is nothing left to live on.

UNIDENTIFIED FEMALE (through translator): We stayed in the forest for two nights without food. The children just cried and cried.

HAIDAR: The tsunami took her home and her uncle. Nina Walter (ph) is exhausted but says she and her children won't rest until they're safely taken somewhere else.

At least one in four people on this island has been killed, injured or has lost a loved one. With so much suffering and trauma, government officials say it would be inhuman to force them to stay here.

The Indian military is now coordinating a dual operation.

(on camera) Their pilots are working around the clock, each plane bringing in with it food, water and medicine and taking out as many survivors as they can.

(voice-over) So many people are desperate to leave, there aren't even enough to help unload relief supplies. And officials make the evacuees do the work before they can board.

Nina Walter (ph) and her family are lucky to get on the plane today. It will be hard to find a job and a home on the main Andaman Islands where they're going, she says. But not as hard as staying here, where the tsunami swallowed her world.

(END VIDEOTAPE)

HAIDAR: The devastation is so complete, Kitty, that none of those evacuees actually carried anything. They just take with them their memories. But they say that's fine. They have nothing to go back to. And on these islands, they just want to get off -- Kitty.

PILGRIM: Suhasini, getting off the smaller islands onto the mainland isn't necessarily a solution, is it? What are conditions like on the main islands?

HAIDAR: Well, this is the next big one officials here are bracing for, because had they get off the plane, they come to the main island here. Officials are, in any case, up to their ears in just relief work and rescue work.

And they've been able to provide a sort of temporary accommodation for all these people. But there's sleeping, cooking, eating, some of them out under the sky. A lot of them very traumatized by what they've seen, getting the basic medical care here.

But officials are concerned that as their numbers rise, and there are thousands of them now coming on to the main island, that they are looking at another crisis. With so many people here already, the island is undergoing a fairly scarce water shortage -- Kitty.

PILGRIM: All right. Thanks very much, Suhasini Haidar. Thank you, Suhasini.

Tonight, officials in Indonesia have a new look at one of the most devastated areas there. Witnesses are describing Banda Aceh as appearing, quote, "vaporized," or as if it were the center of a nuclear blast.

Lindsay Taylor of ITN has the report, which we should warn you, contains disturbing images.

(BEGIN VIDEOTAPE)

LINDSAY TAYLOR, ITN CORRESPONDENT (voice-over): At first glance, it looks just like an open expanse of mud. But then, the telltale squares that indicate that there were once properties and people here.

This is what's become of Meulaboh, which was near the epicenter of the undersea quake. The time was home to 120,000 people. It's feared 40,000 of them are dead.

It's a shocking prospect, but given the force of what passed through here, it's a wonder that so many survived.

Here, the village of Chalang, gone.

On the ground, the receding waters have left Muelaboh in ruins and paralysis, frozen in 30-degree heat. Boats, cars, bodies.

Virtually no help has reached here, and people are largely having to fend for themselves. It's simply overwhelming.

In a temporary shelter, they wait, hoping help might come in time.

In the provincial capital of Banda Aceh, the stench of death is also everywhere. Home now for some is the middle of the road.

"Please, I plead for anyone out there to give us food," she says. "We're all hungry."

Food, water and medicine is urgently awaited, and then there's the pain that can't be treated.

The loss of life is unimaginable, requiring an unprecedented response. In just 24 hours, 250,000 bodies buried. It's not dignified, but it is necessary, a dreadful consequence of the force that unleashed itself here.

Instinctively, they take to the road, hoping to leave the carnage behind, clutching everything of value. But whatever direction they take, they will find the same.

(END VIDEOTAPE)

PILGRIM: That was ITN's Lindsay Taylor.

Well, the latest number of Americans confirmed dead in the tsunami is 14. The State Department says thousands more are unaccounted for. A massive search is under way in Sri Lanka, where at least 100 Americans are believed missing.

Hugh Riminton reports.

(BEGIN VIDEOTAPE)

HUGH RIMINTON, CNN CORRESPONDENT (voice-over): At the U.S. embassy in Colombo, Marc Williams leads the hunt for lost Americans.

MARC WILLIAMS, U.S. EMBASSY IN COLOMBO: We're planning kind of a land foray down to the south to look for areas where there's concentrations of Americans who are reported missing.

RIMINTON: Sometimes there's good news.

UNIDENTIFIED MALE: Missing. Supposed to be there.

UNIDENTIFIED FEMALE: She's found.

UNIDENTIFIED FEMALE: She called her next of kin. She's OK.

RIMINTON: But on the latest count, more than 100 U.S. citizens remain unaccounted for.

WILLIAMS: Here you see people going through master lists of the -- of the missing. It's an ongoing process. Sometimes we think we're doing better because the number of found keeps going up, and then all of a sudden we'll get a bunch of calls and e-mails saying that we need to look for more people.

RIMINTON: A fresh tsunami alert is immediately relayed to those in the field.

UNIDENTIFIED FEMALE: They should just try to keep off the coast.

RIMINTON: As well as searching for the missing and the dead, the embassy welcomes the simply bewildered and exhausted.

(on camera) For traumatized survivors in Sri Lanka and across the region, home can suddenly seem like it's a long way away. The embassy here uses simple psychological tricks to try to ease the pain of that sense of dislocation.

WILLIAMS: They see the Marine guard. We try to give them a Coke or a Mountain Dew and kind of reassure them that they're -- that they're in safety and, you know, this is just the first step in a long process on the way home. They're truly, in some ways, walking wounded.

RIMINTON: One of those is Matthew O'Connor.

MATTHEW O'CONNOR, TSUNAMI SURVIVOR: By the time I had already gotten a hold of the embassy, somehow they had already gotten a hold of my family back in America. And I hadn't even contacted them here. Someone I think had taken my name in the hospital.

RIMINTON: The truth is, some Americans are beyond rescue. In a quiet moment, the consul signs the death papers.

WILLIAMS: I think I'd say it's the worst part of my job. It's really the worst part of my job. The only thing that might be worse is when you have to call the families and tell them.

RIMINTON: He has no illusions. It's a task he expects to repeat in the days ahead.

Hugh Riminton, CNN, Colombo, Sri Lanka.

(END VIDEOTAPE)

PILGRIM: Secretary of State Powell will lead a delegation from the United States to southern Asia on Sunday. Now, according to the White House, the delegation, which will also include Florida Governor Jeb Bush, will assess humanitarian needs throughout the region.

Well, still to come tonight, the personal story of one of the Americans still missing somewhere in Thailand. Barbara Pecarich will join us to talk about the search for her brother, Pat.

Also tonight, an unprecedented relief effort, and Carol Bellamy, executive director of UNICEF, will join us to talk about the tremendous challenges to the recovery effort.

And the devastation in Sri Lanka. The Sri Lankan ambassador to the United States will be our guest. (COMMERCIAL BREAK)

PILGRIM: The death toll from the tsunami disaster is now more than 116,000 people. That's a number almost beyond comprehension. But now officials warn that people in south Asia face a great risk from illness and disease.

And Carol Bellamy is the executive director of UNICEF, and she says that hundreds of thousands of children are in desperate need of clean water. She joins us now.

And thanks very much for being with us.

CAROL BELLAMY, EXECUTIVE DIRECTOR, UNICEF: Thank you.

PILGRIM: You're heading out very soon -- tomorrow -- to...

BELLAMY: Tomorrow.

PILGRIM: ... Sri Lanka and where else?

BELLAMY: And then Indonesia.

PILGRIM: All right. And what are you hearing about the conditions there at this point?

BELLAMY: Well, the -- people have seen the conditions are horrific, of a scale that one has -- barely can imagine. I want to see what's happening now in terms of are we getting the stuff that we're bringing in to people? Is it reaching people and is it making any difference?

PILGRIM: Are you hearing that things are getting through, or is it -- are you going to sort of just control it from the ground there? Is that why you're headed out?

BELLAMY: Well, partly. I mean, the reality is there's been an enormous outpouring of interest and resources. All of the U.N. agencies and NGOs were bringing things in for UNICEF, were bringing in blankets, water purification, other things, biscuits for the kids, things -- medicines for health.

But it -- there's a big difference between getting them into Colombo and then getting them out, you know, getting them to Jakarta and getting them out. I want to make sure we're doing that and, if there are problems that UNICEF or other U.N. agencies are having, maybe I can come back and help.

PILGRIM: Carol, you've been with UNICEF for 10 years. You have seen disasters before. How do you rate this on the scale, and is this probably the biggest challenge you've seen?

BELLAMY: It is. I always hate saying this is the worst, but the scale of this -- so many countries, 11 countries, some more than others, but extraordinary. Loss of life. People whose lives are still in danger. I mean, the loss of life is going to go up even on those people who survived because of the potential outbreak of disease. The destruction of the economy of some of these countries, the long-term consequences. This is a scale almost unimaginable.

PILGRIM: Well, you know, I was reading about how children are particularly vulnerable, and about 30 to 40 percent of the population is children in this area. Why are they particularly more vulnerable than adults in these kind of conditions?

BELLAMY: First of all, these are poor countries, and, as you said, there's a very high young population, 30 percent to 50 percent in some cases, children or young people under the age of 18.

Why are they vulnerable? First of all, they're weaker. They may have been held by their parents and may have then been ripped away from their parents. They may have lost their parents. They're more subject to the effects of diarrhea. We adults can get diarrhea. But, for kids, they become dehydrated. They could die.

Disease outbreak. They may not have been immunized. They've been so traumatized. The adults as well, but the kids don't know. They've lost other very important actors in their lives like teachers, and they're just -- they don't understand. So you just add one after another after another. It has an enormous impact on kids.

PILGRIM: Part of your efforts are going to be to reunite children, is that not right?

BELLAMY: Yes, we are. I mean, again, unfortunately, we have experience in this area, working with partners like Save the Children and Oxfam and the Red Cross, for example.

We've had to do this more, is to try and identify are there still living parents or extended family members using something, quite frankly, as simple as a small picture from a little camera that you just -- a throwaway camera.

You can post pictures, and the parents can look for their kids, the kids can look for their parents.

PILGRIM: In terms of transportation, we're looking at these incredibly devastated areas, and some can't even be reached by land. Are you going to do airlifts? Are you going to do it by boat? Do you even know?

BELLAMY: We're going to have to do all of these. It's interesting. We are now working, actually, with some of the various countries who are going to bring in more aircraft, certainly our partners, the World Food Program. They run the joint logistics unit, and then they'll be running the aircraft.

There may even be some military in this case. I always worry about being too aligned when you're doing humanitarian work with the military, but, in a natural disaster, you can do that because it's not that the people are fighting with each other. But we're going to need everything -- boats, helicopters, planes, trucks. Everything we can use.

PILGRIM: A big financial burden on UNICEF. Isn't this going to take down your funds quite a bit?

BELLAMY: Well, we were already there, I should say, and we had programs in every one of the countries effected. So we reallocated immediately, but, yes, of course, for UNICEF and for everyone else.

So we're out raising money. We're part of the U.N. effort to raise money, and I know the secretary general announced today that at least spend a half a billion dollars with the $250 million from the World Bank.

PILGRIM: How do people watching this give money to UNICEF? I know many people really do want to help.

BELLAMY: Well, we -- we would welcome that. We would hope they would. They can go to our Web site, unicefusa, if they're in this country, dot org. And they can make a contribution from a dollar -- remember trick or treat? You can even put quarters. But from $1 to more.

Or give to whatever charity they want to give to. Make it legitimate, the Red Cross, a good charity. Help out. We hope it might be UNICEF, but, if it isn't, help someone.

PILGRIM: All right. I'm sure everyone's listening. Thank you so much for being here and good luck on your trip.

BELLAMY: Thank you.

PILGRIM: Carol Bellamy.

Coming up, the long road to recovery. The United States preparing for a massive aid package on tsunami relief. We'll have more on that.

Also, in the United States, wild weather. Dangerous floods hit the western United States.

We'll have that story and much more all ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: The United Nations Secretary General Kofi Annan today said he was satisfied with the response of world governments to the tsunami disaster. Now, so far, governments have pledged half a billion dollars. The United States is preparing an aide package to be introduced in Congress early next year.

Lisa Sylvester reports.

(BEGIN VIDEOTAPE) LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Jackson Heights, New York, has the second largest south Asian population in the United States. Congressman Joe Crowley represents the district. He has pledged to fight for a $100 million supplemental aid package for the tsunami victims when Congress returns next week.

REP. JOE CROWLEY (R), NEW YORK: We need to not only express our condolences to the people of southeast Asia, south Asia and east Asia, but actually put our money where our mouths are as well, get that help and assistance to them.

SYLVESTER: Crowley sent a letter to Secretary Colin Powell signed by 22 other lawmakers urging the United States to take the lead in the relief and reconstruction efforts. The Office of Management and Budget advanced the U.S. Agency for International Development $35 million. U.S. officials insist this is only a first installment.

ANDREW NATSIOS, ADMINISTRATOR, USAID: OMB has given us an initial $35 million, exactly what we asked for. We've allocated it to the DART team. They're spending the money. OMB said, you need more money, call us up and we'll give you an advance on your budget.

SYLVESTER: Sources say that as the assessments on the ground come in, the United States will likely have to commit well beyond the $35 million. But how much Congress is willing or able to give may be limited by a record budget deficit.

But there is one thing that disaster experts say the United States should absolutely do: to help develop an early warning system for the Indian Ocean.

STEPHEN COHEN, THE BROOKINGS INSTITUTION: We operate the only tsunami center in the world that I know of, and that is in Hawaii, and I think that certainly immediately should be and can be extended to cover other countries.

(END VIDEOTAPE)

SYLVESTER: Chairman of the House International Relations Committee Henry Hyde says he will introduce legislation to help the victims next week.

And Senator Majority Leader Bill Frist, who is a doctor, intends to go to India next week to try to help out there. Another congressional delegation led by Representative Jim Leach will head to Thailand and Sri Lanka -- Kitty.

PILGRIM: All right. Thanks very much.

Lisa Sylvester.

Well, some bad weather is battering parts of this country tonight with everything from heavy winds to flooding, and the worst part is more is expected.

Rusty Dornin reports from San Francisco. (BEGIN VIDEOTAPE)

RUSTY DORNIN, CNN CORRESPONDENT (voice-over): The rains came, and the snow fell and keeps on falling. A series of slow-rolling storms is hammering the western state. Near Sedona, Arizona, hundreds were evacuated as a creek flooded resorts, an RV park and a dozen neighborhoods.

UNIDENTIFIED FEMALE: I think it's kind of frightening.

UNIDENTIFIED MALE: It's Mother Nature gone insane.

DORNIN: In the Sierra Nevada, blizzard-like conditions at one point closed every pass through California's main mountain range. Travelers to Lake Tahoe and Reno were told to head back where they came, creating massive gridlock on Interstate 80.

UNIDENTIFIED FEMALE: And, unfortunately, the weather has continued to go from worse to miserable, and so we had to close it again.

DORNIN: As winds topping more than 130 miles per hour whipped the mountaintop, many ski resorts were forced to close lifts. Four to seven feet of snow is expected through the new year's weekend.

To the south, pounding rain and high winds hit Los Angeles and San Diego counties, causing widespread power outages and snapping off 170 feet of a radio tower. Bits and pieces of that tower hit several cars below.

There was flash flooding in some areas in San Diego County, motorists had to be rescued from raging waters that swamped his van, all making western residents fret about just what the new year may bring.

Rusty Dornin, CNN, San Francisco.

(END VIDEOTAPE)

PILGRIM: Still to come, the search for the missing in Asia. And we'll talk to one American whose brother is missing somewhere in Thailand.

And devastation I'm Indonesia. That's the hardest hit country of all, and we'll have a live report from CNN's Mike Chinoy next.

Also, on the small island nation of Sri Lanka, tens of thousands are dead, thousands more missing. The Sri Lankan ambassador to the United States joins us.

(COMMERCIAL BREAK)

ANNOUNCER: LOU DOBBS TONIGHT continues. Sitting in for Lou Dobbs, Kitty Pilgrim.

PILGRIM: Now, in a moment, I'll talk with Barbara Pecarich, who is still searching for her brother after the tsunami disaster.

But, first, a look at some of the top stories tonight.

Nearly two months after Election Day, political wrangling continues in Washington State. After counting the votes for governor three times, the state has declared Democrat Christine Gregoire the winner. But a Republican rival will not concede and is demanding a new election.

U.S. cattle imports from Canada could resume as early as March. Now the imports were banned in May 2003 because of mad cow disease. The Bush administration made the announcement today, expressing its confidence in the safety of Canadian beef. And that's despite today's disclosure of a possible new case of mad cow disease in Canada.

And Secretary of State Colin Powell today saying the United States is determined to help those nations hit by the devastating tsunamis. Powell is visiting the embassies to formally extend condolences.

As we reported, the death toll of the tsunami has risen to more than 116,000. One of the most devastated areas is Banda Aceh in Indonesia, and Mike Chinoy joins us live by a videophone from there with the latest.

Mike, thanks for being with us. I know you've been over some of the roughest turf possible. Tell us what you saw.

MIKE CHINOY, CNN CORRESPONDENT: Well, here in Banda Aceh, it looks like much of the city was just leveled by an air raid. There are huge chunks of the city that have just been completely flattened. There are tens of thousands of people living homeless in the streets. There's still a lot of corpses that haven't been collected.

But what has become clear in the last day or so is that as bad as it is here, it's much worse on the western coast of the Island of Sumatra. We got some remarkable pictures that were taken by a British conservationist who's worked in that part of Indonesia for 25 years who chartered a plane and flew up along the coast.

And the pictures that he took show a scene of really unimaginable devastation, town after town, not just damage, but, in many cases, quite literally, wiped off the face of the earth. In some cases, all you could see were foundations of buildings to make out that any humans had ever lived there.

There were some towns where he had to point out that that's where a town had been because there just wasn't anything there. And these are not little villages. These are towns of 10,000, 15,000 people. The largest town along the coast, a town of about 50,000 people, about 80 percent of the buildings are gone, and estimates are that perhaps two-thirds of the people died as well.

And in addition, these coastal areas were homes to lots of farmers and fishermen who lived in thatched huts or stilts -- or houses and small dwellings on stilts. Those are all completely gone, and that, I think, accounts for the dramatic spike in the estimates of casualties here in Indonesia. And those numbers are certain to go up -- Kitty.

PILGRIM: Aceh's extremely remote. Some of the areas you're showing us were just a flyover. When will they be able to actually get people into all the areas they believe are affected? Will that be days or weeks?

CHINOY: Well, it's really not clear. The Indonesian military did get some teams into this one town, Abulo (ph), that was largely wiped out, but clearly there are still survivors there. And the air strip there, although very badly damaged, can accommodate some small fixed wing aircraft.

But some of these other areas are just completely inaccessible by land. The Indonesian navy has positioned a ship in the sea off Sumatra, and that may be one of the areas where international help becomes important, because if Australian or American navies can move ships into position offshore, then they might be able to access these areas by helicopter.

But I have to say, based on the pictures, it's an open question whether they're going to find anybody alive in a lot of these areas -- Kitty.

PILGRIM: Mike, this is a difficult area, in that there was an insurgency, and the military didn't really go very deeply into some of these areas for other reasons. What is the thinking on going in at this point?

CHINOY: Well, you're right. There's been an insurgency for 15 years. Separatist rebels here in Aceh have been fighting for independence from Indonesia. The Indonesian military has a very large presence. It's been a very bitter and bloody war. There's not a lot of goodwill between the local folks in Aceh and the Indonesian armed forces.

Shortly after the disaster, both the guerrillas and the military announced separately that they would honor a cease-fire in the hope that the suffering of the people could be alleviated. But one of the big question marks is how quickly aid gets to people here, and whether people feel the Indonesian military is playing a positive role in bringing that aid to people. We've certainly had a lot of grumbling here in Banda Aceh that the pace of relief has been slower than people would have liked. And so there may well be some political fallout, unless the aid begins to get to more people more quickly. It's possible some of the locals will blame the authorities, and that will increase the political alienation and tension among many people here -- Kitty.

PILGRIM: All right. Thanks very much, Mike Chinoy. Thank you, Mike.

Well, it has been four days since the disaster in South Asia. And still thousands of Americans are not accounted for, and one of the missing is Pat Pecarich. He was traveling in Thailand when the tsunamis hit. And Barbara Pecarich is Pat's sister, and she joins me now. And thank you very much for being here, Barbara. I know this is extremely difficult for you.

Where was Pat traveling, and what do you know so far?

BARBARA PECARICH, BROTHER MISSING IN THAILAND: He had been up in northern Thailand, near Chang Mai, and had called from there a few months ago. He was going to be leaving there and going south for Christmas. I know that -- he spent every year, for the last 10 years or so, in southern Thailand in the wintertime. And so...

PILGRIM: So he knows the area very, very well, right?

PECARICH: Yes. He has many friends there. You know, it's a real interwoven community of people in Phuket who come there year after year with their children and their families. And so he knows a lot of Thai people. He knows a lot of international people from all over the world. We don't know if he was on Parin (ph) beach -- that would be the area that he would probably have been in.

PILGRIM: That's where he normally used to go, yeah.

PECARICH: Parin (ph) beach.

PILGRIM: And how was that area affected?

PECARICH: Parin (ph) beach was heavily hit. I mean, the whole area was heavily hit, you know. There's no way to even begin to understand that, to try and think that way when you know that one person was walking on the street and the person next to them was swept away. I mean, I don't know. All I am asking is that if anybody who saw Pat or was with Pat around Christmas and knew if he was near the Rammtap (ph) inn on Parin (ph) beach, or sometimes he would stay three or four blocks away from there. There's so many people who are part of that community, and many of them, I imagine, have probably gone back to where they -- where their homes are, in Europe or wherever. If you've gone back and you know, if you have anything to say about having been with Pat or seen Pat, it would have been, you know, Christmas Day on the beach.

PILGRIM: Communications are difficult. Have you been able to call into Thailand? Have you received calls from anyone from there?

PECARICH: We've received calls, but mostly it's the e-mail communications. And there are communications of networking going on very strongly. But there's lists from hospitals. I don't know -- you know, you don't know what area the person was in. There's people trying to put pictures up to identify different people. There's different ways of -- but we have -- we don't know anything. He would usually be there at Christmastime, and his little girl, his daughter, is in New Mexico. She has been there with him a number of times before.

PILGRIM: But she was not with him this time?

PECARICH: No, she wasn't with him this Christmas. PILGRIM: Barbara, we really wish you the best. And we'll keep Pat in our thoughts. Thank you very much for ...

PECARICH: So is the e-mail address up?

PILGRIM: I believe we have it.

PECARICH: Is it on the screen?

PILGRIM: They just put it up for us.

PECARICH: If anybody knows anything or had seen him, or including the Thai community there, he has so many people that love him so much there. And he was there because of how much he loved Thailand. And I really -- I really have to say that our heart goes out to everybody who's dealing with this all over. But when you know the people, and you've been walking with them on those beaches...

PILGRIM: We hope for the best. Thank you very much for being here. Difficult time, I know, for you. Thank you very much. Barbara Pecarich.

And to update you on a story we brought you last night, and this is a good story. Our guests, Warren and Julie Lavender, who survived the tsunami, told us about their friends, Mark and Sue Edwards and their children who were missing. Well, the Lavenders contacted us today to tell us that the Edwards family is safe and in Thailand, and we wish them all the very best.

In Sri Lanka, more than 24,000 people lost their lives in the deadly tsunami, and that number is expected to rise. Now, parts of northeast Sri Lanka still inaccessible. More than a million people have been forced from their homes. And joining me now for more on the situation is Sri Lanka's ambassador to the U.S., Devinda Subasinghe. And the ambassador joins me now from Washington. And thank you very much for joining us, Ambassador.

DEVINDA SUBASINGHE, SRI LANKAN AMBASSADOR TO U.S.: Thank you for having me, Kitty.

PILGRIM: What is the most immediate need for your country right now?

SUBASINGHE: It's a whole series of recovery efforts and assessment of the extent of the disaster. That would then define the nature of the response that needs to be put in.

PILGRIM: You know, many of the relief agencies that we're talking to these days say when the countries tell us, we will be happy to get everything that they need quickly, and that priorities are important. Have you set up your priorities, and do you know exactly what you want and how fast you need it?

SUBASINGHE: We've never faced a disaster of this nature or order of magnitude, but yes, I think we're beginning to understand what we need. It's essentially been the need for prevention of water-borne diseases. In that regard, organizations like AmeriCare have been already airlifting water purification tablets, for example, and the medical assistance that was required has already been acquired on the ground, and the rapid assessment teams are at work as well.

PILGRIM: They tell us that the water situation is the absolute top priority, that it's critical to prevent diseases. Are you convinced that that's being handled well?

SUBASINGHE: We are just beginning to address that, yes. We will deploy whatever resources we have, and the global supplementation that has occurred to our own resources.

PILGRIM: What's transportation like out of Sri Lanka? I know many people are trying to get back home. And what are communications like, Ambassador?

SUBASINGHE: The communications system is on overload, but it's operative. The airport is open, and flights are moving in and out of the Bandaranaike International Airport outside Colombo.

PILGRIM: Were they shut down for a period of time?

SUBASINGHE: No.

PILGRIM: So you've been up and functioning.

One of the things that is being asked is why there was no warning system in place. It is a little bit of soul searching going on about this. How fast did you know about this, and do you think that perhaps a warning system would be advised in the future?

SUBASINGHE: I think, on the latter part, Kitty, many scientists, geophysicists and oceanographers, are going to be addressing that question. The -- based on the past history of tsunamis, as someone mentioned to me, this was not supposed to occur in this ocean. And I guess that's a question one needs to answer. In terms of any advanced warning, there was none. There was...

PILGRIM: Oh -- go ahead.

SUBASINGHE: Please, go ahead.

PILGRIM: Well, I was about to ask you if Sri Lanka had ever experienced any sort of tsunami effect before?

SUBASINGHE: No, not a tsunami. In fact, maybe high tides and occasional tidal wave, but not of this order of magnitude, that has covered 70 percent of the island's coastline.

PILGRIM: There's some discussion of governments being, in the area, linking up and being much more accessible to one another in the event of a disaster like this. What exact preparations are being discussed at this point? Do you know?

SUBASINGHE: I think in terms of an immediate response, the government of India responded almost instantaneously, as did the United States in terms of our requirements. Looking to the future, the president of Sri Lanka, President Kumaratunga, has had conversations with Prime Minister Manmohan Singh, as well as President Bush yesterday, with regard to collaborating on specifications for a warning system going forward.

PILGRIM: Secretary-general of the United Nations, Kofi Annan, today said he was convinced that there was enough aid coming in. Are you satisfied with the amount of aid that you're getting from countries?

SUBASINGHE: What we've asked, we've gotten. And I'm assuming that as we go forward and assess the needs, which are changing on a day-to-day basis, that we would be getting the necessary assistance in country.

PILGRIM: Ambassador Subasinghe, thank you for being with us, and our condolences to your country. Thank you.

SUBASINGHE: Thank you, and thank you for the opportunity.

PILGRIM: Coming up, how the U.S. military is mobilizing to help in the massive relief efforts. General David Grange will join us.

Also, major cutbacks at the Pentagon. How the military is hoping to save tens of billions of dollars in the coming year. That and more still ahead. Stay with us.

(COMMERCIAL BREAK)

PILGRIM: Defense officials tell CNN the Pentagon is considering some $60 billion in cuts spread over the next six years. But officials insist that the cuts are not a result of the rising cost of the war in Iraq, and that the Pentagon budget will still be bigger next year. CNN senior Pentagon correspondent Jamie McIntyre has that story.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): With a sticker price that has soared from $35 million to a whopping $260 million a plane, the F-22 Raptor is now in the crosshairs of Pentagon budget cutters. Even as the Air Force insists the most expensive fighter plane ever is a must-have.

GEN. JOHN JUMPER, AIR FORCE CHIEF OF STAFF: We're going to have to make sure that the surface-to-air missiles and the fighters that are, again, being delivered today, are swept clean so that our troops can operate. This is the airplane to do that.

MCINTYRE: Sources say the Pentagon is under the gun to trim $10 billion from next year's budget, and as much as $60 billion in defense spending over the next six years. One option being considered, cutting back the planned buy of 277 F-22s by about 100 planes, to save roughly $15 billion.

Even with the cuts, defense officials say the Pentagon budget would still grow next year, although the planned reductions would effectively end the three-year defense buildup that followed the September 11th attacks. Sources say the White House is pushing for deep cuts to rein in rising federal deficits, which are fueled, in part, by the combined $5 billion a month cost of the wars in Iraq and Afghanistan.

STEVEN KOSIAK, CENTER FOR STRATEGIC AND BUDGETARY ASSESSMENTS: It's probably necessary that they make some cuts. The Pentagon has a very ambitious modernization plan, a very ambitious force structure plan. It's probably not affordable over the long term, given the concerns about the deficit.

MCINTYRE: Among the proposed cuts, retiring and not replacing the fossil-fueled aircraft carrier John F. Kennedy. That would reduce the aircraft carrier fleet from 12 to 11. Building fewer of the Navy's next generation DDX destroyers, and delaying development of the Army's high-tech future combat system.

(on camera): Pentagon officials say the budget cuts are not final and part of a long-term strategy to jettison Cold War concepts. But Congress may have the last word. And critics, including some members of the president's own party, fear the Pentagon may be mortgaging its future, simply to pay the mounting bill for the war in Iraq.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

PILGRIM: Well, the Pentagon is also contributing to relief efforts in Asia, sending more than a dozen warships, planes and several hundred troops to the region. Now, there are already U.S. disaster relief headquarters being set up in Thailand's Utapao naval air base, and American assessment teams are on the ground in Sri Lanka and Indonesia. Joining me now to talk about the military relief effort tonight, in "Grange on Point," is General David Grange. Thanks for being with us, sir.

GEN. DAVID GRANGE (RET.), CNN MILITARY ANALYST: Thank you.

PILGRIM: Let's talk about the military efforts in Asia. How big a scale are they, and do you think that they'll be effective and sufficient?

GRANGE: Well, they'll definitely be effective. There's stuff in place now, as you just indicated, JTF headquarters is deploying, assessment teams are on site to determine what type of support is needed in different areas. And you'll see a buildup all the way through probably mid-January.

What's critical is some emergency relief supplies, whether it be water and medical supplies, reconnaissance to determine the extent of damage. Those type of things up front, and then there will be some long-term requirement.

What's not talked about much, you hear a lot about a $35 million pledge on -- on support to the disaster. But these military bills, this support from the military commitment is going to be very high.

PILGRIM: It will be expensive. Will it detract from any efforts anywhere else?

GRANGE: Well, it won't detract from priority efforts. But it will detract overall, because this is just another mission added on to a very full plate for the Department of Defense. But, again, that's why you do prioritization, and you may have to pull from one area to provide immediate support to another.

PILGRIM: Let's turn to Iraq a bit. We've had a really difficult runup to the election. We're still a little bit short of a month away from the Iraqi elections. How do you assess the way things are going there, and the U.S. military's role? They've beefed up a good bit in Mosul, I understand.

GRANGE: Well, on a military side, again, you know, you have a couple of steps forward, maybe one back, and it goes back and forth that way. But a lot has been accomplished. Taking the safe havens away, and earlier in Najaf and then later in Fallujah. The trust and confidence established between the coalition forces and Iraqi military, protecting infrastructure. Doesn't mean it can never be attacked, but in most cases, it is protected. And if you don't have the infrastructure, you don't have the economy.

Those things are turning around very well. And especially getting ready for the elections. They're going to happen, I think. And partly due because most of the areas are going to be secure.

PILGRIM: We're seeing still some worry about Syria and some of the border areas and insurgents coming across. Where do we stand in terms of Syria cracking down on this? Are they helping the way they should?

GRANGE: Well, I don't think they're helping the way they should. They had an agreement with our country and Iraq, I believe, on sealing the borders, and not supporting -- though a lot of support comes out of Syria, mainly old buddies of Saddam. And so you have insurgents coming across. You have money. You have arms and munitions. And that is an advantage that the insurgents still have, because that's not solved.

PILGRIM: All right. Well, thank you very much for helping us analyze it tonight, General David Grange. Thank you.

GRANGE: Thank you.

PILGRIM: Still ahead, why the FBI is investigating the potentially dangerous use of laser beams in our skies. We'll have a special report on that.

And "Made in America," how one American company is struggling to fight the outsourcing trend. Stay with us.

(COMMERCIAL BREAK) PILGRIM: Tonight, the FBI is investigating why laser beams were directed at the cockpits of at least seven planes over the last five days. Now, these incidents have sparked fears that terrorists could use those lasers as weapons. Homeland security correspondent Jeanne Meserve reports.

(BEGIN VIDEOTAPE)

JEANNE MESERVE, CNN CORRESPONDENT (voice-over): Monday night, the cockpit of a Continental Airlines flight approaching Cleveland's airport was illuminated by a laser beam.

ROGERT HAWK, FBI SPECIAL AGENT: This plane was targeted. It just didn't flash for a moment inside the cockpit. The plane was traveling at about 300 miles an hour at about 8,500 to 10,000 feet. And it followed the plane inside the cockpit for two to four seconds.

MESERVE: The same night, green lights, possibly lasers, hit the cockpits of two flights landing at the Colorado Springs Airport. Pilots have also reported seeing what could have been lasers in Washington, D.C., and Teterboro, New Jersey, a total of at least seven incidents in five days, according to officials.

All the flights landed safely.

But a recent FAA report concluded the potential for an aviation accident definitely exists, because lasers could impair vision or distract a pilot, making landing difficult at best.

The report also notes that a laser could be quickly deployed and withdrawn, leaving no obvious collateral damage or projectile residue, and would be difficult to detect and defend against.

Since the advent of big laser light shows in the 1980s, pilots have been concerned, and over the years, there have been hundreds of incidents involving airplanes and lasers. Commercial lasers strong enough to reach low-level aircraft are not hard to get. Though the industry says it is working with government to regulate the strongest ones.

Experts say directing a beam into the eyes of a pilot in a moving plane hardly seems feasible.

RAFI RON, AVIATION SECURITY EXPERT: I don't think, though, at this point that we should consider this a major risk to our flights. And in terms of our priorities, I think that this should not be on the top of our priorities.

MESERVE: In a bulletin last month, the Department of Homeland Security and FBI said the U.S. intelligence community has no specific or credible evidence that terrorists intend to use lasers. Although they have expressed interest in them.

(on camera): An administration official says the recent incidents have not heightened the government's concerns. But the FBI is investigating to determine if they were pranks, accidents, or something malicious.

Jeanne Meserve, CNN, Washington.

(END VIDEOTAPE)

PILGRIM: When we return, a look at one American company that's proud to say its products are made in the USA. Please stay with us.

(COMMERCIAL BREAK)

PILGRIM: Now "Made in America." And tonight, the story of one American company fighting a flood of cheap foreign imports. Tough Traveler has been making baby carriers and luggage and backpacks in upstate New York for more than 35 years.

(BEGIN VIDEOTAPE)

NANCY GOLD, TOUGH TRAVELER: A lot of bags. In the beginning were actually made from the -- I needed something to drag something around.

PILGRIM (voice-over): When Nancy Gold and her late husband started making their Tough Traveler backpacks, the products fit right in with the local Schenectady clientele. In the beginning, specialty retailers helped spread the Tough Traveler bags around the world. Even the local mayor has dragged one around.

MAYOR BRIAN STRATTON, SCHENECTADY, NY: I've probably had it for about 25 years. It's been to the beach, it's been on top of some of the 46 peaks in the Adirondacks. It's been on the plane, it's been to Florida.

PILGRIM: For a city that's lost many manufacturing jobs to outsourcing, attracting and retaining small business is key. Despite pressure from other companies wanting to take over their production and move it overseas, Tough Traveler has resisted the trend to outsource.

GOLD: I mean, there's no question, I could have sold my business, our business, but I did not. I just -- I don't know. Something in me just said, hmm, these people need jobs.

PILGRIM: But it has not been easy. The retailers that used to sell their products have all but dried up. Now they reach consumers via the Internet, and take custom orders from companies and government agencies.

GOLD: To be a brand in this business, which is almost totally imports is -- actually, it's amazing. That's the first thing. So do we have a challenge? Oh, do we.

PILGRIM: A challenge helped by numerous thank-you letters from customers all over the globe.

(END VIDEOTAPE) PILGRIM: Thanks for being with us tonight. Please join us tomorrow and we'll talk about the year's most intriguing stories and what to expect in 2005 with John Dickerson. He's the White House correspondent for "Time" magazine.

For all of us here, good night from New York. A special two-hour "ANDERSON COOPER 360" is next.

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